DA 07-2037

Scott D. Reiter\
738 Pier Ave., Suite P\
Santa Monica, CA 90405

Re: Substantial Service Showing for WPTB505, File No. 0002727118

In this letter, we address the substantial service showing filed by
Scott Reiter (Reiter) for the C block broadband Personal Communications
Services (PCS) license for the Portsmouth, Ohio Basic Trading Area
(BTA359) (License).[^1] For the reasons set forth below, we reject the
Showing and note that the License automatically terminated on August 22,
2006 due to Reiter's failure to meet the construction requirements of
section 24.203(b) of the Commission's rules.[^2]

On August 22, 2001, the Commission granted Reiter the License under call
sign WPTB505 with a five-year construction deadline of August 22, 2006.
Specifically, Reiter was required to meet the construction requirement
for the License within five years of initial license grant by providing
coverage to at least twenty-five percent of the population of BTA359, or
by making a showing of substantial service.[^3] In addition, Reiter was
required to submit a construction notification within fifteen days of
his construction deadline.

On August 25, 2006, Reiter submitted his Showing in response to the
five-year construction requirement for the License.[^4] Pursuant to a
request by the Wireless Telecommunications Bureau's Mobility Division,
Reiter supplemented his Showing for the License on January 3, 2007 and
January 4, 2007.[^5]

Pursuant to sections 1.946(c) and 1.955(a)(2) of the Commission's rules,
a broadband PCS license will terminate automatically as of the
construction deadline if the licensee fails to meet the requirements of
section 24.203 unless the Commission grants an extension request or
waiver of the PCS construction requirements.[^6] An extension of time to
complete construction may be granted, pursuant to section 1.946(e) of
the Commission's rules, if the licensee shows that the failure to
complete construction is due to causes beyond its control.[^7]
Furthermore, in recognizing that compliance with the broadband PCS
construction requirements may be difficult at times, the Commission
stated that, in situations in which the circumstances are unique and the
public interest would be served, it would consider waiving the PCS
construction requirements on a case-by-case basis.[^8] Waiver may be
granted, pursuant to section 1.925 of the Commission's rules, 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.[^9]

The Commission has defined "substantial service" as "service that is
sound, favorable, and substantially above a level of mediocre service
that would barely warrant renewal."[^10] When adopting substantial
service as an option for 10 MHz (and later 15 MHz) broadband PCS
licenses, the Commission indicated that these smaller BTA licenses could
be used to provide service to geographic areas or populations that the
holders of the 30 MHz licenses that cover the larger Major Trading Areas
("MTAs") may be less likely to cover.[^11] The Commission provided the
specific examples of "residential, cutting-edge niche services" and
"services to business or educational campuses where the population may
be small except during business or school hours" as uses of the spectrum
that could meet the substantial service benchmark.[^12]

In this case, we find that Reiter fails to meet the substantial service
requirement of section 24.203 of the Commission's rules. In his Showing,
Reiter states that after studying the market at great length, he
determined that a "conventional build-out and mobile operation was not
viable" and that the market presents "formidable challenges" for yet
another mobile service provider.[^13] As a result, Reiter states that he
decided to address a "niche" in the market by providing free local phone
service to the residents of a homeless shelter located in the largest
city of the BTA, Portsmouth, Ohio.[^14] Reiter states currently there is
a single, constructed base station and that four handsets are made
available on an "as needed" basis to shelter residents, which could
number up to 200 residents annually.[^15] Reiter also states that the
single base station covers approximately 11.4 percent of the population
of the BTA.[^16] Based on this coverage, Reiter states that he "should
therefore be deemed to have met \[his\] five-year construction
requirement."[^17]

In addition to Reiter's current operations, Reiter states that it may be
possible to expand service to include "commercial operations" or expand
service to include areas such as a day care center and retired senior
volunteers program.[^18] In his Showing Supplement, Reiter states the he
plans to add up to three additional sites within the BTA to areas that
are "commercially underserved."[^19] Reiter states that one site could
be "implemented" almost immediately after Commission action is taken on
his Showing and would provide possible coverage to another 2,420 people,
which would result in total population coverage of approximately fifteen
percent of the BTA.[^20]

We find that Reiter has not demonstrated the provision of substantial
service to the licensed area. Reiter made the decision to provide
coverage in and around areas that as he concedes are already covered by
numerous providers in a city with the largest, most concentrated
population of the BTA.[^21] Although Reiter states that a "conventional
build out and mobile operation was not viable," Reiter elected to
provide a conventional two-way mobile phone service that is not unlike
what other broadband PCS licensees provide except that in Reiter's case,
local phone service is free using the four handsets that are in service.
Reiter has failed to demonstrate that operations confined to a single
base station at a single location with four activated handsets is
"service that is sound, favorable, and substantially above a level of
mediocre service that would barely warrant renewal" or, in the
alternative, that is "cutting-edge," a "niche service" or otherwise.

Furthermore, although Reiter asserts that additional coverage may be
provided in the future, as of his construction deadline, Reiter had not
constructed additional facilities and therefore the possible expansion
that Reiter contemplates is not material to his Showing, which is based
on Reiter's construction in the BTA as of the five-year construction
deadline. Finally, Reiter has not demonstrated how either prong of the
Commission's waiver standard has been met and therefore has not
justified a waiver of the PCS construction requirements.[^22] Because
Reiter failed to meet his construction requirements, the License
terminated automatically on August 22, 2006.[^23]

As a final matter, on our own motion, we grant Reiter and Strata8
Networks, Inc.[^24] special temporary authority for thirty days from the
date of this letter (*i.e.,* until June 8, 2007) in order to provide
time for an orderly transition of Reiter's limited operations as well as
Strata8's operations.

Based on the foregoing, we reject the substantial service showing and
dismiss the underlying notification of construction, File No.
0002727118, filed by Scott Reiter on August 25, 2006 and notify Scott
Reiter that call sign WPTB505 terminated automatically on August 22,
2006. This action is taken pursuant to delegated authority under
sections 0.131, 0.331, 1.925, 1.955 and 24.203 of the Commission's
rules.[^25]

Sincerely,

Thomas Derenge

Deputy Chief, Mobility Division

Wireless Telecommunications Division

[^1]: *See* File No. 0002727118, filed August 25, 2006 (Showing), and
    supplemented on January 3, 2007 and January 4, 2007 (Showing
    Supplement).

[^2]: 47 C.F.R. § 24.203(b).

[^3]: *Id*. "Substantial service" is defined as service which is sound,
    favorable, and substantially above a level of mediocre service which
    just might minimally warrant renewal. 47 C.F.R. § 24.203(d).

[^4]: Showing.

[^5]: Showing Supplement.

[^6]: 47 C.F.R. §§ 1.946(c), 1.955(a)(2), 24.203.

[^7]: 47 C.F.R. § 1.946. Section 1.946(e) also outlines specific
    circumstances that would not warrant an extension of time to
    complete construction. 47 C.F.R. § 1.946(e)(2)-(3).

[^8]: *See* Amendment of the Commission's Rules to Establish New
    Personal Communications Services, GEN Docket No. 90-314, *Memorandum
    Opinion and Order*, 9 FCC Rcd. 4957, 5019 (1994) (*PCS MO&O*),
    *citing* *WAIT Radio v. FCC*, 418 F.2d 1153 (D.C. Cir. 1969).

[^9]: 47 C.F.R. § 1.925. Alternatively, pursuant to section 1.3, the
    Commission has authority to waive its rules if there is "good cause"
    to do so. 47 C.F.R. § 1.3. *See also* *Northeast Cellular Telephone
    Co. v. FCC*, 897 F.2d 1164 (D.C. Cir. 1990).

[^10]: The Commission has used this basic definition of "substantial
    service" in a number of commercial wireless services. *See*, *e.g*.,
    47 C.F.R. § 24.103(d). Because the requirement can be met in a
    variety of ways, the Commission has stated that it will review
    substantial service showings on a case-by-case basis.

[^11]: *PCS MO&O* at 5019.

[^12]: *Id*. In addition, when responding to questions about broadband
    PCS C-block licenses, the Bureau pointed out that the substantial
    service alternative "is specifically tailored for licensees
    interested in providing 'niche' services, for example, to campuses
    and business parks where population levels may be small." *See*
    Wireless Telecommunications Bureau Staff Responds to Questions about
    the Broadband PCS C Block Auction, *Public Notice*, No. 54270, 78 RR
    2d 727, 732-733 (Jun. 8, 1995).

[^13]: Showing at 1. Reiter describes the BTA as consisting of two of
    the "most depressed rural counties in the United States" and that it
    is "very much in the backwater of the Rust Belt." Furthermore,
    Reiter cites to declining population figures and the overall
    socioeconomic status of Portsmouth, Ohio as reasons for Portsmouth
    being "well below average on positive indicators and well above
    average on negative \[indicators\]."

[^14]: *Id*. at 2 -- 3.

[^15]: Showing Supplement at 1 -- 2.

[^16]: *Id*. at 1.

[^17]: Showing at 4.

[^18]: *Id*.

[^19]: Showing Supplement at 2.

[^20]: *Id.* at 1.

[^21]: Based on the 2000 Census, Scioto, Ohio, which is where Portsmouth
    is located, has a population density of 129 persons per square mile,
    which does not fall within the Commission's baseline definition of
    what constitutes a "rural area." *See* Facilitating the Provision of
    Spectrum-Based Services to Rural Areas and Promoting Opportunities
    for Rural Telephone Companies To Provide Spectrum-Based Services,
    *Report and Order*, 19 FCC Rcd. 19078, at 19087- 19088 (2004).

[^22]: Reiter states that no waiver of section 24.203 appears to be
    required; however, if such a waiver is required, Reiter requests a
    waiver based on the reasons set forth in his Showing. *See* Showing
    at note 1.

[^23]: 47 C.F.R. § 1.955(a)(2).

[^24]: Reiter entered into a spectrum lease with Strata8 Networks, Inc.
    that commenced on March 10, 2007 and is set to expire on May 31,
    2007. *See* File No. 0002929397.

[^25]: 47 C.F.R. §§ 0.131, 0.331, 1.925, 1.955, 24.203.