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Licensee, Station KIEZ(AM), Carmel Valley, CA 296 H Street Third Floor Chula Vista, CA 91910  SQ'` `  hhCqIn re:  Station KIEZ(AM), Carmel Valley, CA ` `  Dear Licensee:  "The Chief, Mass Media Bureau, pursuant to authority delegated under Section 0.283 of the  x<Commission's Rules, has before him for consideration information suggesting that there have been  xEviolations of various Commission rules in connection with your principal Jaime Bonilla Valdez's  x("Bonilla") control and operation of this station. Specifically, the information suggests that you improperly  xabdicated station control to a time broker; that you failed to maintain required information in the station's  xpublic inspection file; and that you falsely certified the completeness of that file to the Commission. The  xQinformation raised the question of whether, due to the serious and repeated nature of these rule violations,  xyour pending license renewal and assignment applications for this station should not be granted, but  x*instead be designated for evidentiary hearing. Your pleadings responsive to those charges are also before  x&the Chief, Mass Media Bureau. For the reasons discussed below, we have determined that forfeiture,  xrather than designation for hearing appears appropriate. Consequently, this letter constitutes a NOTICE  xOF APPARENT LIABILITY FOR A FORFEITURE, pursuant to Section 503(b) of the Communications Act of 1934, as amended (the "Act").  S' " Background Matters. COBE Laboratories, Inc. ("COBE"), a business creditor of your principal,  xBonilla, filed an "Objection to Renewal Applications and Petitions for Rescission of Operating  S3!' xlAuthorizations" on December 31, 1997, opposing, inter alia, the license renewal and assignment  xapplications of Station KIEZ(AM), Carmel Valley, California. COBE later withdrew that objection  xpursuant to a "comprehensive settlement" of its legal disputes with Bonilla. By letter under separate cover,  x3we found that it satisfied the requirements of 47 C.F.R. 73.3588, which governs the withdrawal and  S$' x}dismissal of petitions to deny and informal objections. We remain obligated, however, under Booth  Sk%' xAmerican Company, 58 FCC 2d 553, 554 (1976), to consider the merits of COBE's charges,  SC&' xxnotwithstanding the private settlement of that dispute. See Stockholders of CBS, Inc., 11 FCC Rcd 3733,  x3741 (1995) (subsequent history omitted). For the reasons set forth below, we find that the matters"',l(l(,,=&"  xcomplained of by COBE, considered in conjunction with your response, indicate that you did not engage  xxin an unauthorized transfer of control, but did apparently violate the pertinent Commission rule concerning  xgthe maintenance of the station's public inspection file and falsely certified the file's completeness to the Commission.  S8' "Abdication of Station Control. Section 310(d) of the Act prohibits the transfer of control of a  S' xstation license, and any rights thereunder, without prior Commission consent. See Sections 73.3540 and  S' x73.3541 of the Commission's Rules. There is no exact formula by which control of a broadcast station  xcan be determined. We traditionally look beyond the legal title to whether a new entity or individual has  xkobtained the right to determine the basic operating policies of the station in ascertaining whether a transfer  Sr' x/of control has occurred. See WHDH, Inc., 17 FCC 2d 856 (1969) aff'd sub nom. Greater Boston  SJ ' xxTelevision Corp. v. FCC, 444 F.2d 841 (D.C. Cir. 1970) cert. denied, 403 U. S. 923 (1971). Specifically,  S" ' xZwe look to three essential areas of station operation: programming, personnel and finances. See, e.g.,  S 'Stereo Broadcasters, Inc., 87 FCC 2d 87 (1981), recon. denied, 50 RR 2d 1346 (1982).  "In its objection, COBE alleges that the assistance provided to you by the media brokerage firm  xMiller & Associates ("Miller"), in connection with a time brokerage agreement and assignment of license  xapplication executed between you and KIEZ Radio Corporation in June 1995, resulted in your abdication  S2' xof station control ever since that time to Miller. COBE claims, in this regard, that Miller's "paying [your]  xxfiling fees, handling [your] FCC applications, and arranging a series of local marketing agreements to keep  x[KIEZ(AM)] on the air" indicate that you "simply turned the property over to Miller to dispose of . . . ,"  xand that you therefore no longer control the station. COBE further contends that because Miller and  x@Bonilla have, in the past, been "charged with" conspiring to avoid the Commission's rules pertaining to  xthe ownership of translator stations, they likely also engaged in the foregoing alleged improper conduct  SB' xregarding the control of Station KIEZ(AM).' B/ yO' xD #C\  P6QP#э#C\  P6QP# Miller had filed an application to construct a new FM translator at Sacramento, California, to rebroadcast the  yOr' x3 programming of Station KIQS(FM), Willows, California, a station then owned by Bonilla. See File No. BPFT xD 940415TB. The Commission dismissed that application, and dismissed the associated petitions to deny as moot, without addressing the allegations.' You deny the charges, citing the affidavit given by Miller's  xprincipal, Brett E. Miller, in support, and argue that all of the foregoing actions described undertaken by Miller were in full compliance with the pertinent Commission rules and policies.  "A licensee's participation in a time brokerage or local marketing agreement, does not constitute  SR' x@per se evidence that an unauthorized transfer of station control, or violation of the Act or Commission  S*' xrules, has occurred. See, e.g., WGPR, Inc., 10 FCC Rcd 8141 (1995); Roy F. Russo, Esq., 5 FCC Rcd  S' x*7586 (MMB 1990); Joseph A. Belisle, Esq., 5 FCC Rcd 7585 (MMB 1990). Instead, as noted above, we  S' xlook to whether the licensee continues to have ultimate control over the station regarding its programming,  xxpersonnel and finances. In this case, Miller acknowledges that it advanced regulatory fees on the station's  xbehalf, assisted in the filing of the station's applications before the Commission, and secured for the  xDstation new time brokers when the need arose. However, Miller explains that its role was only that of the  xstation's agent, and that it did not exceed the bounds of that permissible relationship when acting on the  xstation's behalf. We agree that these actions do not constitute evidence demonstrating that Miller exercises  xcontrol over the station's programming, personnel or finances. Finally, we believe that the inferences  xVCOBE has drawn from matters alleged in the Sacramento, California, FM translator proceeding are  xspeculative, baseless, and have no bearing on this case. Consequently, we find that COBE has failed to"",l(l(,,]!"  x_raise a substantial and material question of fact that you improperly abdicated control of Station  xyKIEZ(AM) to mediabroker Miller, or that you violated the Act and applicable Commission rules regarding station control.  S'   S8' "#KIEZ(AM) public inspection file/false certification. COBE alleges that you violated the  x^Commission's public inspection file rule, Section 73.3526 of the Commission's Rules, by failing to include  xmaterials required in the station's public file, and that you falsely certified compliance with the rule in  xyour current license renewal application. In response, you explain that, although you represented in the  xJuly 30, 1997, license renewal certification that the file was complete, a review of the station's public file  xwas not actually performed until the termination of the station's time brokerage agreement with KIEZ  xRadio LLC on September 30, 1997. At that time, you discovered that the public file was missing. While  xEyou acknowledge that the July 30, 1997, license renewal certification was not based on a then xcontemporaneous review of the public file for completeness, and was admittedly incorrect when made,  xtyou contend that it was made in good faith, and without any intent to deceive the Commission. In this  xregard, you explain that at the time the renewal certification was made, you mistakenly assumed that  xpersonnel traditionally assigned to this task had kept the public file updated throughout the license term,  x<upon receiving relevant materials from your corporate headquarters. You discovered, however, in  xconnection with your overall review of the Bonilla stations' public files, that many elements of those public files were deficient for a period of several years.  "You contend that the lapses at Station KIEZ(AM), were due, in part, to the departure, "in late  x1994," of Mateo Camarillo, the former corporate officer who monitored this task, and also because the  x&station's subsequent managers were unaware of the necessity to include and update other information  xrequired to be contained in the file. You claim that, to correct this problem, Station KIEZ(AM)'s public  S'file was reconstructed "to the extent possible" at an indeterminate time prior to May 9, 1998.X/ yO' x ԍ#C\  P6QP# You do not indicate precisely the date Station KIEZ(AM)'s public file was reconstructed and brought into rule  yOJ' x compliance. See Exhibit B to Opposition to Informal Objection to Assignment of License of Station KIEZ(AM), containing Declaration of Jaime Bonilla Valdez, dated May 9, 1998.  S'  S' "_#XP\  P6Q9XP#  '"X X4 ` `   F#&I7  PT6Q &P#ederal Communications CommissionX  xxDA 991204  T4______________________________________________________________________________ _____'#&J\  P6Q&P#Section 73.3526(a) of the Commission's Rules requires broadcast licensees to maintain a public  xkfile containing specific types of information related to station operations. The purpose of this requirement  xis to provide the public with timely information at regular intervals throughout the license period, so that  xconcerned individuals or groups may participate effectively in Commission procedures concerning a  S*' xbroadcast licensee, including the evaluation of its performance.x*/ yO' xt #C\  P6QP#э Among the required items that are critical for informed public participation in the station's license renewal  xt procedures, the file should include: the station's annual ownership reports (47 C.F.R. Sec. 73.3526(a)(3)); such  x records as are required to be kept concerning broadcasts by candidates for public office (47 C.F.R. Sec.  x 73.3526(a)(4)); a copy of every annual employment report filed by the licensee (47 C.F.R. Sec. 73.3526(a)(5)); letters  x received from the public regarding operation of the station (47 C.F.R. Sec. 73.3526(a)(7)); and a quarterly list of  x/ programs that have provided the station's most significant treatment of community issues (47 C.F.R. Sec. 73.3526(a)(9)). We note that these citations are to the rule in effect at the pertinent time.  See, e.g., Liability of KLDTTV 55, Inc.,  S' x8 FCC Rcd 6316 (1993), forfeiture reduced, 10 FCC Rcd 3198 (1995). The public file generally must  xDbe maintained within the station's community of license even if the station's main studio is located outside  S' xMof that community. See 47 C.F.R. Section 73.3526(d). The file must be available to the public at any"( ,l(l(,,"  S' xgtime during regular business hours. Id.; Public Notice, "Availability of Locally Maintained Records for  S' xInspection by Members of the Public," DA 981895 (September 28, 1998), citing WBRN, Inc., 32 FCC  S' x"2d 729 (1971); Morton L. Berfield, Esq., 71 RR 2d 142 (FOB 1992) (the file must be immediately  S' xavailable for inspection by members of the public, not through appointments or at times most convenient to the licensee).  "In this case, the fact that you relied on employees or agents to maintain and to ensure the  xkcontinuing presence and completeness of the public file, is not an exculpating or mitigating factor. Where  xrule lapses occur, neither the negligent acts or omissions of station employees or agents, nor the  S' xsubsequent remedial actions undertaken by the licensee, excuse or nullify a licensee's rule violation. See  Sr' xGaffney Broadcasting, Inc., 23 FCC 2d 912, 913 (1970), citing Eleven Ten Broadcasting Corp., 33 FCC  SJ ' x706 (1962); Morton L. Berfield, Esq., supra; Surrey Front Range Limited Partnership, 71 RR 2d 882  x/(FOB 1992). Moreover, the evidence available indicates that you failed to keep the station's public  xinspection file complete and current as required by the rules. It appears, therefore, that you violated Section 73.3526 of the Commission's Rules.   "It also appears that you falsely certified the public file's completion to the Commission in your  x<current license renewal application. Full and clear disclosure of all material facts is essential to the  xefficent administration of the Commission's license renewal process. Proper analysis of a licensee's  xrenewal application is critically dependent upon the accuracy and completeness of information and data  x*which only the licensee can provide. Section 73.1015 of the Commission's Rules, states in pertinent part  xthat "[n]o application . . . shall . . . in any application, pleading, or report or any other written statement  x&submitted to the Commission, make any misrepresentation or willful material omission bearing on any  xQmatter within the jurisdiction of the Commission." A "willful material omission" need not be accompanied  S' xby an intent to deceive.i yO' x ԍ The public file certification made in your current license renewal application, while deficient, does not appear  x to have been made with the intent to mislead the Commission, nor is it reflective of a "degree of carelessness so  yO' x 'wanton, gross and callous' as to be the equivalent of an affirmative and deliberate intent to deceive." Philadelphia  yO' xQ License Renewals, 8 FCC Rcd 6400, 6405 (MMB 1993); Arkansas Educational Television Commission, 6 FCC Rcd  x 478 (1991) (where, as here, management personnel changes contributed to deficiency of public file, and this  x circumstance supported a finding that the license renewal certification, while incorrect, was not filed with intent to  x deceive Commission). Consequently, the allegations contained in the objection do not raise matters concerning your  x* basic qualifications to be or remain a Commission licensee, or warrant a sanction so severe as nonrenewal of the  yO' x station's license. See, e.g., Philadelphia License Renewals, supra, citing Catoctin Broadcasting Corp. of New York,  yO'2 FCC Rcd 2126, 2137 (Rev. Bd. 1987), aff'd, 4 FCC Rcd 2553, recon. denied, 4 FCC Rcd 6312 (1989).  It is sufficient that the omission be conscious and deliberate, regardless of intent.  S' xAbacus Broadcasting Corp., 8 FCC Rcd 5110, 5115 (Rev. Bd. 1993). It appears, therefore, that you  xpwillfully omitted information concerning the completeness of the station's public file in your license  S'renewal application. ( i yOj#' x@ ԍ FCC Form 303S, Section III, Question 2 asks: "has the applicant placed in its public inspection file at the  x* appropriate times the documentation required by 47 C.F.R. Sec. 73.3526 and 73.3527? If 'no', attach as an Exhibit  xk a complete statement of explanation." In this case, you answered the question affirmatively and thus omitted the required explanation.  SR'"R,Y(Y(..z"Ԍ S' ""Sanction. For the reasons set forth above, we find that a monetary forfeiture is warranted for the  xapparent violations of Sections 73.3526 and 73.1015 of the Commission's Rules. It appears that, from  x3the information supplied, the public inspection file rule violation at Station KIEZ(AM) first occurred in  xlate 1994, and continued until approximately May 9, 1998. Accordingly, pursuant to Section 503(b) of  xthe Act, you, Central Coast Communications, Inc., licensee of the abovecaptioned radio station, are  x3hereby advised of your apparent liability for a forfeiture of Fifteen Thousand Dollars ($15,000.00) for  x3your apparent willful, repeated violation of Section 73.3526 and Section 73.1015 of the Commission's Rules.  "In assessing this monetary forfeiture, we have taken into account the nature, circumstances, extent  x"and gravity of the violation, as well as the degree of culpability and the station's prior enforcement  SJ ' x7history. Section 503(b)(2)(D) of the Act, 47 U.S.C. Sec. 503(b)(2)(D). We further note that the Report  S" ' xMand Order "In the Matter of the Commission's Forfeiture Policy Statement and Amendment of Section  x_1.80 of the Rules to Incorporate the Forfeiture Guidelines," 12 FCC Rcd 17087 (July 28, 1997)  S ' xg("Forfeiture Policy Statement"), provides for a forfeiture of $10,000 as the base amount for a violation  x of the public inspection file rule. In the instant case, you violated the rule by either failing to maintain  xa public inspection file, or by maintaining it in a deficient manner, for a substantial period of time.  xAlthough our records indicate that the station has maintained an unblemished past enforcement record, we  S2' x*believe that these factors nevertheless warrant the imposition of a monetary forfeiture. See, e.g., KLDT S ' xTV 55, Inc., supra, 10 FCC Rcd at 3200 (1995), citing Southern Arkansas Radio Co., 6 FCC Rcd 5130  S' x&(MMB 1991) (monetary forfeiture appropriate where, as here, serious public file deficiencies occur).T i yOJ' x #C\  P6QP#э#C\  P6QP# As noted above, the station in question apparently first violated the public inspection file rule in late 1994.  x We further note that the Tel. Authorization Act of 1992, Pub. L. 102538, 160 Stat. 3533 (1992) allows the  x Commission to impose forfeitures for periods of time reaching back to the commencement of the licensee's current term. In this case, the license for Station KIEZ(AM) was last renewed on November 28, 1990.T  xlTherefore, we believe that imposition of the base forfeiture amount for this apparent violation is warranted.  SB' "We note that the Forfeiture Policy Statement, supra, does not enumerate a base forfeiture amount  xfor a "willful material omission." Further, there are no cases which are closely analogous to the situation  xphere. Under these circumstances, the forefeiture must be assessed taking into account the relevant  xstatutory factors under Section 503(b)(2) of the Act, as noted above. Based on our assessment of these  xkfactors, we conclude that your apparent violation of Section 73.1015 of the Commission's Rules warrants  Sz'a separate monetary forfeiture in the amount of $5,000. pp  "In regard to this forfeiture proceeding, you are afforded a period of thirty (30) days from the date  xof this letter "to show, in writing, why a forfeiture penalty should not be imposed or should be reduced,  S' xcor to pay the forfeiture. Any showing as to why the forfeiture should not be imposed or should be reduced should include a detailed factual statement and such documentation and affidavits as may be "",Y(Y(..]!"Ԍ xpertinent." 47 C.F.R. Section 1.80(f)(3). Other relevant provisions of Section 1.80 are summarized in the attachment to this letter. ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhCRoy J. Stewart ` `  hhCChief, Mass Media Bureau  S 'cc:H. Russell, III G. LaVerne Brooks Howard A. Topel, Esq. Theodore D. Kramer, Esq.  SX'