Federal Communications Commission DA 99-1936
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) )
ENTERGY SECURITY CORPORATION) File No. 920EF0059
)
Operator of Fixed Microwave Service Stations )
WNEP492 and WNEH696 in Metarie and New)
Orleans, Louisiana)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: September 30, 1999Released: October 1, 1999
By the Chief, Enforcement and Consumer Information Division,
Wireless Telecommunications Bureau:
I. Introduction
1.This is a Notice of Apparent Liability for Forfeiture pursuant to Section 503(b) of the Communications Act of 1934, as amended,[1] and 1.80 of the Commission’s Rules,[2] against Entergy Security Corporation (“Entergy”), operator of Fixed Microwave Service station licenses WNEP492 and WNEH696 at Metarie and New Orleans, Louisiana. We find that Entergy acquired control of these two stations without prior Commission consent, in apparent violation of Section 310(d) of the Act[3] and Section 101.53 of the Commission’s Rules.[4] For the reasons discussed below, we conclude that Entergy is apparently liable for a forfeiture in the amount of $12,000.
II. Background
2.In 1997, Entergy, a wholly-owned subsidiary of Entergy Corporation,[5] was engaged in “the business of providing remote alarm monitoring services . . . utiliz[ing] telephone landlines and/or wireless facilities to receive, process and transmit emergency and other information.”[6] Entergy merged with Armor Systems, Inc. (“Armor”), another alarm monitoring service provider, and the parties “closed the transaction on October 15, 1997.”[7] Prior to the merger, the stations in question were licensed to Armor.[8] Entergy Corporation’s total operating revenues were $11.495 billion in 1998 and $9.562 billion in 1997.[9]
3.Entergy acquired control of the two stations as a result of the October 1997 merger. On January 4, 1999, Entergy filed FCC Form 415 to assign Armor’s two stations to Entergy.[10] Entergy also filed a request for special temporary authority (“STA”) to operate the stations during the pendency of the assignment application.[11] In response to a Commission letter[12] seeking more information regarding the assignment, Entergy explained that the merger “had inadvertently closed without prior FCC approval because of their [Armor’s and Entergy’s] unfamiliarity with the approval requirement.”[13] Entergy further stated that it “did not learn of the prior approval requirement resulting from the merger until approached about a subsequent transaction[14] involving an acquisition of the merged entity.”[15] The Commission granted the STA on January 15, 1999. Entergy’s assignment application is pending.
III. Discussion
4.Section 310(d) of the Communications Act[16] provides in pertinent part:
No construction permit or station license, or any rights thereunder, shall be transferred,
assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly,
or by transfer of control of any corporation holding such permit or license, to any person
except upon application to the Commission and upon finding by the Commission that the
public interest, convenience, and necessity will be served thereby.
This section was codified for fixed microwave services at Section 101.53(a) of the Commission’s Rules.[17]
5.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 or the Rules shall be liable for a forfeiture penalty.[18] For purposes of Section 503(b) of the Communications Act, the term “willful” means that the violator knew it was taking the action in question, irrespective of any intent to violate the Commission’s rules.[19] For purposes of computing a forfeiture under Section 503(b)(1) of the Act, each day of a continuing violation is considered a separate violation,[20] and a violation is repeated if it occurs more than once.[21]
6.Entergy was required to obtain Commission consent prior to the assignment of Armor’s licenses to Entergy. Indeed, Entergy acknowledges that it “did not obtain the required approval in advance” of the merger.[22] Entergy thus failed to comply with Section 310(d) of the Act[23] and Section 101.53 of the Commission’s Rules[24] when it merged with Armor without prior Commission consent, which resulted in a de facto assignment of Armor’s licenses. It also appears that Entergy engaged in a substantial transfer of control by acquiring the licenses through the merger. Entergy’s unauthorized control of Armor’s licenses began on October 17, 1997, and continued until at least January 4, 1999, a period spanning more than fourteen months. Based on the evidence before us, we find that Entergy engaged in the unauthorized assignment and apparent substantial transfer of control of the two stations licensed to Armor, in apparent willful and repeated violation of Section 310(d) of the Communications Act[25] and Section 101.53 of the Commission’s Rules.[26]
7.The Commission’s Forfeiture Policy Statement, which became effective October 14, 1997, sets a base forfeiture amount of $8,000 for an unauthorized substantial transfer of control.[27] The Forfeiture Policy Statement also specifies that the Commission shall adjust a forfeiture based upon consideration of the factors enumerated in Section 503(b)(2)(D) of the Communications Act,[28] 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.”[29] Additionally, the Commission has stated its intent “to take into account the subject violator’s ability to pay in determining the amount of a forfeiture to guarantee that forfeitures issued against large or highly profitable entities are not considered merely an affordable cost of doing business.”[30] As an initial matter, we note that an unauthorized substantial transfer of control is a serious violation of the Act and the Commission’s rules. In this case, we also note that the violation involved two stations and continued for over fourteen months, which constitute aggravating factors. Furthermore, Entergy’s apparent ability to pay a forfeiture warrants a substantial forfeiture. As for mitigating factors, we note Entergy’s voluntary disclosure of its violation and the nature of the services involved. Thus, taking into consideration all the factors required by Section 503(b)(2)(D) of the Act, including, but not limited to, the nature of the stations in question, the gravity of the violation, the duration of the unauthorized assignment and apparent substantial transfer of control, Entergy’s presumed ability to pay, and Entergy’s voluntary disclosure of its violations to the Commission, we believe the appropriate forfeiture is $12,000.
IV. ORDERING CLAUSES
8.ACCORDINGLY, IT IS ORDERED pursuant to Section 503(b) of the Communications Act of 1934, as amended,[31] and Section 1.80 of the Commission’s Rules,[32] that Entergy Security Corporation is hereby NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of twelve thousand dollars ($12,000) for willfully and repeatedly violating Section 310(d) of the Communications Act of 1934, as amended,[33] and Section 101.53 of the Commission’s Rules.[34]
9. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission’s Rules,[35] that within thirty days of the release of this Notice, Entergy SHALL PAY[36] to the United States the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture.
10. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by Certified Mail/Return Receipt Requested, to Entergy's counsel, John A. Prendergast, Esq., Blooston, Mordkofsky, Jackson & Dickens, 2120 L Street, N.W., Washington, D.C. 20037.
FEDERAL COMMUNICATIONS COMMISSION
Catherine W. Seidel
Chief, Enforcement and Consumer Information Division Wireless Telecommunications Bureau
1
[1]47 U.S.C. § 503(b).
[2]47 C.F.R. § 1.80.
[3]47 U.S.C. § 310(d).
[4]47 C.F.R. § 101.53(a). That rule was replaced by Section 1.948 of the Commission’s Rules on February 12, 1999. In the Matter of Biennial Review – Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission’s Rules to Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications Services, 13 FCC Rcd 21027 (1998). Section 101.53 is applicable here because Entergy filed its authorization request prior to the February 12, 1999 effective date.
[5]See Application of Sonitrol Southeast, Inc. for a Determination of Exempt Telecommunications Status Under Section 34 of the Public Utility Holding Company Act of 1935, as Added by Section 103 of the Telecommunications Act of 1996, 12 FCC Rcd 10429 (OGC 1997).
[6]Application of Entergy ETHC Merger Company for a Determination of Exempt Telecommunications Status Under Section 34 of the Public Utility Holding Company Act of 1935, as Added by Section 103 of the Telecommunications Act of 1996, 12 FCC Rcd 10427, 10428 (OGC 1997). See also Letter Dated June 15, 1999, from Glenn L. Schroeder, Authorized Employee of Entergy at the Time of Merger, to Sharon C. Bowers, Informal Complaints & Public Inquiry Branch, Federal Communications.
[7]Letter Dated June 15, 1999, from Glenn L. Schroeder, Authorized Employee of Entergy at the Time of Merger, to Sharon C. Bowers, Informal Complaints & Public Inquiry Branch, Federal Communications Commission.
[8]See Application for Authorization for Microwave Services, Exhibit, filed January 4, 1999, by Entergy Security.
[9]See Standard & Poor’s Standard Corporation Descriptions, Volume 59, No. 2, p. 2495 (1998).
[10]See Application for Authorization in the Microwave Services filed January 4, 1999, by Entergy Security.
[11]See Request for STA, filed January 14, 1999, by Entergy.
[12]See Letter Dated May 17, 1999 from Sharon C. Bowers, Chief, Informal Complaints & Public Inquiry Branch, Enforcement & Consumer Information Division, Wireless Telecommunications Bureau, to John A. Prendergast of Blooston, Mordkofsky, Jackson & Dickens, counsel for Entergy.
[13]Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized Employee of Entergy at the Time of Merger, supra.
[14]See Application for Authorization in the Microwave Services filed January 4, 1999 by ADT Security Services, Inc., for assignment of stations WNEP492 and WNEH696 from Entergy to ADT. This application is currently pending.
[15]Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized Employee of Entergy at the Time of Merger, supra.
[16]47 U.S.C. § 310(d).
[17]47 C.F.R § 101.53(a).
[18]See 47 U.S.C. § 503(b) and 47 C.F.R. § 1.80(a).
[19]See Southern California Broadcasting Co., FCC Rcd 4387 (1991).
[20]See Eastern Carolina Broadcasting, Inc., 6 FCC Rcd 6154, 6155 (1991).
[21]See Hale Broadcasting Corp., 79 FCC 2d 169, 171 (1980).
[22]Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized Employee of Entergy at the Time of Merger, supra.
[23]47 U.S.C. § 310(d).
[24]47 C.F.R. § 101.53.
[25]47 U.S.C. § 310(d).
[26]47 U.S.C. § 101.53.
[27]The Commission’s Forfeiture Policy Statement and Amendment of Section 1.80 of the Commission’s Rules, 12 FCC Rcd 17087, 17113 (1997) (Forfeiture Policy Statement).
[28]Id. at 17110.
[29]47 U.S.C. § 503(b)(2)(D).
[30]Forfeiture Policy Statement, supra, 12 FCC Rcd at 17099.
[31]47 U.S.C. § 503(b).
[32]47 C.F.R. § 1.80.
[33]47 U.S.C. § 310(d).
[34]47 C.F.R. § 101.53.
[35]47 C.F.R. § 1.80.
[36]Payment may be made by credit card through the Commission's Billings and Collections Branch at (202) 418-1995 or by mailing a check or similar instrument, payable to the order of the Federal Communications Commission, to the Federal Communications Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. The payment should note the file number of this proceeding.