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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 ) ) NEXTEL COMMUNICATIONS, INC. ) DA 98-2206 ) Requests for Waiver of ) 47 C.F.R.  90.617(c) and 90.619(b)) ) ORDER Adopted: July 21, 1999 Released: July 21, 1999 By the Deputy Chief, Wireless Telecommunications Bureau: Table of Contents I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . 1 II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . 2 A. Licensing in the 800 MHz Band . . . . . . . . . 2 B. Waiver Requests . . . . . . . . . . . . . . . . 6 III. DISCUSSION . . . . . . . . . . . . . . . . . . . . 22 IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . 35 V. ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . . 37 Appendix A - Applications Placed on Public Notice (DA 98-2206) Appendix B - Applications Pending as of Date of Order Appendix C - Comments, Reply Comments and Ex Parte Presentations I. INTRODUCTION 1. In this Order, we consider fifty Requests for Waiver submitted by Nextel Communications, Inc. (Nextel) in conjunction with applications seeking FCC consent to assignment of Part 90 Private Land Mobile Radio Service (PLMRS) Business channels from various entities to Nextel. In its waiver requests, Nextel indicates that it desires to utilize these frequencies for Commercial Mobile Radio Service (CMRS) operation in its 800 MHz Specialized Mobile Radio (SMR) systems. Additionally, Nextel states it may use the subject PLMR channels for relocation of upper 200 channel incumbent licensees (incumbents). For the reasons stated below, the subject waiver requests are conditionally granted to permit Nextel to use the subject channels to relocate upper 200 channel incumbents, but are denied to the extent that Nextel requests to use the subject channels for the purpose of expanding its SMR system. We will, however, incorporate the record compiled in this proceeding on the issue of using Private Land Mobile Radio Service (PLMRS) channels in a CMRS system into the rulemaking docket initiated by the Balanced Budget Act Notice, and we invite parties to supplement this record by addressing the issue of using PLMRS channels in a CMRS system further in their comments filed in that docket. II. BACKGROUND A. Licensing in the 800 MHz Band 2. The 800 MHz band is divided into five service categories - - Business, General Category, Industrial/Land Transportation (I/LT), Public Safety, and SMR - - with each category having specific eligibility criteria. Prior to 1995, "intercategory sharing" enabled SMR, Business, I/LT, and Public Safety eligibles to apply for frequencies in other service categories regardless of eligibility criteria under certain circumstances. In the 800 MHz Further Notice, the Commission tentatively concluded that it should revise its eligibility rules for General Category, Business, and I/LT channels to prohibit SMR applicants from applying for Business and I/LT channels in the future. In April of 1995, the Wireless Telecommunications Bureau (Bureau or WTB), prohibited the filing of applications for intercategory sharing among the aforementioned eligibles (intercategory sharing freeze). The objective of the intercategory freeze was to prohibit the acceptance of intercategory sharing applications for spectrum by non-eligibles until the Commission resolved the eligibility and geographic area licensing issues regarding the 800 MHz band. In December of 1995, the Commission eliminated intercategory sharing for SMR applicants. 3. Also in December of 1995, the Commission adopted a geographic area licensing approach to provide regulatory symmetry and operational flexibility to 800 MHz SMR operators and established Economic Areas (EAs) as the licensing area for SMR service in this band. As part of this regulatory framework, the Commission authorized EA licensees to relocate incumbents to comparable facilities. The Commission determined that a smooth and equitable transition to the new licensing framework could be facilitated by some form of mandatory relocation. Thus, upon licensing, the EA licensee has the option of relocating the incumbents to other channels provided certain requirements are met. 4. In 1997 the Commission affirmed its decision to eliminate intercategory sharing by SMR eligibles. Additionally, the Commission finalized its 800 MHz SMR relocation rules. The Commission established two distinct negotiation periods concerning the relocation of incumbents -- a one-year voluntary negotiation period and a one-year mandatory negotiation period -- before an EA licensee may request involuntary relocation of an incumbent. 5. In December of 1997, the Commission auctioned EA licenses for the upper 200 channels of the 800 MHz SMR band (800 MHz SMR auction). Nextel's wholly owned subsidiary, Nextel License Acquisition Corp., was the winning bidder for 475 EAs in the 800 MHz SMR auction. The licenses were conditionally granted on June 17, 1998. B. Waiver Requests 6. Nextel is a provider of SMR services, offering both traditional analog services and digital wide-area services to the public. Between July 1998 and October 1998, Nextel filed fifty applications for assignment of licenses and waiver requests to facilitate the use of PLMRS channels either for relocation of upper 200 channel incumbent licensees (incumbents) or for enhancement of its CMRS system. 7. Although Nextel is eligible to hold licenses for PLMRS Business channels for internal communications purposes, it desires to use some of these channels in its commercial SMR system. The Commission's Rules currently prohibit such use. Section 90.617(c) of the Commission's Rules prohibits the authorization of SMR systems in the Business Radio category. Similarly, section 90.619(b)(7)(iii) of the Commission's Rules does not permit the authorization of SMR systems on Business and I/LT channels in the United States/Canadian border area. 8. With regards to its request for a waiver of section 90.619(b) of the Commission's Rules, Nextel asserts that approximately 4300 stations operating on over 25,000 channels are subject to being relocated in the EAs for which Nextel is licensed. Nextel further asserts that these upper 200 channel incumbents consist of both non-commercial PMRS operators and CMRS operators. Consequently, Nextel maintains that the flexibility to assign channels to satisfy incumbents' requirements and preferences is critical to the success of the relocation program. Thus, Nextel seeks to re-classify its Canadian Region Business channels as SMR channels to (a) incorporate these channels into its commercial SMR system and (b) accommodate the relocation requirements of upper 200 channel incumbents who are subject to relocation. Nextel also maintains that the reclassification of the Business channels to commercial SMR use does not affect the availability of channels or flexibility for non-SMR applicants because Nextel already is licensed for the subject channels which precludes the issuance of new licenses in the area. Finally, Nextel seeks flexibility to use these Canadian Region Business channels primarily for its CMRS system to help it to expand immediately to meet the increasing demand for its digital CMRS system and secondarily for relocation of an incumbent if it becomes necessary. 9. With regards to its request for waiver of section 90.617(c) of the Commission's Rules, Nextel acknowledges that SMR applicants for initial licenses no longer have the opportunity to access Business or I/LT channels. However, Nextel asserts that the Commission's Orders concerning the acquisition of these channels by SMR applicants by filing assignment of license or transfer of control applications have not been definitive as to whether such acquisitions are permissible. Nextel requests the waiver for several reasons. Those reasons include its desire to obtain the Business channels to accommodate the relocation requirements of PLMRS upper 200 channel incumbents. Nextel avers that the objective underlying the elimination of intercategory sharing for SMR applicants is not impacted by a private channel licensee who wishes to provide commercial services or who wishes to transfer its licenses to a commercial SMR provider in exchange for services from the commercial SMR provider. Finally, similar to the Section 90.619(b) Waiver Request, Nextel seeks to use these Business channels primarily in its CMRS system to help it to expand to meet the increasing demand for its digital CMRS. It would also use the channels to relocate incumbents as necessary. Nextel asserts that since April of 1995, the Southern Company has obtained and converted over 400 Business and I/LT channels to CMRS use. Nextel states that it is seeking the same flexibility to respond to marketplace demands and satisfy the requirements of upper 200 channel incumbents in its licensed EAs. 10. On October 28, 1998, the Bureau sought comment on Nextel's applications and associated waiver requests. A number of commenters support conditional grant of the waivers only for the purpose of facilitating relocation of incumbents from the 800 MHz SMR upper 200 channels. These commenters argue that the public interest would be advanced by granting the waiver requests to further the goals of the Commission's new EA licensing and the associated relocation of the upper 200 channel incumbents. 11. Some commenters, such as the Ad Hoc 800 MHz Licensees' Committee (Ad Hoc Committee), support Nextel's request more broadly and argue that the public interest also would be served by allowing the incorporation of PLMRS frequencies in CMRS systems. Ad Hoc Committee argues that licensees should not be prohibited from making efficient business decisions regarding the use of their spectrum. Additionally, some commenters interested in entering purchase agreements or assignments with Nextel echo the arguments of Ad Hoc Committee and contend that the most efficient and effective use of spectrum is effected by arms-length, marketplace-driven decisions. 12. Nextel, with support from the Ad Hoc Committee, suggests that the waivers may not be needed because the intercategory sharing freeze was intended for "new" or "initial" applications and not assignments of license or transfers of control. Thus, Nextel asserts, only unlicensed, unassigned spectrum was subject to the intercategory sharing freeze. Nextel continues that if a waiver is necessary, the intent of the intercategory sharing freeze, which was to halt the influx of intercategory sharing applications, would not be circumvented or compromised by granting the waivers requested in these applications. Opposing this argument that the prohibition on intercategory sharing only applies to initial applications, the Boeing Company (Boeing) argues that the Commission made no distinction between whether the intercategory sharing prohibition on these PLMRS frequencies were the subject of transfer, assignment or initial application. Instead, some commenters, such as API, ITA and Boeing, contend that the intercategory sharing freeze or prohibition was implemented to prevent the very conversion of PLMRS spectrum that is presented by the instant waiver requests. These commenters also warn that a waiver would not only result in an unlawful conversion of PLMRS spectrum in this case, but would signal other SMR entities that encroachment on PLMRS spectrum is permissible. 13. Still other commenters challenge whether the Nextel waiver requests satisfy the Commission's waiver standard. ITA argues that Nextel did not satisfy the standard for a rule waiver to the extent these waiver requests are not limited to the relocation of the 800 MHz SMR upper 200 channel incumbents. UTC also challenges Nextel's satisfaction of the waiver standard. UTC contends that Nextel could facilitate the transaction between the upper 200 channel incumbent and other B/ILT licensees without Nextel becoming a license holder for PLMRS spectrum, and, therefore, reasonable alternatives to a rule waiver exist. 14. Mobex argues that the waivers are contrary to Congress' intent that while licenses available for a company's internal use should not be auctioned, those licenses available for commercial use should be auctioned in order to avoid unjust enrichment of commercial licensees. Mobex further argues that a grant of these requests would "chill" future auction bidding because of all the bidders in the upper 200 auction, only Nextel, through these waivers, had access to additional spectrum for relocation of incumbents. 15. Lastly, the Personal Communications Industry Association, Inc. (PCIA) argues that Nextel's waiver requests do not present any unique circumstances and, in fact, are simply requests to deviate from a rule of general applicability. According to PCIA, with support from Boeing and Mobex, this deviation makes a rulemaking proceeding the appropriate forum to resolve whether the intercategory sharing prohibition should continue. For its part, Nextel argues that a rulemaking proceeding is not necessary because the relief it is seeking depends upon rule interpretation, not new law, rights or duties. Nextel contends that permitting conversion of existing B/ILT licenses to commercial use -- whether for their own operations or via assignments to commercial operators -- is merely a rule interpretation because the intercategory sharing prohibition applies only to unused/unlicensed channels. And, to that end, a new rule or change in a rule is not at issue. 16. On June 14, 1999, Nextel proposed a number of conditions for placement on any licenses granted pursuant to its waiver requests of sections 90.617(c) and 90.619(b). Nextel believes these conditions would restrain potential trafficking in B/ILT spectrum because the conditions would prevent evasion of the Commission's prohibition on SMR operators obtaining vacant B/ILT spectrum for commercial use through intercategory sharing. These proposed conditions are: (a) to return one 800 MHz B/ILT channel for non-commercial use for every two 800 MHz B/ILT channels licensed for non-commercial use Nextel acquires as a result of any rule waivers of sections 90.617(c) and 90.619(b) that it submits by December 4, 2000. (b) submission of quarterly reports to the FCC verifying compliance with the preceding condition. (c) geographic parity among the PLMRS channels acquired and incorporated into the CMRS system and PLMRS channels returned for PLMRS use. Significantly, Nextel describes how it would satisfy its two-for-one swap condition. Nextel provides three types of transactions that would satisfy this "swap" condition: (a) "swaps" to migrate PLMRS incumbents to B/ILT channels from the upper 200 channels, the lower 80 SMR channels, or the 150 General Category channels; (b) "swaps" in transactions with PLMRS licensees to obtain upper 200 channels in the SMR spectrum-limited Canadian Border areas; or (c) surrender of licensed frequencies to the PLMRS frequency pools designated for PLMRS use. 17. Nextel states that by imposition of these conditions, it would be able to (a) acquire B/ILT channels solely to "swap" with upper 200 channel B/ILT incumbents as part of the relocation process; (b) re-tune incumbent B/ILT eligibles from the lower 230 SMR channels to B/ILT channels; and (c) enter into voluntary, arm's-length marketplace decisions with B/ILT licensees to sell their [systems] to a commercial provider for "cash", digital iDEN service, or a combination thereof. Nextel asserts that, through the use of "master contracts" with certain large incumbent B/ILT eligibles, it has been attempting to rationalize the Commission's intercategory licensing over the past decade by moving commercial operations primarily to the SMR and General Category channels, and non-commercial, private systems to the B/ILT channels. Additionally, Nextel maintains that such conditions would effectively balance the Commission's desire to maintain spectrum for private, non-commercial services with its goals of facilitating marketplace-driven transactions that promote competition among providers of commercial wireless services and facilitate more efficient spectrum use. 18. On June 28, 1999, ITA opposed the conditions suggested by Nextel. ITA contends that, contrary to Nextel's assertions, the transactions will not benefit the private wireless industry, but will benefit only Nextel. Specifically, ITA avers that a grant of the waivers with the conditions suggested by Nextel will permit Nextel to aggregate spectrum that has been allocated, not for commercial use, but for private wireless use -- a de facto reallocation under the guise of application assignments of authorization. ITA rejects Nextel's argument concerning re-tuning incumbent B/ILT eligibles from the lower 230 SMR channels to B/ILT channels because the situation of incumbent B/ILT eligibles on the lower 230 SMR channels is not relevant to waiver requests concerning the upper 200 channels. ITA further argues that by re-tuning B/ILT eligibles from the lower 230 SMR channels at this point, Nextel appears to be implementing a business plan for the lower 230 channels before these channels have been auctioned. ITA maintains that Nextel should have to mold its plans around existing incumbents just like all the other prospective bidders will have to do. ITA further declares that Nextel cannot use the execution of "master contracts," which amount to private contractual arrangements, as matters that somehow support the public interest prong of the waiver standard. 19. On July 2, 1999, Boeing responded to Nextel's June 14th Ex Parte, by opposing the grant of the waiver requests on three grounds. First, Boeing reasserts that a rulemaking proceeding is the appropriate mechanism to consider Nextel's requests because the requests effectively change the Commission's Rules. Specifically, Boeing argues that "[r]ather than attempt to change the controlling rule in a rulemaking that would be open to many parties, Nextel has chosen the quiet expediency of the waiver process, with its hit-or-miss ex parte exchanges and its elastic, 'let's make a deal' character." 20. Second, Boeing argues that the prohibition on SMR operations in the B/ILT channels preserves access to spectrum for legitimate, eligible private users and should not be overturned for the convenience of individual parties. Boeing maintains that the parties to these transactions wish to convert a public resource (spectrum that could be equally useful to other private radio licensees) to private gain. Boeing strongly contends that the larger public interest is served by preserving the availability of already greatly diminished spectrum for qualified private users. Moreover, Boeing avers that the "two for one" proposal merely standardizes the rate of drain of private radio spectrum into commercial use (by Nextel) and is counter not only to the plain language of the rule, but to the public policy that generated the language. 21. Third, Boeing argues that Nextel has not satisfied the waiver standard. Boeing states that Nextel has not articulated unique circumstances that would justify a waiver. Finally, Boeing notes that a waiver is not necessary for Nextel to relocate private incumbents from various other categories to B/ILT channels - - if these B/ILT channels are never "integrated into Nextel's network"- - because the Commission's Rules prohibit the operation of SMR systems in B/ILT channels, not assignment of these channels from eligible B/ILT users to other eligible users. III. DISCUSSION 22. The Commission's Rules allow for waiver of specific rule requirements upon certain showings. Section 1.925 of the Commission's Rules permits a rule waiver if 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. Alternatively, an applicant's request for waiver may also be granted if in view of the unique or unusual factual circumstances of the instant case, application of the rules would be inequitable, unduly burdensome or contrary to the public interest, or the applicant has no reasonable alternative. Additionally, section 1.3 of the Commission's Rules provides authority for a rule waiver upon a showing of good cause. 23. Section 90.617(c) of the Commission's Rules lists the channels available for Business applicants in the 800 MHz band. Additionally, this section states that SMR systems will not be authorized on these frequencies. Section 90.619(b) of the Commission's Rules governs the frequency assignment of 800 MHz channels in the United States/Canadian border area. Similarly, section 90.619(b)(7)(iii) of the Commission's Rules does not permit the authorization of SMR systems on Business and I/LT channels. The waivers sought by Nextel would enable it, inter alia, to use Business spectrum to relocate PLMRS and CMRS operators. 24. Based on our review of the record in this proceeding we find that Nextel seeks broad relief to obtain a waiver of the Commission's intercategory sharing prohibition by SMR applicants. Nextel identifies two distinct purposes for which it seeks this broad relief of the intercategry sharing prohibition-- relocation and incorporation into its SMR system. 25. We agree that there are some public interest benefits associated with certain of Nextel's stated objectives in pursuing the subject waivers. In this connection, we note that several commenters state that Nextel should be granted waivers to facilitate relocation of incumbents from the 800 MHz upper 200 channels. Motorola argues that the waivers should be granted where an upper 200 channel incumbent seeks to assign its frequencies to Nextel for other spectrum held by Nextel via this proposed waiver request. ITA endorses the waiver requests to the extent of accomplishing relocation of the upper 200 channel incumbents. 26. Based on the record before us, we conclude that a conditional waiver designed to facilitate relocation of 800 MHz SMR upper 200 channel incumbents would serve the public interest. We believe that such waiver would further the Commission's goals in the 800 MHz SMR proceeding by promoting an efficient and effective transition to geographic area licensing. We further note that some of these upper 200 channel incumbents may be authorized for CMRS operations on their licensed frequencies to the extent that they are sharing their frequencies on a for-profit basis with other entities. Absent a waiver, they would not be permitted to provide CMRS on the subject frequencies. Given the Commission's desire to facilitate a smooth relocation process for such incumbents, we believe that a waiver of section 90.179 of the Commission's Rules under these limited circumstances is warranted. We believe that such a waiver serves the public interest because it facilitates efficient use of spectrum and compliance with relocation rules. To the extent that Nextel's waiver requests are for purposes of relocating 800 MHz SMR upper 200 channel incumbents who are authorized as CMRS, the waivers are granted on the condition that Nextel provide information demonstrating that it has contractual agreements to relocate upper 200 incumbents to such frequencies. 27. With respect to Nextel's request for a waiver in order to incorporate PLMR frequencies into its CMRS system, we do not believe that grant of an unconditional waiver is warranted based on the record before us. When the Commission adopted sections 90.617(c) and 90.619(b) of the Commission's Rules, it sought to preserve PLMRS frequencies for use by those who meet the eligibility criteria. The intercategory sharing freeze was imposed to halt the influx of applications while the prohibition on intercategory sharing (codified in sections 90.617 and 90.619 of the Commission's Rules) was imposed to stop the subsequent licensing of PLMRS spectrum for SMR operations. As a result, Commercial SMR systems are expressly prohibited from operating on Business and I/LT channels. As explained above, this measure was taken to avoid a potential scarcity of radio frequencies for PLMRS uses by stopping the then prevailing practice of incorporating Business and I/LT channels into CMRS systems. Thus, the substance of Nextel's request to use the subject PLMRS channels in its SMR system appears to be at odds with the underlying purpose of sections 90.617(c) and 90.619(b) of the Commission's Rules. 28. We also note that the Land Mobile Communications Council (LMCC) has raised the issue of PLMRS spectrum availability in a pending petition for rulemaking. In its rulemaking petition LMCC contends that a spectrum shortage crisis emerged in the PLMRS industry because the current spectrum allocation environment promotes the development of CMRS at the expense of PLMRS. MRFAC, ARINC and ITA also point to the diminished spectrum available to PLMRS eligibles for PMRS use and urge protection from further encroachment by CMRS users. 29. We note that Nextel, along with other commenters, argues that grant of the requested waiver would not undermine the Commission's Rules because the actual PLMRS frequencies available for authorization would not be affected. In describing available frequencies, Nextel asserts that there is no net change in the frequencies that are available for authorization because the subject spectrum is currently licensed and therefore "unavailable" to other entities. MRFAC, along with other commenters, disagree with Nextel's assessment. They argue that the subject spectrum should become part of the spectrum pool if the licensee fails to renew or otherwise loses its authorization. 30. Because we find that it is in the public interest to facilitate the relocation of incumbents from the upper 200 channels, we will partially grant Nextel's request to immediately use the channels in its SMR network until it relocates an incumbent to the channels as long as the channels are used predominantly (at least seventy-five percent of the channels involved in the pending waivers) to relocate upper 200 incumbents. Consequently, the remaining twenty-five percent of the channels could be used in Nextel's SMR network. To avail itself of this conditional waiver grant, Nextel and the respective parties to the transactions must, within sixty days of the release of this Order: (1) certify that the ultimate licensee will be an upper 200 incumbent (the certification should include a brief description of facts supporting the claimed status); (2) identify which of the fifty-four applications will be used for complete relocation of upper 200 incumbents or predominant relocation of upper 200 incumbents with some incorporation into Nextel's SMR network, and which do not meet the relocation conditions; and (3) amend or withdraw the applications in accordance with the certifications and identifications in (1) and (2) above. 31. We decline to address the specific issues raised by the parties with regards to Nextel's request to incorporate Business channels into its SMR system without relocating incumbents to the channels because we conclude that the practical effect of granting the waiver requests would be to establish a policy of general applicability regarding PLMR spectrum. It is axiomatic that the Commission "must not eviscerate a rule by a waiver. The Commission has been especially reluctant to grant a waiver when to do so would "invite numerous other waiver requests which, if granted, would effectively circumvent the Commission's rulemaking function." Moreover, we do not believe that the conditions proposed by Nextel on June 14, 1999 transforms the subject waiver requests into a matter presenting unique or unusual circumstances rather than one raising significant questions about whether a new policy should be established. We believe that a rulemaking is generally a better, fairer, and more effective method of implementing a new industry-wide policy than is the ad hoc and potentially uneven application of conditions in isolated, proceedings affecting a single party. We further believe that supplementing a rulemaking or other open proceeding would be a "better, fairer, and more effective method" of implementing a new policy than would the granting of individual waivers. We believe these issues have far-reaching implications and should be addressed in a rulemaking proceeding instead of in an adjudication or waiver proceeding. Thus, we conclude that the most prudent course of action would be to proceed by rulemaking in this matter rather than by waiver. 32. We note further that due to the statutory changes made in the 1997 Balanced Budget Act (1997 BBA), the Commission is reexamining licensing issues concerning private spectrum operations in the 800 MHz band, as well as other bands. In light of the open 1997 BBA proceeding, we believe it would be especially problematic to grant the broad waiver sought by Nextel to incorporate PLMR spectrum into its CMRS system at this time. Nextel's proposals, particularly as modified by the types of conditions it proposed with recent ex parte submissions, may well have some merit. Nevertheless such an approach would represent a change in policy with significant far-reaching implications in both the CMRS and PMRS industries. Thus, we agree with PCIA and Boeing that a rulemaking proceeding is the appropriate forum to address these issues. Accordingly, we are incorporating the record of this proceeding into the 1997 BBA proceeding and, by Public Notice released simultaneously with the release of this Order, we are inviting parties to supplement this record by addressing the issue further in their comments filed in the 1997 BBA docket. 33. Finally, we note that Nextel contends that another licensee, Southern Company, has received the relief it is requesting without waiver through applications filed since April 1995. Specifically, Nextel alleges that even though the Bureau's intercategory freeze and then the Commission prohibition on intercategory sharing were in effect, the Bureau's application processing branches permitted the Southern Company to obtain and convert over 400 Business and I/LT channels to CMRS use. Thus, Nextel requests the same accommodation so that it can respond to market demands and satisfy the requirements of the upper 200 channel incumbents. We agree with Boeing, and ITA that SMR applicants are no longer able to obtain Business or I/LT channels in the 800 MHz band for CMRS operations because the Commission eliminated intercategory sharing for SMR applicants in 1995 and affirmed its decision in 1997. In the context of our review of Nextel's allegations against the Southern Company, however, we have reviewed a sampling of the licensing actions Nextel cites and have found no specific instances of the issuance of licenses to the Southern Company in violation of the Commission's prohibition on intercategory sharing by SMR applicants. 34. In addition, we note that even if we were to learn of licensing actions which were inconsistent with the Commission's Rules or its stated policies, the appropriate course of action would be to consider whether we should take some action with respect to the affected license or licensee rather than have the Bureau continue to misapply Commission Rules and policy. The Commission clearly stated its policy with regards to intercategory sharing by SMR applicants in 1995 and again in 1997. A fundamental change to this policy could only be countenanced by the Commission; and, to date, no such change has been made. IV. CONCLUSION 35. We conditionally grant Nextel's waiver requests in two instances: First, in all cases in which the channels will be used for relocation of upper 200 channel incumbents who are eligible to operate on these channels. Second, we will grant the waiver requests, subject to certain conditions, when Nextel certifies that the channels will be used predominantly for the relocation of upper 200 channel incumbents as discussed herein. We conclude that relocating upper 200 channel, Business and I/LT licensees to PLMRS spectrum does not undermine the Commission's Rules prohibiting the licensing of SMR systems on these channels. Further, a conditional grant serves the public interest because it facilitates relocation of the upper 200 channel incumbents and supports conversion from site-by-site licensing to geographic area licensing. 36. However, to the extent that Nextel is seeking waivers from the Commission's Rules principally for the purpose of expanding its CMRS system by incorporating PLMRS spectrum into its commercial SMR operation, those waiver requests are denied. At this juncture, we believe that allowing such use of PLMRS spectrum in a CMRS system would undermine the Commission's Rules prohibiting the licensing of SMR systems on these channels and would foster encroachment on PLMRS spectrum by CMRS users. However, in light of the policy ramifications at issue, supplemental comment on this issue is being requested in a Public Notice released simultaneously with the release of this Order, which will be made a part of the record in the pending rulemaking on implementation of the Balanced Budget Act. V. ORDERING CLAUSES 37. IT IS ORDERED pursuant to section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and Section 1.925 of the Commission's Rules, 47 C.F.R.  1.925, the Requests for Waiver filed by Nextel Communications, Inc. between July 10, 1998 and October 13, 1998 as listed in the Appendices A and B, ARE CONDITIONALLY GRANTED to the extent provided herein and for all other respects DENIED. 38. This action is taken pursuant to Sections 0.131 and 0.331 of the Commission's Rules, 47 C.F.R.  0.131, 0.331. FEDERAL COMMUNICATIONS COMMISSION Kathleen O'Brien Ham Deputy Chief, Wireless Telecommunications Bureau APPENDIX A APPLICATIONS PLACED ON PUBLIC NOTICE (DA 98-2206) CALL SIGN/ FILE NUMBER TRANSFEROR TRANSFEREE WNVX216 Consolidated Portable Sanitation, Inc./Waste Management, Inc. Nextel of California, Inc. WPCZ323 Yellow Freight, Inc. Nextel License Holdings4, Inc. WPHX888 William T. Gerrard Nextel License Holdings1, Inc. D111126 AWC Port Services, Inc. Nextel License Holdings4, Inc. D111127 Matthew Ruckers LTD Nextel License Holdings4, Inc. D111451 SJR Leasing, Inc. Nextel License Holdings4, Inc. D111452 Radio Link Communications Nextel License Holdings4, Inc. D111453 Morning Journal Nextel License Holdings4, Inc. D111454 Michael Vasu Nextel License Holdings4, Inc. D111455 Rob T. Miller Nextel License Holdings4, Inc. D111456 Radio Link Communications Nextel License Holdings4, Inc. D111457 Morning Journal Nextel License Holdings4, Inc. D111619 Efficient Sanitation, Inc. Nextel License Holdings4, Inc. D111620 Waste Management, Inc. Nextel License Holdings4, Inc. D111999 A Auto Sales, Inc. Nextel License Holdings4, Inc. D112401 Billy Orgel Nextel License Holdings1, Inc. D112405 Barry Franklin Nextel License Holdings1, Inc. D113016 Federal Express Corporation Nextel License Holdings4, Inc. D113017 Federal Express Corporation Nextel License Holdings4, Inc. D113139 Federal Express Corporation Nextel of New York, Inc. D113140 Theut Concrete Products Nextel License Holdings4, Inc. D113231 General Electric Radio Services Corporation Nextel License Holdings4, Inc. D113232 General Electric Radio Services Corporation Nextel License Holdings4, Inc. D113759 Nextel Communications of the Mid-Atlantic, Inc. Nextel Communications of the Mid-Atlantic, Inc. D113775 D114001 D114002 D114003 Nextel of New York, Inc. Nextel of New York, Inc. Nextel of New York, Inc. Nextel of New York, Inc. Nextel License Holdings4, Inc. Nextel License Holdings4, Inc. Nextel License Holdings4, Inc. Nextel License Holdings4, Inc. D114006 Waste Management of North America, Inc. Nextel of California, Inc. D115400 Federal Express Corporation Nextel License Holdings4, Inc. D115701 Radio Link Communications Nextel License Holdings4, Inc. D116182 Servicar of Michigan, Inc. Nextel License Holdings4, Inc. D116734 Nextel of New York, Inc. Nextel of New York, Inc. D116735 Nextel of New York, Inc. Nextel of New York, Inc. D116760 Nextel of New York, Inc. Nextel of New York, Inc. D116761 Nextel of New York, Inc. Nextel of New York, Inc. D116762 Nextel of New York, Inc. Nextel of New York, Inc. D116763 Nextel of New York, Inc. Nextel of New York, Inc. D116764 Nextel of New York, Inc. Nextel of New York, Inc. D116786 Nextel of New York, Inc. Nextel of New York, Inc. D116787 Nextel of New York, Inc. Nextel of New York, Inc. D116788 Nextel of New York, Inc. Nextel of New York, Inc. D116868 Nextel of New York, Inc. Nextel of New York, Inc. D116869 Nextel of New York, Inc. Nextel of New York, Inc. D116870 Nextel of New York, Inc. Nextel of New York, Inc. D120755 Independence Excavating, Inc. Nextel License Holdings4, Inc. APPENDIX B APPLICATIONS PENDING AS OF DATE OF ORDER CALL SIGN / FILE NUMBER TRANSFEROR TRANSFEREE WNJA361 Federal Express Corporation Nextel License Holdings4, Inc. D117385 Nextel of New York, Inc. Nextel of New York, Inc. D117386 Nextel of New York, Inc. Nextel of New York, Inc. D117387 Nextel of New York, Inc. Nextel of New York, Inc. D117388 Nextel of New York, Inc. Nextel of New York, Inc. D117389 Nextel of New York, Inc. Nextel of New York, Inc. D126339 Nextel of New York, Inc. Nextel of New York, Inc. APPENDIX C COMMENTS, REPLY COMMENTS AND EX PARTE PRESENTATIONS COMMENTS Ad Hoc 800 MHz Licensees' Committee Aeronautical Radio Inc. (ARINC) American Mobile Telecommunications, Inc. American Petroleum Institute Auto Warehousing Company The Boeing Company EDW. C. Levy Co. Alan Hansel Industrial Telecommunications Associations (ITA) MRFAC, Inc. Majestic Communications Mobex Communications, Inc. Motorola, Inc. Nextel Communications, Inc. Personal Communications Industry Association, Inc. (PCIA) Pfieffer Electronics Corp. Radio Link Communications Ray's Electronics Repeater Communications Corp. Saga Communication, Inc. Small Business in Telecommunications Sound Systems, Inc. Joyce Syverson TJ Communications UTC, The Telecommunications Association VASU Systems Waste Management, Inc. Yellow Services, Inc. REPLY COMMENTS Ad Hoc 800 MHz Licensees' Committee American Mobile Telecommunications, Inc. Auto Warehousing Company Chadmore Wireless Group ITA MRFAC, Inc. Majestic Communications Pfieffer Electronics Corp. Ray's Electronics Repeater Communications Corp. Sound System, Inc. TJ Communications Yellow Services, Inc. Waste Management, Inc. EX PARTE PRESENTATIONS The Boeing Company July 2, 1999 ITA June 28, 1999 Nextel Communications, Inc. June 14, 1999 MFRAC, Inc. May 26, 1999 Equistar Chemicals, LP May 20, 1999 ITA May 17, 1999 Nextel Communications, Inc. April 30, 1999 Nextel Communications, Inc. April 15, 1999 Nextel Communications, Inc. March 23, 1999 Nextel Communications, Inc. March 18, 1999