In re 127, Inc.

Decision Date28 February 2007
Docket NumberEB-05-KC-143
CourtFederal Communications Commission Decisions
PartiesIn the Matter of 127, Inc. Licensee of Station KLFJ Facility ID# 17137 Springfield, Missouri

Adopted: February 26, 2007

NAL/Acct. No. 200632560002 FRN 0011407814

MEMORANDUM OPINION AND ORDER

George R. Dillon Assistant Chief, Enforcement Bureau

By the Assistant Chief, Enforcement Bureau:

I. INTRODUCTION

1. In this Memorandum Opinion and Order ("Order"), we deny the petition for reconsideration filed by 127, Inc. of the Forfeiture Order issued September 6 2006.[1] The Forfeiture Order imposed a monetary forfeiture in the amount of $16, 800 on 127, Inc. for the willful and repeated violation of Sections 73.1125(a) and 73.1745 of the Commission's Rules ("Rules") and the willful violation of Section 73.3526(a) of the Rules.[2] The noted violations involved 127 Inc.'s failure to maintain a main studio, operating overpower during nighttime hours, and failure to make available for inspection the station's public inspection file.

II. BACKGROUND

2. In response to a report of a violation, on December 13 and 14 2005, an agent from the Commission's Kansas City Office of the Enforcement Bureau ("Kansas City Office") monitored station KLFJ's signal from a location in Springfield, Missouri. The agent's monitoring indicated no power reduction in KLFJ's signal from mid afternoon until after sunset, which is inconsistent with the terms of the station authorization. Telephone calls to KLFJ on December 14, 2005 went unanswered at 9:03 AM, 10:38 AM, 1:05 PM, 2:55 PM and 4:00 PM this date.

3. On December 15, 2005, the agent contacted the executive assistant to the station's owner at Surrey Vacation Resorts/Surrey Grand Crown Resort, by using the phone number provided in KLFJ's EEO Form 396. The executive assistant stated there was no studio for the radio station and station programming is done via computer from West Hollywood, California. She did not know the location of the public file but suggested checking at the Econo Lodge in Springfield. She stated the KLFJ phone number listed in the Springfield phone book is supposed to be answered and is located at the Econo Lodge along with the computer containing the station's aired material. She provided the phone number for the contract engineer for KLFJ and stated he would be able to aid with inspection of the transmitter and equipment located at the Econo Lodge.

4. Still on the same date, the agent, accompanied by the KLFJ contract engineer, inspected KLFJ's transmitter site and programming equipment located in Springfield, Missouri. The transmitter was operating at a power of 1125 watts. The contract engineer stated that the station had operated at this power level for two to three months. He stated that there was no studio or studio equipment for KLFJ. The agent found no microphone or other audio mixing capabilities that would allow origination of programming from the Econo Lodge, the transmitter site, or any other location in Springfield. Station programming material is uploaded to one of the two computers located in a back room of the Econo Lodge motel via telephone line from West Hollywood, California. During the inspection, the contract engineer was able to reduce the transmitter power to approximately 25 watts both manually and by using the remote control. He stated that remote control instructions were left at the Econo Lodge prior to the sale of hotel. According to the new owner of the Econo Lodge, current Econo Lodge employees did not have any knowledge of the radio station operation or of any station records. The contract engineer stated he is called by the station only as needed. He stated he had no knowledge of radio station staff locally and stated no chief operator was designated for the station. A check of the telephone for the station located at the Econo Lodge front desk found the telephone unplugged but operating correctly when plugged in.

5. On March 3, 2006, the Kansas City Office issued to 127, Inc. a Notice of Apparent Liability for Forfeiture ("NAL") proposing a forfeiture in the amount of $21, 000 that found 127, Inc. had willfully and repeatedly violated Sections 73.1125(a) and 73.1745 of the Rules, and had willfully violated Section 73.3526(a) of the Rules.[3] In response to the NAL, 127, Inc. did not deny the violations, stated that it had made efforts to correct the violations, and requested cancellation or reduction of the proposed forfeiture due to its "spotless track record" and "many years of untarnished service."[4] On September 6, 2006, the Enforcement Bureau released the Forfeiture Order. The Enforcement Bureau reduced the forfeiture amount from $21, 000 to $16, 800, based on 127, Inc.'s history of compliance with the Rules. 127, Inc. filed a petition for reconsideration of the Forfeiture Order requesting further reduction or cancellation of the forfeiture.

III. DISCUSSION

6. The forfeiture amount in this case was assessed in accordance with Section 503(b) of the Act, [5] Section 1.80 of the Rules, [6] and The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines.[7] In examining 127, Inc.'s petition, Section 503(b) of the Act requires that the Commission take into account the nature, circumstances, extent and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and any other such matters as justice may require.[8]

7. In its petition for reconsideration, 127, Inc. alleges that it did not violate Section 73.3526 of the Rules, because the station's public file was located at the Econo Lodge. In a sworn affidavit, the station owner states that the new owner of the Econo Lodge was aware that the file was located in the hotel and agreed to make it available to the public.[9] 127, Inc. claims that its violation of the public file rules was not willful, because, unbeknownst to it, the new owner of the Econo Lodge failed to inform his employees about the public file. These facts, however, provide no basis to cancel or reduce the forfeiture associated with this violation. It is undisputed that on December 15, 2005 in response to a request during normal business hours, station KLFJ, represented by the owner and employees of the Econo Lodge, was unable to produce a public file. Although 127, Inc. may not have been aware of the break down in training for the Econo Lodge employees, 127, Inc. consciously and deliberately placed the Econo Lodge owner in charge of the station's public file and Econo Lodge employees were unable to make the file available upon request. The "Commission has long held that licensees and other Commission regulatees are responsible for the acts and omissions of their employees and independent contractors, "[10] and the Commission has "consistently refused to excuse licensees from forfeiture penalties where actions of employees or independent contractors have resulted in violations."[11]

8. Similarly, 127, Inc. alleges its violations of Sections 73.1125(a) and 73.1745 of the Rules were not willful, because the station owner relied on contractors and employees to set up the main studio and operate the station consistent with the Rules. Specifically, the station owner hired a contractor to assist in the station purchase and set up. That contractor later hired a contract engineer and station manager.[12] In an affidavit, the contractor stated the station's main studio was complete and working when it first moved to the Econo Lodge. At some point before the inspection, however, he alleges much of the station's equipment was removed from the Econo Lodge, unbeknownst to himself and the station owner. The contractor also states that the contract engineer was instructed to reduce the station's transmitter power at night and failed to do so, unbeknownst to himself and the station owner. These facts, however, provide no basis to cancel or reduce the forfeitures associated with these violations. 127, Inc., as the licensee, is responsible for ensuring compliance with the Rules, and consciously hired others to set up and operate its radio station.[13] As discussed above, 127, Inc. cannot absolve itself of liability by claiming it was unaware of the actions and inactions of those employees and contractors.

9. 127, Inc. agrees that its violations of Sections 73.1125(a) and 73.1745 of the Rules were repeated, but seeks a reduction of the forfeitures, citing U.S. v. Daniels, [14] because it claims its violations were not willful, it was acting in good faith, and there were no complaints received about the station. As discussed above, we agree with the determination in the Forfeiture Order that these violations were willful.[15] We also find no reason to reduce the forfeiture simply because no complaints against the station have been filed. We note, however, that the agent from Kansas City first monitored the station in response to a report of a violation by the station, which was essentially a complaint. Finally, we find that 127, Inc.'s actions - hiring a contractor to set up the main studio and a station engineer to reduce power at night and purchasing main studio equipment - do not constitute good faith efforts worthy of a forfeiture reduction. While these actions were taken prior to the inspection, they were not specifically taken to remedy a violation. Rather, they were prerequisites to operating the station consistent with the Rules and were taken prior to the occurrence of any violations.

10. Finally, 127, Inc. notes that following the release of the Forfeiture Order it moved the main studio to another location and hired a station manager. 127, Inc. also terminated its relationship with the contract engineer. However,...

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