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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 the Matter of ) ) Requests by Interactive Video and Data ) Service Lottery Winners to Waive the ) March 28, 1997 Construction Deadline ) ORDER Adopted: March 13, 1997 Released: March 13, 1997 By the Chief, Wireless Telecommunications Bureau: 1. Introduction. Between January 22, 1997 and February 25, 1997, Interactive Video and Data Service ("IVDS") licensees Kingdon R. Hughes ("Hughes"), Maritime Communications Corporation ("Maritime"), Bay Interactive Ventures Ltd. ("Bay Interactive"), AGS Telecom, Inc. ("AGS"), and ITV, Inc. ("ITV") (collectively, "Petitioners") separately filed requests to waive Section 95.833 of the Commission's Rules, with regard to the three-year construction benchmark for IVDS licenses won by lottery. By this Order, we grant Petitioners' waiver requests to the extent described below. 2. Background. Section 95.833 of the Commission's Rules provides, inter alia, that IVDS licenses cancel automatically if a licensee does not make its service available to at least 30 percent of the population or land area within the service area within three years of grant of the system license. Each IVDS system licensee must file a progress report at the conclusion of the benchmark period to inform the Commission of the construction status of the system. Eighteen IVDS system licenses were awarded by lottery held September 15, 1993, and granted on March 28, 1994. Therefore, the three-year construction benchmark for these 18 licensees is March 28, 1997. 3. On September 4, 1996, Euphemia Banas, et al. filed a formal Petition for Rulemaking requesting that the Commission amend certain rules applicable to IVDS. In a Public Notice released on December 4, 1996, the Wireless Telecommunications Bureau ("Bureau") announced a February 18, 1997, start date for an auction of 981 IVDS licenses. On January 28, 1997, Euphemia Banas, et al. filed an amendment to its Petition for Rulemaking, seeking Commission review of additional IVDS rules, including the construction build-out requirements in Section 95.833 of the Commission's Rules. On January 29, 1997, the Bureau released a Public Notice announcing postponement of the IVDS auction originally scheduled to begin February 18, 1997, "to give the Commission an opportunity to consider [the] Petition for Rulemaking and numerous informal requests of potential bidders and license holders seeking to obtain additional flexibility for the service." 4. In part, Petitioners base their requests for waiver on the Public Notice dated January 29, 1997, and statements made by Bureau staff at an informal IVDS forum held January 30, 1997, indicating that the Commission is presently considering revision of certain rules applicable to IVDS, including construction build-out requirements, with plans to initiate a rule making proceeding on these issues in the near future. For example, Bay Interactive contends that it would be inequitable, burdensome, and contrary to the public interest for the Commission to require licensees to meet the three-year construction benchmark when this requirement likely will be included in the rule making proceeding. Similarly, AGS argues that the public interest would be served by the waiver because the Commission's comprehensive review of the rules governing IVDS operations will likely impact how licensees will fulfill their service plans. 5. Decision. Pursuant to Section 1.3 of the Commission's Rules, the Commission may waive a provision of its rules "if special circumstances warrant a deviation from the general rule and such deviation will serve the public interest." Here, the general rule (the IVDS three- year construction requirement) was "intended to ensure that the [IVDS] system is actually built" and "to reduce the attractiveness of licenses to entities interested in them only as a speculative vehicle." On the facts before us, we find that Petitioners have demonstrated that a waiver of Section 95.833 is warranted. A number of IVDS licensees have detailed their efforts toward building their systems. Thus, contrary to RTT's allegations, we believe that these licensees are working diligently toward constructing their systems. Given the breadth of the proposals set forth in the pending IVDS Petition for Rulemaking, we anticipate that the Commission soon will evaluate, inter alia, applicable construction requirements. As a result, we agree with the Petitioners that pendency of this IVDS rule making proceeding is inextricably tied to these licensees' construction requirements and the mechanisms used to satisfy those benchmarks. Moreover, we believe that providing IVDS licensees with additional flexibility in satisfying the construction benchmarks is desirable and consistent with our previous decisions to allow for more flexible use of the spectrum. 6. Therefore, we conclude that it would be unreasonable and contrary to the public interest to require IVDS licensees to meet the March 28, 1997 build-out requirement, and that the more appropriate course of action is to grant the requested relief to all 18 IVDS lottery licensees to allow the Commission time to review the construction requirements applicable to IVDS. Our approach here is consistent with prior Commission action suspending a deadline while relevant policy is subject to pending rule making proceedings, because enforcing the rule prior to its modification would cause irreparable harm, and thus, would not be in the public interest. In light of our decision, Maritime's alternative request for waiver of 47 C.F.R.  95.851, Bay Interactive's request for "tolling" of the three-year construction deadline, and Hughes' request to extend the construction date of his lottery-won license to match that of his auction-won licenses, are now moot. 7. Accordingly, IT IS ORDERED that the requests of the Petitioners for waiver of Section 95.833 of the Commission's Rules ARE GRANTED insofar as the March 28, 1997 construction deadline for the eighteen IVDS lottery licensees is suspended as described herein. This waiver will remain in effect pending resolution of the construction requirement by Commission or Bureau action. All other requests ARE DENIED. This action is taken pursuant to delegated authority under Section 1.3 of the Commission's Rules. IT IS FURTHER ORDERED that this action IS EFFECTIVE UPON RELEASE. FEDERAL COMMUNICATIONS COMMISSION Michele C. Farquhar Chief, Wireless Telecommunications Bureau