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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 ) ) CELLULAR DESIGN CORPORATION ) Case No. 94F338 ) Finder's Preference Request ) For Station WNIU652 ) New York, New York ) MEMORANDUM OPINION AND ORDER Adopted: July 2, 1999 Released: July 9, 1999 By the Commission: I. INTRODUCTION 1. On March 29, 1996, Cellular Design Corporation (Cellular Design) filed an application for reviewof the Wireless Telecommunications Bureau's (Bureau) denial of its petition for reconsideration. Cellular Design's application for review seeks reversal of the Bureau's decision denying Cellular Design's finder's preference request targeting Station WNIU652. Based on the record in this proceeding, we find no basis to reverse the Bureau's decision. Accordingly, for the reasons set forth below, Cellular Design's application for review is denied. II. BACKGROUND 2. Cellular Design, through counsel, filed a finder's preference request (Request) on August 5, 1994, seeking a dispositive preference for use of the frequencies authorized for operation of Station WNIU652, formerly licensed to Chelsea Car & Limo Service, Inc. (Chelsea). Cellular Design alleged that it was entitled to a dispositive preference for such frequencies because Station WNIU652 had discontinued operations for a period in excess of one year, in violation of Section 90.157 of the Commission's Rules. As evidence, to support its request, Cellular Design provided the declaration of its president, S. Klein, who stated that he had monitored Station WNIU652 "from my receive site on Long Island, New York, toward the authorized site of Business Radio Service - Conventional Station WNIU652 at 405 Lexington Avenue, New York, New York." Mr. Klein also stated that he had conducted the monitoring from March 15, 1993, through May 31, 1994, "primarily during the business day, because a car and limousine service would be most likely to make use of a radio channel during the rush of business hours." Mr. Klein further stated that he "did not receive communications on the channel during business hours" in the period during which he monitored the station. 3. On August 25, 1994, Cellular Design's Request was served on Chelsea by the Bureau. On September 26, 1994, Chelsea timely filed an Opposition to the Request. In opposition, Chelsea stated that it operated two conventional business stations as communications support for its taxi and limousine service. It noted that both stations, WNIU652 and WNHV998, were authorized to operate from 405 Lexington Avenue, New York, New York. According to Chelsea, the transmitter site for this location is managed by Altech Electronics, Inc. (Altech), a radio service provider and transmitter site manager. Chelsea submitted copies of invoices, issued by Altech, and canceled checks written by Chelsea to Altech, for rent, service, and maintenance of radio equipment at the transmitter site, spanning the same period of time during which Cellular Design asserted that Chelsea was not operating. 4. Chelsea further stated that it conducts ninety percent (90%) of its business during the evening hours, and Cellular Design was monitoring Station WNIU652 primarily during the business day. As part of its Opposition, Chelsea provided the statement of Mr. Martin Solowitz, its dispatcher, who declared under penalty of perjury that he used the frequencies associated with Station WNIU652 on a continuous basis during the subject period of March 15, 1993, through May 31, 1994. Mr. Shalom Tsadok, a principal of Chelsea, submitted a declaration, sworn to under penalty of perjury, attesting to the truth of the statements contained in Chelsea's Opposition. 5. On October 6, 1994, Cellular Design filed a Reply to the Opposition. In its Reply, Cellular Design alleged that it had monitored Station WNIU652 as early in the day as 7:30 a.m. and as late in the day as 10:30 p.m., but failed to detect any transmissions until August 16, 1994. Monitoring logs detailing the dates and times of monitoring were provided which demonstrated monitoring during June, August, and September of 1994. Cellular Design acknowledged that Chelsea may have operated Station WNIU652, but presented the new argument that if Chelsea was operating below its authorized ERP of 170 watts, Chelsea had failed to operate Station WNIU652 in "substantial accordance" with the parameters specified in its authorization. 6. By letter decision dated August 2, 1995, Cellular Design's Request was dismissed for failure to provide prima facie evidence that a violation of the Commission's rules had occurred. The August 2, 1995, decision explained: Evidence of sporadic monitoring by itself is insufficient and does not conclusively demonstrate that Station WNIU652 permanently discontinued operation. Under the Commission's rules, the finder has the burden of providing the Commission with prima facie evidence that a violation of the Commission's rules has occurred. Cellular's request contains general and conclusory statements and does not state a prima facie violation (emphasis added). 7. On September 1, 1995, Cellular Design timely filed a petition for reconsideration of the August 2, 1995, dismissal action. Cellular Design argued that a one-year monitoring period of a station constitutes sufficient evidence of a prima facie violation of the Commission's rules, if transmissions were not detected during the entire monitoring period. Cellular Design argued that it had submitted a declaration regarding its monitoring of Station WNIU652, sworn to under penalty of perjury, but the Bureau had ignored the declaration. Cellular Design reiterated that Chelsea was not operating at its authorized ERP. Cellular Design further argued that the invoices and canceled checks which had been provided by Chelsea as evidence of operation did not specify a particular station or frequency. 8. On September 21, 1995, Chelsea filed an Opposition to Petition for Reconsideration. In opposition, Chelsea argued that the Commission had recently clarified the definition of "substantial accordance" as it relates to finder's preference cases, in the Vaughn decision, when it determined that the finder's preference program was not intended, nor would it be utilized, to target operating stations which had committed minor violations of operating requirements. The statement of the president of Chelsea, sworn to under penalty of perjury, was also provided to confirm that the invoices and canceled checks which had previously been provided to the Bureau related to Station WNIU652. On September 29, 1995, Cellular Design filed a Reply to Chelsea's Opposition to the Petition for Reconsideration, arguing that Chelsea's failure to operate Station WNIU652 at its authorized ERP was not a minor licensing error which should be condoned by the Commission. 9. By letter decision dated February 28, 1996, the Bureau, pursuant to delegated authority, denied Cellular Design's petition for reconsideration. The Bureau found that although the invoices and canceled checks submitted by Chelsea were not station or frequency specific, the burden of proof was on Cellular Design, as the finder, to prove that Chelsea had discontinued operations, and Cellular Design had failed to meet its burden. The Bureau also determined that Cellular Design had not presented evidence that Station WNIU652 was not operating at its prescribed ERP when it filed its Request initially. Specifically, the Bureau stated: Moreover, Cellular asserts that Chelsea is operating its station at a level below the authorized effective radiated power prescribed by its license. Cellular attempts to rely on additional evidence not previously presented to this Commission with its initial request. Accordingly, because the Commission's rules do not permit a finder to supplement its initial request with substantive evidence once the request has been reviewed and dismissed, this petition for reconsideration is improper and must be denied. (emphasis added) 10. On March 29, 1996, Cellular Design filed an Application for Review of the Bureau's February 28, 1996, action. Cellular Design argues that the evidence that it had submitted to the Bureau concerning its monitoring of Station WNIU652 was sufficient to demonstrate a prima facie case to meet its burden for prosecution of the Request. Cellular Design argued that the Bureau had mischaracterized the quality of its evidence, resulting in an improper decision. On April 15, 1996, Chelsea timely filed an Opposition to the Application for Review. Chelsea argued that the Bureau's February 28, 1996, action did not conflict with existing case precedent and Commission policy. Chelsea argued that the Bureau had not rejected monitoring as a method of gathering evidence, but rather, the Bureau had determined that Cellular Design's monitoring was inconclusive and insufficient to demonstrate that Station WNIU652 had not operated in conformance with the Commission's Rules. III. DISCUSSION 11. When it established the finder's preference program, the Commission indicated that the scope of rule violations qualifying for a finder's preference was limited to violations of the Commission's construction and placed-in-operation rules. The Commission determined that these type of violations lend themselves to conclusive and expeditious action. It indicated that if a base station was not constructed in "substantial accordance" with the parameters specified in the station authorization, the channel associated with such base station would be recovered from the license. In the instant case, we find that Cellular Design has not successfully demonstrated that any deviation between the authorized and actual ERP resulted in the automatic cancellation of Chelsea's license. The Commission has previously stated its concern that the finder's preference program not be used as a means to disrupt service being provided to the public, by alleging license cancellation based on minor variations from authorized parameters. In this connection, it has indicated that a finder's preference for a station is unwarranted unless a station is not in "substantial accordance" with its licensed parameters, and that the "substantial accordance" enforcement standard describes a larger margin of error than the exact "accordance" required by the underlying rule. 12. We reiterate that the burden of proof in a finder's preference proceeding is on the finder. In the instant case, when Cellular Design filed its Request on August 5, 1994, it relied solely on the argument that it had monitored Station WNIU652 from March 15, 1993 through May 31, 1994, "primarily during the business day," and had not detected any transmissions. We note that monitoring logs were not provided with Cellular Design's initial submission. Under these circumstances, we agree with the Bureau's conclusion that an allegation of sporadic monitoring, by itself, is insufficient to conclusively demonstrate that a station has permanently discontinued operation. We further note that when Cellular Design finally provided monitoring logs, they were not for the period during which it alleged a year of non-operation by the target, but instead were for later. As a result, we find that the stated evidence submitted in Cellular Design's Request initially was not specific and was instead conclusory. Thus, we conclude that Cellular Design's initial submission did not establish a prima facie case. Moreover, had Cellular Design established a prima facie case, Chelsea would have overcome any presumption of non-operation by the evidence it provided in opposition to the Request, which included: (1) an explanation of its operational hours and signal strength; and (2) documented proof that it had received invoices and had paid for use of the transmitting site during the period in question. Indeed, Cellular Design's later log entries included evidence of operation of Station WNIU652 in mid-August, 1994. 13. Cellular Design contends that an adverse inference should be drawn from Chelsea's operation of Station WNIU652 at less than authorized power. We disagree with this contention. First, we note that the power level specified by an FCC-issued license for operation of a station under Part 90 of our rules is the maximum power level. Second, we note that Private Land Mobile Radio (PLMR) licensees are encouraged to use less than the authorized power levels to maximize spectrum efficiency, reduce congestion, minimize interference, promote joint use of shared channels, and reduce co-channel and adjacent channel interference on exclusive channels. Indeed, Section 90.205 of the Commission's Rules provides, in pertinent part, that licensees "use no more power than the actual power necessary for satisfactory operation." Consequently, we conclude that no adverse inference should be drawn from a PLMR licensee using less than the maximum authorized power specified on its license, either in this or in any other context. 14. We further find that Cellular Design's interpretation of the Bureau's February 28, 1996, denial action is incorrect. The Bureau did not hold that a finder was prohibited from providing evidence of monitoring a station to assist it in establishing evidence of a violation of the Commission's Rules. Rather, the Bureau determined that Cellular Design's monitoring evidence in the instant case was insufficient and inconclusive. In fact, Section 90.173(k)(4) of the Commission's Rules stated that "[r]equests containing general and conclusory statements shall be dismissed summarily; requests that do not state a prima facie violation shall also be dismissed." Based on the record in this proceeding, we concur with, and affirm, the Bureau's determination in this instance. 15. The license for Station WNIU652 is now held by Jupiter Travelers, Inc., after having been assigned from Chelsea Car & Limo Service, Inc., conditioned on the outcome of this proceeding. With this affirmance of the Bureau's action denying the finder's preference claim of Cellular Design Corporation, Chelsea Car & Limo Service, Inc., had authority to assign this station to Jupiter Travelers, Inc. As a result, the station will remain authorized to Jupiter Travelers, Inc., and the condition upon Jupiter's license will now be removed. Additionally, a petition for reconsideration filed by Jupiter Travelers, Inc., regarding this matter is rendered moot by this action. IV. CONCLUSION 16. By this Order, we affirm the Bureau's denial of Cellular Design's petition for reconsideration. After considering the entirety of Cellular Design's contentions, we conclude that Cellular Design presented inconclusive evidence which the Bureau correctly identified as insufficient to satisfy Cellular Design's burden of proof under the finder's preference program. Chelsea demonstrated that it had not ceased operation of Station WNIU652 for a period of one year or more. We believe it is in the public interest to allow the continued operation of Station WNIU652, particularly in the absence of a prima facie showing that the Commission's Rules had been violated. V. ORDERING CLAUSES 17. IT IS ORDERED THAT pursuant to Section 5(c) of the Communications Act of 1934, as amended, 47 U.S.C. 155(c) and Section 1.115(e) of the Commission's Rules, 47 C.F.R. 1.115(e), the Application for Review filed by Cellular Design Corporation on March 29, 1996, IS DENIED. 18. IT IS FURTHER ORDERED THAT, in light of the denial of the Application for Review filed by Cellular Design Corporation, Station WNIU652 remains licensed to Jupiter Travelers, Inc., and the condition imposed on the license subjecting it to the outcome of this proceeding IS REMOVED. 19. IT IS FURTHER ORDERED THAT the Petition for Reconsideration of Jupiter Travelers, Inc., filed on April 29, 1998, IS DISMISSED AS MOOT. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary