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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
C&W COMMUNICATIONS, INC. ) File No. EB-02-IH-0643
)
Licensee of Private Land Mobile )
Stations WNJB566 and KNBV420 )
)
STEVE GILL )
)
Licensee of Private Land Mobile )
Station WNEC236 )
)
RADIO SERVICE COMPANY ) File No. EB-02-IH-0386
)
Licensee of Private Land Mobile )
Stations WPBB209, WNXZ684, and )
WNXZ686 )
) File No. EB-02-IH-0681
FRESNO MOBILE RADIO, INC. )
)
Licensee of Private Land Mobile )
Stations WYY797, WYY798, )
WYY799, KNDC491, )
and WNA511
MEMORANDUM OPINION AND ORDER
Adopted: March 17, 2004 Released:
March 18, 2004
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we deny motions
filed by Nextel Communications, Inc. and/or Nextel Partners,
Inc. (``Nextel'') seeking revocation of licenses held by
Private Land Mobile licensees C&W Communications, Inc., and
its owner, Steve Gill (collectively ``C&W''); Radio Service
Company (``Radio Service''); and Fresno Mobile Radio, Inc.
(``Fresno'') (collectively referred to as the ``Incumbent
Licensees'').1 As discussed more fully below, we find
insufficient basis upon which to commence license revocation
proceedings against the Incumbent Licensees for their
alleged failure to negotiate with Nextel in good faith the
relocation of their respective site-based systems to
comparable spectrum in the 800 MHz band.2
II. BACKGROUND
2. In the mid-1990s, the Commission determined that a new
framework for the licensing of 800 MHz licenses was
appropriate.3 The Commission recognized that the advent of
new technologies would permit licensees of wide area systems
to achieve greater efficiencies than licensees operating
small, site-based systems.4 As a result, the Commission
concluded that it was in the public interest to allow
licensees to operate wide area systems in certain Economic
Areas (``EAs'') in the upper portion of the 800 MHz band and
to relocate site-based incumbents to comparable frequencies
in the lower portion of the 800 MHz band.5 By thus
relocating licensees to other frequencies, the new EA
licensee could utilize more efficient technologies and
provide wide area service to more customers in competition
with PCS and cellular providers.6 To accomplish this, the
Commission established competitive bidding rules to award
overlay licenses and to provide procedures for the auction
winner to relocate incumbent licensees to comparable
spectrum. The Commission determined that it was best to
rely on market forces to accomplish the relocation and only
in instances where the parties failed to reach an agreement
and the EA licensee requested intervention would the
Commission become involved and order involuntary
relocation.7
3. Section 90.699 of the Commission's rules8 establishes a
mechanism whereby an EA licensee may arrange for the
relocation of an incumbent licensee's site-based 800 MHz
system operating in the upper 800 MHz band to comparable
spectrum in the lower 800 MHz band. The relocation
procedures consist of a one-year voluntary negotiation
period during which the EA licensee and the incumbent may
negotiate any mutually agreeable relocation arrangement. If
no agreement is reached by the end of the voluntary period,
a one-year mandatory negotiation period commences, during
which both the EA licensee and the incumbent must negotiate
in ``good faith.'' If no agreement is reached during either
the voluntary or mandatory negotiation periods, the EA
licensee may request involuntary relocation of the
incumbent's system.9
4. In 1997, Nextel purchased a number of EA licenses in
the upper 800 MHz band in Auction No. 16,10 including
licenses for channels used by the Incumbent Licensees.
Nextel states that it timely notified each of the Incumbent
Licensees of its desire to relocate their respective systems
to comparable frequencies.11 Nextel and each of the
Incumbent Licensees engaged in negotiations during both the
voluntary and mandatory periods;12 however, the negotiations
proved unsuccessful. According to Nextel, in each case, it
requested technical information to facilitate the making of
proposals and received either no response or less than
sufficient information.13 Nextel states that it sent each
of the Incumbent Licensees a request to meet face-to-face;
however, none met personally with Nextel during either of
the negotiation periods.14 Nextel claims that it made some
relocation offers that went unanswered or that were rejected
without adequate explanation.15 For example, Nextel
maintains that Radio Service's verbal rejections of certain
of its offers lacked substance.16 Nextel asserts that
Fresno's responses lacked adequate technical detail that
would have helped ``to elucidate possible issues with the
offer.''17 Nextel also argues that C&W erected roadblocks
to negotiations by making unreasonable demands for
warranties and assurances.18 Nextel suggests that a desire
for greenmail, i.e. the desire that Nextel purchase their
respective systems at inflated prices, motivated the
Incumbent Licensees to stonewall relocation negotiations.19
5. Each of the Incumbent Licensees maintains that, while
it may have failed to reach an agreement with Nextel, there
was no absence of ``good faith'' on its part.20 Radio
Service and Fresno state that they rejected Nextel's offers
without detailed responses because Nextel's offers to them
did not provide for a ``seamless'' transition, discussed in
the rulemaking proceeding21 as a requirement for involuntary
relocation.22 C&W asserts that Nextel ignored its repeated
requests for assurances for, among other things, a plan for
seamless transition.23 We note that each of the Incumbent
Licensees retained counsel to negotiate on its behalf.24 We
also note that many of the details regarding the adequacy of
the Incumbent Licensees' responses are disputed issues of
fact.
III. DISCUSSION
6. Under section 312(a) of the Act, ``[t]he Commission may
revoke any station license or construction permit . . . for
willful or repeated violation of. . .any rule or regulation
of the Commission authorized by this Act . . . .''25 We
note that the Commission's discretion under section 312(a)
to institute revocation proceedings is very broad. The
Commission has held that initiation of revocation
proceedings through an order to show cause, as permitted by
section 312(a), ``is, of course, wholly subject to our
discretion. . . . Pursuant to the legislative intent behind
47 U.S.C. § 312 . . . the Commission has complete
discretion, after considering allegations of noncompliance
with our rules, even prima facie evidence of violations, to
determine not to issue orders to show cause . . . .''26
Indeed, within its ``broad discretion in this area, the
Commission can refuse to issue an order to show cause based
upon the petition of a third party even if it is determined
that a violation of Commission rules exists.''27
7. Applying this discretionary standard to the facts at
issue, we find that the alleged misconduct is not
sufficiently egregious to warrant the commencement of
license revocation proceedings against any of the Incumbent
Licensees. Section 90.699 of the Commission's rules
requires an EA licensee and an incumbent licensee to
negotiate in ``good faith'' during the mandatory period.
The Commission has determined that ``good faith'' is
determined on a case-by-case basis.28 In these cases, each
of the Incumbent Licensees engaged counsel to negotiate on
their behalf. Nextel appears to have had sufficient
information to make offers to ``retune'' the Incumbent
Licensees' systems, and the Incumbent Licensees rejected
such offers as not sufficiently ``seamless.'' Taken as a
whole, we do not find that the conduct of the Incumbent
Licensees was so grave as to raise questions about their
respective basic qualifications to remain Commission
licensees.29
8. Nextel also claims, as a further basis for seeking
revocation of licenses, that two of the three Incumbent
Licensees failed to negotiate in ``good faith'' after the
close of the mandatory negotiation period.30 We find no
merit to such allegations. The Commission's rules place no
obligation on incumbent licensees to negotiate beyond the
one-year mandatory negotiation period.31
9. Notwithstanding our decision not to commence revocation
proceedings, we are troubled by the failure of the Incumbent
Licensees to meet face-to-face with Nextel and to promptly
provide technical information and substantive responses to
Nextel. We take this opportunity to remind all licensees
that we will, in the future, consider issuing monetary
forfeitures against licensees who fail to fully meet their
obligations to negotiate relocation in ``good faith.''
10. We note that Nextel may request that the Commission
order the involuntary relocation of each of these incumbent
licensees - a procedure specifically embraced by the
Commission and contemplated by section 90.699 when parties
have failed to reach an accord during the two negotiation
periods. We believe that a request for involuntary
relocation, not the commencement of a license revocation
proceeding, would produce the most expeditious result in
this instance and serve the public interest, convenience,
and necessity.
IV. CONCLUSION
11. IT IS HEREBY ORDERED THAT, pursuant to the authority in
sections 0.111 and 0.311 of the Commission's rules,32 the
Motion for Revocation of Licenses, filed on October 16,
2001, by Nextel Communications, Inc. and Nextel Partners,
Inc. against C&W Communications, Inc. and Steve Gill IS
HEREBY DENIED.
12. IT IS FURTHER ORDERED THAT, pursuant to the authority
in sections 0.111 and 0.311 of the Commission's rules,33 the
Motion for Revocation of Licenses, filed on April 15, 2002,
by Nextel Communications, Inc. and Nextel Partners, Inc.
against Radio Service Company IS HEREBY DENIED.
13. IT IS FURTHER ORDERED THAT, pursuant to the authority
in sections 0.111 and 0.311 of the Commission's rules,34 the
Motion for Revocation of Licenses, filed on June 14, 2002,
by Nextel Communications, Inc. against Fresno Mobile Radio
Inc. IS HEREBY DENIED.
14. IT IS FURTHER ORDERED THAT, pursuant to the authority
in sections 0.111 and 0.311 of the Commission's rules,35 the
Motion to Add a Candor Issue, filed on October 16, 2001, by
Nextel Communications, Inc. and Nextel Partners, Inc.
against C&W Communications, Inc., and Motion to Strike
Further Opposition to Motion for Revocation of Licenses
filed by Nextel Communications, Inc. against Fresno Mobile
Radio Inc. on November 19, 2002 ARE DISMISSED AS MOOT.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 See Motion for Revocation of Licenses, filed on October
16, 2001, by Nextel against C&W (``Nextel/C&W Motion'');
Motion for Revocation of Licenses, filed on April 15, 2002,
by Nextel against Radio Service (``Nextel/Radio Service
Motion''); and Motion for Revocation of Licenses, filed on
June 14, 2002, by Nextel against Fresno (``Nextel/Fresno
Motion'').
2 The Commission does not recognize a formal right to seek
revocation of a license. See, e.g., In the Matter of MCI
Telecommunications Corp., 3 FCC Rcd 3155 (1988); KDSK, Inc.,
93 FCC 2d 893 (1983). The Commission, however, has treated
such requests as informal requests for action pursuant to
section 1.41 of the Commission's Rules, 47 C.F.R. § 1.41.
3 Amendment of Part 90 of the Commission's Rules to
Facilitate Future Development of the SMR Systems in the 800
MHz Frequency Band; Implementation of Sections 3(n) and 322
of the Communications Act Regulatory Treatment of Mobile
Services; Implementation of Section 309(j) of the
Communications Act¾Competitive Bidding, First Report and
Order, Eighth Report and Order, and Second Notice of
Proposed Rule Making, 11 FCC Rcd 1463 (1995) (``First
R&O'').
4 First R&O, 11 FCC Rcd at 1476-77.
5 Id.
6 Id., 11 FCC Rcd at 1475.
7 Id., 11 FCC Rcd at 1503-08. See also Amendment of Part 90
to Facilitate Future Development in the 800 MHz Frequency
Band, Second Report and Order, 12 FCC Rcd 19079, 19110-17
(1997).
8 47 C.F.R. § 90.699.
9 47 C.F.R. § 90.699(b) and (c).
10 See Public Notice, 800 MHz Auction Closes: Winning
Bidders in the Auction of 525 Specialized Mobile Radio
Licenses, 12 FCC Rcd 20417 (1997).
11 Nextel notified C&W, Fresno and Radio Service of its
intent to relocate their respective systems by letters dated
January 19, 1999. Nextel/C&W Motion at 4; Nextel/Fresno
Motion at 5; and Nextel/Radio Service Motion at 5.
12 Nextel/C&W Motion at 5; Nextel/Fresno Motion at 5; and
Nextel/Radio Service Motion at 5.
13 Nextel/C&W Motion at 6; Nextel/Fresno Motion at 6; and
Nextel/Radio Service Motion at 5-6.
14 Nextel/Fresno Motion at 7-8; Nextel/Radio Service Motion
at 6-7; and Nextel/C&W Motion at 13, 22. C&W asserts that
despite Nextel's letter, it was Nextel that was unwilling to
meet to negotiate. C&W Opposition to Motion for Revocation
of Licenses, filed November 7, 2001 (``C&W Opposition''), at
1.
15 Nextel/C&W Motion at 7-18; Nextel/Fresno Motion at 7-10;
Nextel/Radio Service Motion at 6-8.
16 Nextel/Radio Service Motion at 6-7.
17 Nextel/Fresno Motion at 7.
18 Nextel/C&W Motion at 7-8.
19 Nextel/C&W Motion at 25; Nextel/Fresno Motion at 17;
Nextel/Radio Service Motion at 5-6. In further support of
its requests for revocation, Nextel maintains that it has
successfully negotiated the relocation of approximately
1,000 incumbent site-based licensees to other spectrum and
that the Incumbent Licensees are the only ones with whom
negotiations have failed. Nextel/C&W Motion at 3;
Nextel/Fresno Motion at 4; and Nextel/Radio Service Motion
at 4.
20 C&W Opposition at 10-13; Radio Service Opposition to
Motion for Revocation of Licenses, filed September 16, 2002,
at 13-18; and Fresno Opposition to Motion for Revocation of
Licenses, filed October 1, 2001, at 3-5.
21 See First R&O, 11 FCC Rcd at 1510. With respect to
involuntary relocation, the Commission stated:
In such a case, the EA licensee must: (1)
guarantee payment of all costs of relocating the
incumbent to a comparable facility; (2) complete
all activities necessary for placing the new
facilities into operation, including engineering
and frequency coordination, if necessary; and (3)
build and test the new system. Specifically, any
relocation of an incumbent must be conducted in
such a fashion that there is a ``seamless''
transition from the incumbents [sic] ``old''
frequency to its ``relocated'' frequency (that is,
there is no significant disruption in the
incumbent's operations).
Id.
22 Fresno Opposition at 9; Radio Service Opposition at 9.
Each incumbent asserts that most of Nextel's offers provided
an amount of compensation to ``retune'' the incumbent's
radio system, and did not provide for building a redundant
system to allow a ``seamless'' transition for each
incumbent's customers, to which the incumbents believed they
were entitled.
23 C&W Opposition at 7.
24 Nextel/C&W Motion at 6; Nextel/Fresno Motion at 5; and
Radio Service Opposition at 10.
25 47 U.S.C. § 312(a).
26 Tulsa Cable Television, 68 FCC 2d 869, 877 (1978).
27 Humboldt Bay Video Co., 56 FCC 2d 68, 71 n. 9 (1975).
See also C.J. Community Services, Inc. v. FCC, 246 F.2d 660,
664 (D.C.Cir.1957) (``When a violation of the Act has been
shown, the Commission may revoke a station license, but
under § 312(b), it also may impose a lesser sanction.'').
28 See In the Matter of Petition for Declaratory Ruling
Concerning the Requirement of Good Faith Negotiations Among
Economic Area Licensees and Incumbent Licensees in the Upper
200 Channels of the 800 MHz Band, Memorandum Opinion and
Order, 16 FCC Rcd 4882, 4884 (WTB 2001). The Wireless
Telecommunications Bureau noted in this declaratory ruling,
issued shortly before the close of the mandatory period in
this case, that as part of each case-by-case determination,
the Commission will generally apply the factors set forth in
section 101.73 of the Commission's rules. 47 C.F.R. §
101.73. These factors include whether the auction winner
has made a bona fide offer of relocation, whether any
premium demanded by the Incumbent is disproportionate to the
cost of providing comparable facilities, what steps the
parties have taken to determine the actual cost of
relocation, and whether either party has withheld
information necessary to estimate the cost of relocation.
29 In light of this result, we will dismiss as moot two
ancillary motions filed in these matters: Nextel's Motion
to Add a Candor Issue in the C&W proceeding filed on October
16, 2001 (relating to C&W's representation that it provided
almost all requested technical information despite its
alleged failure to submit certain information regarding the
``combiner'' system C&W was utilizing), and Nextel's Motion
to Strike Fresno's Further Opposition to Motion for
Revocation of Licenses filed on November 19, 2002. We have
reviewed the ancillary motions and conclude that nothing
therein alters our decision to deny Nextel's request to
institute revocation proceedings for the alleged infractions
of our rules.
30 Nextel/Radio Service Motion at 8 and Nextel/Fresno Motion
at 10.
31
See 47 C.F.R. § 90.699(b) and (c).
32 47 C.F.R. §§ 0.11 and 0.311.
33 Id.
34 Id.
35 Id.