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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 ) Desert Telecommunications L.P. ) ) Transfer of Control ) File No. 02243-CL-MP-89 ) Block B Unserved Area Permittee ) Los Angeles MSA, Market No. 2B(2) ) CRS Station KNKR313 ) ) ) ORDER Adopted: October 21, 1997 Released: October 21, 1997 By the Chief, Commercial Wireless Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. This order grants a transfer of control application and a waiver request filed concurrently on July 24, 1997 by Desert Telecommunications L.P. (Desert). Desert requests a waiver of Sections 22.137(d)(3)(i) and 22.943(b)(1) to permit Desert to transfer its license to Los Angeles SMSA Limited Partnership (LASLP). Sections 22.137(d)(3)(i) and 22.943(b)(1) generally prohibit an unserved area licensee from entering into any agreement to assign the license or transfer control of the licensee (except pro forma assignments and transfers) until the cellular system in question has served subscribers for at least one year. II. BACKGROUND 2. Desert filed its application for the Los Angeles MSA's Block B unserved area almost nine years ago. The processing of applications in this market was substantially delayed by the McElroy litigation, however, which involved lengthy reconsideration and review by the Commission, two petitions for mandamus to the U.S. Court of Appeals for the District of Columbia Circuit and two Court remands. On February 24, 1997, pursuant to the second Court remand in McElroy, Desert's application was granted. Upon licensing, Desert began developing a plan to establish cellular service in its service area. However, in light of the Commission's recent licensing of Personal Communications Service (PCS) systems, Desert soon determined that the supply of engineering, construction, and other support services in the area was inadequate to meet current construction demands and construction of its system would be delayed. Thus, Desert requests that the Commission waive Sections 22.137(d)(3)(1) and 22.943(b)(1) of the rules to permit Desert to transfer control of its Block B unserved area license before its system has been constructed and operating for one year. III. DISCUSSION 3. Pursuant to Section 22.119(a) of the rules, the Commission may grant a request for waiver if the requesting party shows that: (1) the underlying purpose of the rule(s) would not be served or would be frustrated by application to the instant case, and that a grant of the requested waiver would be in the public interest; or (2) in view of unique or unusual factual circumstances of the instant case, application of the rule(s) would be inequitable, unduly burdensome or contrary to the public interest or that the applicant has no reasonable alternative. 4. Desert argues that Section 22.119(a)(1) of the rules applies in that the underlying purpose of Sections 22.137 and 22.943 would not be served in the instant case and that granting the waiver would be in the public interest. Desert maintains that the Block B unserved area in Los Angeles is demographically unique because (1) it is geographically expansive, encompassing approximately 23,000 square miles; (2) it is among the largest unserved areas licensed by the Commission; (3) the population in the unserved area exceeds 200,000; (4) and three major interstate highways traverse the area. Desert also notes that the unserved area includes vast stretches of desert and argues that this desert land presents an additional set of formidable zoning and environmental obstacles to construction of Desert's system. According to Desert, the combination of these circumstances justifies waiver of Sections 22.137 and 22.943. 5. In the Unserved Area First Report and Order, the Commission prohibited the transfer of unserved area authorizations until after the facilities have provided service to the public for one year in order to deter speculative applications. Therefore, in order to warrant a waiver of the rules in accordance with Section 22.119(a), Desert must show its application was not speculative and as a result the underlying purpose of the rules would not be served if applied in this case. 6. Desert's partners allege that they had no intention of being involved in a speculative venture when Desert filed its unserved area application over nine years ago. On the contrary, Desert claims that it filed and prosecuted the application notwithstanding substantial uncertainty regarding whether the Commission would process these filings. Desert also claims that its application was backed by market studies, proposing multi-cell systems, costing thousands of dollars, as opposed to generic, single-cell, "lottery ticket" type applications. Furthermore, Desert asserts that if it were a speculator, it would not have mounted an eight-year legal battle for the license and expended substantial time and capital in testing the market and preparing initial engineering studies in connection with the Phase I major modification application. Moreover, Desert maintains that the public interest will be served by waiving these rules and permitting the transfer of control so that LASLP may build out the system and provide service to the public. 7. We are satisfied that Desert has met the Part 22 waiver criteria with respect to its request. We find that Desert has made the required showing of unique or unusual circumstances pursuant to Section 22.119(a). It is clear that the policy behind Sections 22.137 and 22.943 was to prevent speculative applications and that the evidence presented by Desert demonstrates that it did not have speculative intent when applying for the license. We also note that Desert has been prevented by the long pendency of the McElroy litigation from proceeding with development of cellular service for nearly nine years. Therefore, the underlying purpose of the rule would not be served by enforcing the rules in this case. Moreover, waiving the rules and permitting the transfer of Desert's license to LASLP will serve the public interest by hastening competitive Block B cellular service to an area that has long been without such service. IV. CONCLUSION 8. We therefore conclude that Desert should have the benefit of a waiver of Sections 22.137(d)(3)(i) and 22.943(b)(1). We believe that Desert has satisfied the waiver criteria and that a waiver of our rules would serve the public interest, convenience, and necessity. V. ORDERING CLAUSES 9. Accordingly, IT IS ORDERED THAT, pursuant to Section 22.119(a) of the Commission's rules, 47 C.F.R.  22.119(a), the Request for Waiver of Sections 22.137(d)(3)(i) and 22.943(b)(1) filed by Desert Telecommunications Limited Partnership on July 24, 1997 IS HEREBY GRANTED. 10. IT IS FURTHER ORDERED THAT, pursuant to Sections 4(i) and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 310(d), and Section 0.331 of the Commission's rules, 47 C.F.R.  0.331, the Application to Transfer Control of Desert Telecommunications Limited Partnership from JAJ Cellular, Inc. to Los Angeles SMSA Limited Partnership IS HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION David L. Furth Chief, Commercial Wireless Division Wireless Telecommunications Bureau