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FCC Says Alabama Fine Is Within Reason

What percentage of a station's revenue constitutes an excessive fine?

A small family-owned AM station in Alabama has won a fine reduction but still must pay $5,600 for not filing for license renewal on time and operating without authorization.

The case provides some insight into how the FCC staff handles cases in which a station claims financial hardship.

The station is WFHK in Pell City, Ala.; its president is Adam Stocks. He had 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-own 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.

The owner submitted three years of profit and loss statements, showing losses for 2004 and 2005 and a profit in 2006.

“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. 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.”

But the commission recognized that the station has “an unblemished record of compliance” and trimmed the fine to $5,600.