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                              Before the
                  Federal Communications Commission
                        Washington, D.C. 20554

In Re                                             )
                                          )
JET-TEL Group Limited Partnership  )
Air-Ground Station KNKG802         )      File No.  MSD-94-8
                                          )
Request for Waiver of Former Sections     )
22.43(e)(1) and 22.43(e)(3) of the                )
Commission's Rules                 )
                                   
                                   
                                   
 
                               ORDER

          
           Adopted:  December 9, 1996                                      Released:  December 9, 1996

By the Chief, Wireless Telecommunications Bureau:

I.  INTRODUCTION
            
      1.  This Order addresses the Request for Waiver ("Request"), filed on February 8,
1994, by JET-TEL Group Limited Partnership ("JET-TEL"), seeking a waiver of former
Sections 22.43(e)(1) and (e)(3) of the Commission's rules.   Former Section 22.43(e)(1)
(recodified at Section 22.873(a)) provided that licensees in the 800 MHz Air-Ground Service
must construct at least 25 ground stations within three years after the initial license grant. 
Former Section 22.43(e)(3) (recodified at Section 22.144(b)) provided for automatic
termination of the licensee's authorization if it fails to meet this construction requirement.  As
discussed below, we deny JET-TEL's request to waive the three-year construction
requirement.  In addition, because JET-TEL's license was issued more than five years ago, we
consider JET-TEL's petition as a request for waiver of Section 22.873(b), which requires that
at least 50 ground stations be constructed and operated within five years of licensing.   We
conclude that JET-TEL has not shown good cause for waiver of the five-year construction
requirement.  Accordingly, JET-TEL's authorization is terminated.

II.  BACKGROUND
                                           
A.  Waiver Request

     2.  The Commission granted an air-ground license to JET-TEL on February 8, 1991. 
Accordingly, JET-TEL was required to construct 25 ground stations by February 8, 1994,  
and to have at least 50 ground stations constructed and operational within 5 years, i.e., by
February 8, 1996.  On February 8, 1994, the expiration date of the three-year period, JET-
TEL filed the instant petition seeking a waiver of the three-year construction requirement. 
 
       3.  On March 2, 1994, the former Mobile Services Division of the Common Carrier
Bureau issued a Public Notice soliciting comments on JET-TEL's Request.  The Public
Notice also requested comments concerning whether the control channels assigned to
cancelled air-ground licenses should be available for licensure or converted for use by existing
air-ground licensees as additional channels.  In response to the Public Notice, GTE Airfone
Inc. (GTE), Claircom Communications Group, L.P. (Claircom), In-Flight Phone Corp. (In-
Flight), and Mobile Telecommunications Corp. (MTel) filed comments.  JET-TEL, GTE, and
Claircom filed reply comments.  Of the commenters, only MTel supported JET-TEL's
Request.  

B.  Summary of the Pleadings 

       4.  JET-TEL alleges that it was unable to construct the required 25 ground stations
within three years due to the bankruptcy of its principal financing source, the Haas Group,
which filed for bankruptcy on March 16, 1993.   According to JET-TEL, the bankruptcy
resulted from the embezzlement by a former Haas Group officer of funds that were committed
to JET-TEL.  JET-TEL asserts that the remaining assets of the Haas Group have been frozen
in the bankruptcy proceeding and are unavailable to JET-TEL.  Since the Haas Group
bankruptcy, JET-TEL states that it has contacted more than 80 potential lending sources, but
has been unable to secure the financing necessary to implement its business plan. 
Nonetheless, JET-TEL asserts that it would meet its five-year deadline for constructing 50
ground stations. 

       5.  In support of its waiver request, JET-TEL notes that it has spent more than
$150,000 in out-of-pocket expenses and thousands of hours of its principals' time to plan and
develop its air-ground system.  JET-TEL also states that it has performed an extensive
market demand study and developed a unique and detailed business plan for its air-ground
system; performed equipment proposal evaluations; submitted equipment proposals to vendors;
and negotiated with equipment vendors regarding the purchase, installation and construction
of the proposed system.  JET-TEL asserts that while other licensees have focused their
initial efforts on commercial aviation, it is willing to serve the general aviation market.   JET-
TEL also contends that digital equipment is commercially available that will enable it to
immediately deploy a digital system, thus avoiding the expense of constructing both analog
and digital systems.  Finally, JET-TEL argues that grant of the waiver will promote
competition in the air-ground service, while denial of the waiver would lead to anti-
competitive behavior by the three remaining air-ground licensees.  

       6.   The three currently operating 800 MHz Air-Ground licensees, GTE, Claircom, and
In-Flight, oppose JET-TEL's waiver request.   GTE argues that under the Commission's rules,
no extension of time to construct can be granted based on alleged lack of financing.  GTE
also contends that JET-TEL has demonstrated that it is not a serious applicant by seeking
additional investors only months after it had submitted its initial financial showing on January
31, 1991 and, therefore, that it was not a serious applicant.  GTE also questions JET-TEL's
ability to build 50 stations within five years of licensing (and within two years of the waiver
request) because GTE believes sufficient air-ground equipment is not commercially
available.  In-Flight maintains that JET-TEL has already had three years to begin
construction, which is substantially longer than the FCC allows for constructing other
communications systems.  Claircom contends that JET-TEL has made only minimal efforts
to initiate construction of its system, alleging that during the first two years of its construction
period, JET-TEL did not take steps to begin site acquisition, ground station construction, or
design of its airborne equipment.   
        
       7.  GTE, In-Flight, and Claircom also maintain that the general aviation market is
presently being served and that digital equipment is currently used or will be used by all three
of these existing air-ground carriers.  All three carriers further maintain that the marketplace
demonstrates the absence of a market for another air-ground system and that currently, there
is already a competitive market for air-ground services.   Consequently, these carriers
request that JET-TEL's control channel be made available to them to increase the capacity of
their existing systems.  GTE also asserts that granting JET-TEL's request would result in an
increase in waiver requests and delay service while the Commission considers such waivers.
  
       8.   In its reply comments, JET-TEL argues that its unsuccessful attempts to secure
financing do not detract from its seriousness and sincerity as a Commission licensee.  In
addition, JET-TEL argues that because air-ground licensees, unlike cellular licensees, are
subject to both a three-year interim construction benchmark and a five-year buildout
requirement, JET-TEL is entitled to a waiver of the three-year benchmark because it still
intends to comply with the five-year requirement.  JET-TEL also contends that it should
receive a waiver notwithstanding the extended buildout period provided under the rules
because air-ground service is a nationwide service for which the Commission has established
longer construction periods and interim benchmarks.    MTel also supports JET-TEL's
Request, arguing that JET-TEL will provide increased competition and will provide the
consumers with more choices of nationwide air-ground services.    
  
III.  DISCUSSION
                              
       9.  Since JET-TEL filed its waiver application, the Commission has revised the Part 22
rules in the Part 22 Rewrite Order.  Accordingly, we will evaluate JET-TEL's waiver request
under the current Part 22 rules applicable to the 800 MHz Air-Ground service.  We note that
our decision would be the same regardless of whether the former or current rules are applied: 
the current rules do not substantively change the three-year or five-year construction
requirements that were applicable to JET-TEL under the rules prior to the Part 22 Rewrite
Order.  Thus, application of the new rules will not alter the legal consequences of past
actions.  

       10.  The Commission imposes a strict burden on any party seeking a waiver of the
Commission's rules.  A party must show "[t]hat the underlying purpose of the rule will not
be served, or would be frustrated by its application in a particular case," or "[t]hat the unique
facts and circumstances of a particular case render the rule inequitable, unduly burdensome or
otherwise contrary to the public interest."  For the reasons stated below, we find that JET-
TEL has not made the required showing. 

       11.  Section 22.873 establishes a two-stage timetable for construction of air-ground
systems:  licensees must have 25 constructed and operational ground stations within three
years of the initial license grant (Stage I), and 50 ground stations within five years of the
grant (Stage II).  These requirements are designed to ensure that a party issued an air-ground
license be capable of implementing the service on a nationwide basis.  In addition, we
require applicants to submit information demonstrating that they have the financial capability
to construct and operate an air-ground system.  Applicants must demonstrate that they have
either a firm financial commitment or available internal financial resources necessary to
construct and operate an air-ground system for one year.   These requirements ensure that
only serious entrants will need to be accommodated by other air-ground operators. 

       12.  JET-TEL's request to waive the Stage I construction deadline is based on lack of
financing caused by the bankruptcy of the Haas Group, its primary financial backer.  Section
22.142(c)(2) of the Commission's rules (formerly Section 22.43(b)) provides that the
Commission "does not grant applications for extension of the construction period if failure to
commence providing service to subscribers is due to delays caused by lack of financing. . . " 
Because the rule specifically precludes lack of financing as a basis for granting an extension
of time to construct, we decline to grant JET-TEL's request for an extension.   
       
       13.  JET-TEL attempts to distinguish its request on the grounds that it only seeks
waiver of an interim construction "benchmark," but still intends to comply with the final five-
year construction requirement.  We are unpersuaded by this argument.  The three-year Stage I
construction requirement is a construction deadline.  Licensees who fail to meet this deadline
are subject to automatic cancellation of their licenses pursuant to Section 22.144(b).  In our
view, the requirements of Section 22.142(c)(2) regarding extension requests apply to JET-
TEL's request for waiver of the three-year deadline, notwithstanding the fact that air-ground
licensees are also subject to a second construction requirement at five years. 

       14.  Even if Section 22.142(c)(2) did not apply, we find insufficient basis in the record
for granting JET-TEL's waiver request.   Although JET-TEL appears to have made some
effort to develop a business plan, the record indicates that to date, JET-TEL has not
constructed any ground stations or commenced operation of any portion of its proposed
system.   In addition, JET-TEL has failed to show that it has sufficient financing to construct
a nationwide air-ground system.  To the contrary, JET-TEL states that it has been unable to
secure the financing necessary to implement its business plan despite having contacted more
than 80 potential lending sources.  

       15.  We also disagree with JET-TEL's assertion that grant of its waiver request is
necessary to avoid anti-competitive consequences in the air-ground industry.  GTE, Claircom,
and In-Flight have all established air-ground systems that currently compete with one another.
The mere fact that JET-TEL seeks to be a fourth competitor in air-ground industry does not
entitle it to a waiver.  JET-TEL offers no substantiation for its claim that the three operating
licensees will act in an anti-competitive manner if JET-TEL's extension request is not granted. 
 Similarly, JET-TEL's promise to serve the general aviation market as opposed to the
commercial aviation market is insufficient to demonstrate that a grant of the waiver request
would be in the public interest.  The record indicates that GTE, In-Flight, and Claircom do
provide some service to the general aviation market, and that air-ground service is also
available to general aviation in the 450 MHz Air-Ground Radiotelephone Service.  

       16.  Since JET-TEL filed its waiver request, its Stage II five-year construction
deadline under Section 22.873(b) has also expired.  Although JET-TEL did not formally
request waiver of this deadline, we will treat the Request as seeking a waiver of Section
22.873(b) as well.  For the same reasons stated above, we find no basis to grant an extension
of the five-year deadline.  JET-TEL has neither constructed any ground stations or
commenced operations, nor has it demonstrated the financial ability to complete a nationwide
air-ground system.

        17.  Under Section 22.144(b), if a licensee does not provide service to subscribers by
the date of required commencement of service, the authorization will automatically
terminate.  Although a timely request for extension of time tolls this provision, denial or
dismissal of the extension request results in automatic termination upon notice to the applicant
or its counsel.  Accordingly, because we are denying JET-TEL's waiver request, we find that
JET-TEL's license is subject to automatic termination due to non-construction.  The
termination of JET-TEL's license, however, is without prejudice to its right to re-file for an
authorization in the event that 800 MHz Air-Ground channels are made available for future
licensing.      

IV.  ORDERING CLAUSES

       18.  Accordingly, IT IS ORDERED that, pursuant to Sections 4(i), 303, and 319 of the
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303, and 319, and Sections
0.331, 1.3, and 22.119 of the Commission's rules, 47 C.F.R.  0.331, 1.3, and 22.119, the
waiver request filed by JET-TEL Group Limited Partnership on February 8, 1994 IS
DENIED.

       19.  IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and 319 of the
Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 319, and Sections 0.331
and 22.144 of the Commission's rules, 47 C.F.R.  0.331 and 22.144, JET-TEL's 800 MHz
Air-Ground authorization IS TERMINATED without prejudice.
 

      FEDERAL COMMUNICATIONS COMMISSION




      Michele C. Farquhar
      Chief, Wireless Telecommunications Bureau