******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) GTECH CORPORATION, ) File Nos. 733484-733509, 733513, 733517, CN WAN CORPORATION, ) 733519, 733521, 733523, 733738, 733482, RADSCAN OF DETROIT, INC., ) 735403, 733680, and 735131 TELEBEEPER OF NEW MEXICO, INC., and ) UNICOM CORPORATION ) ) Petitions for Reconsideration of ) Dismissal of Applications for ) Multiple Address System Authorization) MEMORANDUM OPINION AND ORDER Adopted: March 4, 1998 Released: March 6, 1998 By the Chief, Wireless Telecommunications Bureau: I. INTRODUCTION AND EXECUTIVE SUMMARY 1. GTECH Corporation (GTECH), CN WAN Corporation (CellNet), Radscan of Detroit, Inc. (Radscan), and TeleBeeper of New Mexico, Inc. (TeleBeeper) have filed petitions for reconsideration of decisions by the former Microwave Branch, Licensing Division, Wireless Telecommunications Bureau, dismissing their applications for new Multiple Address System (MAS) licenses. Unicom Corporation (Unicom) has filed a petition for reconsideration of the decision by the Licensing and Technical Analysis Branch (Branch), Public Safety and Private Wireless Division, Wireless Telecommunications Bureau, dismissing its application for modification of its existing MAS license. The applications of GTECH, CellNet, Radscan, TeleBeeper, and Unicom (collectively "Petitioners") were dismissed by the Branch pursuant to a Commission-imposed suspension of the acceptance of MAS applications for subscriber-based service in the 928/952/956 MHz bands, except applications for minor modifications or for license assignment or transfer of control. For the reasons discussed below, we conclude that the Petitioners do not propose to provide subscriber-based services. Consequently, we will grant the petitions for reconsideration and reinstate their applications nunc pro tunc. II. BACKGROUND 2. On February 19, 1997, the Commission adopted a Notice of Proposed Rulemaking in WT Docket No. 97-81, seeking public comment on proposals designed to streamline licensing procedures for, and to increase the technical and operational flexibility of, MAS licensees. In the Notice, the Commission also temporarily suspended acceptance of MAS applications for new licenses, amendments, or major modifications in the 932/941 MHz and 928/959 MHz bands, and applications in the 928/952/956 MHz bands for the provision of subscriber-based services. The Notice stated that any such applications received on or after February 19, 1997, would be returned as unacceptable for filing. The Commission noted, however, that the suspension would not affect applications for MAS licenses for private, internal communications in the 928/952/956 MHz bands. 3. GTECH. On February 19, 1997, GTECH applied for thirty-one MAS licenses in the 928/952 MHz bands. It applied for another license in that band on February 27, 1997. On May 5, 1997, the Branch dismissed the applications, pursuant to Section 1.958 of the Commission's Rules, on the grounds that they were unacceptable for filing because they were for subscriber-based service and were received after the suspension took effect. On June 4, 1997, GTECH petitioned for reconsideration of those decisions. The Policy and Rules Branch, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau, subsequently requested additional information regarding GTECH's operations, which GTECH provided on August 13, 1997. 4. CellNet. On February 19, 1997, CellNet applied for two licenses in the 928/952 MHz bands. On May 5, 1997, the Branch dismissed the applications, pursuant to Section 1.958 of the Commission's Rules, after determining that CellNet's application was filed after the suspension took effect and CellNet's proposed use of the channels was subscriber-based. On June 30, 1997, CellNet petitioned for reconsideration of that decision. 5. Radscan. On April 29, 1997, Radscan applied for an MAS license in the 928/952 MHz bands. On July 3, 1997, the Branch dismissed the application, pursuant to Section 1.958 of the Commission's Rules, on the basis that Radscan's application was filed after the suspension took effect and Radscan's proposed use of the channels was subscriber-based. On August 1, 1997, Radscan petitioned for reconsideration of that decision. 6. TeleBeeper. On February 25, 1997, TeleBeeper applied for an MAS license in the 956 MHz band. On May 5, 1997, the Branch dismissed TeleBeeper's application as defective, pursuant to Section 1.958, on the grounds that it proposed a subscriber-based use and was filed after the suspension took effect. On June 4, 1997, TeleBeeper filed its petition for reconsideration of that dismissal. Upon the request of the Policy and Rules Branch, Public Safety and Private Wireless Division, TeleBeeper submitted a supplement to that petition on January 14, 1998. 7. Unicom. On April 15, 1997, Unicom filed an application to modify the license for its MAS Station WNE0664 in the 956 MHz band. On July 10, 1997, Unicom filed a request for Special Temporary Authority (STA) to operate at the new site. On July 14, 1997, the Branch granted Unicom's STA request. Upon the request of the Branch, on November 18, 1997, Unicom submitted an eligibility statement to supplement its application for license modification. On December 4, 1997, the Branch dismissed Unicom's license modification application, pursuant to Section 1.958 of the Commission's Rules, because its application was filed after the suspension took effect and Unicom's proposed use of the channels was subscriber-based. On January 5, 1998, Unicom sought reconsideration of that decision. In addition, on January 13, 1998, Unicom filed a request for extension of its STA. On January 15, 1998, the Branch denied Unicom's STA Extension Request. III. DISCUSSION 8. As the Commission stated in its Notice, its decision to suspend the acceptance of MAS applications proposing to provide "subscriber-based" services in the 928/952/956 MHz bands was based on its proposal to use competitive bidding to award those MAS licenses that met the "subscriber-based" test under the language of former Section 309(j) of the Communications Act of 1934 (the Act), as amended. Specifically, this section of the Act required the issuance of licenses by competitive bidding in cases where the Commission accepted mutually exclusive applications and the use of frequencies involved "the licensee receiving compensation from subscribers in return for which the licensee -- (i) enables those subscribers to receive communications signals that are transmitted utilizing frequencies on which the licensee is licensed to operate; or (ii) enables those subscribers to transmit directly communications signals utilizing frequencies on which the licensee is licensed to operate." The legislative history of that provision states that spectrum is auctionable where the licensee "will . . . in essence, resell the spectrum to subscribers," but not where the spectrum will be put to "private use." The Petitioners argue that the dismissal of their applications was erroneous because they did not propose to provide subscriber-based service over the subject MAS frequencies. We agree that the applications were not subject to the suspension. 9. GTECH. GTECH administers most of the state lotteries in the United States. Under its contract with each state, GTECH installs, in retail outlets throughout the state, GTECH-owned lottery terminals that are connected to GTECH-owned MAS remote stations or private leased telephone lines. According to GTECH, the MAS remote stations communicate with an MAS master station licensed to and owned by GTECH, which communicates with GTECH's central data center in Rhode Island by a private leased line or by a satellite network licensed to, and owned by, GTECH. GTECH states that it then forwards the relevant information, by leased line or satellite network, to its primary data center in the state. Thus, GTECH asserts that it installs, operates (i.e., provides all needed supplies and services), maintains, and owns the entire lottery operation. According to GTECH, the state's lottery agency can monitor certain information regarding lottery operations to verify GTECH's compliance with the contract through GTECH-owned or GTECH-leased management terminals located at the primary data center; the state's lottery agency, however, cannot communicate over GTECH's MAS facilities. To maintain the security of its MAS links, GTECH allows only internal communications on the network; it does not resell excess capacity to other entities. 10. Based on our review of GTECH's description of its proposed use of the subject MAS frequencies, we conclude that GTECH does not provide subscriber-based services on these frequencies. We note that GTECH uses MAS frequencies to transmit and receive communications signals, but find that such transmissions and receptions are not the services for which it receives compensation. GTECH's clients contract for lottery management services, and GTECH's use of MAS frequencies is merely "in connection with and as an adjunct to [that] primary business . . . activit[y]." As a result, we believe that the nature of GTECH's use of the MAS frequencies is not for the provision of a subscriber-based communications service. Therefore, GTECH's applications should not have been dismissed pursuant to the suspension of acceptance of MAS applications to provide subscriber-based service. 11. CellNet. CellNet uses its MAS network principally to provide remote meter reading services to electric and gas utility companies. CellNet states that its wireless system contains the following elements, all owned by CellNet: (1) numerous endpoints consisting of electric and gas utility meters retrofitted with unlicensed Part 15 spread spectrum transmitters; (2) "MicroCell Controllers" (the MAS remote stations), which are designed to collect the data from up to 750 endpoints; and (3) "CellMasters" (the MAS master stations). According to CellNet, the MicroCell Controllers collect the data transmitted by the utility's retrofitted meters, and then transmit the data to the CellMasters. The CellMasters transmit the collected data, using dedicated landline, fiber, or fixed microwave facilities, to the CellNet Operations Center, which consists of several manned computer workstations. CellNet explains that once it retrieves the raw data, it processes and formats the data, then makes the processed data available to the CellNet customer (a utility) at the Operations Center, on a query basis, in an enhanced form, using proprietary software and standard TCP/IP protocols. 12. Similar to GTECH, CellNet only uses MAS frequencies as a tool in the provision of its primary business activity -- the provision of data developed in the monitoring of endpoints over its network. CellNet does not receive compensation specifically for the transmission of communications signals. Rather, CellNet is paid for providing a meter reading service, including data processing, formatting and storage, to its utility customers. The CellNet customer is not offered direct access to or the use of the CellNet MAS network, nor does CellNet transmit information of the customer's choosing. Rather, the collected data can only be accessed by the utility customer when the data reaches CellNet's database. Thus, we believe that the nature of CellNet's use of the MAS frequencies is not for the provision of a subscriber-based communications service. Therefore, CellNet's application should not have been dismissed pursuant to the suspension of acceptance of MAS applications to provide subscriber- based service. 13. Radscan. Radscan provides security alarm monitoring services to central station alarm monitoring companies, such as ADT Security Systems and Wells Fargo Alarm Services, that offer traditional wireline alarm monitoring services to the public. Radscan's wireless service supplements and enhances the reliability of central station alarm services. According to Radscan, in each area that Radscan serves, it constructs a network of master stations with overlapping service contours. Radscan describes its master stations as free-standing, multi-microprocessor systems capable of responding to transmissions of remote units, decoding messages, validating transmitted codes, buffering and screening classes of messages, transmitting to remotes, communicating with other master stations, and communicating by back-up telephone modem with central stations. Remote units, purchased by the household resident, are either two-way transceivers polled by master stations, or one-way transmitters that are programmed to send messages to master stations at certain intervals. Although two-way transceivers thus exist on Radscan's MAS network, Radscan notes that the information transmitted along the network is not of the subscriber's choosing. Radscan adds that its subscribers have no ability to communicate information on the network. Radscan explains that if a master station receives an alarm signal or loses contact with a remote unit, it sends a signal to the appropriate central station, at which point appropriate public safety officials may be alerted. Radscan contends that over 99 percent of the system traffic on the Radscan network consists of internally generated polling and status messages from remotes to masters, masters to remotes, and between master stations. Less than one percent of all communications pass from a remote unit at a customer's premises to a central station alarm company. Further, according to Radscan, even those messages undergo processing and are altered in form before they are sent on to the alarm company. 14. Radscan does not merely play the role of a conduit by enabling subscribers to receive or directly transmit communications signals in return for compensation, nor does Radscan resell spectrum to subscribers. Radscan's primary business activity is providing an alarm monitoring service to central station alarm monitoring companies. In Radscan's operations, the MAS signal (or lack thereof) is not routed directly through Radscan without any conversion. Rather, as described above, the Radscan master station responds to and decodes messages from remote units, validates transmitted codes with both the transmitting remote unit and with adjacent master stations, and communicates by back-up telephone modem with central stations should a loss of contact occur with the remote unit signal. In sum, the Radscan MAS master stations are equipped with built-in intelligence. Radscan's subscribers compensate Radscan not for a communications service, but for an alarm monitoring service. Radscan merely uses MAS spectrum in the course of providing this monitoring service. Consequently, we believe that the nature of Radscan's use of the MAS frequencies is not for the provision of a subscriber-based communications service. Therefore, Radscan's application should not have been dismissed pursuant to the suspension of acceptance of MAS applications to provide subscriber-based service. 15. TeleBeeper. TeleBeeper, a provider of Part 90 paging services, seeks the MAS frequencies at issue for use as internal "links" to control its paging base stations. The commercial paging service it offers to subscribers is carried over separately-licensed base station frequencies. Telebeeper states that it would use the MAS links to transmit control sequence tones to its paging base station transmitters to "key up" those transmitters. According to TeleBeeper, these MAS link stations would not communicate directly with subscribers, but rather would activate and control its paging system base stations, signalling the base stations to transmit a signal to a specific pager. TeleBeeper explains that the subscriber's paging unit is not capable of receiving a signal on the MAS frequencies nor would any subscriber communications be carried over the requested MAS frequencies. 16. The Commission's Rules indicate that control transmitters may or may not carry subscriber communications. For example, one licensee may carry subscriber traffic on its control channels, whereas another may not. In this case, TeleBeeper represents that the actual communications message delivered to the subscriber at no point will be transmitted over the requested MAS channels. We therefore agree with TeleBeeper that, for the limited purpose of the suspension of acceptance of MAS applications adopted in the Notice, its proposed use of the MAS frequencies is not subscriber-based. Unlike its commercial use of paging base station frequencies, TeleBeeper uses MAS frequencies solely for transmitter control purposes and not to transmit subscriber communications to one or more paging base stations. As a result, TeleBeeper's application should not have been dismissed pursuant to the suspension of acceptance of MAS applications to provide subscriber-based service. 17. Unicom. Unicom, a provider of paging services, seeks the subject license modification in order to continue to use its MAS facilities as internal links to activate and control its Part 90 paging base stations in and around the Charleston, South Carolina area. Like TeleBeeper, the commercial paging service it offers to subscribers is carried over separately-licensed base station frequencies. According to Unicom, the MAS link stations do not communicate directly with subscribers and no subscriber traffic is carried on the subject MAS station. 18. As with TeleBeeper, Unicom represents that the actual communications message delivered to the subscriber at no point will be transmitted over the requested MAS channels. We therefore agree with Unicom that, for the limited purpose of the suspension of acceptance of MAS applications adopted in the Notice, its proposed use of the MAS frequencies is not subscriber-based. Unlike its use of paging base station frequencies, Unicom uses MAS frequencies solely for transmitter control purposes and not to transmit subscriber communications to one or more paging base stations. As a result, Unicom's application for modification should not have been dismissed pursuant to the suspension of acceptance of MAS applications to provide subscriber-based service. IV. CONCLUSION 19. We find that the subject MAS applications of GTECH, CellNet, Radscan, TeleBeeper, and Unicom to operate on the 928/952/956 MHz bands should not have been dismissed pursuant to the Commission-imposed suspension of the acceptance of applications for licenses to provide subscriber-based service in these bands, because the Petitioners do not propose to use the subject MAS frequencies for the provision of subscriber-based services. We, therefore, grant the petitions for reconsideration and reinstate those applications nunc pro tunc. V. ORDERING CLAUSES 20. IT IS ORDERED that, pursuant to the authority of 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 0.331 and 1.106 of the Commission's Rules, 47 C.F.R.  0.331 and 1.106, the petitions for reconsideration filed by GTECH Corp., CN WAN Corp., Radscan of Detroit, Inc., TeleBeeper of New Mexico, Inc., and Unicom Corporation ARE GRANTED. 21. IT IS FURTHER ORDERED that the February 19, and February 27, 1997, applications of GTECH Corp., the February 19, 1997, applications of CN WAN Corp., the April 29, 1997, application of Radscan of Detroit, Inc., the February 25, 1997, application of TeleBeeper of New Mexico, Inc., for MAS licenses in the 928/952/956 MHz bands, and the April 15, 1997, application of Unicom Corporation for modification of its MAS license in the 956 MHz band ARE REINSTATED NUNC PRO TUNC. 22. For further information concerning this Memorandum Opinion and Order, contact Todd Lantor, Scot Stone, or Derek Khlopin, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau, at (202) 418-0680. FEDERAL COMMUNICATIONS COMMISSION Daniel B. Phythyon Chief, Wireless Telecommunications Bureau j:\sstone\gtech.ord 2-26-98 draft