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Timestamp: 2015-01-30 02:53:12
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KWRD (AM), Henderson, Texas
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DA 12-1198
In re Applications of
Jerry Russell d/b/a The Russell Company
Hanszen Broadcasting
Facility I.D. No. 71519
For Assignment of License for Station
File No. BAL-20080617ACD
KWRD(AM), Henderson, Texas
Adopted: July 27, 2012
Released: July 27, 2012 By the Chief, Audio Division
The Media Bureau has before it the captioned application (the “Application”) seeking Commission consent to the assignment of the license for Station KWRD(AM), Henderson, Texas (the “Station”) from Jerry Russell d/b/a The Russell Company (“Russell” or the “Licensee”) to Hanszen Broadcasting (“Hanszen”). Also before us are Petitions to Deny the Application filed on July 17, 2008, by Larry G. Fuss (“Fuss”) (the “Fuss Petition”) and on August 12, 2008, by counsel for Phillip Burr (“Burr”) (the “Burr Petition”),1 related responsive pleadings,2 and Russell’s January 29, 2009, and February 22, 2011, responses to two staff inquiry letters as described below.3 2.
In this Memorandum Opinion and Order, for the reasons set forth below, we treat the Fuss and Burr pleadings as informal objections, deny those objections, and grant the Application with conditions. 1 Additionally, on July 21, 2008, Burr also filed on his own behalf a letter accusing Russell of defrauding him in connection with the sale of the Station. Attached was a copy of the “Plaintiff’s Original Petition” regarding this claim which Burr instituted in the District Court for the 4th Judicial District of Rusk County, Texas, Case No. 2008-156. 2 Hanszen filed oppositions to the Fuss Petition and the Burr Petition on July 30, 2008, and August 1, 2008, respectively. Russell also filed an opposition to the Fuss Petition on August 7, 2008. Burr also filed a “Consolidated Reply to Oppositions to Petition to Deny” (“Burr Reply”) on August 12, 2008. Additionally, on January 20, 2011, and again on March 11, 2011, counsel for Hanszen wrote the Commission claiming that Hanszen would make an “exemplary licensee” committed to improving station performance and urging the Commission to grant the Application without further delay. Finally, on August 2, 2011, counsel for Hanszen filed a “Motion for Prompt Relief.”
3 On March 11, 2009, Fuss filed comments on Russell’s January 20, 2009, response. Federal Communications Commission
Russell and Hanszen filed the Application on June 17, 2008, proposing to assign the license and sell the assets of the Station to Hanszen for a total purchase price of $100,000.4 In the Application, Russell responded to the question in Section II, Item 4, regarding his other broadcast interests by checking the box “N/A” but including an Exhibit 5 stating, “Assignor believes it is the licensee of KOFY-AM, [Gilmer, Texas].”5
Fuss Petition. In his Petition, Fuss alleges that the Application failed to disclose Russell’s ownership of numerous other broadcast stations.6 This, he claims, “exhibits an act of deception” that the Commission should investigate.7 Additionally, Fuss asserts that all of Russell’s and MRSVI’s radio stations have been silent for more than one year without Commission authority. Fuss also alleges that: (1) Russell, Community and MRSVI have all failed to pay forfeitures assessed by the Commission against stations licensed to them for a variety of rule violations, including violations of the Emergency Alert System, tower enclosure, and public inspection file rules;8 (2) Russell, Community, and MRSVI each failed to file biennial ownership reports required by Section 73.3615 of the Rules;9 (3) Russell, Community and MRSVI have failed to pay their annual regulatory fees as required by Section 9 of the Act10 and Section 1.1151 of the Rules;11 and (4) Russell, Community and MRSVI all engage in “shoddy” radio station business practices, such as disregarding contractual and other legal obligations.12 5.
In its opposition, Hanszen contends that, even if true, the Fuss Petition’s allegations are irrelevant and that the revocation of the Station’s license would not serve the public interest. Hanszen argues that Fuss lacks standing to file a petition to deny because he lives in Las Vegas, Nevada, and is simply a creditor of Russell.13 With regard to Russell’s alleged failure to report other broadcast interests in the Application, Hanszen contends that Russell was under no obligation to do so because the stations not reported had been silent for over a year and, therefore, pursuant to Section 312(g) of the Act,14 their licenses had terminated by operation of law. Additionally, Hanszen asserts that: (1) Section 1.80(f)(5) of 4 Hanszen also agrees to assume certain Station’s liabilities. Among these was the $7,200 balance on a Forfeiture Order issued to Russell by the Enforcement Bureau, Acct No. 200732500002 as discussed below. See Jerry Russell dba The Russell Company, Forfeiture Order, 22 FCC Rcd 48 (South Central Region, EB, 2007), recon. dismissed,Memorandum Opinion and Order, 22 FCC Rcd 9065 (EB 2007) (the “2007 Forfeiture”). The 2007 Forfeiture was imposed for willful and repeated violation of 47 C.F.R. § 11.35(a) of the Rules due to Russell's failure to ensure the operational readiness of the Station’s Emergency Alert System. Hanszen loaned to Russell $25,000 out of the deposited purchase price to satisfy this and other obligations. See Application, Asset Purchase Agreement, Paragraphs 2.3.9 and 3.2 and Security Agreement. The Commission’s Office of Managing Director has confirmed that the 2007 Forfeiture has been paid.
5 Application Section II, Item 4 and Exhibit 5. 6 Fuss argues that Russell did not disclose his ownership of KZEY(AM), Tyler, Texas, owned by Community Broadcast Group, Inc. (“Community”) of which Russell is the President and 92 percent shareholder. He also alleges that Russell failed to disclose that he is President and 100 percent stockholder of M.R.S. Ventures, Inc. (“MRSVI”), the licensee of a number of radio stations in Arkansas and Mississippi. 7 Fuss Petition at 3.8 Id. at 4 and Exhibit 7. See 47 C.F.R. §§ 11.35(a), 73.49, and 73.3526, respectively. 9 Id. at 5. See 47 U.S.C. § 73.3615.10 47 U.S.C. § 159.11 47 C.F.R. § 1.1151.12 Fuss Petition at 8. 13 Hanszen cites Arizona Mobile Telephone Co., Memorandum Opinion and Order, 80 FCC 2d 87 (Rev. Bd. 1980).14 47 U.S.C. § 312(g).
the Rules directly refers unpaid forfeitures to the Department of Justice for collection, and that matter does not concern the Commission here; (2) ownership reports did not have to be filed for other Russell-controlled entities because these stations had been silent for more than a year and the station licenses had expired pursuant to Section 312(g); (3) all delinquent regulatory fees appear to have been paid; and (4) the “shoddy business practices” alleged in the Fuss Petition “extend beyond FCC rule compliance [and] are not wit