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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of )
File No. EB-07-IH-9590
Fox Television Holdings, Inc. )
NAL Acct. No. 200932080014
Licensee of Various Satellite Earth )
Station Licenses FRN No. 0007322548
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: December 2, 2008 Released: December 2, 2008
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Fox Television Holdings, Inc. ("FTH"), licensee of various
satellite earth station licenses, apparently, willfully and
repeatedly, violated section 310(d) of the Communications Act of 1934,
as amended (the "Act"), and section 25.119 of the rules of the Federal
Communications Commission (the "Commission" or "FCC") by failing to
timely apply for and obtain Commission consent to the transfer of
control of certain satellite earth station licenses used in connection
with operations of FTH television stations. Based on our review of the
facts and circumstances surrounding this matter, we find that FTH is
apparently liable for a forfeiture in the amount of $17,500.
II. BACKGROUND
2. Section 310(d) of the Act provides that a satellite earth station
license must not be "transferred, assigned, or disposed of in any
manner, voluntarily or involuntarily, directly or indirectly, or by
transfer of control of any corporation holding [the] license," unless
the license holder applies for Commission authority to transfer the
license, and the Commission finds that the transfer is in "public
interest, convenience, and necessity." Under section 25.119 of the
Commission's rules, the transfer of control of a satellite earth
station license must be approved by the Commission in advance.
Transfer of control is defined as a change in the party controlling
the licensee or the controlling ownership interest of the licensee.
3. On October 6, 2006, the Commission granted unopposed applications for
authority to transfer control of Fox Television Stations, Inc.
("FTS"), licensee of 37 television broadcast stations, from K. Rupert
Murdoch to Fox Entertainment Group, Inc. ("FEG"). According to the
applicants, FTS was a wholly-owned subsidiary of FTH. Mr. Murdoch
owned 100 percent of FTH's issued and outstanding Preferred Stock
(7600 shares) and FEG owned 100 percent of FTH's issued and
outstanding Common Stock (2400 shares). The applicants proposed to
recapitalize the stock of FTH to reduce Mr. Murdoch's voting interest
from 76 percent to 14.8 percent, and increase FEG's voting interest
from 24 percent to 85.2 percent. The transaction was consummated on
December 29, 2006. FTH subsequently realized that it had not applied
for the Commission's approval to transfer control of 35 satellite
earth station licenses used to support the operations of the broadcast
television stations. FTH therefore belatedly filed applications for
Commission approval nunc pro tunc to transfer the 35 satellite earth
station licenses from FTH to Fox Television Holdings, Inc. (As
Recapitalized), which the Commission placed on public notice on August
29, 2007. The applications were unopposed, and the Commission granted
authorization for the transfer of the satellite earth station licenses
on December 14, 2007, "without prejudice to any enforcement action in
connection with any prior unauthorized transfer of control of the
station[s]."
4. On July 17, 2008, the Enforcement Bureau issued a letter of inquiry
("LOI") to FTH directing FTH to provide information and documents
regarding whether FTH transferred satellite earth station licenses
without the Commission's approval. FTH responded to the LOI on August
6, 2008. FTH admits that it failed to timely apply for Commission
approval to transfer the satellite earth station licenses. FTH argues,
however, that the Commission should not assess a forfeiture because
the transfer did not result in any changes in FTH's day-to-day
operations; and the Commission approved the recapitalization of FTH
when it approved the transfer of FTH's broadcast licenses on October
6, 2006. FTH further states it voluntarily disclosed its failure to
the Commission, and submitted applications for transfer of control
nunc pro tunc for the satellite earth station licenses. FTH argues
that the maximum sanction for its apparent violation should be an
admonishment. Alternatively, FTH argues that the Commission's base
forfeiture should be reduced given FTH's voluntary disclosure; and
that the transfers of the 35 satellite earth station licenses were
related to a single transaction.
I. DISCUSSION
5. Under section 503(b)(1) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation, or order issued by
the Commission shall be liable to the United States for a forfeiture
penalty. Section 312(f)(1) of the Act defines willful as "the
conscious and deliberate commission or omission of [any] act,
irrespective of any intent to violate" the law. The legislative
history to section 312(f)(1) of the Act clarifies that this definition
of willful applies to both sections 312 and 503(b) of the Act and the
Commission has so interpreted the term in the section 503(b) context.
The Commission may also assess a forfeiture for violations that are
merely repeated, and not willful. "Repeated" means that the act was
committed or omitted more than once, or lasts more than one day. To
impose such a forfeiture penalty, the Commission must issue a notice
of apparent liability and the person against whom the notice has been
issued must have an opportunity to show, in writing, why no such
forfeiture penalty should be imposed. The Commission will then issue a
forfeiture if it finds by a preponderance of the evidence that the
person has violated the Act or a Commission rule. As set forth below,
we conclude under this standard that FTH is apparently liable for a
forfeiture for its apparent, willful and repeated violations of
section 310(d) of the Act and section 25.119 of the Commission's
rules.
6. The fundamental issue in this case is whether FTH violated section
310(d) of the Act and Section 25.119 of the Commission rules by
transferring 35 satellite earth station licenses without required
Commission approval. We answer this question affirmatively. Based on a
preponderance of the evidence, and under Section 1.80 of the
Commission's rules, we therefore conclude that FTH is apparently
liable for a forfeiture of $17,500.
7. FTH admits that it failed to apply for Commission approval to transfer
control of the satellite earth station licenses. In connection with
the stock recapitalization, FTH applied for Commission approval to
transfer FTH television broadcast licenses. Notwithstanding FTH's
arguments, the Commission did not also approve the transfer of the
satellite earth station licenses, given that the transfer of the earth
station licenses were also involved in the stock recapitalization of
FTH. The Commission's approval was limited to the specific licenses
identified in FTH's applications. Moreover, even though FTH
voluntarily brought this matter to the Commission's attention, and
filed applications for Commission approval nunc pro tunc, an
unauthorized transfer of control constitutes a serious breach of a
licensee's responsibility, and it took approximately eight months for
FTH to file the applications after the unauthorized transfer occurred.
8. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
forfeiture for each violation or each day of a continuing violation,
up to a statutory maximum for a single act or failure to act. In
determining the appropriate forfeiture amount, we consider the factors
enumerated in section 503(b)(2)(E) of the Act, including "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 such other matters as justice may
require." Section 1.80(a) of the Rules provide that any person who
willfully or repeatedly fails to comply with the provisions of the Act
or the Rules shall be liable for a forfeiture penalty. Based on the
record before us, it appears that FTH's violations of Section 310(d)
of the Act and Section 25.119 of the Rules were willful and repeated.
9. The Commission's Forfeiture Policy Statement and implementing rules
prescribe a base forfeiture of $1,000 for an unauthorized pro forma
transfer of control of a Commission license. Thus, based on the number
of licenses involved, FTH could be subject to a forfeiture in the
amount of $35,000. We acknowledge, however, that the transfer of the
35 satellite earth station licenses resulted from a single
transaction, and FTH voluntarily disclosed its oversight to the
Commission. In analogous situations, the Commission has found that
multiplying the base forfeiture amount by the number of licenses at
issue would result in an excessive forfeiture, and that the number of
licenses involved should be considered an aggravating factor.
Considering the unauthorized license transfers occurred as a result of
a single transaction, FTH's voluntary disclosure, the number of the
licenses at issue, the period of operation (approximately eight
months) prior to filing corrective applications, and our precedent, we
find that a reduction in the total forfeiture amount from $35,000 to
$17,500 is appropriate. In sum, applying the factors set forth in
section 503(b)(2)(E) of the Act and section 1.80 of the Commission's
rules, we conclude that FTH is apparently liable for a total
forfeiture of $17,500.
IV. ORDERING CLAUSES
10. Accordingly, IT IS ORDERED THAT, pursuant to Section 310(d) of the
Communications Act of 1934, and Section 1.80 of the Commission's
rules, that Fox Television Holdings, Inc. is hereby NOTIFIED of its
APPARENT LIABILITY FOR A FORFEITURE in the amount of $17,500 for
willfully or repeatedly violating section 310(d) of the Act and
section 25.119 of the Commission's rules.
11. IT IS FURTHER ORDERED THAT, pursuant to Section 1.80 of the
Commission's rules, within thirty days of the release date of this
NOTICE OF APPARENT LIABILITY FOR FORFEITURE, Fox Television Holdings,
Inc. SHALL PAY the full amount of the proposed forfeiture or SHALL
FILE a written statement seeking reduction or cancellation of the
proposed forfeiture.
12. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the NAL/Account Number and FRN Number referenced
above. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Fox Television Holdings, Inc.
will also send electronic notification within forty-eight (48) hours
of the date said payment is made to david.janas@fcc.gov.
13. The response, if any, to this NOTICE OF APPARENT LIABILITY FOR
FORFEITURE must be mailed to Hillary S. DeNigro, Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Suite 4-C330, Washington, D.C.
20554 and must include the NAL/Acct. No. referenced above. E-mail
address: hillary.denigro@fcc.gov.
14. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices; or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.
15. Requests for payment of the full amount of this Notice of Apparent
Liability for Forfeiture under an installment plan should be sent to:
Chief Financial Officer - Financial Operations, Federal Communications
Commission, 445 12th Street, S.W., Room 1-A625, Washington, D.C.
20554. For answers to questions, please contact the Financial
Operations Group Help Desk at 1-877-480-3201 or Email:
ARINQUIRIES@fcc.gov.
16. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT LIABILITY
FOR FORFEITURE shall be sent by first class mail and certified mail
return receipt requested to Jared Sher, Skadden, Arps, Slate, Meagher
& Flom LLP, Counsel for Fox Television Holdings, Inc., 1400 New York
Avenue, NW, Washington DC 20005-2111.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief
Enforcement Bureau
47 U.S.C S: 310(d); 47 C.F.R. S: 25.119.
See 47 U.S.C S: 310(d).
See 47 C.F.R. S: 25.119; Matter of SkyPort Global Communications, Inc.,
Notice of Apparent Liability for Forfeiture, DA 08-2457, P: 4
(Investigations & Hearings Division, Enforcement Bureau rel. Nov. 5,
2008).
47 C.F.R. S: 25.119(b).
See Matter of K. Rupert Murdoch (Transferor) and Fox Entertainment Group
(Transferee), Memorandum Opinion and Order, 21 FCC Rcd 11499 (2006).
Id. at 11499, P: 2.
Id. at 11500, P: 3.
See Letter from Jared S. Sher, Counsel, Skadden, Arps, Slate, Meagher &
Flom LLP, to David Janas, Special Counsel, Investigations & Hearings
Division, Enforcement Bureau, Federal Communications Commission (Aug. 6,
2008) ("LOI Response") at 2.
See id. at 4.
See Public Notice, Report No. SES-00958 (rel. Aug. 29, 2007) (File Nos.
SES-T/C-20070806-01063, SES-T/C-20070807-01050, SES-T/C-20070807-01051,
SES-T/C-20070807-01052, SES-T/C-20070807-01053, SES-T/C-20070807-01054,
and SES-T/C-20070807-01055). The call signs for the 35 satellite earth
station licenses include E000014, E000065, E000168, E000201, E000210,
E000642, E010173, E030109, E030331, E040467, E050115, E050228, E050238,
E050246, E050325, E050398, E060142, E060186, E060338, E060374, E860360,
E874292, E880593, E890118, E900067, E900976, E910471, E960522, E970182,
E970411, E970411, E970359, E980339, E980353, and E980499.
See, e.g., WAGA License, Inc., Radio Station Authorization, File No.
SES-T/C-20070807-01050, Consent to Transfer Control (Dec. 14, 2007).
See Letter from Trent Harkrader, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission to Dianne
Smith, Vice President, Fox Televisions Holdings, Inc. (As Recapitalized)
(July 17, 2008) ("LOI").
See supra note 8.
See id. at 4. ("FTH acknowledges and regrets that ... it inadvertently
failed to include in its request for consent to the Transaction the earth
station licenses held by subsidiaries of FTH").
See id.
See id.
See id. at 4-5.
Id. at 5.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1); see also 47 U.S.C. S:
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S: 1464).
47 U.S.C. S: 312(f)(1).
H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Application for Review of Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388, P: 5 (1991) ("Southern
California Broadcasting Co.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P: 10
(2001) ("Callais Cablevision") (issuing a Notice of Apparent Liability
for, inter alia, a cable television operator's repeated signal leakage).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, P: 5; Callais
Cablevision, 16 FCC Rcd at 1362, P: 9.
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591, P: 4 (2002) (forfeiture paid).
47 U.S.C. S: 310(d); 47 C.F.R. S: 25.119.
47 C.F.R. S: 1.80.
LOI Response at 4.
See id.
47 U.S.C. S: 503(b)(2)(B); see also 47 C.F.R. S: 1.80(b)(2). An
unauthorized transfer of control is a continuing violation that does not
end until the Commission grants a transfer of control application or other
authorization. See Matter of Notice of Apparent Liability for Forfeiture
of Enserch Corporation, Forfeiture Order, 15 FCC Rcd 13551, 13554, P: 10
(2000).
47 U.S.C. S: 503(b)(2)(E).
See supra paragraph 5 (discussing the meanings of the elements, "willful"
and "repeated").
47 U.S.C. S: 310(d); 47 C.F.R. S: 25.119.
See 47 C.F.R. S: 1.80; Matter of the Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17113 (1997)
("Forfeiture Policy Statement"). See also LOI Response at 1-4 (stating why
the recapitalization of FTH did not constitute a substantial transfer of
control).
See, e.g., Matter of Spectracom, LLC, Notice of Apparent Liability for
Forfeiture, 21 FCC Rcd 13412, 13414, P: 6 (Investigations & Hearings
Division, Enforcement Bureau 2006) ("Considering the circumstances of this
case, the nature of the licenses at issue, the relatively brief period of
operation (approximately five (5) months) prior to filing the Application,
the relatively few authorizations at issue, and our precedent, we find
that a reduction in the total forfeiture amount [from $24,000 to $12,000]
is appropriate). In Matter of Roadrunner Transportation, Inc., Forfeiture
Order, 15 FCC Rcd 9669, 9672, P:P: 10-12 (2000), the Commission considered
the licensee's voluntary disclosure, the duration of the period of
unauthorized operation prior to filing corrective applications, and the
number of licenses involved to be important factors in reducing a total
proposed forfeiture from $72,000 to $40,000 for the unauthorized
substantial transfer of control of 18 licenses.
47 U.S.C. S: 503(b)(2)(E); 47 C.F.R. S: 1.80.
47 U.S.C. S: 310(d).
47 C.F.R. S: 1.80.
47 U.S.C. S: 310(d); 47 C.F.R. S: 25.119.
47 C.F.R. S: 1.80.
47 C.F.R. S: 1.1914.
Federal Communications Commission DA 08-2625
2
Federal Communications Commission DA 08-2625