[Federal Register Volume 62, Number 90 (Friday, May 9, 1997)]
[Notices]
[Page 25615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12075]



[[Page 25615]]

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FEDERAL COMMUNICATIONS COMMISSION

[WT Dkt. No. 97-56; FCC 97-38]


Order to Show Cause, Hearing Designation Order and Notice of 
Opportunity for Hearing for Forfeiture

AGENCY: Federal Communications Commission.

ACTION: Notice; Hearing Designation Order.

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(Authority: 47 U.S.C. Secs. 312 and 503; 47 CFR Sec. 0.411(c))

SUMMARY: On February 6, 1997, (released February 12, 1997) the 
Commission designated pending applications and finder's preference 
requests filed by Marc Sobel, and licenses held by Marc Sobel and Marc 
Sobel d/b/a Air Wave Communications (collectively ``Sobel'') for 
hearing to determine if an unauthorized transfer of control occurred in 
violation of 47 U.S.C. Sec. 310(d). In addition the Commission directed 
the ALJ to determine if Sobel is qualified to be a licensee, and to 
determine if an order for forfeiture should issue. The Commission 
designated these matters for hearing at a time and place to be 
designated in a subsequent order.

FOR FURTHER INFORMATION CONTACT: Gary Schonman at (202) 418-0569, FCC 
1919 M St., NW.

SUPPLEMENTARY INFORMATION: The following is a synopsis of the 
Commission's order. The full text of the order is available for 
inspection and copying at the FCC Docket Branch (Room 230), 1919 M 
Street NW., Washington, D.C. The text of the order may also be 
purchased by calling ITS at (202) 857-3800.
    The results of the Commission's predesignation investigation 
indicate that on December 30, 1994, Sobel and another land mobile 
licensee in the Los Angeles area, James A. Kay, Jr. (``Kay''), executed 
a so-called Radio System Management and Marketing Agreement 
(``Agreement'') involving several of Sobel's stations, all of which 
provide service to subscribers. The Agreement, as amended, expressly 
covers the following stations: Stations KNBT299, WNYE761, WNYR424, 
WPFF529, WNXL471, WPAD685, KRU576, WPCN239, WPCZ354, WPCG780, WNWB334, 
WNZS492, WPDB603, WPFH460, and WPCA891. The Agreement contemplates, 
among other things, that if the stations have not already been built, 
Kay will construct them at Kay's expense; Kay will serve as the 
exclusive supplier of equipment and labor to maintain each of the 
stations; Kay will be the exclusive marketing agent for the sales of 
service to the public and/or persons eligible to receive service from 
each of the stations; Kay will serve as the sole manager of each of the 
stations; Kay will compensate all employees, agents, and independent 
contractors and pay all insurance, taxes and other costs arising out of 
the employment of workers at each of the stations; Kay will maintain 
all financial records and contracts associated with the operations of 
each of the stations; and Kay will bear all responsibility for paying 
utility, telephone, site rental, radio equipment, and legal expenses 
associated with the operations of each of the stations. In 
consideration for these services, the Agreement provides that Kay will 
receive the first $600 of gross revenues per month from the operation 
of each of the stations, and half of all remaining gross revenues per 
month from the operation of each of the stations. The Agreement runs 
for 10 years and renews automatically (unless Kay elects otherwise) for 
five 10 year periods (for a total of 50 years). The Agreement also 
grants to Kay, in consideration for $100, an irrevocable 10 year option 
to purchase any or all of the covered stations, including the 
assignment of each associated FCC license, for $500 per station upon 
demand by Kay. The Agreement requires Sobel to maintain exclusive 
ownership of the subject stations during the term of the Agreement, 
free of all liens and encumbrances, ``until and unless said license(s) 
are assigned to'' Kay.
    In determining whether de facto control of a non-broadcast license 
or facility has been transferred in violation of Sec. 310(d) of the 
Communications Act, the Commission and the courts have traditionally 
relied upon a six-part test announced in Intermountain Microwave, 24 RR 
983 (1963). When the Intermountain factors are applied to the Agreement 
between Sobel and Kay, a substantial and material question arises as to 
whether Sobel has willfully and/or repeatedly engaged in unauthorized 
transfers of control of his stations to Kay, in violation of 
Sec. 310(d) of the Communications Act of 1934, as amended. Sobel and 
Kay executed the Agreement a mere two weeks after the Commission 
formally placed Kay's basic qualifications to remain a licensee in 
issue. Order to Show Cause, Hearing Designation Order, and Notice of 
Opportunity for Hearing for Forfeiture, 10 FCC Rcd 2062 
(1994)(requiring Kay to show cause why his licenses should not be 
revoked). The nature and timing of Sobel's arrangement with Kay raise 
serious questions concerning Sobel's compliance with Sec. 310(d) of the 
Act and, as a consequence, Sobel's basic qualifications to be and 
remain a Commission licensee.
    The Commission designated specific applications for hearing and 
directed Sobel to show cause why his licenses should not be revoked, in 
a consolidated proceeding before an FCC Administrative Law Judge at a 
time and place to be specified in a subsequent Order, upon the 
following issues: (a) To determine whether Marc Sobel and/or Marc Sobel 
d/b/a Air Wave Communications have willfully and/or repeatedly violated 
Sec. 310(d) of the Communications Act of 1934, as amended, by engaging 
in unauthorized transfers of control of their respective stations to 
James A. Kay, Jr.; (b) To determine, in light of the evidence adduced 
pursuant to the foregoing issue, whether Marc Sobel and/or Marc Sobel 
d/b/a Air Wave Communications are qualified to be and remain Commission 
licensees; (c) To determine whether the above-captioned applications 
filed by Marc Sobel and/or Marc Sobel d/b/a Air Wave Communications 
should be granted; and (d) To determine whether the above-captioned 
licenses held by Marc Sobel and/or Marc Sobel d/b/a Air Wave 
Communications should be revoked. The Commission also directed the ALJ 
to determine, pursuant to Sec. 503(b)(2)(B) of the Communications Act 
of 1934, as amended, whether an Order of Forfeiture shall be issued 
against Marc Sobel and/or Marc Sobel d/b/a Air Wave Communications in 
an amount not to exceed $100,000 for each violation or each day of a 
continuing violation, except that the amount assessed for any 
continuing violation shall not exceed a total of $1,000,000 for any 
single act or failure to act, for having willfully and/or repeatedly 
violated Sec. 310(d) of the Communications Act of 1934, as amended. The 
Commission also placed the burden of proceeding with the introduction 
of evidence and the burden of proof with respect to the issues (a), 
(b), and (d) above shall be on the Wireless Telecommunications Bureau, 
and burden of proceeding with the introduction of evidence and the 
burden of proof with respect to the issue at (c) above on Sobel.

Federal Communications Commission.
Shirley S. Suggs,
Chief, Publications Branch.
[FR Doc. 97-12075 Filed 5-8-97; 8:45 am]
BILLING CODE 6712-01-P