Click here for Adobe Acrobat version
Click here for Microsoft Word version
********************************************************
NOTICE
********************************************************
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
*****************************************************************
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Caguas Educational TV, Inc. ) EB-04-IH-0382
) Facility ID No. 27292
Licensee of Noncommercial ) NAL/Account No. 200532080130
Educational Station WLAZ(FM), ) FRN 0008628646
Kissimmee, Florida
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: March 17, 2005
Released: March 17, 2005
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL''), we find that Caguas Educational TV,
Inc. (``Caguas''), licensee of noncommercial educational
Station WLAZ(FM), Kissimmee, Florida, has apparently
violated section 399B of the Communications Act of 1934, as
amended (the ``Act''),1 and section 73.503 of the
Commission's rules,2 by willfully and repeatedly
broadcasting prohibited advertisements. Based upon our
review of the facts and circumstances of this case, we
conclude that Caguas is apparently liable for a monetary
forfeiture in the amount of $10,000.
II. BACKGROUND
2. This case arises from a complaint made to the
Commission in July 2004 (``Complaint''), alleging that
noncommercial educational Station WLAZ(FM) broadcast
prohibited underwriting announcements during the month of
May 2004. Thereafter, the Bureau inquired of the licensee
concerning the allegations contained in the complaint.3
Caguas responded to the LOI on November 22, 2004.4
III. DISCUSSION
3. 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.5 In order to impose such a penalty, the Commission
must issue a notice of apparent liability, the notice must
be received, and the person against whom the notice has been
issued must have an opportunity to show, in writing, why no
such penalty should be imposed.6 The Commission will then
issue a forfeiture if it finds, by a preponderance of the
evidence, that the person has willfully or repeatedly
violated the Act or a Commission rule.7 As described in
greater detail below, we conclude under this procedure that
Caguas is apparently liable for a forfeiture in the amount
of $10,000 for its apparent willful and repeated violations
of the Commission's underwriting rules.
A. Caguas Has Willfully and Repeatedly Broadcast
Advertisements in Violation of Section 399B of the
Act and Section 73.503 of the Commission's Rules
4. Advertisements are defined by the Act as program
material broadcast "in exchange for any remuneration" and
intended to "promote any service, facility, or product" of
for-profit entities.8 The pertinent statute specifically
provides that noncommercial educational stations may not
broadcast advertisements.9 Although contributors of funds
to such stations may receive on-air acknowledgements, the
Commission has held that such acknowledgements may be made
for identification purposes only, and should not promote the
contributors' products, services, or businesses.10
Specifically, such announcements may not contain comparative
or qualitative descriptions, price information, calls to
action, or inducements to buy, sell, rent or lease.11 At
the same time, however, the Commission has acknowledged that
it is at times difficult to distinguish between language
that promotes versus that which merely identifies the
underwriter. Consequently, the Commission expects only that
licensees exercise reasonable, ``good faith'' judgment in
this area.12
5. At issue here are two underwriting announcements
that Caguas admits that Station WLAZ(FM) repeatedly
broadcast from April 1 through September 30, 2004.13 Caguas
acknowledges that it received consideration for airing the
messages on behalf of the station's underwriters, Sol De
Borinquen Bakery and Wanda's Quality, that both are for-
profit entities, and that the two messages were repeated a
total of 404 and 1267 times, respectively, during this
period.14 Although Caguas claims that it was under no
``obligation'' to broadcast underwriting announcements on
behalf of ``Wanda's Quality,'' the licensee represents that
it did so as a ``courtesy'' to recognize the donor for
providing the station with giveaway items that it, in turn,
used for self-promotion.15
6. The announcements were broadcast in Spanish, and
Caguas notes that its own translation of the Sol de
Borinquen Bakery announcement is slightly different from
that which the Bureau included with its LOI.16 Having
reviewed Caguas's version, we do not believe that it
substantially alters the overall context or meaning of the
underwriting message. However, we accept Caguas's alternate
text insofar as it represents the purported basis by which
it claims to have attempted to exercise its ``good faith''
discretion under Xavier, supra. Thus, we have revised our
attached transcripts to reflect Caguas's translation of the
Sol de Borinquen Bakery announcement.
7. After careful review of the record in this case,
we find that both announcements apparently exceed the bounds
of what is permissible under section 399B of the Act, and
the Commission's pertinent rules and policies, in light of
the ``good faith'' discretion afforded licensees under
Xavier, supra. The announcement for Wanda's Quality states
that the company has ``the biggest variety of undershirts,
polos, short and long sleeve oxford shirts,'' and that they
are ``[t]he people that know most about embroidery and
printing.''17 The announcement for Sol de Borinquen Bakery
asserts that it is ``the greatest bakery in Kissimmee;'' and
that it offers its ``famous frappe.''18 We conclude that a
noncommercial licensee, exercising ``good faith,'' could
only conclude that the above statements make qualitative and
comparative references to Wanda's Quality and to Sol de
Borinquen Bakery, and that, in particular, the words and/or
phrases ``biggest,'' ``people that know most,'' and
``greatest,'' impermissibly seek to distinguish the
underwriters' products and/or service favorably from that of
their competitors. The announcements are thus promotional
and prohibited.19
8. We further find that the announcements in question
were broadcast in exchange for consideration. First, Caguas
acknowledges that it aired the announcements for Sol de
Borinquen Bakery on the basis of one announcement for each
$10 contributed.20 With respect to the arrangement between
Wanda's Quality and Caguas, ``consideration,'' for purposes
of section 399B of the Act, may take forms other than direct
cash payments.21 Caguas admits that it aired the
announcements to acknowledge that underwriter's donation of
t-shirts bearing the station's logo, although it was not
obligated to do so. In determining whether the
announcements constituted prohibited advertisements under
section 399B of the Act, it is sufficient to find that
consideration was exchanged for their broadcast, and that
the announcements promoted the services or products of for-
profit entities.22 It is not necessary to find that the
licensee was contractually obligated to pay the
consideration. Finally, the Commission has long held
licensees responsible for ensuring that any material
broadcast in a foreign language conforms to the requirements
of the Act and the Commission's rules.23 To the extent that
Caguas has overlooked its duties in this regard, we remind
it to take appropriate care in the future to avoid further
violations of this type.
B. Proposed Action
9. Section 503(b) of the Act and section 1.80(a) of
the Commission's rules both state that any person who
willfully or repeatedly fails to comply with the provisions
of the Act, the rules or Commission orders shall be liable
for a forfeiture penalty.24 The Commission's Forfeiture
Policy Statement sets a base forfeiture amount of $2,000 for
violation of the enhanced underwriting requirements.25 The
Forfeiture Policy Statement also provides that the
Commission shall adjust a forfeiture based upon
consideration of the factors enumerated in section
503(b)(2)(D) of the Act, such as ``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.''26
10. In this case, it appears that, from April 1
through September 30, 2004, Caguas willfully and repeatedly
broadcast advertisements in violation of section 399B of the
Act and section 73.503(d) of the Commission's rules. We
believe that a substantial forfeiture is necessary because
of the substantial period of time during which it aired the
prohibited announcements, six months, and the 1,671 times
that it repeated the announcements during that period.
Nevertheless, we believe if we simply multiplied the $2,000
base amount by the 1,671 apparent violations, the potential
liability would be excessive in this case. Based on all of
the circumstances, and after examining forfeiture actions in
other recent underwriting cases, we believe that a proposed
forfeiture of $10,000 is appropriate here.27
11. Accordingly, applying the Forfeiture Policy
Statement and the statutory factors to this case, we
conclude that Caguas is apparently liable for a forfeiture
in the amount of $10,000, for violating the Commission's
underwriting rules. We will not hesitate to take even
stronger enforcement action against noncommercial
educational licensees that engage in similarly serious
violations of our underwriting requirements.
IV. ORDERING CLAUSES
12. In view of the foregoing, we conclude that a
monetary sanction is appropriate. Accordingly, pursuant to
section 503(b) of the Communications Act of 1934, as
amended, and sections 0.111, 0.311 and 1.80 of the
Commission's rules, Caguas Educational TV, Inc., licensee of
noncommercial educational Station WLAZ(FM), Kissimmee,
Florida, is hereby NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of $10,000 for willfully and
repeatedly broadcasting advertisements in violation of
section 399B of the Act, 47 U.S.C. § 399b, and section
73.503 of the Commission's rules, 47 C.F.R. § 73.503.
13. IT IS FURTHER ORDERED, pursuant to section 1.80 of
the Commission's rules, that within thirty days of the
release of this Notice, Caguas SHALL PAY the full amount of
the proposed forfeiture or SHALL FILE a written statement
seeking reduction or cancellation of the proposed
forfeiture.
14. Payment of the forfeiture must be made by mailing
a check or similar instrument, payable to the order of the
Federal Communications Commission. The payment must include
the NAL Acct. No. and FRN referenced above. Payment by
check or money order may be mailed to Forfeiture Collection
Section, Finance Branch, Federal Communications Commission,
P.O. Box 73482, Chicago, Illinois 60673-7482. Payment by
overnight mail may be sent to Bank One/LB 73482, 525 West
Monroe, 8th Floor Mailroom, Chicago, Illinois 60601.
Payment by wire transfer may be made to ABA Number
071000013, receiving bank Bank One, and account number
1165259.
15. The response, if any, must be mailed to William H.
Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W, Room 4-C330, Washington D.C. 20554 and
MUST INCLUDE the NAL/Acct. No. referenced above.
16. The Commission will not consider reducing or
canceling a forfeiture in response to a claim of inability
to pay unless the respondent submits: (1) federal tax
returns for the most recent three-year period; (2) financial
statements prepared according to generally accepted
accounting practices (``GAAP''); or (3) some other reliable
and objective documentation that accurately reflects the
respondent'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.
17. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan
should be sent to: Chief, Revenue and Receivables Operations
Group, 445 12th Street, S.W., Washington, D.C. 20554.28
18. IT IS FURTHER ORDERED that a copy of this Notice
shall be sent, by Certified Mail/Return Receipt Requested,
to Caguas Educational TV, Inc., P.O. Box 3986, Carolina,
Puerto Rico 00984-3986, and to its counsel, Francisco R.
Montero, Esq., and Alison J. Miller, Esq., Fletcher, Heald &
Hildreth, P.L.C., 11th Floor, 1300 North 17th Street,
Arlington, Virginia 22209-3801.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
ATTACHMENT
The following text was transcribed from underwriting
announcements broadcast over noncommercial educational
Station WLAZ(FM), Kissimmee, Florida.
Wanda's Quality
Attention, churches, schools and businesses! Already, in
Orlando embroidery and printing, Wanda's Quality! With the
biggest variety of undershirts, polos, short and long sleeve
oxford shirts, in all sizes for boys, ladies and gentlemen.
Likewise, caps and promotional articles. Wanda's Quality!
Telephone 407-301-5854, 407-301-5854. Wanda's Quality! The
people that know the most about embroidery and printing.
Wanda's Quality. Sponsored by Genesis.
Sol de Borinquen Bakery
Sol de Borinquen has opened its doors, the greatest bakery
in Kissimmee. Sol de Borinquen Restaurant, 2510 Michigan
Avenue. Breakfast, lunch, authentic Caribbean food, the
famous frappe, hot bread (sobao and water). Wedding and
birthday cakes, Caribbean style, cheese custard, brazo
Gitano and many other authentic Caribbean foods. Sol de
Borinquen Restaurant, 2510 Michigan Avenue, telephone 407-
518-7755. Open from 6:00 a.m. Sol de Borinquen, an
authentic Caribbean bakery.
_________________________
1 47 U.S.C. § 399b.
2 47 C.F.R. § 73.503.
3 Letter from William D. Freedman, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, to
Caguas, dated October 7, 2004 (``LOI'').
4 Letter from Francisco R. Montero, Esq., and Alison J.
Miller, Esq., to Kenneth M. Scheibel, Jr., Attorney,
Investigations and Hearings Division, Enforcement Bureau,
dated November 22, 2004 (``Response'').
547 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); see also
47 U.S.C. § 503(b)(1)(D) (forfeitures for violation of 14
U.S.C. § 1464). 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. 47 U.S.C. § 312(f)(1). 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, H.R. Rep. No. 97-765, 97th Cong. 2d Sess.
51 (1982), and the Commission has so interpreted the term in
the section 503(b) context. See, e.g., Application for
Review of Southern California Broadcasting Co., Memorandum
Opinion and Order, 6 FCC Rcd 4387, 4388 (1991) (``Southern
California Broadcasting Co.''). The Commission may also
assess a forfeiture for violations that are merely repeated,
and not willful. See, e.g., Callais Cablevision, Inc.,
Grand Isle, Louisiana, Notice of Apparent Liability for
Monetary Forfeiture, 16 FCC Rcd 1359 (2001) (issuing a
Notice of Apparent Liability for, inter alia, a cable
television operator's repeated signal leakage).
``Repeated'' means that the act was committed or omitted
more than once, or lasts more than one day. Southern
California Broadcasting Co., 6 FCC Rcd at 4388, ¶ 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362 ¶ 9.
647 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
7See, e.g., SBC Communications, Inc., Forfeiture Order, 17
FCC Rcd 7589, 7591 ¶ 4 (2002) (forfeiture paid).
8 47 U.S.C. § 399b(a).
9 Id.
10 See In the Matter of the Commission Policy Concerning
the Noncommercial Nature of Educational Broadcasting
Stations, Public Notice (1986), republished, 7 FCC Rcd 827
(1992) (``Public Notice'').
11 Id.
12 See Xavier University, Letter of Admonition, issued
November 14, 1989 (Mass Med. Bur.), recon. granted,
Memorandum Opinion and Order, 5 FCC Rcd 4920 (1990).
13 Response at Exhibit A.
14 Id. at 3, 4.
15 Id. at 4. Caguas indicates that Wanda's Quality ``from
time to time'' provided the station with t-shirts which bore
the station's logo. Id.
16 Id. at 2. Caguas does not dispute the translation of
the Wanda's Quality announcement also contained in the LOI.
Id.
17 See Attachment.
18 Id.
19 See Public Notice, supra.
20 Response at 4
21 See Commission Policy Concerning the Noncommercial Nature
of Educational Broadcast Stations, 90 FCC 2d 895, 911
(1982), recon., 97 FCC 2d 255 (1984) (``Policy
Statement'').
22 Moreover, in similar cases, the Commission has rejected
arguments that such payments constituted general station
contributions unrelated to the broadcast of underwriting
announcements made on behalf of the donors involved. See
Penfold Communications, Inc., Memorandum Opinion and Order,
13 FCC Rcd 23731 (Mass Media Bur. 1998).
23 See Licensee Responsibility to Exercise Adequate Control
Over Foreign Language Programs, Public Notice, 39 FCC 2d
1037 (1973).
24 See 47 U.S.C. § 503(b); 47 C.F.R § 1.80.
25 The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, 12 FCC Rcd 17087, 17115 (1997)
(``Forfeiture Policy Statement''), recon. denied 15 FCC Rcd
303 (1999); 47 C.F.R. § 1.80(b).
26 47 U.S.C. § 503(b)(2)(D). See also Forfeiture Policy
Statement, 12 FCC Rcd at 17100 ¶ 27.
27 See, e.g., Hispanic Broadcast System, Inc.(WQQZ(FM)),
Notice of Apparent Liability for Forfeiture, DA 05-349,__FCC
Rcd__ (rel. Feb. 9, 2005) ($10,000 forfeiture proposed for
underwriting violations), response pending; Minority
Television Project, Inc. (KMTP-TV), Notice of Apparent
Liability for Forfeiture, DA 05-348,__FCC Rcd__ (rel. Feb.
9, 2005) ($7,500 forfeiture proposed for underwriting
violations), response pending; Christian Voice of Central
Ohio, Inc.(WCVZ(FM)), 19 FCC Rcd 23663 (Enf. Bur. 2004)
($20,000 forfeiture proposed for underwriting violations),
response pending; Minority Television Project, Inc. (KMTP-
TV), Forfeiture Order, 18 FCC Rcd 26611 (Enf. Bur. 2003),
application for review denied, Order on Review, 19 FCC Rcd
25116 (2004) ($10,000 forfeiture for underwriting
violations), recon. pending.
28 See 47 C.F.R. § 1.1914.