10 FCC Rcd No. 8 Federal Communications Commission Record FCC 95-110

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

Liability of Jones Eastern

of the Outer Banks, Inc.

Licensee of Station WRSF(FM)

Columbia. North CaroLina

For a Forfeiture

MEMORANDUM OPINION AND ORDER

Adopted: March 10, 1995; Released: April 3, 1995

By the Commission: Commissioner Quello dissenting and issuing a statement.

1. The Commission has under consideration (1) a

$20,000 Notice of Apparent Liability (NAL) issued November 9. 1992. 7 FCC Rcd 7309 (1992). to Jones Eastern of the Outer Banks. Inc. (Jones Eastern), licensee of Radio Station WRSF(FM). Columbia. North Carolina. and (2) the response. received on December 7, 1992. of C.J. Jones, President of Jones Eastern.

2. The forfeiture was assessed for Jones Eastern’s apparent willful and repeated violations of Section 73.1125 of the Commission’s Rules by failing to maintain a "meaningful management and staff presence" at the station’s main studio. The facts are set forth in full detail in the NAL and will not be repeated here.

3. In response to the NAL. Jones Eastern first asserts that the Commission erroneously concluded that Jones Eastern has failed to make any changes in its main studio staffing arrangement. including implementation of its new staffing proposal set forth in its July 1991 Petition for Reconsideration and Clarification. According to Jones Eastern. this proposal was implemented in June 1991 even before the Petition for Reconsideration and Clarification was submitted. In October 1992. the Commission approved Jones Eastern’s new staffing proposal. but later issued the NAL in November 1992. under the assumption, Jones Eastern claims, that Jones Eastern had not yet implemented the proposal. Jones Eastern maintains that its counsel who drafted the Petition for Reconsideration and Clarification failed to understand and convey that the proposal had already been implemented in June 1991, and erroneously gave the impression that the staffing proposal was merely a proposal rather than an accomplished fact. However, this assertion does not change the fact that from at least October 1989. when the Commission first notified Jones Eastern of its non-compliance with the main studib staffing requirements, until June 1991, when Jones Eastern purportedly implemented satisfactory staffing, Jones Eastern was in violation of the Commission’s Rules. In any event, we have considered this earlier cessation of noncompliance in our redetermination of the forfeiture amount discussed below.

4. Jones Eastern also contends that it is being unfairly punished for violating a Commission rule during a period when the rule had "no concrete meaning whatsoever." We disagree with this assertion. In 1988 the Commission clearly stated that a broadcast licensee must maintain a "meaningful management and staff presence" at its main studio during normal business hours. Main Studio and Program Origination Rules (Clarification), 3 FCC Rcd 5024, 5026 (1988). The fact that the Commission subsequently elabo rated on what constitutes a "meaningful management and staff presence" does not render the prior standard meaningless. Indeed, the fact that Jones Eastern apparently corrected its deficient staffing in June 1991, before the Commission’s subsequent clarification in 1992, indicates that Jones Eastern had sufficient guidance to comply with the main studio staffing requirement between October 1989 and June 1991. Furthermore, it should be noted that the NAL did not include any violation that may have occurred prior to October 27, 1989, when the Mass Media Bureau notified Jones Eastern that WRSF was not in compliance with the main studio staffing requirements. On October 27. 1989, the date we consider to be the beginning of noncompliance, we explained to Jones Eastern the staffing requirements and the manner in which WRSF fell short. Accordingly, we reject this argument.

5. Jones Eastern further contends that the Commission erroneously increased the forfeiture on the grounds that Jones Eastern’s violation was "repeated and intentional," and that Jones Eastern reaped "substantial economic gain... through the evasion of costs required to comply with the rule." Jones Eastern contends that any "violation" between October 1989 and June 1991 was not repeated and intentional. but rather the result of delay in the Commission’s disposition of Jones Eastern’s Application for Review. Jones Eastern also asserts that there is no evidence that it "evaded" complying with the main studio staffing requirement for the purpose of reaping economic gain. We reject these arguments. Instead of responding to the Mass Media Bureau’s October 1989 notice that the Jones Eastern’s main studio staffing was inadequate and making a good faith effort to correct this deficiency. Jones Eastern chose to file an Application for Review, a process that can be lengthy and does not stay the effectiveness of the Mass Media Bureau’s clear ruling that WRSF’s operation violated the rule. The Commission is not sanctioning Jones Eastern for exercising its procedural options. During the pendency of this Application. Jones Eastern made no attempt to comply with the Commission’s rulings and must bear the responsibility for this choice. Furthermore, with respect to its argument that there is no proof that Jones Eastern reaped economic benefit from its noncompliance. Jones Eastern concedes that by filing the Application for Review it was seeking a ruling that would be less expensive for it to implement. Therefore, it is reasonable for the Commission to conclude that Jones Eastern did in fact reap an economic benefit by intentionally failing to comply with the main studio staffing requirement between October 1989 and June 1991.

6. We will, however, reconsider the forfeiture amount because, in calculating the apparent monetary Liability of S20.000. the NAL relied, in part, upon the standards of our Policy Statement, Standards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991), recon. denied, 7 FCC Rcd 5339, revised, 8 FCC Rcd 6215 (1993) ("Policy Statement"). These forfeiture standards have since been set aside by the United States Court of Appeals. See United States Telephone Ass’n.

v. FCC, 28 F.3d 1232 (D.C. Cir. 1994). Accordingly, we will directly apply to the specific circumstances of this case the statutory factors in Section 503(b)(2)(D) of the Cornmunications Act, including the nature, circumstances, extent, and gravity of the violations. Our past decisions that predated the Policy Statement, and intervening legislative changes,’ will also be relevant to this reconsideration.

7. To determine the appropriate monetary forfeiture for WRSF's main studio violation, we have reviewed the precedent and compared the seriousness of WRSF’s main studio deviations with those in other main studio, cases decided prior to the adoption of the Policy Statement, but also prior to the substantial increase in our forfeiture authority in 1989. These cases generally resulted in forfeiture amounts ranging from $5,000 to $10,000. In Texas Key Broadcasters, Inc., 30 FCC 2d 146 (1971), the licensee was assessed a forfeiture of $5,000 for the relocation of its main studio without authority, a condition that lasted approximately two years. In Broadcasting Service of America, 38 RR 2d 552 (1976), the licensee was assessed a forfeiture of $5,000 for the unauthorized relocation of its main studio for a period of four weeks.² We also look to International Panorama TV, Inc., 52 FCC 2d 258 (1975), assessing a forfeiture of $5,000. which involved the licensee’s unauthorized relocation of its main studio for a period lasting approximately five weeks. In a more recent case. The Dalton Group, Inc., 6 FCC Rcd 646 (1991), the NAL and Forfeiture Order (issued prior to the 1989 increase in our forfeiture authority) imposed a forfeiture of $10,000 for main studio, public inspection file, and program origination rule violations, conditions which lasted more than a year before being corrected by the grant of a modification application.

8. In the case before us now, the evidence indicates that the licensee was operating in violation of the main studio rule for more than one and a half years after being specifically advised by the Mass Media Bureau that its operation violated the rule, and also after having had its application for permission to relocate its main studio to the Nags Head location denied by the Commission. Additionally, as noted. the main studio violation forfeiture cases cited above were all decided before our forfeiture authority was significantly increased, Accordingly, we believe that a $12,000 forfeiture for WRSF’s main studio violation is warranted.

9. Accordingly, pursuant to Section 503(b) of the Communications Act as amended. IT IS ORDERED that Jones Eastern of the Outer Banks. Inc., licensee of Radio Station WRSF(FM), Columbia. North Carolina. FORFEIT to the United States the sum of Twelve Thousand Dollars ($12,000) for the willful and repeated violation of 47 C.F.R. Section 73.1125. Payment of the forfeiture may be made by mailing to the Commission, at the address indicated in the attachment to this Memorandum Opinion and Order, a check or similar instrument payable to the Federal Communications Commission. In regard to the forfeiture proceeding, the licensee may take any of the

actions set forth in Section 1.80 of the Commission’s Rules, as summarized in the attachment to this Memorandum Opinion and Order.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton

Acting Secretary

In 1989, Congress amended Section 503(b) of the Communications Act. Pub. L. No. 239, 10 1st Cong., 1st Sess.. 103 Stat, 2131 (1989). Among other things, the amendment increased the dollar amounts of this agency’s forfeiture authority, to better serve as a meaningful sanction and deterrent to others. See Budget Reconciliation Act, I-louse Conf. Rep. No. 386 at 435.

reprinted in 1989 U.S. Code Cong. & Ad. News at 3038. 2 In that case, the licensee was also found to have violated Section 74.631(a) by improperly utilizing a television remote pickup station, but the Commission stated that "in determining the amount of the forfeiture, it was primarily influenced by the unauthorized relocation" of the main studio. Id. at 553.

Dissenting Statement of

Coinaioner James H. Quello

Liability of Jones Eastern of the Outer Banks, Inc.

Licensee of Station WRSF(FM), Columbia, North Carolina

For a Forfeiture

In my more than 20 years as an FCC Commissioner, I have always endeavored to bring to the job a sense of pragmatism born of my 30 years as a businessman, as well as a sense of fairness resulting from my 80 years as a citizen of these United States. Both of these instincts are offended by the forfeiture imposed in this case. I do not disagree with the finding that, in a technical legal sense, there was a violation of the main studio staffing requirement in this case. However, I do disagree with the imposition of a $12,000 forfeiture in light of the circumstances that led to the issuance of a Notice of Apparent Liability. In particular, I fail to see how a stiff fine is justified where the very rule that the licensee is charged with violating was twice clarified at various stages of this case. The old adage, "a moving target is harder to hit," should not apply to government regulation. Unluckily, Jones Eastern has learned the hard way that the vagaries of imprecision apply to many things in life, including in this case t:he main studio rule, For these reasons, I am compelled to respectfully dissent once again in this case. See Notice of Apparent Liability to Jones Eastern of the Outer Banks, Inc., Licensee, WRSF(FM), 7 FCC Rcd 7309 (1992) (Commissioner Quello dissenting)

The evolution of the current main studio staffing requirement and the evolution of this case are, not coincidentally, closely intertwined. The main studio rule requires that "(e)ach AM, FM and TV broadcast station maintain a main studio within the station’s principal community contour . . ." 47 C.F.R. Section 73.1125. In 1988, the Commission clarified what constitutes a main studio:

A station must maintain a main studio which has the capability adequately to meet its function . . of serving the needs and interests of the residents of the station’s community of license. To fulfill this function, a station must equip the main studio with production and transmission facilities that meet applicable standards, maintain continuous pràgram transmission capability, and maintain a meaningful management and staff presence.

Main Studio and Program Origination Rules (Clarification), 3 FCC

Rcd 5024, 5026 (1988) (emphasis added) ("Main Studio

Clarification") .

In January 1989, shortly after the main studio staffing requirement was established, the Mass Media Bureau denied a request by Jones Eastern to relocate the WRSF main studio from Columbia, its city of license, to Nags Head, North Carolina,

outside the station’s principal community contour. Seven months later, in response to a confidential complaint, the Bureau issued a letter of inquiry to Jones Eastern requesting information concerning the equipment and staffing at its main studio.

Jones Eastern advised the Bureau that the staff of its Columbia facility in 1989 included: (1) a full-time office manager (the Bureau subsequently determined that this employee was a receptionist and not a manager), who worked at the Columbia facility 8:00 a.m. to 5:00 p.m. Monday through Friday; (2) a business manager, who spent approximately four hours per week at the studio; (3) the station’s general manager, who spent approximately two hours per week at the studio; and (4) a senior account executive, whose schedule at the studio was not provided. The business manager and the account executive were both residents of Columbia and, in addition to time spent in the studio, spent time in the community talking with Columbia residents and community leaders and participating in local civic activities. The full-time office worker helped conduct a survey of 125 of Columbia’s 836 residents to obtain information for the production of a public affairs program. Jones Eastern submitted samples of WRSF’s 1989 quarterly issues/programs list to show that these ascertainment efforts achieved the Commission’s community service objectives.

On Octaber 27, 1989, the Bureau found that, although WRSF’s equipment was in compliance with Section 73.1125, its staffing was inadequate under the "meaningful management and staff presence" requirement set forth in the Main Studio Clarification. The Bureau ordered WRSF to take steps necessary to comply with the rule and to submit a progress report within 30 days. No clarification of what level of staffing constitutes a "meaningful management and staff presence" was provided in the Bureau’s decision that could have provided Jones Eastern with specific direction in modifying its staffing at the Columbia studio. The only language that could be viewed even remotely as "guidance" was the following statement: "It appears that on a full time basis the studio has either a manager with no staff or a staff person with no management." Ref. 8310-TD.

In an apparent desire for a ruling by the Commission on the Bureau’s interpretation of the vague requirement of a "meaningful management and staff presence," and left with continuing uncertainty about just what level of staffing would be deemed adequate, Jones Eastern filed an application for review of the Bureau’s October 1989 decision. In it, Jones Eastern argued that the staffing at the Columbia facility was adequate under the 1988 requirement. Jones Eastern further urged that, should the Commission deem its current staff inadequate, it issue a declaratory ruling outlining the precise number of staff persons and work hours that constitute a meaningful presence.

On June 19, 1991, a year and a half later, the Commission denied Jones Eastern’s application for review, ruling that the occasional oversight of the managers at the Columbia facility did not constitute a meaningful presence. However, the Commission at the same time recognized that the main studio staffing requirement was in need of clarification, and therefore established for the first time that a main studio staff should consist of "full-time managerial and full-time staff personnel." The Commission also indicated that:

This is not to say that the same staff person and manager must be assigned full-time to the main studio. Rather, there must be management and staff presence on a full-time basis during normal business hours to be considered "meaningful."

6 FCC Rcd. 3615, 3616 (1991)

Armed with its first concrete indication from the Commission as to what specifically constitutes a "meaningful management and staff presence," Jones Eastern that same month implemented a new staffing proposal. The new main studio staff consisted of: (1) a full-time office worker; (2) a full-time chief engineer who also acted as the station’s news director during morning and afternoon drive time; and (3) various account executives and the station manager who worked at the Columbia facility several days a week. Jones Eastern filed a petition which sought Commission reconsideration of its June 1991 decision in light of its new staffing, and further clarification of the staffing requirement.

This petition for reconsideration was denied in an October 14, 1992 Commission order. However, Jones Eastern’s new staffing levels were determined to be adequate, and clarification of the persistently vague main studio staffing requirement was once again deemed necessary. In response to specific questions posed by Jones Eastern and the National Association of Broadcasters (which filed comments in support of Jones Eastern’s request for clarification), the Commission clarified what categories of positions would constitute a "meaningful managerial presence" at the main studio. The Commission also clarified that:

Because some of these positions may require the persons occupying them to conduct significant business outside the office, we would not, of course, require management personnel to remain "chained to their desks" during normal business hours. Rather, we require that management personnel report to work at the main studio on a daily basis, spend a substantial amount of time there and, unlike Jones Eastern’s "ghost management," use the studio as a "home base." Ultimately, that management presence must remain responsible for whatever station operations occur from that studio. To the extent that the staff person may

fully perform its station functions with time to spare, and coverage of the main studio permits, that person may also take on responsibilities for another business, as long as the main studio remains attended during normal business hours.

7 FCC Rcd 6800, 6802 (1992) . For the first time since the 1988

main studio staffing requirement was adopted, broadcasters were

provided with a complete picture of what the Commission meant by

a "meaningful management and staff presence."

Despite the previous ambiguity surrounding the main studio staffing requirement, the Commission (minus this Commissioner’s vote) just one month later issued a $20,000 Notice of Apparent Liability for Forfeiture ("NAL") to Jones Eastern. 7 FCC Rcd 7309 (1992). The Memorandum Qpinion and Order ("MO&O") adopted today (again minus this Commissioner’s vote) affirms the imposition of a forfeiture but adjusts the amount downward to $12,000 in light of the fact that the United States Court of Appeals set aside the forfeiture standards on which the Jones Eastern decision was based, and in recognition of the fact that Jones Eastern implemented its new staffing proposal in June of 1991. The $12,000 forfeiture is therefore based on the approximately 18-month period between October 27, 1989, when the Bureau first notified Jones Eastern that its staffing was inadequate, tand June 1991, when the Commission first ruled on the adequacy of Jones Eastern’s staffing, and provided the first of two clarifications of the vague "meaningful management and staff presence" requirement.

The Commission noted in the NAL and in the instant MO&O that Jones Eastern did not seek to have enforcement of the main studio staffing requirement stayed during this period in which it was awaiting Commission guidance.

And so we arrive at the end of this tortured saga and learn that, had Jones Eastern filed with its application for review a motion for stay and maintained its 1989 staffing levels until the Commission clarified the main studio staffing requirement in 1991, presumably it would have avoided the imposition of a forfeiture. Instead, Jones Eastern filed an application for review without a motion for stay, maintained its 1989 staffing levels, and waited for a much-needed Commission ruling on its application for review and request for clarification. For the cardinal sin of not filing a motion for stay, Jones Eastern is directed to pay $12,000 into the Federal Treasury.

Where does this leave us? I think we can all agree that the main studio staffing requirement was in need of clarification:

hence, two decisions clarifying the requirement. I think we can also agree that Jones Eastern’s 1989 staffing levels were not consistent with the spirit of the main studio rule. (However,

from my years in business, I do not view Jones Eastern’s interpretation as entirely unreasonable.) Finally, we should all be able to agree that Jones Eastern sought clarification from the Commission of the rule it was charged with violating.

I part company with my colleagues, however, in their conclusion that a $12,000 forfeiture should be imposed for Jones Eastern’s failure to formally file a motion for stay of enforcement of this admittedly vague rule pending clarification. Once Jones Eastern was notified by the Bureau that its main studio staffing was inadequate, it appealed that decision but also requested clarification of the subject rule in the event its appeal was denied. In short, it is readily apparent that Jones Eastern intended to comply with the Commission’s ultimate determination regarding the WRSF main studio staffing as soon as it pursued its statutory right to appeal the Bureau’s decision, and as soon as it figured out what, exactly, our rules required.

Are we so rigid that we could not, during the eighteen months in which it took the Commission to rule on the application for review and request for clarification of the main studio staffing requirement, excuse Jones Eastern from a large forfeiture for failing to formally request that enforcement be stayed? Could we not have inferred in the filing of an application for review an inherent request for stay? Could we not, instead, have strongly admonished Jones Eastern, even issued a minimal forfeiture, for failing to comply adequately with the spirit of the main studio staffing requirement and allowed them to go on, appropriately chastened, with the business of broadcasting? It is with the Commission’s failure in this case to dispense pragmatically fair justice with which I am compelled to respectfully dissent.