**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of Applications of | *  | File No. BRMD-20010330AHW    |
|                                  | *) |                              |
| MDS DIGITAL NETWORK, INC.        | ** | File No. BRMD-20010330ADO    |
|                                  |    |                              |
| For Renewal of License of        | *  | File No. BRMD-20010330AHV    |
| Multipoint Distribution Service  | *) |                              |
| Station WPY40, Los Angeles,      | ** |                              |
| California                       |    |                              |
|                                  | *  |                              |
| For Renewal of License of        | *) |                              |
| Multipoint Distribution Service  | ** |                              |
| Station KFI79, Los Angeles,      |    |                              |
| California                       | *  |                              |
|                                  | *) |                              |
| For Renewal of License of        | ** |                              |
| Multipoint Distribution Service  |    |                              |
| Station KFF79, Los Angeles,      | *  |                              |
| California                       | *) |                              |
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+----------------------------------+----+------------------------------+

**ORDER ON RECONSIDERATION**

**Adopted: December 7, 2004 Released: December 7, 2004**

By the Deputy Chief, Broadband Division, Wireless Telecommunications
Bureau:

# I. INTRODUCTION

1.  On December 17, 2003, MDS Digital Network, Inc. (MDS Digital) filed
    a petition seeking reconsideration[^1] of the action taken by the
    Public Safety and Private Wireless Division (Division) of the
    Wireless Telecommunications Bureau on November 17, 2003.[^2] The
    Division granted a Petition to Deny and Petition for Declaration of
    License Forfeiture filed by Southern Wireless Video, Inc.
    (Southern)[^3] against MDS Digital Network, Inc. (MDS Digital),
    thereby declaring that MDS Digital forfeited the licenses for
    Stations WPY40, KFI79, and KFF79, Los Angeles, California as of June
    24, 2000.[^4] For the reasons discussed below, we deny the PFR.

    **II. BACKGROUND**

2.  The Commission granted its consent to the assignment of Stations
    WPY40, KFI79, and KFF79 from Microband Corporation of America
    (Microband) on November 23, 1990.[^5] In 1999, Mr. Kim transferred
    the licenses to MDS Digital on a *pro forma* basis.[^6] Mr. Kim
    serves as the president and sole employee of MDS Digital. Mr. Kim
    and, subsequently, MDS Digital, have filed annual reports for each
    station since 1991 (for the calendar year of 1990).[^7]

3.  *Station KFF79.* According to the annual report filed for the year
    1990 for Station KFF79, Mr. Kim transmitted Korean language
    programming "on a test basis on a twenty-four hour per day, seven
    day per week basis since the station was acquired."[^8] In the
    following year, Station KFF79 transmitted Korean and Arabic language
    programming to approximately 1,300 subscribers "on a twenty-four
    hour per day, seven day per week basis" for a total of 8,760 hours
    of entertainment programming rendered during the calendar year.[^9]
    The number of subscribers to the programming transmitted by Station
    KFF79 greatly increased to approximately 5,000 for calendar years of
    1992 and 1993.[^10] Although Mr. Kim reported that Station KFF79
    retained 5,000 subscribers during the calendar year of 1994, Mr. Kim
    further reported that Station KFF79 only rendered 384 total hours of
    service in that calendar year due to heavy damage caused to station
    facilities by an earthquake on January 16, 1994.[^11] Station KFF79
    was returned to service in the following year and continued
    distributing programming to customers from 1995 through 1998.[^12]
    However, according to the annual reports filed for the years of 1999
    and 2000, Station KFF79 only operated in test mode, which resulted
    in approximately 168 hours of transmissions each year.[^13]
    Moreover, Mr. Kim conceded therein that for each year "there
    \[were\] numerous consecutive periods greater than 48 hours in which
    the station rendered no service as authorized."[^14] In annual
    reports filed for the calendar year of 2001, for Mr. Kim asserted
    that "\[t\]he equipment for Station KFF79 remains in place and,
    while the landlord has disconnected the power supply, Station KFF79
    is operational. On more than one occasion during 2001 testing was
    done using Station KFF79."[^15]

4.  *Station KFI79.* Station KFI79 provided news broadcast service to
    the Orange County News Service in 1990[^16] and subsequently
    simulcasted Korean and Arabic language programming originated on
    Station KFF79 from 1991 through 1994.[^17] However, in the 1995
    annual report, Mr. Kim disclosed that Station KFI79 remained
    operational but provided no service to any subscribers "because the
    licensee has received interference complaints forcing the shutdown
    of the studio-to-transmitter link."[^18] For various reasons,
    Station KFI79 thereafter operated in test mode from 1996 through
    2000.[^19] Specifically, the testing of Station KFI79 resulted in
    approximately 4,392 hours of such transmissions in 1996, 350 hours
    in 1997, 330 hours in 1998, and 72 hours in both 1999 and 2000. In
    each annual report for the calendar years of 1996 though 2000, Mr.
    Kim further disclosed that there were numerous consecutive periods
    greater than 48 hours in which the Station KFI79 rendered no service
    as authorized.[^20] In the 2001 annual report, for Mr. Kim asserted
    that "\[t\]he equipment for Station KFI79 remains in place and,
    while the landlord has disconnected the power supply, Station KFI79
    is operational."[^21]

5.  *Station WPY40.* According to the annual reports, Station WPY40
    operated from 1990 through 1994 on a test basis in preparation of
    simulcasting programming originated on Station KFF79.[^22]
    Thereafter, the annual reports filed for Station WPY40 for the
    calendar years of 1995 through 2002 are effectively the same as
    those filed for Station KFI79.[^23]

6.  On March 30, 2001, MDS Digital filed applications to renew the
    licenses for Stations WPY40, KFI79, and KFF79. On August 1, 2001,
    Southern filed petitions to deny the pending renewal
    applications.[^24] Southern alleges that the applications cannot be
    granted because MDS Digital's licenses for Stations WPY40, KFI79,
    and KFF79 "have been forfeited and/or canceled pursuant to Sections
    21.44(a)(3) and 21.303(d) of the \[Commission's\] Rules."[^25]
    According to Southern, "\[t\]he licenses should be deemed forfeited
    because the Stations have voluntarily been dismantled and have been
    non-operational for a period of over thirty continuous days."[^26]
    Based on its field studies and on the annual reports submitted by
    Mr. Kim and MDS Digital, Southern contends that MDS Digital was
    required, pursuant to Section 21.303(d) of the Commission's Rules,
    to submit the licenses for cancellation, file a modification
    application, or request a waiver of the rule.[^27] Southern
    therefore concludes that, because MDS Digital failed to take any of
    the permissible actions, the Commission should summarily dismiss the
    applications and deem the license forfeited.[^28] MDS Digital filed
    numerous motions seeking additional time to file its
    opposition.[^29]

7.  The Division found no need to address the issue of whether MDS
    Digital's licenses were automatically forfeited pursuant to Section
    21.44(a)(3) of the Commission's Rules[^30] because it found that
    "the record clearly establishes that MDS Digital permanently
    discontinued operation of Stations WPY40, KFI79, and KFF79."[^31]
    Specifically, the Division noted that "MDS Digital's annual reports,
    as well as Southern's submissions in this proceeding, establish that
    neither Mr. Kim nor MDS Digital have used Stations WPY40 and KFI79
    to render any service since the stations were acquired, nor have Mr.
    Kim or MDS Digital used Station KFF79 to render any service since
    early in 1999."[^32] Accordingly, the Division concluded that,
    pursuant to Section 21.303(d) of the Commission's Rules,[^33] "the
    licenses for Stations WPY40, KFI79, and KFF79 cancelled as of June
    24, 2000, the ending date of the twelve-month period following
    demonstration by the evidence before us of non-service by the
    stations."[^34]

    **III. DISCUSSION**

8.  MDS Digital contends that we should rescind the *MO&O*, deny
    Southern's Petition, and reinstate and renew MDS Digitial's licenses
    for Stations WPY40, KFI79, and KFF79.[^35] Specifically, MDS Digital
    asserts that the *MO&O* contains factual errors which unduly
    prejudice MDS Digital.[^36] In addition, MDS Digital argues that the
    Division ignored the evidence on record, which, according to MDS
    Digital demonstrates that Mr. Kim expended extraordinary effort and
    resources in developing the stations.[^37] MDS Digital maintains
    that the Division should not penalize Mr. Kim for his lack of
    success in this endeavor because it was due to matters outside of
    his control (*i.e.,* natural disaster, technological evolution, and
    orders of United States Bankruptcy Court).[^38] MDS Digital further
    contends the Division unlawfully applies a strict enforcement and
    automatic cancellation standard without providing due notice and
    fails to treat similarly situated parties the same.[^39]

9.  MDS Digital argues that the *MO&O* improperly interprets Section
    21.303(d) to authorize automatic cancellation without fair
    notice.[^40] MDS Digital contends that the Division's strict
    enforcement and automatic cancellation in this context is
    unprecedented.[^41] MDS Digital finds that "\[n\]othing in express
    terms of the rule contemplates automatic cancellation."[^42] MDS
    Digital maintains that the Commission clarified "that Section
    21.303(d) required a 'licensee to submit for cancellation" a license
    not used for 12 consecutive months."[^43] MDS Digital further
    asserts that it "had a reasonable basis to believe that the
    operational status of the Stations was sufficient under Section
    21.303(d)."[^44] Moreover, MDS Digital alleges that the "extreme
    penalty" of license cancellation "is particularly inappropriate in
    consideration of prior Commission actions relating to potential
    violations of Section 21.303(d)."[^45] Lastly, MDS Digital argues
    that, even if the Commission were to find MDS Digital in violation
    of Section 21.303(a), good cause exists for the Commission to grant
    MDS Digital a waiver for six months consistent with the waiver
    granted CMTI.[^46]

10. We reject MDS Digital's argument that it had insufficient notice of
    what constituted service under Section 21.303(d) of the Commission's
    Rules. The U.S. Court of Appeals for the District of Columbia
    Circuit has held in determining whether a party has fair notice, the
    critical inquiry is whether "by receiving the regulations and other
    public statements issued by the agency, a regulated party acting in
    good faith would be able to identify, with ascertainable certainty,
    the standards with which the agency expects parties to
    conform."[^47] In *Trinity Broadcasting*, the District of Columbia
    Circuit also explained that a licensee may not be penalized when the
    rules in question were unclear, the "agency itself struggles to
    provide a definitive reading of the regulatory requirements," and
    the licensee's interpretation of those rules was reasonable.[^48] We
    therefore disagree, as explained below, with MDS Digital's
    contention that Section 21.303(d) of the Commission's Rules was
    unclear because, according to MDS Digital, the Commission did not
    formally address what sort of use was required to avoid license
    cancellation.

11. On September 25, 1987, the Commission released the *Part 21 Report
    and Order* revising Part 21 of the Commission's Rules, which governs
    the construction, licensing, and operation of common carrier
    domestic fixed radio facilities, including MDS. In the *Part 21
    Report and Order*, the Commission expressly changed Commission
    policy regarding unused licenses in the domestic public fixed radio
    services. Before the *Part 21 Report and Order* was released, the
    Commission did not require licensees to submit an unused license for
    cancellation.[^49] In changing this policy, the Commission stated
    that "\[t\]he comments have failed to convince us that requiring a
    licensee to submit an unused license for cancellation is, in and of
    itself, unreasonable."[^50] The Commission further explained that
    while it did not desire to discourage risk taking in the development
    of new technologies, it had, at the same time an obligation to
    ensure that spectrum is used efficiently.[^51] Consequently, the
    Commission added Section 21.303(d) to Part 21.

12. The plain language of the rule requires an applicant to render
    service once within a twelve month period.[^52] Although MDS Digital
    contends that the Commission failed to articulate what constitutes
    "service," we find that this is not a close case. In particular, we
    agree with the Division that it was clearly unreasonable for MDS
    Digital to believe that the periodic broadcasting of signals that
    nobody received constituted "service" within the meaning of the
    rule.[^53] Such an interpretation is unreasonable; in order to
    provide a service, a provider would, at a minimum, need a customer
    or other person to serve. Moreover, under MDS Digital'
    interpretation of the rule, a licensee could avoid license
    cancellation by broadcasting a signal once a year that nobody
    receives.[^54] This construction, however, is plainly inconsistent
    with the Commission's underlying purpose of ensuring that spectrum
    is used efficiently and effectively.[^55] We also note that while
    MDS Digital discusses at length the efforts it made to establish
    service on the stations, the plain language of the rule requires
    that a licensee provide service, as opposed to attempting to provide
    service.

13. MDS Digital asserts that it was treated differently than similarly
    situated parties.[^56] We disagree. The cases referenced by MDS
    Digital are significantly, factually distinct from the present
    matter.[^57] With respect to CMTI, the waiver request was untimely
    filed and should have been dismissed by Commission staff on that
    basis.[^58] We also note that the staff letter granting the waiver
    did not address the definition of what constitutes service pursuant
    to Section 21.303(d) of the Commission's Rules.[^59] Due process
    does not compel the Commission to follow erroneous decisions by
    Commission staff, particularly when the rulings in question do not
    analyze the relevant issues.[^60] In addition, we do not believe
    that MDS Digital's situation is similar to that addressed in the
    *Wireless Holdings Letter.* The staff therein addressed the
    disclosure by licensees of periodic transmission outages that lasted
    less than twelve consecutive months, thus not implicating the
    requirements of Section 21.303(d) of the Commission's Rules.[^61]
    Moreover, at the time of the disclosure, the subject stations had
    already resumed providing "continuous service" to the public.[^62]

14. As the Division noted in the *MO&O*, after twelve consecutive months
    of non-use, Section 21.303(d) of the Commission's Rules explicitly
    required MDS Digital to submit its license for cancellation, file an
    application for modification of the license to delete the unused
    frequency, or request a waiver and demonstrate that the frequency
    will be used (as evidenced by appropriate requests for service)
    within twelve months of the end of the period of non-use.[^63] In
    the instant case, the Division found that the twelve-month period of
    non-use concluded on June 24, 2000.[^64] However, as explained
    above, Station WPY40 has never provided service to subscribers since
    Mr. Kim acquired the facility via assignment in 1990.[^65] Although
    Station WFI79 provided service to subscribers until January 16,
    1994, the annual reports disclose that it was not operational due to
    the removal or alteration of equipment or facilities from January
    16, 1994 through December 31, 1995 and resumed transmitting
    "periodic" test signals in 1996 and each year thereafter until the
    landlord disconnected the equipment. Indeed, only Station WFF79
    provided service to subscribers after January 16, 1994. However,
    even with regard to Station WFF79, the annual reports confirm that
    the facility was only used to transmit test signals in 1999 and
    2000.[^66] We therefore find that this is not even a close case. By
    June 24, 2000, all of the subject stations' periods of non-use far
    exceeded twelve months in duration. Nevertheless, MDS Digital failed
    to submit its license for cancellation, file a modification
    application, or seek a waiver of the rule within the period
    specified in Section 21.303(d) of the Commission's Rules.[^67]

15. As noted above, MDS Digital' waiver request was untimely. Even if we
    reached the merits of the waiver request, however, it would be
    denied. Under Section 21.19 of the Commission's Rules, the
    Commission may grant a request for a waiver if it is shown that: (i)
    the underlying purpose of the rules(s) would not be served or would
    be frustrated by application to the instant case, and that a grant
    of the requested waiver would be in the public interest; or (ii) in
    view of the unique or unusual factual circumstances of the instant
    case, application of the rule(s) would be inequitable, unduly
    burdensome or contrary to the public interest, or the applicant has
    no reasonable alternative.[^68] MDS Digital failed to demonstrate
    that the underlying purpose of Section 21.303(d) of the Commission's
    Rules, to prevent spectrum warehousing, would be frustrated with the
    application of the rule in this instance.[^69] As explained above,
    MDS Digital did not provide service for years, which prevented
    someone else from using this spectrum. We also disagree with MDS
    Digital that there are unique factual circumstances in this case
    that render the application of section 21.303(d) inequitable, unduly
    burdensome, and contrary to the public interest. MDS Digital's
    argument that application of this rule does "not support the public
    interest but simply punishes an individual and a company for
    struggling to maintain operating an MDS network in the face of
    overwhelming barriers none of which one to the control of Mr. Kim or
    \[MDS Digital\]"[^70] ignores the Commission's statements and
    rationale in the *Part 21 Report and Order.* Risk-taking in the
    wireless industry is not a unique factual circumstance. In fact, the
    Commission stated in the *Part 21 Report and Order* that "\[w\]e
    have no desire to discourage risk taking in new technologies"[^71]
    The Commission, however, found that the adoption of Section
    21.303(d) was necessary to allow others to use the spectrum that was
    not being used to provide service and to allow the Commission to
    ascertain when spectrum is not being utilized or is being under
    utilized.[^72] Therefore, even if we were to consider the untimely
    filed waiver request, a waiver would not be warranted in this
    instance.

    **IV. CONCLUSION AND ORDERING CLAUSES**

16. For the reasons discussed above, we deny the PFR, thereby affirming
    the forfeiture of MDS Digital's licenses for Stations KFF79, KFI79,
    and WPY40 for failure to comply with Section 21.303(d) of the
    Commission's Rules. We further dismiss MDS Digital's request for
    waiver as untimely.

17. ACCORDINGLY, IT IS ORDERED that, pursuant to Sections 4(i) and 405
    of the Communications Act of 1934, 47 U.S.C. §§ 154(i), 405, and
    Section 1.106 of the Commission's Rules, 47 C.F.R. § 1.106, the
    Petition for Reconsideration filed by MDS Digital Network, Inc. on
    December 17, 2003 IS DENIED.

18. This action is taken under delegated authority pursuant to Sections
    0.131 and 0.331 of the Commission's Rules, 47 C.F.R. §§ 0.131,
    0.331.

> FEDERAL COMMUNICATIONS COMMISSION
>
> John J. Schauble
>
> Deputy Chief, Broadband Division
>
> Wireless Telecommunications Bureau

[^1]: MDS Digital Network, Inc., Petition for Reconsideration (filed
    Dec. 17, 2003) (PFR).

[^2]: MDS Digital Network, Inc., *Memorandum Opinion and Order,* 18 FCC
    Rcd 24012 (WTB PSPWD 2003) (*MO&O*).

[^3]: Southern Wireless Video, Inc., Petition to Deny and Petition for
    Declaration of License Forfeiture (filed Aug. 1, 2000 (Petition).
    The Petition was filed against applications filed by MDS Digital on
    March 30, 2001 for renewal of the licenses for Stations WPY40,
    KFI79, and KFF79, Los Angeles, California. *See* FCC File Nos.
    BRMD-20010330AHW; BRMD-20010330ADO; BRMD-20010330AHV (filed Mar. 30,
    2001) (Applications).

[^4]: *See MO&O,* 18 FCC Rcd at 24012 ¶ 1. Because the Division declared
    the licenses for Stations WPY40, KFI79, and KFF79 forfeit as of June
    24, 2000, it dismissed MDS Digital\'s pending renewal applications.
    *See id.*

[^5]: *See Public Notice,* Report NO. D-569-A (rel. Dec. 5, 1990).

[^6]: *See* Notice of Consummation (filed Dec. 9, 1999).

[^7]: 47 C.F.R. § 21.911(a)(3) requires MDS licensees to file annual
    reports for each station listing the number of subscribers and the
    total hours of transmission service rendered during the calendar
    year in the following categories: entertainment, education and
    training, public service, data transmission, and other services.

[^8]: *See* Station KFF79 1990 Annual Report (filed Mar. 26, 1991). Mr.
    Kim reported no subscribers for the calendar year of 1990. *See id.*
    Mr. Kim categorized the total hours of transmission service rendered
    during the calendar year of 1990 as approximately 720 hours of
    entertainment programming. *See id.*

[^9]: *See* Station KFF79 1991 Annual Report (filed Mar. 5, 1992).

[^10]: *See* Station KFF79 1992 Annual Report (filed Mar. 10, 1993);
    Station KFF79 1993 Annual Report (filed Mar. 25, 1994). The total
    hours of transmission service rendered during the calendar years of
    1992 and 1993 were, respectively, 8,784 and 8,760 hours of
    entertainment programming.

[^11]: *See* Station KFF79 1994 Annual Report (filed Feb. 28, 1995). Mr.
    Kim stated that repairs were underway. *See id.* Mr. Kim reported
    that Station KFF79 was not operational due to the removal or
    alteration of equipment or facilities and did not render service
    from January 16 through December 31, 1994. *See id.*

[^12]: *See* Station KFF79 1995 Annual Report (filed Mar. 1, 1996);
    Station KFF79 1996 Annual Report (filed Mar. 12, 1997); Station
    KFF79 1997 Annual Report (filed Mar. 11, 1998); Station KFF79 1998
    Annual Report (filed Jul. 12, 1999). According to the annual
    reports, Station KFF79 transmitted a total of 8,760 hours of
    entertainment programming to 1,050 subscribers in 1995, 8,784 hours
    of entertainment programming to 1,600 subscribers in 1996, and 8,088
    hours of entertainment programming to 1,571 subscribers in 1997.
    According to the extremely late-filed 1998 annual report, Station
    KFF79 provided a total of 2,054 hours of transmission service, of
    which 1,704 hours were categorized as entertainment and 350 hours
    were categorized as other, to 2,066 subscribers.

[^13]: *See* Station KFF79 1999 Annual Report (filed Mar. 29, 2000);
    Station KFF79 2000 Annual Report (filed Mar. 1, 2001). The annual
    reports state that, on April 14, 1999, U.S. Bankruptcy Court for the
    Northern District of Oklahoma entered a temporary restraining order,
    which restrained the lease or encumbrance of this license for any
    period in excess of 90 days. Accordingly, no parties were willing to
    commit the necessary financial resources for a short-term lease with
    no assurance of renewal.

[^14]: *See id.*; Station KFF79 1999 Annual Report.

[^15]: Station KFF79 2001 Annual Report (filed Mar. 1, 2002). Similarly,
    in the 2002 annual report, Mr. Kim reiterated that "\[t\]he
    essential equipment for operation of Station KFF79 remains in place
    although the landlord has disconnected certain of the equipment."
    Station KFF79 2002 Annual Report (filed Feb. 28, 2003).

[^16]: *See* Station KFI79 1990 Annual Report (filed Mar. 26, 1991).
    Specifically, Mr. Kim reports that Station KFI79 rendered
    approximately 600 hours of news programming since he acquired the
    station, via assignment, in November of 1990. *See id.*

[^17]: *See* Station KFI79 1991 Annual Report (filed Mar. 5, 1992);
    Station KFI79 1992 Annual Report (filed Mar. 10, 1993); Station
    KFI79 1993 Annual Report (filed Mar. 25, 1994); Station KFI79 1994
    Annual Report (filed Feb. 28, 1995). Indeed, the annual reports for
    Station KFI79 for the calendar years of 1991 through 1994 are
    effectively identical to the annual reports for Station KFF79, which
    are discussed above.

[^18]: *See* Station KFI79 1995 Annual Report (filed Mar. 1, 1996).
    Accordingly, Mr. Kim disclosed that Station KFI79 provided no
    service, as authorized, for the period from January 1 through
    December 31, 1995. *See id.* Therefore, when taken in consideration
    with the prior annual report, Station KFI79 provided no service as
    authorized from January 16, 1994 through December 31, 1995.

[^19]: Specifically, Mr. Kim operated Station KFI79 in test mode in
    1996, 1997, and 1998 because Mr. Kim sought to use Station KFI79 as
    part of a network to provide Internet services throughout the
    greater Los Angeles area and, in so doing, experienced problems in
    securing the necessary link of Station KFI79's transmitter to a host
    computer. *See* Station KFI79 1996 Annual Report (filed Mar. 12,
    1997); Station KFI79 1997 Annual Report (filed Mar. 11, 1998);
    Station KFI79 1998 Annual Report (filed Jul. 12, 1999). Mr. Kim
    offers the same explanation for Station KFI79's lack of service for
    calendar years of 1999 and 2000 as that discussed above with respect
    to Station KFF79. *See* Station KFI79 1999 Annual Report (filed Mar.
    29, 2000); Station KFI79 2000 Annual Report (filed Mar. 1, 2001).

[^20]: *See* Station KFI79 1996 Annual Report; Station KFI79 1997 Annual
    Report; Station KFI79 1998 Annual Report; Station KFI79 1999 Annual
    Report; Station KFI79 2000 Annual Report.

[^21]: Station KFI79 2001 Annual Report (filed Mar. 1, 2002). Similarly,
    in the 2002 annual report, Mr. Kim reiterated that "\[t\]he
    essential equipment for operation of Station KFI79 remains in place
    although the landlord has disconnected certain of the equipment."
    Station KFI79 2002 Annual Report (filed Feb. 28, 2003).

[^22]: *See* Station WPY40 1990 Annual Report (filed Mar. 26, 1991);
    Station WPY40 1991 Annual Report (filed Mar. 5, 1992); Station WPY40
    1992 Annual Report (filed Mar. 10, 1993); Station WPY40 1993 Annual
    Report (filed Mar. 25, 1994); Station WPY40 1994 Annual Report
    (filed Feb. 28, 1995). According to the annual reports, service to
    consumers could not begin until Mr. Kim secured the point-to- point
    microwave capacity needed to simulcast programming originating on
    Station KFF79. Because Mr. Kim never obtained the necessary link,
    Station WPY40 continued to operate in test mode through 1999. *See*
    PFR at 8-9.

[^23]: *See* Station WPY40 1995 Annual Report (filed Mar. 1 1996)
    (reporting that the station rendered no service as authorized from
    January 1 through December 31, 1995); Station WPY40 1996 Annual
    Report (filed Mar. 12, 1997) (reporting that the testing of Station
    WPY40 resulted in approximately 72 hours of transmissions); Station
    WPY40 1997 Annual Report (filed Mar. 11, 1998) (reporting that the
    testing of Station WPY40 resulted in approximately 350 hours of
    transmissions); Station WPY40 1998 Annual Report (filed July 12,
    1999) (reporting that the periodic testing of Station WPY40 resulted
    in approximately 330 hours of transmissions); Station WPY40 1999
    Annual Report (filed Mar. 29, 2000) (reporting that the testing of
    Station WPY40 resulted in an approximately 72 hours of
    transmissions); Station WPY40 2000 Annual Report (filed Mar. 1,
    2001) (same); Station WPY40 2001 Annual Report (filed Mar. 1, 2002);
    Station WPY40 2002 Annual Report (filed Feb. 28, 2003).

[^24]: *See* Petition. Southern is the licensee of the Los Angeles,
    California Basic Trading Area (BTA No. B262). Southern states that
    is currently operating wireless cable systems throughout the Los
    Angeles area and, as the auction winner, it has the exclusive right
    to file a long-form application to operate an MDS Station in those
    portions of the BTA where the service area of a forfeited incumbent
    station has been merged with the BTA pursuant to 47 CFR 21.932(c).
    *See* Petition at 1-2.

[^25]: *See* Petition at 2.

[^26]: *Id.* (*citing* 47 CFR 21.44(a)(3)). Southern provides
    declarations by engineers stating that, during the months of June
    and July of 2001, engineers inspected and monitored MDS Digital's
    transmitter site and determined that the stations were not
    operating. *See* Petition, Exhibits A, B, and C; *see also*
    Petition, Exhibit D (appending field surveys that were performed on
    the three stations in 1999 and that indicate the stations have not
    been operational on numerous dates from January 27, 1999 through
    June 24, 1999).

[^27]: *See* Petition at 3.

[^28]: *See* Petition at 3.

[^29]: The Division incorrectly noted in the *MO&O* that, at the time of
    its release on November 17, 2003, the most recent request for an
    extension of time for MDS Digital to file its opposition brief had
    been submitted on September 6, 2002 (requesting an extension of time
    through December 6, 2002). *See MO&O,* 18 FCC Rcd at 24014 n.11.
    However, we find that MDS Digital had filed subsequent motions
    seeking additional time to file its opposition. *See* MDS Digital
    Network, Inc., Consent Request for Additional Time to File
    Opposition to Petition to Deny and Petition for License Forfeiture
    (filed Aug. 18, 2003) (requesting through Nov. 18, 2003); MDS
    Digital Network, Inc., Consent Request for Additional Time to File
    Opposition to Petition to Deny and Petition for License Forfeiture
    (filed May 19, 2003) (requesting through Aug. 19, 2003); MDS Digital
    Network, Inc., Consent Request for Additional Time to File
    Opposition to Petition to Deny and Petition for License Forfeiture
    (filed Mar. 17, 2003) (requesting through May 19, 2003); MDS Digital
    Network, Inc., Consent Request for Additional Time to File
    Opposition to Petition to Deny and Petition for License Forfeiture
    (filed Jan. 17, 2003) (requesting through Feb. 17, 2003); MDS
    Digital Network, Inc., Consent Request for Additional Time to File
    Opposition to Petition to Deny and Petition for License Forfeiture
    (filed Dec. 17, 2002) (requesting through Jan. 17, 2003). We find
    that MDS Digital was not unduly prejudiced by the Division\'s
    failure to act on MDS Digital's motions for extensions of time to
    file its opposition brief. We therefore find it appropriate to
    consider the arguments raised by MDS Digital in the instant PFR.

[^30]: 47 C.F.R. § 21.44(a)(3); *see* Petition.

[^31]: *MO&O,* 18 FCC Rcd at 24014-24015 ¶ 7 (internal citations
    omitted).

[^32]: *Id.*

[^33]: 47 C.F.R. § 21.303(d).

[^34]: *MO&O,* 18 FCC Rcd at 24014 ¶ 7. The Division therefore also
    dismissed MDS Digital's applications for the renewal of the subject
    licenses. *See id.*

[^35]: *See* PFR at 4.

[^36]: *See id.* MDS Digital notes that the Division's most significant
    error was its finding that MDS Digital "had not sought an extension
    of time to file its opposition to the Petition beyond December 2002,
    when \[MDS Digital\] had filed additional content motions to extend
    the opposition deadline to November 18, 2003." PRF at 6. MDS Digital
    therefore concludes that the Division effectively denied MDS Digital
    the opportunity to respond to the PTD. *See id.*

[^37]: *See id.*

[^38]: *See id.*

[^39]: *See id*. at 5.

[^40]: *See id.* at 14. MDS Digital also argues against the application
    of 47 CFR 21.44(a)(3) to effectuate the automatic cancellation of
    the subject licenses, even though the Division found no need to
    reach this issue. *See id.* at 12-14. MDS Digital contends that 47
    CFR 21.44(a)(3) "bars only the 'voluntary removal or alteration of
    the facilities, so as to render the station not operational for
    period of 30 days or more.'" PFR at 13 (*citing* 47 CFR
    21.44(a)(3)). In contrast, MDS Digital alleges that there is nothing
    \"voluntary\" about the landlord disconnecting the Stations' power
    and equipment. *See* PFR at 13.

[^41]: *See id.* at 14.

[^42]: *Id.*

[^43]: *See* PFR at 15 (*citing* Revision of Part 21 of the Commission's
    Rules, *Report and Order,* 2 FCC Rcd 5713, 5724 ¶¶ 81-83 (1987)
    (*Part 21 Report and Order*). MDS Digital notes that, while the
    Division may be correct that imposing strict enforcement and
    automatic cancellation, pursuant to 47 CFR 21.303(d), is reasonable,
    the Division is not free to impose that interpretation absent
    reasonable notice to MDS Digital. *See* PFR at 15 (*citing Satellite
    Broadcasting Co., Inc. v. FCC,* 824 F.2d 1, 3-4 (D.C. Cir. 1987)).

[^44]: PFR at 16 (emphasis added). MDS Digital takes the position that
    the stations were "operational" to the extent that the critical
    equipment remains in place and capable of being used to transmit a
    signal. *See* PFR at 14. In discussing the meaning of the term
    \"operational\" under 47 CFR 21.44(a)(3), MDS Digital asserts that
    \"\[t\]he term "operational" is not defined for this provision and
    nowhere does the Commission asserts that Section 21.44(a)(3)
    requires licensees to be providing service to customers." PFR at 13.

[^45]: PFR at 17. According to MDS Digital, on February 23, 1995, the
    Video Services Division of the Mass Media Bureau refused to deny a
    renewal application filed by Cleveland Microband Teleservices, Inc.
    (CMTI) for MDS Station WQQ66, even though the licensee admitted that
    it had not been utilizing the stations to provide service to
    customers over a twelve-month period. *See* PFR at 17 (*citing*
    Letter from Lynne Milne, Senior Attorney, MDS Section, Video
    Services Division, Mass Media Bureau to Mr. William K. Hoffman,
    Cleveland Microband Teleservices, Inc. (dated Feb. 23, 1995) (*CMTI
    Letter*)). MDS Digital also relies on a staff letter, dated March
    29, 1996, to Mr. Robert J. Rini, Esq., that found that no further
    Commission action was warranted after a number of licensees,
    including Wireless Holdings, Inc. (Wireless Holdings), disclosed
    various violations of Section 21.303. *See* PFR at 17 (*citing*
    Letter from Daniel R. Ball, Attorney, MDS Section, Video Services
    Division, Mass Media Bureau to Robert J. Rini, Esq. (dated Mar. 29,
    1996) (*Wireless Holdings Letter*)).

[^46]: PFR at 18. MDS Digital concedes that, while it has not formally
    sought waiver under 47 CFR § 21.303(d), it has made every effort
    before the Commission to maintain the subject licenses. *Id.*
    Therefore, MDS Digital requests that the Commission "deem these
    actions sufficient to constitute a constructive request for waiver.
    In the alternative, the Division should deem this filing to be a
    late-filed request for waiver under Section 21.303(d)." *Id.* at 18
    n.68.

[^47]: *General Electric Co. v. Environmental Protection Agency*, 53
    F.3d 1324, 1329 (D.C. Cir. 1995); *see also* *Trinity Broadcasting
    of Florida, Inc. et al. v. FCC*, 211 F. 3d 618, 628 (D.C. Cir. 2000)
    ("*Trinity Broadcasting*").

[^48]: *Trinity Broadcasting*, 211 F.3d at 632.

[^49]: *Part 21 Report and Order*, 2 FCC Rcd at 5724 ¶ 82.

[^50]: *Id*. at ¶ 83.

[^51]: *Id.* at ¶ 82.

[^52]: *Id.*

[^53]: *See MO&O,* 18 FCC Rcd at 24104 n.24. Indeed, MDS Digital takes
    the position that the stations were "operational" to the extent that
    the critical equipment remains in place and capable of being used to
    transmit a signal. *See* PFR at 14.

[^54]: Indeed, MDS Digital seems to suggest that a licensee could avoid
    cancellation by simply maintaining critical equipment at the station
    site that, even if disconnected and without power, is capable of
    being used to transmit a signal.

[^55]: *See Part 21 R&O,* 2 FCC Rcd at 5724 ¶82.

[^56]: PFR at 17-18.

[^57]: *See* PFR at Exhibit C (Cleveland Microband Teleservices, Inc.,
    Request for Waiver of Section 21.303(d) of the Commission's Rules
    (filed Apr. 5, 1991)); PFR at Exhibit D (Letter from Mr. Robert J.
    Rini, Rini, Coran and Lancellotta, to Mr. Charles Dziedzic, Video
    Services Division, Mass Media Bureau, FCC (dated Mar. 6, 1996)
    (*Rini Letter*)).

[^58]: Whereas CMTI's request for waiver was simply untimely filed, MDS
    Digital did not even seek a waiver until filing the instant PFR on
    December 17, 2003.

[^59]: *See CMTI Letter.*

[^60]: *See e.g.*, *See Jelks v. FCC*, 146 F.3d 878, 881 (1998) (a
    subordinate body like the Division cannot alter a policy set by the
    Commission itself), *cert. den.* 119 S.Ct 1045 (1999); *Amor Family
    Broadcasting Group, v. FCC*, 918 F.2d 960, 962 (D.C. Cir. 1990)
    (even if internal inconsistency at a subordinate level were shown,
    the Commission itself would not be acting inconsistently) *citing
    Homemakers North Shore, Inc. v. Bowen*, 832 F.2d 408, 413 (7th Cir.
    1987); *Continental Cellular*, 6 FCC Rcd. 6834, 6836 n.25 (1991)
    (The Commission is not bound to apply a decision issued on delegated
    authority that is contrary to the Commission\'s Rules); *North Texas
    Media, Inc. v. FCC*, 778 F.2d 28, 33 (D.C. Cir. 1985) (\"The initial
    improvident grant of a \[short-spacing\] waiver \... now described
    as an error, does not deprive the agency of authority to require
    future applicants to meet certain standards, in order to obtain such
    a waiver.")

[^61]: *See* *Wireless Holdings Letter; see also Rini Letter..*

[^62]: *See Rini Letter* at 3.

[^63]: *MO&O,* 18 FCC Rcd at 24014 ¶ 7.

[^64]: *See id.*

[^65]: Rather, Station WPY40 only "periodically" transmitted test
    signals from November of 1990 until January 16, 1994; was not
    operational due to the removal or alteration of equipment of
    facilities from January 16, 1994 through December 31, 1995; and
    resumed transmitting "periodic" test signals in 1996 and each year
    thereafter until the landlord disconnected the equipment.

[^66]: Thereafter, Station KFF79 only transmitted test signals "*\[o\]n
    more than one occasion during 2001.*" *See* Station KFF79 2001
    Annual Report (emphasis provided). MDS Digital concedes that the
    equipment and power to Station KFF79's facilities were disconnected
    by the landlord in 2001 and that, therefore, Station KFF79 did not
    even transmit test signals for the remainder of 2001 and 2002.

[^67]: MDS Digital concedes that it did not seek a waiver pursuant to 47
    CFR § 21.303(d) until it filed the instant PFR on December 17, 2003.
    *See* PFR at 18 n.68. Thus, we conclude that MDS Digital' waiver
    request was untimely filed.

[^68]: 47 CFR § 21.19. MDS Digital does not address the standard
    provided for in 47 CFR § 21.19 but, rather, cites that discussed in
    *WAIT v. FCC,* 418 F.2d 1153 (D.C. Cir. 1980). *See* PFR at 18.
    According to the MDS Digital, a waiver is appropriate if (1) special
    circumstances warrant a deviation from the general; and (2) a
    deviation would not disserve the rule's underlying purpose and would
    better serve the public interest than would enforcement. *Id.*
    (*citing* *WAIT*, 418 F.2d at 1157).

[^69]: MDS Digital argues that the commission should provide it with the
    same flexibility that the Commission "previously provided Digital
    Television licensees to come into compliance with its construction
    and operational rules." PFR at 19 (*citing* Remedial Steps for
    Failure to Comply with Digital Television Construction Schedule 18
    FCC Rcd 7174 (2003)). However, the Commission already considered the
    amount of time and the degree of flexibility appropriate for MDS
    licensees to come into compliance with the Commission\'s Rules in
    adopting 47 CFR § 21.303(d).

[^70]: PFR at 14.

[^71]: *Part 21 Report and Order*, 2 FCC Rcd at 5724 ¶ 82.

[^72]: *Id.*