******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 the Matter of ) ) Public Mobile Services Lottery ) Lottery No. PMS-31 ) ) For Selection of Licenses for ) 931 MHz Paging Channels in the ) Greater New York City Metropolitan) Area ) ) ) In re ) ) Contact Communications, Inc. ) File No. 28245-CD-P/L-88 ) File No. 28247-CD-P/L-88 ) For Facilities in the Public Land) Mobile Service at New York, ) New York and Glen Oaks, New York) for Station KNKO425 ) ) ) In re ) ) Enhanced Telecommunications Services) File No. 27392-CD-P/L-01-88 ) ) For Facilities in the Public Land Mobile) Service at East Brunswick, New Jersey) ) ) In re ) ) Tri-State Radio Company ) File No. 22323-CD-P/L-01-90 ) File No. 22324-CD-P/L-01-90 ) File no 22325-CD-P/L-01-90 For Facilities in the Public Land Mobile) Service at Manorville, New York and) Independence, New Jersey ) ) ) In re ) ) Paging Plus, Inc. ) File No. 22269-CD-P/L-01-90 ) File No. 22271-CD-P/L-01-90 ) File No. 22273-CD-P/L-01-90 For Facilities in the Public Land Mobile) Service at Marcus Hook, Pennsylvania,) Alpine, New Jersey, and Jamaica, New) York ) ) ) In re ) ) Paul Kelley d/b/a/ American Teltronix ) File No. 24331-CD-P/L-01-90 ) ) For Facilities in the Public Land Mobile ) Service at Cedar Grove, New Jersey) ) ) In re ) ) Contact Communications, Inc. ) File No. 27432-CD-P/ML-01-92 ) File No. 27433-CD-P/ML-01-92 ) File No. 27434-CD-P/ML-01-92 For Facilities in the Public Land Mobile) File No. 27435-CD-P/ML-01-92 Service at Various Locations for) File No. 27437-CD-P/ML-01-92 Station KNKO0425 ) File No. 27438-CD-P/ML-01-92 ) File No. 27440-CD-P/ML-01-92 ) File No. 27941-CD-P/ML-01-92 ) File No. 27944-CD-P/ML-01-92 ) File No. 27951-CD-P/ML-01-92 ) File No. 27955-CD-P/ML-01-92 ) File No. 27956-CD-P/ML-01-92 ) File No. 27957-CD-P/ML-01-92 ) File No. 27958-CD-P/ML-01-92 ) ) In re ) ) Contact Communications, Inc. ) File No. 26302-CD-P/ML-01-93 ) ) For Facilities in the Public Land Mobile) Service at the Bronx, New York for) Station KNKO0425 ) ) ) In the Matter of ) ) Contact Communications, Inc. ) ) ) Request for Special Temporary Authority) in the Public Land Mobile Service to) Establish an Additional Base Station at the) Bronx, New York for Station KNKO0425) ) ) In re ) ) Paging Partners, Inc. ) File No. 25023-CD-P/L-01-93 ) ) For a Facility in the Public Land Mobile) Service at Harvard, Massachusetts) ) ) ORDER Adopted: February 19, 1997 Released: February 21, 1997 By the Chief, Wireless Telecommunications Bureau I. INTRODUCTION AND EXECUTIVE SUMMARY 1. In this Order, the Bureau resolves a proceeding related to paging channels in the 931 MHz band for the greater New York City metropolitan market ("New York market"). A lottery was held to determine which of the mutually exclusive applicants for the 931 MHz frequencies in New York market would receive the four frequencies available for assignment at the time of the lottery. There have been several attempts to resolve challenges to grants of the applications for available frequencies in the New York market in the intervening years. All attempts to resolve the disputes have, however, been frustrated by various applicants disputing the grants for those 931 MHz frequencies. Herein, the Wireless Bureau approves a Settlement Agreement proposed by the remaining litigants which modifies an existing settlement and resolves all outstanding litigation in this New York 931 MHz paging lottery. II. BACKGROUND 2. In 1988, Page America of New York (Page America) filed an application for a 931 MHz frequency in the New York market. On June 15, 1988, the Commission issued a Public Notice announcing the acceptance of Page America's application and triggering the 60-day cut-off period for the filing of mutually exclusive applications. Four other applicants filed for the same frequency within the 60-day cut-off period. On August 23, 1989, the Commission held Lottery No. PMS-31 to determine which of the five applicants for the 931 MHz authorizations in the New York market would receive the four frequencies which were available for assignment. The first four ranked applicants, Skytel, Tri-State, Page America, and Contact, received grants. Various parties filed petitions seeking reconsideration of the grant of the licenses to the first four ranked applicants. 3. On December 11, 1990, the former Common Carrier Bureau affirmed the grant to the first-ranked applicant, Skytel, of frequency 931.4375 MHz and the grant to the second-ranked applicant, Tri-State, of frequency 931.6625 MHz. The Bureau also granted the third-ranked applicant, Page America, the 931.1375 MHz frequency. The applications of the fourth and fifth ranked applicants, Contact and Enhanced, were dismissed because the frequencies were unavailable. On January 11, 1991, Contact and Enhanced each filed Applications for Review of the New York Order. 4. Subsequent to the filing of the Applications for Review, the former Mobile Services Division (MSD) attempted to resolve this case through settlement. During the settlement process, MSD staff determined that -- subsequent to the receipt of Contact and Enhanced's Applications for Review -- two additional applicants filed for the 931 MHz frequencies in New York. In the course of the settlement conferences, the MSD identified two additional frequencies available for assignment -- frequencies 931.9625 and 931.0875 MHz. By letter dated June 24, 1992, the MSD approved a settlement among Tri-State, Contact, and Enhanced in Lottery No. PMS-31, and the two new applicants, Teltronix and Paging Plus. MSD further waived the relevant portions of Part 22 of the Commission's rules concerning the availability of frequencies for assignment, and adopted the proposed frequency assignment plan (as modified to include the two new applicants) agreed to by the parties. As a result of the settlement, all pending petitions for reconsideration and applications for review were declared "moot." The grant of the settlement agreement did not disturb the grants to Skytel and Page America, which had been affirmed in the New York Order. The settlement resulted in the assignment of the following frequencies: Tri-State 931.4875 MHz Contact 931.9625 MHz Enhanced 931.6625 MHz Teltronix 931.4625 MHz Paging Plus 931.0875 MHz 5. On July 31, 1992, Paging Partners Corporation (Paging Partners) filed a Petition for Reconsideration of the grant of frequency 931.9625 MHz to Contact. Paging Partners had -- prior to the MSD settlement letter -- filed applications for the 931.9625 MHz frequencies. However, Paging Partners had not been made a party to the settlement group and had not received any grant. In May of 1996, the Commercial Wireless Division (CWD) of the Wireless Bureau attempted to resolve this matter through settlement. On August 19, 1996, a "Settlement Agreement" was filed which modified the 1992 settlement and requested that the Commission approve such modification in order to resolve the ongoing proceedings. The parties to the modified settlement agreement are: TSR Paging, Inc. (TSR) (successor in interest to Tri-State); Paging Partners; Electronic Tracking Systems, Inc. (ETSI) (successor in interest to Contact); Millie L. Kelley, Administrator of the Estate of Paul Kelley (Teltronix); and Pellish Communications, Inc. (Pellish) (formerly Paging Plus, Inc.) (collectively, the Parties). Additionally, on August 19, 1996, the Parties filed multiple assignment applications which are necessary to implement the provisions of the Settlement Agreement. III. SETTLEMENT AGREEMENT 6. According to the Settlement Agreement, the parties will terminate all litigation in exchange for (i) the assignment of ETSI's licenses and pending applications to Paging Partners and the issuance of new licenses to TSR under different call signs but specifying the same 931 transmitter sites authorized in the original ETSI licenses; and (ii) the execution and implementation of a co-licensing and time sharing agreement between Paging Partners and TSR requiring that they operate the ETSI licenses on a 50-50 time shared basis from two transmitters located at the same site. The Settlement Agreement specifies that all parties shall bear the expenses incurred in connection with the preparation and implementation of the Settlement Agreement, with the exception of ETSI who, according to the Settlement Agreement, is entitled to reimbursement of expenses. 7. On October 3, 1996, the Parties filed a supplement to the settlement to demonstrate that the modified settlement complies with the Commission's rules governing settlements under Section 22.129 of the Commission's rules. However, the Parties maintain that the Commission should apply former Section 22.29 to this particular agreement, not Section 22.129. The Parties cite Western California Cellular Partners in support of their argument that former Section 22.29 should be applied in the present case. In Western, the parties requested that the Commission approve their settlement agreement under former Section 22.29. The Parties argued that the Commission must apply the rules in effect when the applications were filed, although they voluntarily agreed to comply with the new rules. In Western, unlike the present case, Section 22.959 of the rules applied. Section 22.959 provides that an application for an initial cellular system shall be processed under the rules in effect when the application was filed. The Commission also decided that nothing in the history of the proceeding indicated that either party was involved in a speculative venture and applied former Section 22.29 of the Commission's rules. In the present case, the Parties assert that the original contested 931 MHz applications were filed while former Section 22.29 was still in effect and, therefore, former Section 22.29 should be controlling. We disagree. The applications at issue in Western involved initial cellular applications. We decline to broaden the scope of the cellular rule to apply across services, including paging channels in the 931 MHz band. 8. Since the filing of the Parties' applications, the Commission has revised Part 22 of the rules and Section 22.29 has been replaced with the more rigorous requirements of Section 22.129. Section 22.29 encouraged settlements but did not require certification that the consideration received did not exceed the legitimate expenses incurred in prosecuting the petition as required by Section 22.129. We believe that the rules in effect at the time the modified Settlement Agreement was filed with the Commission should be controlling. Therefore, we will apply Section 22.129 to the proposed settlement before us. 9. Section 22.129 of the Commission's rules provides that any party withdrawing or requesting dismissal of its application, petition to deny or other pleading must (i) request approval of the withdrawal or dismissal from the Commission; (ii) submit a copy of any written agreement related to the withdrawal or dismissal; and (iii) submit an affidavit setting forth certification that the parties have not received any money or other consideration in excess of the legitimate and prudent expenses incurred in preparing and prosecuting the application or petition. The parties must also detail the exact nature and amount of any consideration received and submit an itemized accounting of the expenses for which it seeks reimbursement. Other consideration has been defined by the Commission as financial concessions which include the transfer of assets and non-financial concessions that confer benefit to the recipient. 10. The Parties further argue that since ETSI and TSR are not a "party withdrawing or requesting dismissal of its application, petition to deny, informal objection or other pleading" as specified in Section 22.129. Therefore, they are not required to demonstrate that the consideration received does not exceed their legitimate and prudent expenses. According to the Parties, Paging Partners is the only party requesting dismissal of a petition. The Parties assert that although Paging Partners maintains that it is entitled to access to a 931 MHz frequency, it is settling for operating 50% of the 931.9625 MHz frequency previously licensed to ETSI. Thus, Paging Partners, according to the Parties, is simply paying the fair market value for 50% of the value of assets associated with ETSI licenses and applications. This, according to the Parties, demonstrates that Paging Partners is not receiving a "pay-off" to drop its petition. 11. We find that the parties have not fully complied with Section 22.129(a) of the Commission's rules. The Parties claim that they will receive money or other consideration in excess of the legitimate and prudent expenses incurred in the prosecution of these proceedings. However, we note that Section 22.129(a) may be waived if -- due to the unusual circumstances of the case presented -- application of the rule would be contrary to the public interest. Section 22.119(a)(2), in pertinent part, states that "the FCC may waive the requirements of rules in this part . . . In view of 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 . . ." The Commission exercised its authority under Section 22.135 to bring the parties together to consider settlement to put an end to the longstanding controversy surrounding 931 MHz licensing in New York. Consequently, the parties contend that this modification of the existing settlement is in the public interest because it allows the Parties to resolve their differences and avoid extensive, costly and continued litigation. We find that waiver of the settlement rule, 47 C.F.R.  22.129(a), is in the public interest as it would (i) permit the Commission to resolve the long-standing and litigious 931 MHz lottery for the New York market and provide a workable compromise among the Parties; (ii) permit the Commission to grant licenses in one of the largest paging markets in the country; and (iii) provide a way to speed service to the public. In promulgating Section 22.129, we balanced the need to discourage the filing of speculative applications and litigious pleadings designed solely to extract money from an applicant against providing some incentive for legitimate petitioners to settle contested proceedings. Here, there is no evidence that any of the parties involved filed any pleadings for speculative reasons or with the intent to extract money from the other applicants. In sum, strictly applying the settlement rules will not serve the underlying purpose of the rule. IV. ORDERING CLAUSES 12. ACCORDINGLY, IT IS ORDERED That, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), and Sections 0.331 and 22.129 of the Commission's rules, 47 C.F.R.  0.331 and 22.129, the request for approval of the modified Settlement Agreement filed by TSR Paging, Inc., Paging Partners Corporation, Electronic Tracking Systems, Inc., Millie L. Kelley, Administrator of the Estate of Paul Kelley, and Pellish Communications on August 19, 1996 IS GRANTED; the modification of the 1992 settlement IS APPROVED; and that all the pleadings filed by the parties with respect to this proceeding ARE DISMISSED. 13. Further, IT IS ORDERED That, Paging Partners Corporation's application for 931.9625 MHz at Washington, DC IS DISMISSED; Paging Partners Corporation's application for 931.9625 MHz at Baltimore, Maryland, IS DISMISSED. 14. Further, IT IS ORDERED That, pursuant to Sections 4(i) and 309(a) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 309(a), and Sections 0.331, 22.132(b), and 22.137 of the Commission's rules, 47 C.F.R.  0.331, 22.132(b), and 22.137, the assignment of stations KNKP608, KNKP609, KNLW206, and KNLW208 in various locations in New York, Massachusetts, Connecticut, Delaware, Washington, D.C., Maryland, and New Jersey from Electronic Tracking Systems, Inc. to TSR Paging, Inc. and Paging Partners, Corporation, jointly (File No. 33994-CD-AL-96) IS GRANTED; 15. Further, IT IS ORDERED That, the partial assignment of the second transmitters located at station KNLW207 at Bridgeport, Connecticut, Harvard, Massachusetts, Flemington, New Jersey, and New York, New York from Paging Partners Corporation to TSR Paging, Inc. (File No. 34471- CD-P/AL-96) will be processed in accordance with Commission's rules; the partial assignment of the second transmitter located at station KNKM828 at Philadelphia, Pennsylvania from Paging Partners Corporation to TSR Paging, Inc. (File No. 34469-CD-P/AL-96) will be processed in accordance with Commission's rules; and the partial assignment of the second transmitter located at station KNKK653 at Wilmington, Delaware from Paging Partners Corporation to TSR Paging, Inc. (File No. 34470-CD-P/AL-96) will be processed in accordance with Commission's rules. 16. As a result of these grants, the assignment of the 931 MHz frequencies from the New York lottery are modified as follows: TSR (formerly Tri-State) 931.4875 MHz TSR and Paging Partners, jointly 931.9625 MHz Enhanced 931.6625 MHz Teltronix 931.4625 MHz Pellish (formerly Paging Plus) 931.0875 MHz FEDERAL COMMUNICATIONS COMMISSION Michele C. Farquhar Chief, Wireless Telecommunications Bureau