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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) EAST RIVER ELECTRIC POWER ) COOPERATIVE ) ) Requests for Waiver of the ) Inter-Category Freeze at 800 MHz and) Section 90.621(e)(5) of the Commission's) Rules ) ORDER Adopted: September 3, 1997 Released: September 3, 1997 By the Acting Chief, Wireless Telecommunications Bureau: I. INTRODUCTION & EXECUTIVE SUMMARY 1. On June 6, 1996, in support of its intended expansion of its existing 800 MHz Private Land Mobile Radio system, East River Electric Power Cooperative (East River), a wholesale electric power supply and transmission cooperative, filed requests to waive Section 90.621(e)(5) of the Commission's Rules, and to waive the Commission's freeze on inter-category sharing in the 800 MHz band (Waiver Requests). East River contends that these Waiver Requests are designed to allow eligibles in the Public Safety and Business Radio Services to use its system, given that such use would otherwise be prohibited by the Commission's eligibility rules. In a separate pleading also filed on June 6, 1996, East River requests an extended period of time to complete construction of its 800 MHz wide-area system pursuant to Section 90.629(a)(2) of the Commission's Rules. 2. On July 11, 1996, the public was invited to comment on these requests. In response, comments were filed by eight parties, including public safety agencies, frequency coordinators, equipment manufacturers, Commission licensees and trade groups. Additionally, East River submitted reply comments reiterating the necessity of waivers to permit implementation of its proposed operations. Based on the record in this proceeding, we conclude that East River's Waiver Requests should be granted with respect to Public Safety eligibles, but not with respect to Business eligibles. The record also supports grant of East River's request for an extended period of time to complete construction of its wide-area system. II. BACKGROUND 3. Suspension of Acceptance of Inter-Category Sharing Applications. Private Mobile Radio Service (PMRS) frequencies in the 806-821/851-866 MHz bands (the 800 MHz band) are divided into "categories," or "pools." These categories are: (1) Specialized Mobile Radio (SMR), (2) Public Safety, (3) Business (BRS), (4) Industrial/Land Transportation (I/LT), and (5) General Category. As a general matter, entities are licensed on frequencies in the categories for which they meet the eligibility criteria. Pursuant to Section 90.621(e) of the Commission's Rules, however, entities eligible for licenses in the 800 MHz band, such as Public Safety, I/LT and BRS entities, may seek to be licensed on frequencies in another category if there are no frequencies available in their own category. Permitting a licensee's use of frequencies outside a category for which it is eligible is referred to as inter-category sharing. 4. On April 5, 1995, the Wireless Telecommunications Bureau (Bureau) suspended the acceptance of applications for inter-category sharing of 800 MHz PMRS frequencies allocated to the Public Safety, I/LT and Business Radio Services. In reaching its decision to suspend acceptance of such applications, the Bureau noted a significant increase in the number of Business and I/LT eligibles filing applications, on an inter-category basis, for 800 MHz Public Safety frequencies. The Bureau also noted that the Commission had initiated a rulemaking proceeding in which it was considering whether to limit the availability of inter- category sharing. To avoid compromising the resolution of issues raised in the rulemaking proceeding, and to address the concerns of the Public Safety community that adequate spectrum remain to meet its needs, the Bureau suspended acceptance of inter-category sharing applications in the 800 MHz band. With regard to the Public Safety Category, the Bureau concluded that a suspension was necessary even though Public Safety 800 MHz frequencies are fully occupied in or near most metropolitan areas, and, therefore, are not generally available for inter-category sharing. Some channels, however, remain available in less populated, but rapidly growing parts of the country. Public Safety agencies view these channels as resources to meet many of their future radio spectrum needs. 5. Waiver Requests. East River currently is the licensee of 85 channel pairs in the 800 MHz I/LT and Business Pools in South Dakota and Minnesota. It has begun efforts to expand its communications system, which provides remote control capability, alarm reporting and instantaneous readout of voltage, power factor, weather, system load and other data. According to East River, its expansion and upgrade includes a planned implementation of Ericsson's "EDACS" 800 MHz equipment, which will assertedly ensure the reliability of East River's system. Upon the realization that excess capacity would be created by implementation of this new system, East River sought means by which it could bring additional users onto the system in order to defray some of its system's costs. East River chose to file seventeen SMR applications to effectuate its plans to lease excess capacity on a for-profit basis to additional system users. The Bureau, however, granted only one of these applications because the other applications requested channels then unavailable. Since East River was not given all the SMR channels requested, it sought to implement its proposal to lease excess capacity on a for-profit basis by converting the I/LT stations to which it was then licensed to community repeaters, and filing license applications for community repeaters in the Business Radio Service. 6. Now East River proposes to extend its multiple licensing arrangement so that: (1) Public Safety and Business eligibles, in addition to I/LT eligibles, may obtain their own licenses for community repeaters and operate using East River's I/LT frequencies and East River's facilities; and (2) Public Safety eligibles, in addition to Business eligibles, may obtain their own licenses for community repeaters and operate using East River's Business frequencies and East River's facilities. To implement this arrangement, East River seeks waiver of the suspension of acceptance of inter-category sharing applications and the rules governing inter-category sharing of the frequencies in the 806-821/851-866 MHz bands, in order to enable Public Safety and Business eligibles to use the same frequencies at the same locations as East River. These waivers are sought because without them Business eligibles could not become multiple licensees on East River's I/LT Pool frequencies unless they were eligible in this category, and Public Safety eligibles could not become multiple licensees on East River's I/LT and Business Pool frequencies. East River also requests waiver of Section 90.621(e)(5) of the Commission's Rules requiring that an applicant for inter-category sharing submit a statement from its own category's frequency coordinator that frequencies are not available in its category. In addition, East River requests that grant of such waiver be in the form of a letter that Business and Public Safety Radio applicants seeking to conduct operations on the same frequencies at the same locations as East River can attach directly to their application forms. East River suggests that this letter state that it has been granted authority to license additional users for its community repeater system notwithstanding the Bureau's existing suspension of acceptance of inter-category sharing applications and the specific requirements of the applicable inter-category sharing rules. 7. Extended Implementation Request. In addition to its Waiver Requests, East River asks for an extended period of time to complete construction of its 800 MHz wide-area system. It contends that constructing facilities to operate on five channels at 17 transmitter sites within one year has proven to be a difficult process for it, a rural electric cooperative. East River states that its initially assigned frequencies repeated at distances too close, thereby causing interference, which required a slight variation in the channel allocations and resulted in loss of valuable planning and implementation time. More importantly, East River asserts that its implementation of Ericsson's "EDACS" system -- unique in that it requires a proprietary audio card to be added to the system when the system is expanded from four to five channels -- requires upgrades at various sites. East River contends that these and other factors require additional time for completion of construction of East River's 800 MHz system. East River indicates that by September 1997, four channels will be constructed at each site, while the fifth channel will be constructed at each site during the remaining license term. East River contends that extending the implementation time for construction of its wide-area system would be in the public interest because it is a rural electric cooperative utility needing a reliable communications network and because it proposes to serve the communications needs of local Public Safety agencies. III. DISCUSSION 8. To obtain a waiver of the Commission's rules and procedures, a petitioner must demonstrate that its circumstances are unique and that good cause exists to justify the requested relief. East River has met this burden as it pertains to Public Safety eligibles. The public interest would not be served, however, by permitting Business eligibles to compensate East River for use of system capacity. In addition, East River has made a sufficient showing justifying grant of its Request for Extended Implementation. Our basis for these determinations is set forth below. 9. The Nature of East River's Proposed Operations. Opponents argue that East River is attempting to do indirectly what it was unable to do directly, i.e., offer a commercial communications service. They submit that if East River intends to operate its system as a for-profit operation, it should be categorized as a Commercial Mobile Radio Service (CMRS) facility. We find merit in opponents' allegations that East River's proposed use of its excess capacity cannot be categorized as a PMRS service. While the Commission usually considers any leasing of excess capacity as for-profit service, it presumptively classified shared use arrangements on a not-for-profit basis and multiple licensing arrangements as PMRS. The Commission has concluded that not-for-profit shared use and multiple licensing arrangements permit private radio users to combine resources to meet compatible communications needs that might otherwise go unmet, and that Congress recognized this arrangement as an element of "private" mobile service. The presumption that these arrangements are PMRS, however, is rebuttable. The Commission noted its concern that licensees of shared use systems not be permitted to enter into nominally not-for-profit arrangements that actually disguise for-profit activity. It also indicated that while the types of costs that multiple licensees can share are not limited, the cost-sharing arrangement itself must be bona fide. 10. East River's proposal does not constitute a legitimate multiple licensing arrangement under Section 90.185 of the Commission's Rules, and does not qualify as a permissible shared use arrangement under Section 90.179 of the Commission's Rules. East River contemplates what is essentially a hybrid system that meets its internal private communications needs and the non-private communications needs of other entities. As regards East River's communications for internal purposes, its system remains a private mobile radio service. The use of excess capacity as proposed by East River, however, does not qualify as PMRS. By East River's own admission, it seeks the waiver of the suspension of acceptance of inter-category sharing applications and rules because of its failed attempt to effectuate its plans through grant of SMR authorizations. As indicated by East River's initial effort to become an SMR operator in the 800 MHz band, its intention is and always has been to offer service to other entities. In its own words, " . . . [w]hen it became clear that East River would not receive [SMR] authorizations at all of its necessary transmitter sites, East River sought other 800 MHz spectrum options." 11. Even were we not to consider East River's stated motive for filing the Waiver Requests, we conclude that its proposed use of excess capacity does not meet the criteria for PMRS operation on either a multiple licensing or shared use basis. A true multiple licensing arrangement, as envisioned by the Commission's rules, would be present where each one of the licensees is theoretically providing service to itself, not others. This paradigm is clearest when the multiple licensees are similar in status (e.g., all small entities), obtain their common equipment from a third-party equipment vendor rather than from one of the multiple licensees, and share other costs of operation, e.g., a manager's fee, purchase of equipment, and site rental. Under such conditions, the Commission will treat multiple licensing systems as PMRS because they are used only for internal business communications and do not provide a communications service to the public. In the proposed scenario, however, East River would be the single large dominant licensee among a group of proposed smaller multiple licensees. East River owns the equipment, has the sites, and intends to manage the wide-area mobile radio system apparently for profit. Notwithstanding the Commission's general view that multiple licensing arrangements are usually considered to be PMRS-type systems, we conclude that East River's proposal as it relates to use of excess capacity is not truly a multiple licensing system. Rather, East River is proposing to lease the excess capacity of its own system in a for-profit sharing arrangement. Such an arrangement is more properly regulated under Section 90.179 of the Commission's Rules. Therefore, East River's proposal must be evaluated under the criteria of Section 90.179 of the Commission's Rules, which establishes the parameters for shared use of radio stations in the PMRS. Section 90.179(f), however, only permits shared use of frequencies above 800 MHz on a for-profit basis by SMR, Private Carrier Paging and Location and Monitoring Service licensees. Thus, East River's proposal, which contemplates for-profit service, runs afoul of the Commission's Rules. 12. Waiver Grants. Nonetheless, given the Commission's continuing commitment to address the communications needs of the public safety community, we conclude that grant of the East River waiver requests as they relate to Public Safety eligibles, if it is implemented on a non-profit basis, would further the public interest. We agree with UTC and Kenwood Systems Group, Inc. (Kenwood) that the benefits of East River's system upgrade can accrue to the public through increased spectrum availability for public safety agencies. This will help to serve the Commission's current efforts to better meet the spectrum needs of state and local public safety agencies. The additional system capacity to serve the public's needs for the transmission of critical communications such as those concerning police, fire and emergency medical operations is most advantageous and clearly in the public interest. We disagree with the Industrial Telecommunications Association, Inc.'s (ITA) suggestion that East River's prospective customers use the Public Safety channels currently available in both South Dakota and Minnesota, rather than share East River's system. Rather, we believe that utilizing East River's system is a significantly more efficient use of the spectrum because it preserves the limited spectrum allocated to public safety agencies for other uses. In the Balanced Budget Act of 1997, the U.S. Congress recognized the importance of spectrum flexibility in meeting public safety needs. The Congress found that, under the right circumstances, flexible allocation of spectrum can result in more innovative and productive use of the spectrum. 13. Also, contrary to opponents' arguments, East River has demonstrated the unique circumstances warranting the requested waivers, with respect to public safety entities, in compliance with Section 90.151(a) of the Commission's Rules. A grant of East River's requests limited to only public safety entities will aid the Commission's efforts to provide an environment in which public safety licensees have flexibility in choosing how best to meet their operational requirements. In addition, this partial grant of East River's waiver requests will expedite access of public safety entities to the latest communications technology and will provide these entities with additional spectrum resources more efficiently, thus conserving their limited economic resources. In this manner, East River's excess capacity will not lie fallow, but instead will serve the public safety community and therefore the community at large. In contrast, the interests of the business community are actually and prospectively met by a number of various BRS and CMRS options. Additionally, the proposed business use of these frequencies does not involve considerations of safety of life and protection of property that are an integral part of our reasons for granting these Waiver Requests for Public Safety use. Therefore, we find that granting a waiver to permit Business use of East River's excess capacity is not justified. We also find, however, that the essential and critical nature of public safety transmissions clearly warrant waiver of the inter-service category rules in these circumstances. 14. We agree with UTC that waiving the suspension of acceptance of inter-category sharing applications to permit use of East River's system by Public Safety eligibles will not frustrate the underlying purpose of the suspension -- to ensure that adequate spectrum remains available to meet the needs of the public safety community. In fact, grant of the Waiver Requests furthers the availability of spectrum resources to the public safety community. As indicated in the Balanced Budget Act of 1997, the U.S. Congress envisioned that the Commission would use its waiver authority to promote and facilitate the provision of public safety services. Also, contrary to the arguments of opponents, such as ITA, grant of the Waiver Requests does not frustrate the underlying purpose of Section 90.621(e)(5) of the Commission's Rules. This rule reserves the benefits of inter-category sharing for those situations where there are no available frequencies left in a user's own category. However, no new spectrum allocations are being requested. Rather, East River's requests concern the additional use of already authorized channels. As noted by the American Mobile Telecommunications Association, Inc. (AMTA), no public interest is served if public safety entities with internal communications requirements -- which otherwise cannot be satisfied -- are denied access to available spectrum. Furthermore, as the subject channels are currently occupied by East River, grant of the Waiver Requests will more intensely utilize already assigned spectrum without diminishing spectrum availability in East River's geographic area. 15. We, however, do not find persuasive ITA's assertion that the public safety community, while indicating support of the Waiver Requests, has not indicated any commitment to use East River's system. Public safety entities have demonstrated their current intention to share East River's system. In particular, the City of Yankton, South Dakota, indicated that it is currently considering an agreement with East River to share its mobile communications system. Consistent with this expressed intention, the Police Department of Yankton, South Dakota, has filed with the Commission, and been granted, a request for Special Temporary Authority (STA) to share East River's system. 16. In its comments opposing East River's Waiver Requests, Nextel analogizes to the Viking Dispatch Services (VDS) case. We find, however, that East River's proposal has both similarities to and distinctions from the VDS venture. In VDS, the Bureau denied license applications for an alleged not-for- profit, cost-shared dispatch system on the basis that it was, instead, a commercial for-profit venture. Unlike VDS, East River is and has been a bona fide private land mobile radio licensee serving its own internal communications needs on already assigned frequencies. As some commenters submit, however, East River's proposal to sell its excess capacity to the business community does not constitute a PMRS venture. Our decision limiting East River's waiver to serving the public safety community reflects recognition of certain public interest benefits of East River's proposal while excluding those elements that would violate the Commission's rules and policies regarding PMRS. 17. Extended Implementation Request. Pursuant to Section 90.629 of the Commission's Rules, applicants for either conventional or trunked operations may be authorized a period of up to five (5) years for constructing and placing a system in operation if the proposed system is to be part of a coordinated wide area system which will require more than eight months for conventional operations or one year for trunked operations to plan, approve, fund, purchase, construct and place into operation. East River has justified its request for extended implementation as required by this rule. It indicates that its load management system covers the largest geographic area of any similar installation in the country. East River uses excess capacity in its transmission system to deliver wholesale power to 24 municipal electric systems and other customers in South Dakota, Minnesota, and Iowa. The EDACS system being implemented is unique in that it requires a proprietary audio card to be added to the system when the system is expanded from four to five channels. The large expansion and upgrade of East River's 800 MHz portion of its mobile system is the type of operation contemplated by the rule. Furthermore, East River states that every site will be operational by the end of the first year. The only requested extension is for construction of the complete set of five channels at each of the 17 transmitter sites and only for a single channel after the first year. East River has complied with Section 90.629 of the Commission's Rules by requesting a specific amount of time to implement its wide-area system, and providing a list of its systems and a proposed construction schedule. We also note that commenters support extending the implementation period. As East River's system warrants an extended period for implementation, we grant its request and impose a September 30, 1999 deadline by which East River's system must be fully constructed and in operation. 18. Request to Waive Section 90.621(e)(5). Because East River proposes a multiple licensing arrangement contemplating use of its BRS and I/LT channels by Business Radio and Public Safety eligibles, it requests, on behalf of its prospective additional user/licensees, waiver of Section 90.621(e)(5) of the Commission's Rules. To this end, East River also requests that -- in granting waiver of the inter-category sharing rules and suspension of acceptance of applications -- we provide it with blanket authority to license additional users for its community repeater system. Specifically, East River suggests that grant of the waivers take the form of a blanket letter which an applicant for a community repeater could attach directly to its application form. With respect to applicants that are eligibles in the BRS, this waiver is denied because we are not granting the requested waivers to permit BRS applicants to use East River's system. With respect to Public Safety applicants, East River's request for blanket licensing authority is denied because waiver of the inter-category suspension of acceptance of applications and inter-category rules is granted on the condition that East River shares its facilities on a non-profit cooperative basis consistent with the provisions of Section 90.179 of the Commission's Rules, rather than operating its stations as community repeaters under the Commission's multiple licensing rules (47 C.F.R.  90.185), because its venture does not constitute a multiple licensing arrangement to which the latter rules would apply. We note, however, that to take advantage of our grant of East River's request to waive the eligibility rules to permit Public Safety entities to share its system's I/LT frequencies, East River must file individual applications to modify its licenses to reflect operation as a non-profit cooperatively shared system pursuant to Section 90.179 of the Rules. IV. CONCLUSION 19. This Order grants East River's requests for waiver of the suspension of acceptance of applications for inter-category sharing in the 800 MHz band and the inter-category sharing rules to enable Public Safety eligibles to share its system upon proper application for license. This Order denies East River's additional requests for waiver of the suspension of applications for inter-category sharing in the 800 MHz band, and the inter-category sharing rules prohibiting Business Radio Service eligibles from sharing its system. This Order also grants East River's request for an extended implementation period. The actions taken herein serve the public interest in that they will enable the more efficient use of the spectrum, and provide improved opportunities for communication by the public safety community. V. ORDERING CLAUSES 20. IT IS ORDERED that pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 303(r), and Sections 90.151 and 90.621(e) of the Commission's Rules, 47 C.F.R.  90.151, 90.621(e), the Requests for Waiver filed by East River Electric Power Cooperative are GRANTED IN PART and DENIED IN PART to the extent indicated above and conditioned on modification of East River's licenses as described above. 21. IT IS FURTHER ORDERED that pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 303(r), and Section 90.629 of the Commission's rules, 47 C.F.R.  90.629, the Request for Extended Implementation filed by East River Power Cooperative is GRANTED conditioned on modification of East River's licenses as described above. FEDERAL COMMUNICATIONS COMMISSION Daniel B. Phythyon Acting Chief, Wireless Telecommunications Bureau