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FCC Proposes Fining Florida Company for Possible Auction Rule Violations

February 16, 1995

WASHINGTON (AP) _ After a six-month investigation, federal regulators today proposed fining a St. Petersburg, Fla., company for possibly violating auction procedures for interactive TV and data licenses.

The Federal Communications Commission proposed its biggest fine _ $390,000 _ in this area against Commercial Realty St. Pete Inc., which had won 20 interactive licenses at an auction in July.

In addition, the company is facing penalties of at least $1.23 million for failing to make down payments on those licenses, the FCC said.

The licenses permit a company to deliver two-way services, including letting a viewer at home play along with his favorite game show.

The commission also might forbid Commercial Realty from participating in future FCC auctions.

In proposing action, the FCC said Commercial Realty communicated with other bidders in violation of the commission’s anti-collusion rules, falsely certified that it was financially qualified to fulfill its bidding obligations and falsely certified that it was entitled to a 25 percent bidding credit as a woman-owned firm.

The commission’s investigation found that James Hartley controlled the company and made all its business decisions even though his wife, Teresa Hartley, owned all outstanding shares of stock and was the company’s only director.

Under FCC’s rules, women and minorities have to have operational, not financial, control over a company to be eligible for bidding credits and other preferences.

Last year, the company lost the right to hold the 20 licenses after failing to make down payments. It had pledged to pay $41 million for the licenses.

The FCC will re-auction those licenses, which include Miami, St. Louis, Pittsburgh, Sacramento and Portland, Ore.

The commission will give the company a chance to respond before taking final action. Commercial Realty had no immediate comment.

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