Enforcement Bureau finds Turner apparently liable for forfeiture

The bureau issued a Notice of Apparent Liability for Forfeiture Sept. 10 regarding the unauthorized assignment of 49 licenses involving a corporate restructuring at Turner Broadcasting System.
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The FCC Enforcement Bureau found Sept. 10 that Turner Broadcasting System, owner of CNN America and Courtroom Television Network, is apparently liable for forfeiture of $16,000 for the transfer of 49 international wireless and radio licenses without the approval of the FCC.

In the Notice of Apparent Liability for Forfeiture, the bureau said Turner "apparently willfully and repeatedly violated" a section of the Communications Act and commission rules stemming from an internal company reorganization. The bureau concluded that Turner is apparently liable for a fine totaling $16,000.

The matter stems from a December 2006 corporate reorganization, the notice said. The reorganization saw the transfer of the licenses from CNN-LP, a subsidiary in which Turner held controlling interest, to another wholly owned Turner subsidiary, CNN Investment Company. On the same day, CNN Investment Company changed its name to Cable News Network Inc. (CNN-Inc.).

"All of these events occurred on the same day and resulted in a pro forma transfer of control of CNN-LP, immediately followed by a pro forma assignment of the 49 subject licenses, to CNN-Inc.," the notice said. Turner did not seek commission approval of the transfer of the licenses in either case.

A Turner review of its license holdings in May 2009 in preparation of another corporate reorganization revealed the situation, the notice said. This restructuring envisioned assigning some of the licenses from CNN-Inc. to Turner, others to the wholly owned subsidiary CNN America and still others to wholly owned subsidiary Courtroom Television Network. According to Turner, it was at this point that it discovered CNN-LP still held the licenses and prepared applications seeking commission consent for the assignment.

Later, the FCC Wireless Telecommunications Bureau and International Bureau granted the assignment applications and referred the matters to the Enforcement Bureau for investigation.

The proscribed penalty for an unauthorized transfer of a license is $1000; however, since the Turner case involved so many licenses, the bureau held that the ordinary forfeiture could be “excessive.” The bureau also found the pro forma nature of the license transfers to be a mitigating circumstance. Turner has 30 days to pay the amount or file an appeal.