*Pages 1--11 from Microsoft Word - 40611* Federal Communications Commission DA 04- 2330 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of AMERICAN FAMILY ASSOCIATION Licensee of Station KBMP( FM), Enterprise, Kansas ) ) ) ) ) ) ) ) File No. EB- 02- IH- 0819- AHB NAL/ Acct. No. 200432080203 FRN 0005025911 Facility ID No. 91037 NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: July 27, 2004 Released: July 28, 2004 By the Chief, Enforcement Bureau: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture (“ NAL”), we find that American Family Association (“ AFA”), licensee of non- commercial radio Station KBMP( FM), Enterprise, Kansas, apparently violated the main studio rule by willfully and repeatedly failing to meet the location requirements set forth in section 73.1125( a) of the Commission’s rules, and by willfully and repeatedly failing to maintain a meaningful management and staff presence at its main studio. 1 We also find that AFA apparently failed to comply with a Bureau order by failing to respond fully to a Bureau inquiry that directed AFA to produce certain information concerning the main studio of Station KBMP( FM). Based on our review of the facts and circumstances of this case, we find that AFA is apparently liable for a forfeiture of ten thousand dollars ($ 10,000) for violations of the main studio rule at Station KBMP( FM) and for failing to respond fully to a Bureau order. II. BACKGROUND 2. AFA acquired the construction permit for unbuilt Station KBMP( FM) from Solid Rock Broadcasting, Inc. in August of 1999. 2 By letter dated June 21, 2001, AFA requested a waiver of the Commission’s main studio rule, 47 C. F. R. § 73.1125, to co- locate the main studio of KBMP( FM) with that of its co- owned Station KCFN( FM), Wichita, Kansas. AFA supplemented this request by letters dated August 16, 2001, and May 1, 2002. AFA placed Station KBMP( FM) into operation on March 6, 2002, submitting a covering license application that same day. 3 Six months later, by letter dated 1 See 47 C. F. R. § 73. 1125( a); see also Main Studio and Program Origination Rules, 2 FCC Rcd 3215 (1987), clarified 3 FCC Rcd 5024 (1988); Jones Eastern of Outer Banks, Inc. (“ Jones Eastern I”), 6 FCC Rcd 3615 (1991), clarified 7 FCC Rcd 6800 (1992) (“ Jones Eastern II”). 2 See FCC File No. BAPED- 990514EA, granted July 13, 1999, with a consummation date of August 17, 1999. 3 See FCC File No. BAPED- 990514EA. 1 Federal Communications Commission DA 04- 2330 2 September 5, 2002, AFA requested expedited processing of its main studio waiver request. In that letter, signed by Patrick J. Vaughn in his capacity as General Counsel of AFA, AFA stated: KBMP- FM has been on the air since March 6, 2002, but American Family Association, Inc. (AFA) has been unable to comply with the Main Studio staffing requirements. AFA requests expedited processing of its Main Studio waiver request before we are hit with forfeitures. 4 3. Upon receiving this letter, the Media Bureau staff telephoned Mr. Vaughn, asking him to explain his statement in his September 5 letter about not complying with the main studio rule. By letter dated October 1, 2002, Mr. Vaughn stated: Prior to building KBMP, AFA operated a translator in Enterprise, KS, with the First Christian Church of Enterprise serving as the translator’s local sponsor. Joe Minnick, a member of First Christian Church, working as a volunteer prepared local public service spots to run at the top on the hour on the translator. In the planning for KBMP we anticipated that Mr. Minnick would coordinate other volunteers to staff the main studio. However, Mr. Minnick has moved. First Christian Church continues to act as our local sponsor and pays the tower rent, but without Mr. Minnick they are unable to muster sufficient volunteers to cover the “meaningful presence” requirement. Therefore, AFA has requested expedited processing of this request for a main studio waiver. 5 4. By letter dated October 31, 2002, the Audio Division of the Media Bureau of the Commission granted AFA’s waiver request, “without prejudice to whatever action, if any, the Commission deems appropriate in light of AFA’s apparent violation of the Commission’s main studio requirements.” 6 The Media Bureau referred the matter to the Enforcement Bureau for possible enforcement action. 5. By letter dated November 13, 2003, the Investigations and Hearings Division of the Commission’s Enforcement Bureau sent a letter of inquiry to Mr. Vaughn directing AFA to provide nine categories of information and copies of all documents relevant to AFA’s responses. 7 The categories of information included such matters as: the exact address of all current and previous main studio locations for Station KBMP( FM) and the date each studio location was established; all waiver requests and waivers of the main studio rule for the station; for each main studio address, the days of the week and the hours of the day during which that studio was/ is open to the public; a detailed description of the technical production and transmission equipment and capacity maintained at the main studio( s); the identity of each person employed at the station’s main studio and pertinent information about each person’s employment; and the local or toll- free telephone number maintained for the station. 8 4 Letter from Patrick J. Vaughn to Marlene H. Dortch, Secretary of the Commission, dated September 5, 2002. 5 Letter from Patrick J. Vaughn to Marlene H. Dortch, dated October 1, 2002 (emphasis in original). 6 Letter from Peter H. Doyle, Chief, Audio Division of Commission’s Media Bureau, to Patrick J. Vaughn, dated October 31, 2002. 7 Letter from William D. Freedman, Deputy Chief, Investigations and Hearings Division of Commission’s Enforcement Bureau, to Patrick J. Vaughn, dated November 13, 2003. 8 Id. at 3- 4. 2 Federal Communications Commission DA 04- 2330 3 6. By letter dated November 21, 2003, Mr. Vaughn provided the following response, which was accompanied only by a copy of the October 31, 2002 letter granting AFA’s waiver request: On October 31, 2002, the Commission granted a waiver of 47 C. F. R. Section 73.1125 for KBMP- FM, Enterprise, Kansas. A copy of the waiver is attached as Exhibit One. Toll- free telephone number (800) 705- 4450 is posted at the KBMP- FM tower site. 9 III. DISCUSSION 7. Under section 503( b)( 1) of the Communications Act of 1934, as amended (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. 10 In order to impose such a forfeiture 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 forfeiture penalty should be imposed. 11 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. 12 As described in greater detail below, we conclude under this procedure that AFA is apparently liable for a forfeiture in the amount of $10,000. This $10,000 forfeiture consists of $7,000 for AFA’s apparent willful and repeated violations of the main studio rule, the location and staffing requirements of which are set forth in section 73.1125 of the Commission’s rules and Commission precedent, and $3,000 for failing to respond fully to a Bureau order. 9 Letter from Patrick J. Vaughn to David Brown, Investigations and Hearings Division of Commission’s Enforcement Bureau, dated November 21, 2003. 10 47 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, 97 th 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. 11 47 U. S. C. § 503( b); 47 C. F. R. § 1. 80( f). 12 See, e. g., SBC Communications, Inc., Apparent Liability for Forfeiture, Forfeiture Order, 17 FCC Rcd 7589, 7591 ¶ 4 (2002). In SBC Communications, the Commission assessed a $100,000 forfeiture against a carrier for its willful refusal to supply a sworn declaration in response to an Enforcement Bureau letter of inquiry. The Commission stated: “[ T] he order here was squarely within the Commission’s authority and, in any event, parties are required to comply with Commission orders even if they believe them to be outside the Commission’s authority.” Id. at ¶ 5. 3 Federal Communications Commission DA 04- 2330 4 A. AFA Apparently Has Willfully and Repeatedly Failed to Meet the Location and Staffing Requirements of the Main Studio Rule. 8. The Commission promulgated the main studio rule to ensure that a station’s main studio serves the needs and interests of the residents of the station’s community of license. 13 The Commission has long held that a local presence is critical to fulfilling this function. 14 Thus, section 73. 1125( a) of the Commission’s rules requires that a station’s main studio either be placed (a) within a station’s community of license; (b) at any location within the principal community contour of any AM, FM, or TV broadcast station licensed to the station’s community of license; or (c) within twenty- five (25) miles from the reference coordinates of the center of its community of license. 15 A licensee must acquire written authorization before it places a main studio at a location other than one specified in section 73.1125( a). 16 9. For a main studio to fulfill its primary function, the Commission has determined that a licensee must also “equip the main studio with production and transmission facilities that meet applicable standards, maintain continuous program transmission capability, and maintain a meaningful management and staff presence.” 17 A meaningful management and staff presence exposes stations to community activities, helps them to identify community needs and interests and, consequently, helps them meet their community service requirements. 18 In Jones Eastern II, the Commission defined a minimally acceptable meaningful management and staff presence as full- time managerial and staff personnel and, though the Commission stated that it did not require that management personnel be “chained to the desk,” it did require that such personnel report to work at the main studio on a daily basis, spend a substantial amount of time there, and use the station as a ‘home base.” 19 To qualify as managerial, the Commission stated that the employee should be “authorized to make typical managerial decisions pertaining to facilities, equipment, programming, sales and emergency procedures.” 20 10. By AFA’s own admission, the main studio for Station KBMP( FM) did not meet the location requirements of section 73.1125( a) from March 6, 2002, when the station commenced operation, until October 31, 2002, when AFA received a waiver of the main studio rule. The record shows that this was a knowing violation by AFA, as AFA’s request for expedited processing sought action by the Commission’s Media Bureau “before we are hit with forfeitures.” 21 In this regard, we note that in 2002, AFA was issued a forfeiture order in the amount of $5, 000 for operating Station KBKC- FM, Moberly, 13 Main Studio and Program Origination Rules, Memorandum Opinion and Order on Reconsideration, 3 FCC Rcd at 5026 ¶ 23. 14 See, e. g., Main Studio and Program Origination Rules, Report and Order, 2 FCC Rcd at 3217 ¶ 29. 15 47 C. F. R. § 73.1125( a). 16 47 C. F. R. § 73.1125( d)( 2). 17 Main Studio and Program Origination Rules, Memorandum Opinion and Order on Reconsideration, 3 FCC Rcd at 5026 ¶ 24 (emphasis added). 18 Id. 19 Jones Eastern II, 7 FCC Rcd at 6801- 6802 ¶ 11. 20 Id. at 6801 ¶ 10. 21 Letter from Patrick J. Vaughn to Marlene Dortch, dated September 5, 2002. 4 Federal Communications Commission DA 04- 2330 5 Missouri, without a main studio. 22 As in this case, AFA had put that station on the air after filing a main studio waiver request, but did not have a grant of that waiver when it commenced operation of the station without a local main studio. 11. AFA likewise admits that it failed to maintain a meaningful staff or management presence at a location within Enterprise, Kansas, within the Station KBMP( FM) principal community contour or within twenty- five miles from the reference coordinates of Enterprise, Kansas during the period from March 6, 2002 to October 31, 2002. 23 B. AFA Apparently Has Willfully Failed to Respond in Full to a Bureau Order. 12. Section 403 of the Act authorizes the Commission to institute on its own motion any inquiry into, inter alia, any matter relating to the enforcement of the Act or the Commission’s rules. 24 Section 308( b) provides that the Commission “may require from an applicant or licensee further written statements of fact during the license term. . . .” 25 Pursuant to that and other authority, 26 the Bureau ordered AFA to provide certain information. AFA did not do so. A party cannot pick and choose which portions of the directives in a Bureau inquiry letter require a response. 27 However, that is the course of action taken by AFA, through its General Counsel, Mr. Vaughn, in his letter of November 21, 2003. Out of nine categories of information and documents the Enforcement Bureau’s letter dated November 13, 2003 directed AFA to provide, Mr. Vaughn responded to two while offering no explanation for not responding to the other categories. 28 C. Proposed Action 13. 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. 29 The Commission’s Forfeiture Policy 22 See American Family Association, Forfeiture Order, 17 FCC Rcd 18, 135 (EB 2002), recon. denied 18 FCC Rcd 2413 (EB 2003). 23 Letter from Patrick J. Vaughn to Marlene Dortch, dated September 5, 2002; see also letter from Patrick J. Vaughn to Marlene Dortch, dated October 1, 2002. 24 See 47 U. S. C. § 403. 25 47 U. S. C. § 308( b). See also 47 C. F. R. § 73. 1015. 26 See 47 U. S. C. § 154( i),( j). 27 See, e. g., SBC Communications, supra note 12; Radio Moultrie, Inc., Order to Show Cause and Notice of Opportunity for Hearing, 17 FCC Rcd 24, 304 (2002) (order to show cause to revoke license for, inter alia, failure to respond to Bureau inquiry letters); World Communications Satellite Systems, Inc., Forfeiture Order, 19 FCC Rcd 2718 (EB 2004) ($ 10, 000 forfeiture for submitting a jurisdictional objection in lieu of a response to a Bureau inquiry letter). 28 Mr. Vaughn’s letter did include a sentence stating, “Please contact me if you have further questions regarding AFA’s compliance with 47 C. F. R. Section 73. 1125 at KBMP- FM, Enterprise, Kansas.” Letter from Patrick J. Vaughn to David Brown, dated November 21, 2003. However, that is no substitute for providing, for each category of information requested, either the information requested or an explanation as to why the information was not available. 29 See 47 U. S. C. § 503( b); 47 C. F. R § 1.80. 5 Federal Communications Commission DA 04- 2330 6 Statement sets a base forfeiture amount of $7,000 for violation of the main studio rule. 30 The Forfeiture Policy Statement sets forth a base forfeiture amount of $4,000 for failure to respond to Commission communications. 31 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 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.” 32 14. It appears that, from at least March 6, 2002, and continuing up to October 31, 2002, AFA willfully and repeatedly violated the main studio rule, by failing to locate the Station KBMP( FM) main studio at a place in accordance with section 73.1125( a), and by failing to maintain a meaningful local management and staff presence. The deliberate and knowing violation of this rule by a party that has previously been assessed a forfeiture for violating the rule under similar circumstances warrants (at the very least) the full $7,000 forfeiture proposed here. 15. Likewise, it appears that AFA willfully violated a Bureau order by failing to respond in full to the Enforcement Bureau’s letter of inquiry of November 13, 2003. Instead of providing the nine categories of information and providing relevant documents for all categories as directed by the Bureau’s inquiry (or explaining why requested information in particular categories was not available), AFA, through its General Counsel, only responded to two categories of information and only provided a relevant document within the scope of those two categories. Because AFA did submit a partial response, the $4,000 base amount for such misconduct will be reduced to $3,000. 16. Accordingly, applying the Forfeiture Policy Statement and the statutory factors to this case, we conclude that AFA is apparently liable for a $10,000 forfeiture, for violating the Commission’s main studio rule and failing to respond in full to a Bureau order. IV. ORDERING CLAUSES 17. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 503( b) of the Communications Act of 1934, as amended, 47 U. S. C. § 503( b), and section 1.80 of the Commission’s rules, 47 C. F. R. § 1.80, American Family Association, is hereby NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of ten thousand dollars ($ 10,000) for willfully and repeatedly violating the Commission’s main studio rule and for failing to respond fully to a Bureau order. 18. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the Commission’s rules, 47 C. F. R. § 1.80, within thirty (30) days of the release of this NOTICE OF APPARENT LIABILITY, American Family Association SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 19. Payment of the forfeiture may be made by mailing a check or similar instrument, payable to the order of the Federal Communications Commission. Such remittance should be made to the Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P. O. Box 73482, Chicago, 30 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), recon. denied 15 FCC Rcd 303 (1999) (Forfeiture Policy Statement); 47 C. F. R. § 1.80( b). 31 Id. 32 47 U. S. C. § 503( b)( 2)( D). See also Forfeiture Policy Statement, 12 FCC Rcd at 17100 ¶ 27. 6 Federal Communications Commission DA 04- 2330 7 Illinois 60673- 7482. The payment should note the NAL/ Acct. No. and FRN No. referenced above. 20. The response, if any, to this NOTICE OF APPARENT LIABILITY, must be mailed to William H. Davenport, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445 12 th Street, S. W., Room 4- C321, Washington DC 20554 and MUST INCLUDE the NAL/ Acct. No. referenced above. 21. 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. 22. Requests for payment of the full amount of this Notice of Apparent Liability under an installment plan should be sent to: Chief, Credit and Management Center, 445 12th Street, S. W., Washington, D. C. 20554. 33 23. Under the Small Business Paperwork Relief Act of 2002, Pub. L. No. 107- 198, 116 Stat. 729 (June 28, 2002), the Commission is engaged in a two- year tracking process regarding the size of entities involved in forfeitures. If AFA qualifies as a small entity and wishes to be treated as a small entity for tracking purposes, please so certify to us within 30 days of this NAL, either in AFA’s response to the NAL or in a separate filing to be sent to the Investigations and Hearings Division, Enforcement Bureau, 445 12 th Street, S. W., Washington, D. C. 20554. AFA’s certification should indicate whether AFA, including its parent entity and its subsidiaries (if any), meets one of the definitions set forth in the list in Attachment A of this NAL. This information will be used for tracking purposes only. AFA’s response or failure to respond to this question will have no effect on your rights and responsibilities pursuant to section 503( b) of the Communications Act of 1934, as amended. If AFA has any questions regarding any of the information contained in Attachment A, please contact the Commission’s Office of Communications Business Opportunities at (202) 418- 0990. 24. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT LIABILITY shall be sent, by Certified Mail/ Return Receipt Requested, to Patrick J. Vaughn, General Counsel, American Family Association, P. O. Drawer 2440, Tupelo, MS 38803. FEDERAL COMMUNICATIONS COMMISSION David H. Solomon Chief, Enforcement Bureau 33 See 47 C. F. R. § 1.1914. 7 Federal Communications Commission DA 04- 2330 8 ATTACHMENT A FCC List of Small Entities As described below, a “small entity” may be a small organization, a small governmental jurisdiction, or a small business. (1) Small Organization Any not- for- profit enterprise that is independently owned and operated and is not dominant in its field. (2) Small Governmental Jurisdiction Governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand. (3) Small Business Any business concern that is independently owned and operated and is not dominant in its field, and meets the pertinent size criterion described below. Industry Type Description of Small Business Size Standards Cable Services or Systems Cable Systems Special Size Standard – Small Cable Company has 400,000 Subscribers Nationwide or Fewer Cable and Other Program Distribution Open Video Systems $12.5 Million in Annual Receipts or Less Common Carrier Services and Related Entities Wireline Carriers and Service providers Local Exchange Carriers, Competitive Access Providers, Interexchange Carriers, Operator Service Providers, Payphone Providers, and Resellers 1,500 Employees or Fewer Note: With the exception of Cable Systems, all size standards are expressed in either millions of dollars or number of employees and are generally the average annual receipts or the average employment of a firm. Directions for calculating average annual receipts and average employment of a firm can be found in 13 CFR 121.104 and 13 CFR 121.106, respectively. 8 Federal Communications Commission DA 04- 2330 9 International Services International Broadcast Stations International Public Fixed Radio (Public and Control Stations) Fixed Satellite Transmit/ Receive Earth Stations Fixed Satellite Very Small Aperture Terminal Systems Mobile Satellite Earth Stations Radio Determination Satellite Earth Stations Geostationary Space Stations Non- Geostationary Space Stations Direct Broadcast Satellites Home Satellite Dish Service $12.5 Million in Annual Receipts or Less Mass Media Services Television Services Low Power Television Services and Television Translator Stations TV Auxiliary, Special Broadcast and Other Program Distribution Services $12 Million in Annual Receipts or Less Radio Services Radio Auxiliary, Special Broadcast and Other Program Distribution Services $6 Million in Annual Receipts or Less Multipoint Distribution Service Auction Special Size Standard – Small Business is less than $40M in annual gross revenues for three preceding years Wireless and Commercial Mobile Services Cellular Licensees 220 MHz Radio Service – Phase I Licensees 1,500 Employees or Fewer 220 MHz Radio Service – Phase II Licensees 700 MHZ Guard Band Licensees Private and Common Carrier Paging Auction special size standard - Small Business is average gross revenues of $15M or less for the preceding three years (includes affiliates and controlling principals) Very Small Business is average gross revenues of $3M or less for the preceding three years (includes affiliates and controlling principals) Broadband Personal Communications Services (Blocks A, B, D, and E) 1,500 Employees or Fewer Broadband Personal Communications Services (Block C) Broadband Personal Communications Services (Block F) Narrowband Personal Communications Services Auction special size standard - Small Business is $40M or less in annual gross revenues for three previous calendar years Very Small Business is average gross revenues of $15M or less for the preceding three calendar years (includes affiliates and persons or entities that hold interest in such entity and their affiliates) Rural Radiotelephone Service Air- Ground Radiotelephone Service 1,500 Employees or Fewer 9 Federal Communications Commission DA 04- 2330 10 800 MHz Specialized Mobile Radio 900 MHz Specialized Mobile Radio Auction special size standard - Small Business is $15M or less average annual gross revenues for three preceding calendar years Private Land Mobile Radio 1,500 Employees or Fewer Amateur Radio Service N/ A Aviation and Marine Radio Service Fixed Microwave Services 1,500 Employees or Fewer Public Safety Radio Services Small Business is 1,500 employees or less Small Government Entities has population of less than 50,000 persons Wireless Telephony and Paging and Messaging 1,500 Employees or Fewer Personal Radio Services N/ A Offshore Radiotelephone Service 1,500 Employees or Fewer Wireless Communications Services 39 GHz Service Small Business is $40M or less average annual gross revenues for three preceding years Very Small Business is average gross revenues of $15M or less for the preceding three years Multipoint Distribution Service Auction special size standard (1996) – Small Business is $40M or less average annual gross revenues for three preceding calendar years Prior to Auction – Small Business has annual revenue of $12. 5M or less Multichannel Multipoint Distribution Service Instructional Television Fixed Service $12.5 Million in Annual Receipts or Less Local Multipoint Distribution Service Auction special size standard (1998) – Small Business is $40M or less average annual gross revenues for three preceding years Very Small Business is average gross revenues of $15M or less for the preceding three years 218- 219 MHZ Service First Auction special size standard (1994) – Small Business is an entity that, together with its affiliates, has no more than a $6M net worth and, after federal income taxes (excluding carryover losses) has no more than $2M in annual profits each year for the previous two years New Standard – Small Business is average gross revenues of $15M or less for the preceding three years (includes affiliates and persons or entities that hold interest in such entity and their affiliates) Very Small Business is average gross revenues of $3M or less for the preceding three years (includes affiliates and persons or entities that hold interest in such entity and their affiliates) Satellite Master Antenna Television Systems $12.5 Million in Annual Receipts or Less 24 GHz – Incumbent Licensees 1,500 Employees or Fewer 24 GHz – Future Licensees Small Business is average gross revenues of $15M or less for the preceding three years (includes affiliates and persons or entities that hold interest in such entity and their affiliates) Very Small Business is average gross revenues of $3M or less for the preceding three years (includes affiliates and persons or entities that hold interest in such entity and their affiliates) Miscellaneous 10 Federal Communications Commission DA 04- 2330 11 On- Line Information Services $18 Million in Annual Receipts or Less Radio and Television Broadcasting and Wireless Communications Equipment Manufacturers Audio and Video Equipment Manufacturers 750 Employees or Fewer Telephone Apparatus Manufacturers (Except Cellular) 1,000 Employees or Fewer Medical Implant Device Manufacturers 500 Employees or Fewer Hospitals $29 Million in Annual Receipts or Less Nursing Homes $11.5 Million in Annual Receipts or Less Hotels and Motels $6 Million in Annual Receipts or Less Tower Owners (See Lessee’s Type of Business) 11