# Before the

# Federal Communications Commission

# Washington, D.C. 20554

In the Matter of )

)

National Rural Telecommunications ) File No. 131693

Cooperative, LLC )

)

Request for Waiver and Consolidation )

Of 220 MHz Construction Requirements )

# MEMORANDUM OPINION AND ORDER

**Adopted: August 3, 2000 Released: August 4, 2000**

By the Chief, Commercial Wireless Division, Wireless Telecommunications
Bureau:

# I. Introduction

1\. On February 29, 2000, National Rural Telecommunications Cooperative,
LLC (NRTC) filed a request seeking waiver of Sections 90.725, 90.767,
and 90.769 of the Commission's rules in order to consolidate the
construction ("buildout") requirements for its various licensed 220 MHz
facilities.[^1] By this Order, we grant NRTC's waiver request in part
and deny it in part, as described below.

# II. Background

2\. NRTC is a non-profit cooperative association composed of rural
electric cooperatives, rural telephone systems, and small independent
telephone companies. NRTC currently holds three different types of
licenses in the 220 MHz band: (1) a five-channel Phase I nationwide
license; (2) a 10-channel Phase II nationwide license; and (3) seven
7-channel Phase II regional licenses covering the continental United
States.[^2] In its petition, NRTC states that it plans to use these
authorizations to deploy a 22-channel nationwide 220 MHz system that
will provide advanced telecommunications services to rural areas in
forty-eight states.[^3]

3\. Each of the three types of 220 MHz licenses held by NRTC is
currently subject to different construction and implementation
requirements. Under Section 90.725 of the Commission's rules, Phase I
nationwide licensees must construct base stations having a minimum of
five assigned nationwide channels, and must place those base stations
into operation: (1) in at least ten percent of the geographic areas
designated in the application within two years of the initial license
grant, including base stations in at least seven urban areas listed in
Section 90.741; (2) in at least forty percent of the geographic areas
designated in the application within four years of the initial license
grant, including base stations in at least twenty-eight urban areas
listed in Section 90.741; (3) in at least seventy percent of the
geographic areas designated in the application within six years of the
initial license grant, including base stations in at least twenty-eight
urban areas listed in Section 90.741; and (4) in all geographic areas
designated in the application within ten years of the initial license
grant, including base stations in at least twenty-eight urban areas
listed in Section 90.741.[^4] The sites to be selected under Section
90.741 of the Commission's Rules are the "Top 100 Urban Areas for Phase
I Nationwide Systems."[^5] NRTC's Phase I license was initially issued
to Overall Wireless on July 13, 1994, and the two-and four-year
construction requirements were satisfied prior to NRTC's acquisition of
the license. Currently, NRTC is required to construct an additional
twenty-one sites by July 13, 2000,[^6] and another twenty-one sites by
July 13, 2004.

4\. Section 90.769 of the Commission's rules requires a Phase II
nationwide licensee to construct a sufficient number of base stations to
provide coverage to: (1) either a composite area of at least 750,000
square kilometers or 37.5 percent of the United States population within
five years of the initial license grant; and (2) either a composite area
of at least 1,500,000 square kilometers or 75 percent of the United
States population within ten years of the initial license grant.[^7]
There is no requirement that the sites used to satisfy the Phase II
requirements be selected from a pre-determined list. NRTC's Phase II
Nationwide license was issued on November 6, 1998. The five-and ten-year
benchmarks applicable to NRTC's Phase II Nationwide licenses are
therefore November 6, 2003 and November 6, 2008, respectively.

5\. Section 90.767 of the Commission's rules requires a Phase II
regional licensee to construct a sufficient number of base stations to
provide coverage to: (1) at least one-third of the population of the
licensee's Regional Economic Area Grouping (REAG) within five years of
the initial license grant; and (2) at least two-thirds of the population
of the REAG within ten years of the initial license grant.[^8] Thus, the
Phase II Regional requirements are based solely on population covered.
NRTC's Phase II Regional licenses were issued on November 6, 1998. The
five-and ten-year benchmarks applicable to NRTC's Phase II Regional
licenses are therefore November 6, 2003 and November 6, 2008,
respectively.

6\. In its petition, NRTC seeks a waiver of the construction
requirements applicable to its Phase I nationwide and Phase II Regional
licenses, and requests instead that the Commission apply the Phase II
nationwide construction requirements and deadlines to all of NRTC's
licensed facilities.[^9] NRTC argues that application of a single set of
construction benchmarks rather than three sets of inconsistent
requirements is appropriate because NRTC plans to operate all of its 220
MHz licensed facilities as a single 22-channel nationwide system.[^10]
NRTC also contends that applying the Commission's Phase I nationwide and
Phase II regional construction requirements to certain of NRTC's
facilities would impede construction of its integrated system and
frustrate the goal of providing service to rural areas.[^11] NRTC
contends that the construction requirements for Phase II nationwide
licenses are best suited to the construction of a system that is
intended to serve sparsely populated geographic territories.[^12]

# III. Discussion

7\. Pursuant to section 1.925 of the Commission's rules, a waiver may be
granted if the petitioner establishes either that: (1) the underlying
purpose of the rule would not be served or would be frustrated by
application to the instant case, and that grant of the waiver would be
in the public interest; or (2) where the petitioner establishes unique
or unusual factual circumstances, application of the rule would be
inequitable, unduly burdensome, or contrary to the public interest, or
the applicant has no reasonable alternative.[^13] Alternatively, under
section 1.3 of the Commission's rules, the Commission has authority to
waive its rules if there is "good cause" to do so.[^14]

8\. On the facts before us, we find that a partial waiver of our 220 MHz
construction requirements is warranted. On a nationwide basis, NRTC
holds a total of 22 channels in the 220 MHz service, but because these
channels fall into three different licensing categories they are subject
to inconsistent and to some degree conflicting construction requirements
and timetables. The rules for Phase I nationwide licenses require phased
construction of a set number of individual base stations and focus on a
designated list of urban areas.[^15] The Phase II regional license
construction rules require coverage of a specified percentage of the
population in each of the seven REAGs.[^16] The Phase II nationwide
rules give licensees the option of meeting coverage benchmarks based
either on population or on geographic area.[^17] In light of the fact
that NRTC is using all of its licensed facilities to build a single
integrated system, we conclude that it is reasonable under these
circumstances to apply a more uniform set of construction requirements
to the system as a whole.

9\. Specifically, we agree with NRTC that it is appropriate to extend
geographic coverage requirements such as those found in the Phase II
nationwide rules to NRTC's other licenses. The geographic coverage
option already applies to the largest portion of the 22 channels held by
NRTC. In addition, because this option allows licensees to meet coverage
requirements based on geographic area as an alternative to population,
it is well suited to NRTC's planned deployment of service in rural,
sparsely populated areas. Provision of telecommunications services to
rural areas is an important Commission goal. We conclude that under the
circumstances presented here, this goal is better served by encouraging
full deployment of NRTC's 22-channel system in rural areas than by
applying construction requirements to certain channels in that system
that are focused solely on population or on coverage of specific urban
markets. Therefore, with regard to NRTC's Phase I nationwide channels,
we will give NRTC the option of applying either its remaining six-and
ten-year Phase I construction benchmark requirements or the Phase II
nationwide construction benchmarks and timetable as modified below.

10\. In addition, we believe that with respect to its Phase II regional
licenses, we should allow NRTC to use geographic coverage as an
alternative to population coverage. However, we also believe we should
continue to require NRTC to complete some buildout in each of the seven
REAGs at the five-year and ten-year dates. In each of its seven REAGs,
therefore, NRTC must construct a sufficient number of base stations to
provide coverage to: (1) either a composite area of at least 100,000
square kilometers or one-third of the population of the REAG within five
years of the initial license grant; and (2) either a composite area of
at least 200,000 square kilometers or two-thirds of the population of
the REAG within ten years of the initial license grant.

11\. Furthermore, while we agree with NRTC that special circumstances
exist that justify a waiver in this case, we also conclude that it is
reasonable, as a condition of the waiver, to require NRTC to meet
certain interim construction benchmarks for its system. Without a
waiver, NRTC would have been required under its Phase I nationwide
license to meet its six-year construction benchmark for the Phase I
channels on July 13, 2000. Under the Phase II nationwide timetable,
however, NRTC's first construction benchmark does not occur until
November 6, 2003. Therefore, to ensure that NRTC proceeds expeditiously
with buildout of its proposed integrated system, we will require NRTC to
meet an interim coverage benchmark for its 22-channel system of 250,000
square kilometers or 12.5% of the United States population by July 13,
2002. This represents one-third of the coverage required at the
five-year benchmark for Phase II Nationwide licenses.[^18]

12\. In addition, because one of the bases for this waiver is NRTC's
intent to build an integrated, nationwide system providing a unified
service utilizing its various sets of licenses,[^19] this waiver applies
to the subject licenses only so long as NRTC or a successor in interest
operates the licenses as an integrated 22-channel system. This waiver
will not apply to any smaller subset of these licenses transferred or
assigned to another licensee.

# IV. Ordering Clause

13\. Accordingly, IT IS ORDERED that, pursuant to Section 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C. § 154(i), and Sections
0.131, 0.331, 1.3, and 1.925 of the Commission's Rules, 47 C.F.R. §§
0.131, 0.331, 1.3, 1.925, the request filed by NRTC for waiver of the
Phase I Nationwide and Phase II Regional construction requirements IS
HEREBY GRANTED to the extent discussed herein, and otherwise IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

> William W. Kunze

Chief, Commercial Wireless Division

Wireless Telecommunications Bureau

[^1]: *See* Request of NRTC, LLC for Waiver and Consolidation of 220 MHz
    Construction Requirements filed February 29, 2000 (Waiver Request).

[^2]: ^?^ The stations involved are WPCU 518-545 (Phase I Nationwide);
    WPOL 329-334 (Phase II Regional); and WPOI 700 (Phase II
    Nationwide).

[^3]: ^?^ Waiver Request at 3.

[^4]: ^?^ 47 C.F.R. § 90.725.

[^5]: 47 C.F.R. § 90.741.

[^6]: The Commercial Wireless Division of the Wireless
    Telecommunications Bureau orally granted NRTC a temporary extension
    of this deadline during the pendency of NRTC's waiver request.

[^7]: ^?^ 47 C.F.R. § 90.769.

[^8]: ^?^ 47 C.F.R. § 90.767.

[^9]: ^?^ Waiver Request at 8.

[^10]: ^?^ Waiver Request at 2.

[^11]: ^?^ Waiver Request at 6.

[^12]: ^?^ Waiver Request at 8.

[^13]: ^?^ 47 C.F.R. § 1.925(3).

[^14]: ^?^ 47 C.F.R. § 1.3.

[^15]: 47 C.F.R § 90.725.

[^16]: 47 C.F.R. § 90.767.

[^17]: 47 C.F.R. § 90.769.

[^18]: *Id.*

[^19]: Waiver Request at 6.