The FCC, in its forfeiture order, fined Shelby Broadcast Associates $16,500. The radio station said their tax returns showed they had been unprofitable for years. However, they forgot to tell the agency that the station was being sold for $184,000.
The Federal Communications Commission (FCC) has levied a $16,500 fine against Shelby Broadcast Associates, LLC, citing unauthorized operations and failure to disclose full operational details. The fine, aimed at the broadcaster for violations at its FM translator station W252BE in Tarrant, Alabama, comes amidst a financial debate in which Shelby claims it is unable to pay due to a lack of revenue.
While Shelby argued their lack of ability to pay the fine due to significant losses over the past years, the FCC found that the broadcaster’s upcoming sale of the station could easily cover the fine. Shelby is set to sell W252BE for $184,000.
Shelby’s financial struggles were spotlighted in their response to the FCC’s Notice of Apparent Liability (NAL), where they attached IRS tax returns from 2020 to 2022 to demonstrate their financial state. However, the FCC was unmoved by these submissions.
The FCC has previously held that a licensee’s gross revenue is the best indicator of its ability to pay a forfeiture. It has also found that forfeitures are reasonable when they amount to a small percentage of that revenue.
However, the FCC has also held that it “looks to all potential sources of income available to the entity,” including the pending station sale. It has rejected a claim of inability to pay where a licensee failed to mention the pending sale of its station, which would yield a more significant sum than the forfeiture amount.
In its determination, the FCC noted that the sale price not only negates the financial hardship claim but also highlights the potential for substantial economic gain, which Shelby failed to disclose adequately.
The dispute began when the FCC identified that Shelby had been operating the station beyond the terms of its license without proper authorization since its Special Temporary Authority (STA) expiration in November 2016. This unauthorized operation continued despite the requirement for stations to operate within their licensed parameters or face penalties.
The forfeiture order is available here.
