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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) PETROLEUM COMMUNICATIONS, INC., ) File Nos. 676402, et.al. ) Request for Extension of Time to Construct) Trunked SMR Radio Service Stations) KNRU807 Through KNRU822 ) in the Gulf of Mexico ) MEMORANDUM OPINION AND ORDER Adopted: February 18, 1997 Released: February 18, 1997 By the Chief, Wireless Telecommunications Bureau: I. INTRODUCTION 1. In this Memorandum Opinion and Order, we address a petition for reconsideration filed by Petroleum Communications, Inc. ("PetroCom") that seeks reversal of an August 20, 1996 decision by the Licensing Division's Land Mobile Branch. In that decision, the Land Mobile Branch denied PetroCom's request for an extension of time to construct Specialized Mobile Raio (SMR) facilities in the Gulf of Mexico. For the reasons discussed below, we grant PetroCom's petition for reconsideration. II. BACKGROUND 2. On October 31, 1995, the Commission granted 16 construction permits to PetroCom to build trunked SMR facilities at various oil drilling platforms in the Gulf of Mexico. Pursuant to 47 C.F.R. 90.631(e), PetroCom was required to construct these licensed facilities within one year. On June 16, 1996, PetroCom requested that the Commission toll the one-year construction requirement and extend the time in which these stations must be constructed and operational to a new deadline of April 30, 1997. 3. In its request, PetroCom cited the unique nature of constructing wireless systems in the Gulf of Mexico as justification for the extension. PetroCom noted that each potential site must be evaluated to determine the amount of available space, power requirements, antenna location, and mounting and cooling requirements. PetroCom also cited seasonal weather conditions in the Gulf, explaining that construction of wireless facilities normally occurs during the winter and spring months, which is the oil industry's off-season. In light of these factors, PetroCom estimated that an additional six months would be required to complete the final engineering plan and design works. 4. On August 20, 1996, the Land Mobile Branch denied PetroCom's request. The Branch found that PetroCom had not accounted for the time period between October 31, 1995 and June 16, 1996 -- a period of time when oil productivity was inactive and PetroCom normally performs its construction work. The Branch also found that PetroCom had failed to demonstrate sufficient differences between its existing collocated communication facilities and its licensed SMR facilities to warrant the requested extension of time. The Branch concluded that the request seemed unusually long given that PetroCom presumably visits these sites on a regular basis and is therefore already familiar with the facilities available at each site. The Branch also noted that if PetroCom failed to construct its stations within 12 months, it could participate in 800 MHz auctions to obtain other frequencies. 5. On September 19, 1996, PetroCom filed the instant petition for reconsideration ("Petition"). On October 29, 1996, PetroCom filed a supplement to its petition for reconsideration ("Supplement"). III. PETITION FOR RECONSIDERATION 6. In its Petition, PetroCom asserts that the Land Mobile Branch failed to take into account the unique requirements of construction in the Gulf. PetroCom states that design and construction of a water-based system requires more time than designing and constructing a land-based system. PetroCom again contends that construction of wireless facilities in the Gulf cannot occur during the summer and fall because these months are used strictly for oil production. PetroCom also disputes the Branch's finding that it should have been able to visit its SMR sites on a regular basis; PetroCom contends that the oil platforms "are so remotely located, and transportation to the sites so expensive, that routine visits to the sites do not occur." PetroCom also notes that it does not own the oil platforms and has no control over changes to the site that may occur subsequent to a visit. Thus, PetroCom notes, current site evaluations are necessary before construction of new communications facilities can commence. 7. In its Supplement, PetroCom also argues that its construction timetable has been affected by circumstances beyond its control relating to the backhaul element of the proposed system. PetroCom states that when it filed its applications in 1993, it entered into discussions with Motorola regarding reconfiguring of Motorola "SmartZone" equipment for backhauling SMR traffic from oil platforms to shore using PetroCom's existing C-band satellite facilities. PetroCom alleges that after the license grants, Motorola notified PetroCom that it had reorganized its operations and could not devote resources to carry out this task. This required PetroCom to seek an alternative means of backhauling its SMR services. PetroCom states that it began discussions with Shell regarding use of digital facilities on Shell's platforms. Because Shell's applications were subject to a petition to deny, negotiations were delayed until September 1996, when Shell's applications were granted. PetroCom now states that it expects to finalize an agreement with Shell and commence construction of backhaul facilities at the Shell sites in early 1997. IV. DISCUSSION 8. Section 319(b) of the Communications Act of 1934, as amended, and section 90.167(c) of the Commission's rules provide that extensions of time will be granted where the licensee shows that the failure to commence service is due to causes beyond its control. Section 90.167(c) further states, in part, that "no extensions will be granted for delays caused by lack of financing, lack of site availability, for the assignment or transfer of control of an authorization, or for failure to timely order equipment." 9. We find that PetroCom has made the requisite showing to warrant an extension of time. First, we believe that PetroCom has demonstrated that construction of SMR facilities in the Gulf imposes unique burdens beyond the licensee's control that are not present in the case of land-based SMR systems. These include the seasonal nature of construction on Gulf platforms, the difficulty of obtaining access to remote sites in mid-ocean, and the technical requirements of designing and constructing a water-based system. 10. We also conclude that an extension is justified in light of PetroCom's need to develop an alternative backhaul mechanism for its system. PetroCom was unable to implement its original plan for satellite-based backhaul because of Motorola's decision not to devote resources to the reconfiguration of the sustem. We conclude that PetroCom responded to this situation reasonably and diligently in seeking to negotiate an alternative arrangement for backhaul with Shell. As a result of these negotiations, PetroCom has been able to obtain firm pricing commitments for capacity and site locations. However, PetroCom points out that the new backbone configuration will require some modifications to its original system plan, including purchase of new equipment and relocation of some facilities to Shell platform sites already on the backbone. We believe that PetroCom has shown that the technological changes that it will need in order to utilize Shell's digital backbone are significant enough to lend additional support to its request for additional time. 11. We also conclude that grant of the extension will serve the public interest by promoting better service and more wireless competition in the Gulf. In its decision denying the extension, the Land Mobile Branch stated that if PetroCom failed to construct its stations within 12 months, it could participate in 800 MHz auctions to obtain other frequencies. However, while the Commission has adopted rules for geographic area licensing and auctions for land-based SMR services, it has not yet proposed to extend geographic area licensing to SMR service in the Gulf. As a result, it could be some time before this alternative would be available to PetroCom. Because the rulemaking process has not yet been initiated with respect to future licensing of SMR in the Gulf, and because PetroCom has shown good cause for an extension, we believe PetroCom should be given the opportunity to complete its system. V. CONCLUSION AND ORDERING CLAUSES 12. Having reviewed PetroCom's pleadings filed in this matter, we conclude that grant of PetroCom's request for extension of time in which to construct its facilities will serve the public interest, convenience, and necessity. Specifically, we find that PetroCom has committed substantial resources toward construction of its SMR facilities, is currently ready to deploy equipment, and would provide much needed dispatch communication services to the oil industry in the Gulf of Mexico. 13. Accordingly, IT IS ORDERED that, the Petition for Reconsideration filed by Petroleum Communications, Inc. IS GRANTED. IT IS FURTHER ORDERED that PetroCom's time to complete construction and commence operation of the referenced facilities IS EXTENDED up to and including October 30, 1997. 14. This action is taken pursuant to authority delegated in Sections 0.241 and 0.331 of the Commission's Rules, 47 C.F.R.  0.241 and 0.331. Michele C. Farquhar, Chief Wireless Telecommunications Bureau