NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $// Order, Lawrence E. Vaughn, Jr., DA 95-1844//$ $/ 90.173(k) policies governing the assignment of frequencies/$ RECORD ONLY Before the Federal Communications Commission Washington, D.C. 20554 DA 95-1844 In the Matter of Lawrence E. Vaughn, Jr. Finder's Preference Request Station WNXE819 Sherman Oaks, CA ORDER Adopted: August 18, 1995 Released: August 22, 1995 By the Chief, Wireless Telecommunications Bureau: 1. On September 16, 1994, Lawrence E. Vaughn, Jr. filed a petition for reconsideration of the Licensing Division's denial of his finder's preference request (the "Licensing Division decision"). Mr. Vaughn asserts that the denial changed the evidentiary standard necessary to obtain a finder's preference award, and that fairness requires that the "new" standard not be applied retroactively. For the reasons described below, Mr. Vaughn's request for reconsideration is denied. 2. The finder's preference program was established four years ago as a complement to the Commission's existing compliance programs in the private land mobile services. Pursuant to this program, a finder who submits evidence conclusively demonstrating that a license assigned on an exclusive basis in the 220-222 MHz, 470-512 MHz, and 800/900 MHz band cancelled automatically for failure to construct, place in operation, or continue to operate a station can obtain a preference for the use of the licensed frequencies in the assigned area. Id. at 7305; 47 C.F.R.  90.173(k). 3. Mr. Vaughn presented evidence that the target licensee's station was not constructed precisely at the authorized coordinates. The target licensee, Ross Shade Trust ("RST"), constructed its system approximately one half mile (within one kilometer) from its authorized coordinates. The error occurred due to RST's reliance on the Commission database and the coordinates as reported by the site owner. When RST applied for the license, it used the coordinates reflected on an existing license issued to the owner of the hotel where RST constructed its station. Mr. Vaughn's request was denied because it did not conclusively and expeditiously demonstrate that RST's license cancelled automatically. In the Order denying Vaughn's request, the Deputy Chief of the Licensing Division discussed the burden of proof that finders need to satisfy in cases of this type. The Order stated that, absent unique circumstances, finder's preferences would not be awarded where the dispute involved a variance from authorized coordinates of less than 1.6 kilometers (one mile). The Order interpreted the Commission's directives and concluded that disputes involving small variances do not allow for conclusive and expeditious resolution because issues of measurement, credibility, and good faith arise. 9 FCC Rcd at 4439. 4. Other petitioners who are parties to finder's proceedings involving similar requests have also requested reconsideration of the Licensing Division decision. Stephen Orr, Kelley Communications, Patrick E. Connelly, James A. Cassell, Joy Rheins, Fred B. Lott, Laura Lee Fairbanks, John Roeder, and David E. Huffman filed a joint petition on September 6, 1994 ("Orr Petition"). These petitioners generally support Mr. Vaughn's petition. Two other parties, Lyle, Ltd. and Century Communications, Inc., filed a joint petition on September 19, 1994 ("Lyle Petition"). These petitioners, who are targets in other pending finder's cases, argue that the finder's program was not intended to recover systems that are being used. Lyle and Century favor a policy where preferences for stations constructed at variance from their authorized geographic coordinates are limited. For the reasons stated below, the Orr Petition is denied, and the Lyle Petition is granted in part and denied in part. 5. The Commission, in the order which established the finder's preference program, discussed the construction requirements in its rules and stated that certain land mobile stations not constructed in "substantial accordance" with its authorized parameters cancel automatically. The meaning of "substantial accordance" has been decided on a case-by-case basis. Such determinations do not lend themselves to fixed definitions. 6. Mr. Vaughn argues that a "substantial accordance standard" was announced in In re Lott where the Licensing Division stated that: The integrity of our channel reuse program requires that licensees build at their licensed location. As a rule of thumb, construction more than one second, (60 feet), away from the licensed location is not in accordance with the station's authorization. Id. Mr. Vaughn mistakenly relies on this passage, taken out of context, for the proposition that the Commission reversed decades of Commission policy and adopted a new substantial accordance standard requiring construction in exact accordance with a system's authorized coordinates. In Lott, the target licensee constructed the station more than five miles from the authorized location. In the target licensee's defense, it cited precedent in which small inconsistencies (in the cited instance approximately one fifth of a mile) between the authorized parameters and the constructed location did not result in automatic license cancellation. The Lott Order distinguished the situations stating, "The distances are not comparable." Id. The target also cited a broadcast case allowing a correction to a de minimis error on a license. The Lott Order stated that five miles was not de minimis. Id. 7. Contrary to Mr. Vaughn's assertion, the Lott decision did not adopt a new "substantial accordance" standard. Instead, the cited language described exact compliance. Mr. Vaughn ignores the absence of the term "substantial accordance" in the cited passage. The Commission's policy is not, and never has been, to cancel operating stations serving end users on the basis of small licensing errors. Mr. Vaughn's interpretation of the Lott decision results in an unworkable policy which would require cancellation of licenses for unavoidable errors caused by even the most modern measuring devices. 8. Mr. Vaughn's interpretation of the Lott decision cannot be reconciled with controlling Commission precedent. If the Commission had intended the finder's program to require construction in exact accordance with the authorized parameters, it would not have adopted a "substantial accordance" standard. See, e.g., 6 FCC Rcd at 7299 (para. 9). Mr. Vaughn attempts to distinguish the decisions cited in the denial Order that allowed licensees to correct minor discrepancies in their authorized coordinates. In re Applications of Eugene Walton, 6 FCC Rcd 6071 (1991)(para. 4) and In re Brownfield Broadcasting Corp., 93 FCC 2d 1197 (1982)(para. 6). Mr. Vaughn asserts that these cases should be distinguished because the licensees discovered their own errors. (Consolidated Reply to Oppositions to Petitions for Reconsideration filed October 14, 1994 at 7.) Mr. Vaughn fails to explain the basis for this distinction and fails to recognize that it has not been the Commission's policy to cancel licenses for minor discrepancies. 9. Other petitioners, Orr et al., assert that the Licensing Division decision violated the Administrative Procedures Act by changing the "one second rule" without a notice and comment rule making. Petitioners' legal analysis is incorrect. The Commission never established a "one second rule" and the Licensing Division decision falls squarely within the Commission's authority to adjudicate pending disputes, particularly those involving problems which arise in the absence of a general rule. SEC v. Chenery Corp., 332 U.S. 194, 203 (1947). 10. Orr et al. recognized that a one second standard is included in the FCC Form 574 Instructions (1989). The one second standard is the accuracy standard used for filing license applications. From this, petitioners reach the unsupported conclusion that the one second rule is necessarily the "substantial accordance" standard. Orr et al. question whether under the Privacy Act and the Paperwork Reduction Act the Commission is justified in requiring this level of accuracy if the Commission is not going to use the finder's preference program to enforce the "one second level of accuracy." As stated above, the finder's preference program is only a complement to the Commission's enforcement function. The decision to limit the finder's program to cases amenable to expeditious disposal does not limit the Commission's discretion regarding enforcement in other contexts. This includes situations in which minor variations present air safety problems. 11. Mr. Vaughn asserts that the doctrine of stare decisis requires that he receive a preference for the RST station. He asserts that his finders preference request is indistinguishable from the Lott case. We disagree. The distances involved in these two cases are not comparable. Vaughn's pleading fails to cite any precedent for cancelling a station license for a similar discrepancy between the site where the station is constructed and its authorized coordinates. 12. Mr. Vaughn also asserts that the Commission should be estopped from denying his preference request because the Commission reviewed the request, found that it made a prima facie showing that the license automatically cancelled, and served it on RST in accordance with 47 C.F.R.  90.173(k). The preliminary review of a finder's preference request is not a final determination of the sufficiency of the evidence. The Commission staff reviews every request a second time before cancelling any licenses. The Commission staff served Mr. Vaughn's request on RST because the request indicated that the station was not constructed at its authorized coordinates and the street address was an abandoned hotel. This constitutes a prima facie showing. (Evidence that a station is not constructed at its authorized location has been repeatedly found to be sufficient to warrant a preference award in the absence of any rebuttal evidence.) RST's rebuttal included evidence that it permanently constructed its station less than one kilometer away from its authorized coordinates, and that the hotel where the station is constructed was not abandoned. The hotel was temporarily closed due to damage from the Los Angeles earthquake. The rebuttal evidence demonstrated that the station was constructed at the proper street address near its authorized coordinates and that the error in the coordinates was inadvertent. In this case, Mr. Vaughn failed to demonstrate conclusively that the station was not constructed in substantial accordance with its licensed parameters. 13. The finder's preference program was not established to resolve difficult cases. The Commission limited the program to "those rule violations that lend themselves to conclusive and expeditious action." 6 FCC Rcd at 7305. The finder's preference program is not the appropriate mechanism for dealing with stations constructed at locations involving minor or de minimis variations from authorized parameters. 14. The Licensing Division decision appropriately provided guidance regarding the analysis to be applied to variances from authorized coordinates of less than one mile. This type of finder's preference request is not amenable to conclusive and expeditious disposition. This benchmark is neither an absolute bar, nor a bright line beyond which the automatic license cancellation provision will always be triggered. The benchmark merely gives potential finders some guidance regarding their burden of proof. With respect to small variations from authorized coordinates (variations less than 1.6 kilometers) the burden is to demonstrate that unique circumstances exist. Absent such a showing, if the target responds with sufficient evidence that it has constructed, a preference will not be awarded. An example of a showing of unique circumstances might be a situation where the licensee knowingly constructed at an alternative site so as to change the footprint of the station's coverage and thereby thwart the Commission's channel reuse restrictions. 15. We also conclude that the choice of a 1.6 kilometer benchmark in the Licensing Division decision was reasonable choice. This benchmark has been used successfully in the context of geographic coordinates near certain mountain peaks. Pursuant to 47 C.F.R.  90.621(b), all stations within 1.6 kilometers of certain mountain peaks are considered to be at the peak for purposes of applying certain rules applicable to those peaks. 16. Lyle Ltd. and Century Communications, Inc. ("Lyle and Century") have requested reconsideration because they believe that the Licensing Division decision inappropriately abrogated the Commission's case-by-case determination of the substantial accordance standard. They each operate stations inadvertently constructed over 1.6 kilometers from the authorized coordinates. Despite this variance, they assert that they should have an opportunity to demonstrate construction in substantial accordance with their authorized coordinates. Lyle and Century point out that there is no precedent for the proposition that every station fully constructed and operating more than 1.6 kilometers from its authorized coordinates should cancel automatically without consideration of other factors. We disagree with Lyle and Century's reading of the Licensing Division decision, but agree with their reading of applicable precedent. We therefore grant their petition for reconsideration to the extent that we clarify that the Licensing Division decision does not stand for the proposition that every station constructed more than 1.6 kilometers from its authorized location cancels automatically without regard to other mitigating factors. 17. Lyle and Century also assert that no finder's preference should be awarded for a station constructed at a variance from its geographic coordinates. They support this contention by asserting that the primary purpose of the finder's program was to recover unused spectrum. They assert that at a minimum the station should be immune from preference requests if the listed station address is correct but the coordinates differ. We find little support for this limitation in the Commission's Order establishing the finder's preference program. The Commission discussed the construction requirement and stated that licensees who fail to construct in substantial accordance with their authorized parameters cancel automatically. The Commission then provided preferences only when a finder demonstrates conclusively that the licensee failed to meet the construction requirement. 18. IT IS HEREBY ORDERED THAT, for the foregoing reasons, the petitions for reconsideration filed by Mr. Vaughn, and Orr et al. in the captioned matter are denied. As discussed above, the petition for reconsideration filed by Lyle, Ltd. and Century Communications, Inc. is granted in part and denied in part. FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, Wireless Telecommunications Bureau