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FCC Says $7,000 Fine Is Within Reason Despite Financial Hardship

WASHINGTON: A small family broadcast business in Alabama won a fine reduction from the FCC, but still must pay $5,600 for not filing its license renewal on time and operating without authorization. The case provides some insight into the FCC’s handling of financial hardship cases. 

The station is WFHK-AM in Pell City, Ala.; its president is Adam Stocks. He argued that the fine would place a significant financial burden on the station and his family, and that because the station was not a “repeat offender,” the fine should be reduced. The original notice was issued in early 2007 for violations dating to several years earlier. Stocks told the FCC that he and his wife co-owned the station and would have to take out a loan to pay the fine. He said that in six years of ownership, the station’s only profitable year had been 2006, when it made $2,600. He submitted three years of profit and loss statements, showing losses for 2004 and 2005 and a profit in 2006. The commission nonetheless determined that its original $7,000 fine was appropriate.

“The $7,000 forfeiture in this case represents 3.9 percent of the station's average gross revenue over the three years for which information was provided,” the FCC responded. “In considering claims of financial hardship, we have found reasonable forfeiture amounts of 4 percent of gross revenue, and the Enforcement Bureau has found that a forfeiture as high as 7.9 percent of the violator’s gross revenue was not excessive despite claims of financial hardship. A forfeiture of $7,000 is therefore reasonable in this case.”

The commission took WFHK’s “an unblemished record of compliance” into account, however, and trimmed the fine to $5,600. -- from Radio World