# Before the

# Federal Communications Commission

# Washington, D.C. 20554

In the Matter of )

)

Paging Network, Inc. )

)

Request for Waiver of Section 90.665 of the )

Commission's Rules Relating to the )

Construction of 900 MHz SMR MTA )

Facilities )

# ORDER

**Adopted: May 26, 2000 Released: May 30, 2000**

By the Commission:

# I. INTRODUCTION

1\. In this Order, we address a petition filed by Paging Network, Inc.
("PageNet"), seeking waiver of or, in the alternative, forbearance from
the construction requirements of Section 90.665(b) and (c) of the
Commission's rules applicable to 900 MHz Specialized Mobile Radio
("SMR") licensees.[^1] For the reasons discussed below, we deny
PageNet's waiver request and forbearance request, without prejudice to
PageNet's right to file a waiver request at a future date if
circumstances warrant.

# II. BACKGROUND

2.  In 1995, the Commission adopted geographic area licensing and
    service rules for the 900 MHz SMR band, including coverage
    requirements for licensees operating in this band.[^2] Section
    90.665(c) requires a 900 MHz Major Trading Area ("MTA") licensee to
    construct and place into operation a sufficient number of base
    stations to provide coverage to at least one-third of the population
    of its MTA within three years of license grant, and to at least
    two-thirds of the MTA population within five years of the license
    grant. Alternatively, an MTA licensee may demonstrate to the
    Commission at the five-year mark that it is providing substantial
    service.[^3]

3.  PageNet was the second largest bidder in the 900 MHz SMR auction and
    was granted 126 licenses in this spectrum band on August 12,
    1996.[^4] Thus, PageNet's three-year construction deadline for these
    licenses was August 12, 1999 and its five-year construction deadline
    is August 12, 2001. Given the results of the auction and successful
    negotiations to acquire additional 900 MHz licenses from incumbent
    providers in several markets, PageNet's licenses give it a
    nationwide footprint for 900 MHz SMR.

4.  On March 1, 1999, prior to the three-year deadline, PageNet filed a
    request for waiver of or, in the alternative, forbearance from the
    construction requirements of Section 90.665(b) and (c).
    Specifically, PageNet requests waiver of its three-year and
    five-year construction deadlines to allow PageNet until the end of
    its ten-year license period to demonstrate either coverage of
    two-thirds of the population of its MTA or that it is providing
    substantial service. In the alternative, PageNet requests that the
    Commission forbear, pursuant to Section 10 of the Communications
    Act, from applying Section 90.665(b) and (c) to PageNet.

5.  Two parties, Preferred Communications, Inc. ("Preferred"), an 800
    MHz licensee, and Industrial Communications & Electronics, Inc.
    ("ICE"), a 900 MHz licensee, commented on PageNet's waiver
    request.[^5] Preferred did not oppose the waiver, but argued that
    any waiver should be conditioned on PageNet using its 900 MHz SMR
    spectrum to offer new information or messaging services.[^6] ICE
    opposed the waiver request, arguing that PageNet has not met the
    standard necessary to justify waiver and that grant of the waiver
    would be inconsistent with the underlying policies of Section
    90.665.[^7]

III\. DISCUSSION

A.  Waiver Request

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6.  Pursuant to Section 1.925 of our rules,[^8] a party requesting a
    waiver of a Commission rule must affirmatively show that (1) the
    underlying purpose of the rule will not be served, or would be
    frustrated, by its application in a particular case, and that grant
    of the waiver is otherwise in the public interest; or (2) the unique
    facts and circumstances of a particular case render application of
    the rule inequitable, unduly burdensome, or otherwise contrary to
    the public interest, or there are no reasonable alternatives.[^9] As
    discussed in detail below, we find that PageNet has failed to
    satisfy our waiver requirements.[^10]

7.  In adopting the coverage requirements for 900 MHz SMR licensees, we
    concluded that they were reasonable and attainable and would promote
    efficient use of the spectrum. Further, we found that the
    construction requirements would serve as a deterrent to competitors
    seeking to warehouse spectrum. We also concluded that the
    "substantial service" option would give licensees flexibility in
    this band, particularly in instances in which licensees offer
    cutting-edge niche services.[^11]

8.  PageNet contends that it is entitled to a waiver because of the
    nationwide scope of its proposed operations, their cost, and the
    innovative messaging technologies it intends to offer.[^12] PageNet
    also argues that grant of a waiver would not frustrate the
    underlying purpose of the construction requirement because it fully
    intends to utilize the spectrum, not to warehouse it to prevent
    competitors from using it. Further, PageNet avers that strict
    adherence to the Section 90.665 coverage requirements would disserve
    the public interest by stifling the introduction of new and diverse
    products and services into the marketplace, to the ultimate
    detriment of consumers.[^13]

9.  We find that PageNet has failed to show that it lacks a feasible
    alternative within Section 90.665 to satisfy the five-year
    construction requirement. As PageNet acknowledges, even if it does
    not meet the population coverage benchmarks of Section 90.665(c), it
    has the option of meeting the construction obligation through a
    showing of substantial service.[^14] Moreover, PageNet has well over
    a year---until August 12, 2001---to make this showing. Thus, our
    substantial service option allows PageNet precisely what it
    seeks---the time and flexibility to introduce innovative or
    specialized services into the marketplace. PageNet has provided no
    evidence that it cannot begin utilizing its spectrum to deploy new
    technologies and services in the 900 MHz band by the August 12, 2001
    deadline. We adopted this liberal construction standard for the 900
    MHz band, in part, because we recognized the difficulty in
    establishing strict construction benchmarks for new services.[^15]
    Further, the recently approved merger of Arch Communications and
    PageNet should enhance PageNet's ability to satisfy the construction
    requirements by the five-year deadline.[^16]

10. In addition, we find that PageNet has failed to show that the
    underlying purpose of the rule would not be served by application of
    the rule. One of the primary purposes of these construction
    requirements is to ensure that licensees deploy services by the
    mid-points of their license terms, thereby providing consumers
    timely access to services. While we applaud PageNet's desire to
    introduce innovative services into the marketplace, this is not a
    sufficient justification for a five-year extension of our
    construction requirements. Further, the record is devoid of any
    evidence demonstrating that PageNet has taken measures since the
    grant of its licenses to utilize the 900 MHz SMR spectrum. We
    therefore agree with ICE that PageNet has failed to describe any
    circumstances unique to its operation that would justify a
    waiver.[^17]

11. PageNet also argues that the 900 MHz SMR band is analogous to the
    Wireless Communications Service ("WCS") and Interactive Video Data
    Service ("IVDS"), which have construction requirements consistent
    with the relaxed construction deadlines PageNet seeks.[^18] We
    disagree. We adopted the more liberal construction requirement for
    WCS, *i.e.*, substantial service within 10 years, largely because of
    the underdeveloped nature of equipment for use in the WCS band and
    the strict technical requirements we adopted to prevent
    interference.[^19] We agree with ICE that these circumstances do not
    exist in the 900 MHz band,[^20] and we thus reject PageNet's
    assertions.[^21] As for IVDS, we adopted a single benchmark
    requirement of substantial service at the ten-year mark in large
    part because the five-year benchmark had already passed and the
    three- and five-year benchmarks had been suspended.[^22] As
    discussed above, however, the five-year construction requirement
    applicable to 900 MHz SMR licensees remains attainable for
    PageNet.[^23]

12. For these reasons, we conclude that PageNet has failed to show that
    compliance with the five-year substantial service requirement is
    impracticable or that waiver would otherwise be in the public
    interest. To the extent PageNet is concerned about satisfying the
    substantial service requirement, it has the option of filing a
    proposed substantial service showing prior to its five-year
    deadline, and seeking a declaratory ruling whether such showing
    meets the requirement. Our decision is also without prejudice to
    PageNet's right to seek a waiver at a later time, provided that it
    can demonstrate that compliance with the rule is not feasible and
    that grant of a waiver would otherwise be in the public interest.

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B.  Forbearance Request

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13. As an alternative to its waiver request, PageNet requests that the
    Commission forbear, under Section 10 of the Communications Act of
    1934, as amended, from applying the Section 90.665 coverage
    requirements to PageNet.[^24] Section 10(a) of the 1996 Act provides
    for regulatory flexibility by requiring the Commission to forbear
    from applying "any regulation or any provision of this Act to a
    telecommunications carrier or telecommunications service . . . if
    the Commission determines that-

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(1) enforcement of such regulation or provision is not necessary to
    ensure that the charges, practices, classifications, or regulations
    by, for, or in connection with that telecommunications carrier or
    telecommunications service are just and reasonable and are not
    unjustly or unreasonably discriminatory;

(2) enforcement of such regulation or provision is not necessary for the
    protection of consumers; and

(3) forbearance from applying such provision or regulation is consistent
    with the public interest."[^25]

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14. In making this public interest determination, Section 10(b) requires
    the Commission to consider whether forbearing from enforcing the
    regulation "will promote competitive market conditions, including
    the extent to which such forbearance will enhance competition among
    providers of telecommunications services."[^26] Further, "if the
    Commission determines that such forbearance will enhance competition
    among providers of telecommunications services, that determination
    may be the basis for a Commission finding that forbearance is in the
    public interest.\"[^27]

15. For the reasons discussed below, we conclude that forbearance from
    applying the 900 MHz construction requirements to PageNet is not
    warranted under the third prong of Section 10(a),[^28] which
    requires us to find that carrier-specific forbearance for PageNet is
    consistent with the public interest.[^29]

16. In adopting the 900 MHz SMR coverage requirements, we concluded that
    Section 90.665 "is reasonable and attainable for 900 MHz MTA
    licensees while also serving as a suitable deterrent to competitors
    who may seek to obtain MTA licenses for anti-competitive warehousing
    rather than for service to the public."[^30] PageNet has offered no
    evidence, and we have no basis for concluding, that forbearance from
    Section 90.665 would enhance competition among telecommunications
    providers.[^31] Moreover, there is nothing in the record to suggest
    that forbearance is warranted for PageNet but not other 900 MHz SMR
    licensees. While Section 10 permits us to forbear from applying our
    regulations to a single telecommunications carrier, the statute
    provides that we may do so only where the record shows that such
    forbearance is consistent with the public interest. We find that
    enforcement of the 900 MHz construction requirements in PageNet's
    case will continue to serve the public interest by facilitating the
    provision of service to smaller markets, hastening the deployment of
    innovative services in the marketplace, and promoting efficient use
    of the spectrum. Accordingly, we conclude that forbearance from
    applying Section 90.665 to PageNet is not consistent with the public
    interest.

IV\. ORDERING CLAUSES

17. Accordingly, IT IS ORDERED, pursuant to section 4(i) of the
    Communications Act of 1934, as amended, 47 U.S.C. 154(i), that the
    request for waiver of Section 90.665(b) and (c) filed by Paging
    Network, Inc. is DENIED.

18. IT IS FURTHER ORDERED, pursuant to section 10 of the Communications
    Act of 1934, as amended, 47 U.S.C. §160, that the request for
    forbearance from enforcement of Section 90.665(b) and (c) filed by
    Paging Network, Inc. is DENIED.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary

[^1]: Paging Network, Inc., Request for Waiver (filed Mar. 1, 1999)
    ("PageNet Request").

[^2]: *See* Amendment of Parts 2 and 90 of the Commission\'s Rules to
    Provide for the Use of 200 Channels Outside the Designated Filing
    Areas in the 896-901 MHz and 935-940 MHz Bands Allotted to the
    Specialized Mobile Radio Pool, *Second Report and Order*, 10 FCC Rcd
    6884 (1995) ("*Second Report and Order*"); *see* *also* Second
    Erratum, DA 95-2327 (rel. Nov. 8, 1995). The erratum with the
    corrected rule was published in the Federal Register on July 23,
    1999, to be effective on August 12, 1999, the date of the three-year
    construction deadline for the first 900 MHz MTA licenses issued. 64
    FR 39942 (1999).

[^3]: *Id.* § 90.665(c). At the three-year construction benchmark, a
    licensee must notify the Commission either that it has met the
    one-third-population coverage requirement or that it intends to
    submit a showing of substantial service at the five-year mark. The
    Wireless Telecommunications Bureau has waived the requirement that
    licensees that elect substantial service indicate, at the three-year
    mark, how they intend to demonstrate substantial service at the
    five-year mark. *See* Construction Requirements for Metropolitan
    Area-Based Licenses in the 896-901/935-940 MHz Band, DA 99-1564
    (rel. Aug. 6, 1999).

[^4]: *See* FCC Announces Grant of 900 MHz Specialized Mobile Radio MTA
    Licenses, *Public Notice*, 12 FCC Rcd. 13,055 (1996).

[^5]: Preferred Communication Systems, Inc. Comments on PageNet Request
    for Waiver (May 7, 1999) ("Preferred Comments"); Industrial
    Communications & Electronics, Inc. Opposition to Request for Waiver
    (May 7, 1999) ("ICE Comments").

[^6]: Preferred Comments at 1.

[^7]: ICE Comments at 1.

[^8]: 47 C.F.R. § 1.925.

[^9]: *Id.*

[^10]: PageNet requested waiver of Section 90.665(b) and (c) under
    former Section 90.151, which required petitioners to show that
    unique circumstances were involved and that there was no reasonable
    alternative solution within existing rules. 47 C.F.R. § 90.151
    (1997). However, at the time of PageNet's filing, Section 90.151 and
    other waiver provisions applicable to wireless services had been
    consolidated into Section 1.925. 47 C.F.R. § 1.925.

[^11]: *Second Report and Order*, 10 FCC Rcd at 6898.

[^12]: PageNet Request at 10-12.

[^13]: *Id.* at 12.

[^14]: PageNet Request at 13.

[^15]: *Second Report and Order*, 10 FCC Rcd at 6898.

[^16]: In the Matter of Arch Communications Group, Inc. and Paging
    Network, Inc. For Consent to Transfer Control of Paging, Narrowband
    PCS, and Other Licenses, DA 99-3028 (WTB, Apr. 25, 2000).

[^17]: ICE Comments at 5.

[^18]: PageNet Request at 14.

[^19]: In the Matter of Amendment of the Commission's Rules to Establish
    Part 27, the Wireless Communications Service, 12 FCC Rcd 10785,
    10843 (1997).

[^20]: ICE Comments at 8.

[^21]: In the 900 MHz SMR band, technology and equipment are available
    to licensees and several incumbents are providing service.

[^22]: In the Matter of Amendment of Part 95 of the Commission's Rules
    to Provide Regulatory Flexibility in the 218-219 MHz Service, 15 FCC
    Rcd 1497, ¶ 75 (1999).

[^23]: Because we are denying PageNet's waiver request, there is no need
    for us to address Preferred's proposal that we condition PageNet's
    request.

[^24]: By previous order, the Wireless Telecommunications Bureau
    extended by 90 days the deadline for considering PageNet's
    forbearance request, as provided under Section 10(c) of the Act.
    *See* Paging Network, Inc., *Order*, DA 00‑223 (WTB, rel. Feb. 8,
    2000) (extended until May 30, 2000 the one-year period for review of
    PageNet\'s forbearance request).

[^25]: 47 U.S.C. § 160(a).

[^26]: *Id.* § 160(b)

[^27]: *Id.*

[^28]: Because we conclude that forbearance from Section 90.665 with
    respect to PageNet is inconsistent with the public interest, we find
    it unnecessary to address the first and second prongs of the Section
    10(a) analysis.

[^29]: *Id.* § 160(a)(3).

[^30]: *Second Report and Order*, 10 FCC Rcd at 6898.

[^31]: *See* 47 U.S.C. § 160(b).