Skip Navigation

Federal Communications Commission

English Display Options

Commission Document

Advantage Cellular LMDS Construction Extension Denial Order

Download Options

Released: November 8, 2012

Federal Communications Commission

DA 12-1798

Before the

Federal Communications Commission

Washington, D.C. 20554

In re Matter of
)
)

ADVANTAGE CELLULAR SYSTEMS, INC
)
File Nos. 0005238986, 0005239072,
)
0005239099, 0005239219
Requests for Extension of Time, or in the
)
alternative, Limited Waiver of Substantial Service )
Requirements for Four Local Multipoint
)
Distribution Service Licenses
)
)

MEMORANDUM OPINION AND ORDER

Adopted: November 7, 2012

Released: November 8, 2012
By the Deputy Chief, Broadband Division, Wireless Telecommunications Bureau:

I.

INTRODUCTION

1.
In this Memorandum Opinion and Order, we deny Advantage Cellular Systems, Inc.’s
(“ACSI”) requests for extension of time to demonstrate compliance with the substantial service
requirements for its four Local Multipoint Distribution Service (“LMDS”) licenses, as well as its
associated requests for waiver of the June 1, 2012 substantial service deadline. Given our denial of these
requests, these licenses automatically terminated, by operation of Commission rule, as of June 1, 2012.

II.

BACKGROUND

2.
In 1997, the Commission allocated 1,300 megahertz of LMDS spectrum in each basic
trading area (“BTA”) across the United States.1 Specifically, the Commission allocated two LMDS
licenses per BTA – an “A Block” and a “B Block” in each.2 The A Block license is comprised of 1,150
megahertz of total bandwidth, and the B Block license is comprised of 150 megahertz of total bandwidth.3


1 See Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission’s Rules to Redesignate the 27.5 GHz
Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules and Policies For Local
Multipoint Distribution Service and For Fixed Satellite Services, CC Docket No. 92-297, Second Report and Order,
Order on Reconsideration and Fifth Notice of Proposed Rulemaking
, 12 FCC Rcd 12545, 12605 ¶ 136 (1997)
(”Second LMDS Report and Order”); see also Rand McNally Commercial Atlas & Marketing Guide 36-39 (123rd
ed. 1992). Rand McNally is the copyright owner of the Major Trading Area (MTA) and BTA Listings, which list
the BTAs contained in each MTA and the counties within each BTA, as embodied in Rand McNally’s Trading Area
System MTA/BTA Diskette, and geographically represented in the map contained in Rand McNally’s Commercial
Atlas & Marketing Guide. The conditional use of Rand McNally copyrighted material by interested persons is
authorized under a blanket license agreement dated February 10, 1994 and covers use by LMDS applicants. This
agreement requires authorized users of the material to include a legend on reproductions (as specified in the license
agreement) indicating Rand McNally ownership. The Commission has allocated the LMDS for operations in a total
of 493 BTAs throughout the nation.
2 See Second LMDS Report and Order, 12 FCC Rcd at 12556 ¶ 12.
3 See id.

Federal Communications Commission

DA 12-1798

The A Block consists of the sub bands 27.50-28.35 GHz (the A1 Band); 29.10-29.25 GHz (the A2 Band);
and 31.075-31.225 GHz (the A3 Band).4 The B Block consists of the sub bands 31.00-31.075 (the B1
Band) and 31.225-31.30 GHz (the B2 Band).5 The same entity may hold the licenses for both the A and
B Blocks of spectrum in an individual BTA, but each license is auctioned and licensed separately.
3.
LMDS licensees are regulated under Part 101 of the Commission’s rules, which generally
governs terrestrial microwave operations, and may provide any service consistent with the Commission’s
rules and the licensee’s regulatory status,6 subject to a ten-year term from the initial license grant date.7
At the end of the ten-year period, licensees are required to submit an acceptable showing to the
Commission demonstrating that they are providing “substantial service” in each licensed area.8 Failure
by any licensee to meet this requirement will result in forfeiture of the license and the licensee will be
ineligible to regain it.9
4.
The final LMDS band allocation was adopted by the Commission on March 20, 1997.10
Since allocating the LMDS spectrum, the Commission has thus far held two LMDS auctions: Auction 17
and Auction 23.11 Auction No. 17, the first LMDS auction, began on February 18, 1998, and closed on
March 25, 1998.12 The licenses in question here were originally issued to ACSI on June 24, 1998 as a
result of Auction No. 17.13
5.
ACSI was originally required to demonstrate substantial service by June 24, 2008, or 10
years after the initial license grant date.14 On June 22, 2007, ACSI filed applications for an extension of
time to demonstrate substantial service for its LMDS licenses.15 On April 11, 2008, the Wireless
Telecommunications Bureau (the “Bureau”) granted the requests for extension of the construction


4 See 47 C.F.R. § 101.1005.
5 See id.
6 See 47 C.F.R. § 101.1013(b).
7 See Second LMDS Report and Order, 12 FCC Rcd at 12657 ¶ 259. Pursuant to 47 C.F.R. § 101.67, LMDS
licenses are issued for a period not to exceed ten years, subject to renewal upon demonstration of substantial service.
8 See 47 C.F.R. § 101.1011(a); see also Second LMDS Report and Order, 12 FCC Rcd at 12658 ¶¶ 261-262.
9 See 47 C.F.R. § 101.1011(a).
10 See Second LMDS Report and Order, 12 FCC Rcd at 12556 ¶ 13; see also Rulemaking to Amend Parts 1, 2, 21,
and 25 of the Commission’s Rules to Redesignate the 27.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz
Frequency Band, to Establish Rules and Policies For Local Multipoint Distribution Service and For Fixed Satellite
Services, CC Docket No. 92-297, First Report and Order and Fourth Notice of Proposed Rulemaking, 11 FCC Rcd
19005, 19025 ¶ 45 (1996) (allocating the initial 1 gigahertz of spectrum for LMDS and seeking comment on the
allocation of an additional 300 megahertz of spectrum at 31.0-31.3 GHz).
11 See, e.g., LMDS Auction Closes, Public Notice, 13 FCC Rcd 18217 (1998) (Auction 17 Closing PN); Local
Multipoint Distribution Service Auction Closes, Public Notice, 14 FCC Rcd 8543 (1999) (Auction 23 Closing PN).
12 See FCC Announces Spectrum Auction Schedule for 1998, Public Notice, 12 FCC Rcd 19726 (1997); Auction 17
Closing PN,
13 FCC Rcd at 18217.

13 See File No. 0000000076 (granted June 24, 1998); see also FCC Announces the Conditional Grant of 25 Local
Multipoint Distribution Service Licenses, Public Notice, 13 FCC Rcd 17186 (WTB 1998). The licenses in question
are Stations WPOH497 (Dalton, GA), WPOH498 (Clarksville, TN-Hopkinsville, KY), WPOH499 (Cookeville,
TN), and WPOH500 (Cookeville, TN).
14 See Second LMDS Report and Order, 12 FCC Rcd at 12657 ¶ 259.
15 File Nos. 0003083152-0003083155 (filed June 22, 2007).
2

Federal Communications Commission

DA 12-1798

deadlines filed by a large group of LMDS licensees – including ACSI – to extend their deadlines to meet
the substantial service requirements to June 1, 2012, resulting in a nearly four-year construction extension
for each of these licensees.16
6.
The Bureau found that these LMDS licensees faced factors beyond their control,
including difficulties in obtaining viable and affordable equipment, that warranted an extension.17 In
making this finding, the Bureau noted that the licensees seeking relief from the construction deadlines
represented a majority of LMDS licensees for whom buildout requirements were approaching, and that
they all faced these same basic obstacles to timely construction.18 Thus, these obstacles were not a
product of an individual licensee’s short-sightedness or its unfortunate business decisions; rather, the
difficulties in procuring the basic equipment necessary for LMDS operations were widespread, stemming
from the state of the market. Based on the record evidence, the Bureau anticipated that various
developments in the market – arising in large part from the rollout of new services that could provide
opportunities for LMDS operations – would help rectify these difficulties. Thus, the Bureau found that
ACSI and others could potentially use their LMDS licenses to provide wireless backhaul services to
licensees in the 700 MHz band, the Advanced Wireless Services-1 (“AWS-1”) band, and other bands
suitable for mobile broadband service, all of which at that time had recently been auctioned, licensed, or
put into use.19 The Bureau anticipated that these bands would develop robustly, along with other mobile
and fixed wireless services, and that resulting opportunities for associated LMDS service (such as
wireless backhaul) would help spur production of equipment designed for LMDS use and thus facilitate
timely construction by ACSI and the other LMDS licensees, under the extended buildout deadline set by
the Bureau.20
7.
On May 30, 2012, ACSI filed applications pursuant to Section 1.946(e) of the
Commission’s Rules seeking a further seven-month extension of time until December 31, 2012, to
construct its four LMDS licenses.21 Invoking the Commission’s general waiver authority under Section
1.925 of the Commission’s Rules, ACSI alternatively seeks a waiver of Section 101.1011(a) of the
Commission’s Rules, as a means of extending the construction deadline applicable to the licenses until
December 31, 2012.22 ACSI asserts that it “has made numerous efforts since the purchase of these
particular licenses to find suitable uses within the markets where the licenses are maintained.”23 In
particular, ACSI asserts that there is a pending “significant potential use of the license in Clarksville,
Tennessee (WPOH 498)” and is awaiting confirmation and further discussion with RJ Corman railroad of
a business relationship for use of that license.24 With regard to the other three licenses at issue, ACSI
admits that “[w]hile there have been good discussions and analyzation of the market for the utilization of
these licenses, there has been no final plans and purpose for the respective licenses established.”25 This


16 Applications filed by Licensees in the Local Multipoint Distribution Service (LMDS) Seeking Waivers of Section
101.1011 of the Commission’s Rules and Extensions of Time to Construct and Demonstrate Substantial Service,
Memorandum Opinion and Order, 23 FCC Rcd 5894 (WTB 2008) (LMDS Order).
17 LMDS Order, 23 FCC Rcd at 5905 ¶ 24.
18 Id.
19 Id. at 5905 ¶ 25.
20 Id.
21 Extension and Waiver Request at 1.
22 Id.
23 Id.
24 Id.
25 Id.
3

Federal Communications Commission

DA 12-1798

lack of progress notwithstanding, ACSI states that a brief extension to “more fully explore and hopefully
finalize the construction buildout for these licenses” would be in the public interest.26 ACSI suggests that
if no market is available for these licenses, the licenses would terminate as of December 31, 2012.27

III.

DISCUSSION

8.
We find that ACSI has not justified a grant of an extension of time, or a waiver of the
construction deadline, for its LMDS licenses. And without such extension or waiver, ACSI’s LMDS
licenses automatically terminated, by operation of Sections 1.946(c) and 1.955(a)(2) of the Commission’s
Rules, as of June 1, 2012.28 We discuss these findings in detail below.

A.

Extension Requests

9.
ACSI requests a further seven-month extension of time, until December 31, 2012, to
demonstrate substantial service.29 As noted above, this is the second extension that ACSI has requested
for constructing these licenses. To be eligible for an extension of time to construct, ACSI must show that
its “failure to meet the construction deadline is due to involuntary loss of site or other causes beyond its
control.”30 We conclude that ACSI has not met this threshold.
10.
We find that ACSI has made certain business decisions relating to the use of the licenses
and that the failure to timely construct the licenses is not the result of circumstances beyond its control.
ACSI has not constructed any facilities for its licenses and has chosen to pursue a possible business
relationship for use of the spectrum prior to construction. The Commission has consistently found that a
licensee’s own business decisions are not circumstances beyond the licensee’s control and are therefore
not an appropriate basis for regulatory relief.31
11.
We find that ACSI’s present pursuit of a single speculative business venture for one
license does not justify granting an extension, and its decision to put its LMDS spectrum on the shelf until


26 Id.
27 Id.
28 47 C.F.R. §§ 1.946(c) (providing that if a licensee in the Wireless Radio Services fails to commence service or
operations by the expiration of its construction period or to meet its coverage or substantial service obligations by
the expiration of its coverage period, its authorization terminates automatically, without specific Commission action,
on the date the construction or coverage period expires) and 1.955(a)(2) (cross-referencing Section 1.946(c) and
reiterating that authorizations in the Wireless Radio Services automatically terminate without specific Commission
action, if the licensee fails to meet applicable construction or coverage requirements).
29 Extension and Waiver Request at 1.
30 47 C.F.R. § 1.946(e)(1).
31 See, e.g., Redwood Wireless Minnesota, LLC, Order, 17 FCC Rcd 22416 (WTB CWD 2002) (construction delays
resulting from business disputes were exercises of business judgment and were not outside Petitioner’s control);
Eldorado Communications LLC, Order, 17 FCC Rcd 24613 (WTB CWD 2002) (licensee’s determination to initially
deploy TDMA system and subsequently to adopt GSM with months remaining before construction deadline was
business decision within its control); Bristol MAS Partners, Order, 14 FCC Rcd 5007 (WTB PSPWD 1999)
(equipment installation or delivery not delayed for some unique reason and licensee failing to obtain equipment was
business decision); AAT Electronics Corporation, 93 FCC 2d 1034 (1983) (decision not to market service
aggressively because of equipment uncertainties was within licensee’s control); Business Radio Communications
Systems, Inc., 102 FCC 2d 714 (1985) (construction delay caused by zoning challenge not a circumstance beyond
licensee’s control); Texas Two-Way, Inc., 98 FCC 2d 1300 (1984), aff'd sub nom., Texas Two-Way, Inc. v. FCC,
762 F.2d 138 (D.C. Cir. 1985) (licensee is responsible for delay resulting from interference caused by construction
adjacent to construction site because site selection was an independent business decision).
4

Federal Communications Commission

DA 12-1798

it works out a deal for services constituted a business decision voluntarily made by ACSI, not an
inevitable result of circumstances beyond its control. Indeed, even now, ACSI has only committed to
develop one of its four LMDS licenses only if the business relationship with RJ Corman develops, and
apparently agrees to the forfeiture of such license if the pending arrangement does not come to fruition.32
With regard to the other licenses, ACSI does not even appear to be pursuing any concrete business
relationship and just wants time to more fully explore buildout options, notwithstanding the fact that it has
had fourteen years to explore options. We note that while there were legitimate challenges to establishing
LMDS service when ACSI received its first construction extension, the market for wireless backhaul has
been developing steadily in the band and other licensees have been able to establish wireless backhaul
service in the band. In 2005, 8.7 percent of backhaul traffic was sent by fixed wireless.33 By 2009, that
figure increased to 12.3 percent.34 Indeed, many LMDS licensees did meet the June 1, 2012 deadline and
built facilities.35 Under those circumstances, we conclude that ACSI made a voluntary decision not to
actively pursue development of LMDS facilities.
12.
As noted above, when the Bureau granted an extension to LMDS licensees in 2008, it
anticipated that licensees could potentially provide wireless backhaul services to licensees in bands that
had recently been auctioned, licensed, or put into use.36 In the years since the Bureau originally extended
the construction deadline for these licenses, there has been considerable deployment of wireless
broadband service in the 700 MHz, AWS-1, and BRS/EBS bands. Thus, the validity of one of the factors
supporting the Bureau’s earlier extension of the construction deadline – that with some additional time,
productive opportunities for using LMDS licenses would develop as these emerging wireless broadband
services create a need for supporting backhaul service – has been substantially confirmed.

Notwithstanding that progress, ACSI made no meaningful attempt to develop its LMDS spectrum. We
therefore conclude that the decision to grant an extension to LMDS licensees in 2008 does not support
ACSI’s request for yet more time.

B.

Waiver Request

13.
To be granted a waiver of the June 1, 2012 construction deadline, ACSI must show that
either (1) the underlying purpose of the rule(s) would not be served or would be frustrated by application
to the instant case, and that a grant of the requested waiver would be in the public interest; or (2) in view
of the unique or unusual circumstances of the instant case, application of the rule(s) would be inequitable,
unduly burdensome or contrary to the public interest, or the applicant has no reasonable alternative.37 As
is discussed more fully below, we conclude that ACSI has failed to make the requisite showing, and we
therefore deny its waiver request.


32 Extension and Waiver Request at 1.
33 See Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993 Annual Report and
Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile
Services, WT Docket No. 10-133, Fifteenth Report, 26 FCC Rcd 9664, 9845 ¶ 320 (2011).
34 Id. In a separate proceeding, Clearwire Corporation has indicated that it uses wireless for over 90 percent of its
backhaul needs, including almost 13,000 licenses with over 48,000 paths. See Comments of Clearwire Corporation,
WT Docket No. 12-156 (filed July 19, 2012) at 2.
35 As of October 3, 2012, the Broadband Division had accepted 67 LMDS buildout notifications from at least 18
different licensees. Another 221 showings were pending and undergoing review.
36 LMDS Order, 23 FCC Rcd at 5905 ¶ 25.
37 See 47 C.F.R. § 1.925(b)(3); see also 47 C.F.R. § 1.3; Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164,
1166 (D.C. Cir. 1990); WAIT Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969), aff'd, 459 F.2d 1203 (1972), cert.
denied
, 409 U.S. 1027 (1972).
5

Federal Communications Commission

DA 12-1798

14.
First, we conclude that an extension would be inconsistent with the underlying purpose of
the substantial service standard, which, as the Commission has said, is to provide “a clear and expeditious
accounting of spectrum use by licensees to ensure that service is being provided to the public.”38 ACSI is
still exploring buildout options and has no concrete plans to construct. In contrast, many other licensees
built their facilities. Granting ACSI a further extension despite its lack of effort or commitment to
developing its LMDS spectrum would be inconsistent with the underlying purpose of the substantial
service requirement.
15.
We also conclude that ACSI has not shown requiring compliance with the substantial
service rules is inequitable, unduly burdensome, and contrary to the public interest. As we have
previously discussed, ACSI’s decision not to construct its LMDS licenses was a business decision. Other
licensees made other business decisions that led them to build out their licenses.39
16.
We conclude that grant of ACSI’s request for an extension of time to construct would
ultimately serve to defeat the fundamental public interest of ensuring licensee compliance with public
interest obligations, including the duty to follow rules designed to bring service to the public as
expeditiously as possible.40 ACSI has had these licenses for fourteen years and has done nothing with
them. Yet, the licenses in question could play an important role in providing wireless backhaul to support
4G services and should not lay fallow. The Bureau will expeditiously take action to relicense the
spectrum in an appropriate fashion so that another operator could promptly place the spectrum in use.
17.
Authorizations for LMDS licenses automatically terminate if the licensee fails to meet
construction or coverage requirements.41 In light of our decision to deny ACSI’s request for an extension
or waiver of the construction requirements on the ground that grant of such request is not in the public
interest, ACSI’s licenses automatically terminated, by operation of Sections 1.946(c) and 1.955(a)(2) of
the Commission’s Rules,42 as of June 1, 2012.

IV.

CONCLUSION AND ORDERING CLAUSES

18.
ACSI has failed to justify an extension of time to meet the substantial service deadline for
its LMDS stations or to justify a waiver of the June 1, 2012 deadline for establishing substantial service.


38 See Amendment of Part 101 of the Commission’s Rules to Facilitate the Use of Microwave for Wireless Backhaul
and Other Uses and to Provide Additional Flexibility to Broadcast Auxiliary Service and Operational Fixed
Microwave Licensees, WT Docket No. 10-153, Second Report and Order, Second Further Notice of Proposed
Rulemaking, Second Notice of Inquiry, Order on Reconsideration, and Memorandum Opinion and Order
, 27 FCC
Rcd 9735, 9773-9774 ¶ 104 (2012) (“Wireless Backhaul 2nd R&O”), citing 39 GHz R&O, 12 FCC Rcd at 18623 ¶
42; see also 39 GHz R&O, 12 FCC Rcd at 18625 ¶ 46 (“This approach will permit flexibility in system design and
market development, while ensuring that service is being provided to the public.”); 39 GHz R&O, 12 FCC Rcd at
18626 ¶ 46 (“This revised performance standard should ensure that meaningful service will be provided without
unduly restricting service offerings.”); 39 GHz R&O, 12 FCC Rcd at 18625 ¶ 47 (“[A]pplying a similar performance
requirement to all licensees at the license renewal point will help establish a level playing field without
compromising the goals of ensuring efficient spectrum use and expeditious provision of service to the public.”); 39
GHz Renewal Order
, 17 FCC Rcd at 4407 ¶ 11 (“The Commission’s overarching purpose behind adopting the
substantial service standard for renewal was to ensure that the spectrum was being used to provide service to the
public.”).
39 See note 35, supra.
40 See Wireless Backhaul 2nd R&O, 27 FCC Rcd at 9773-9774 ¶ 104.
41 47 C.F.R. §§ 1.946(c) and 1.955(a)(2).
42 Id.
6

Federal Communications Commission

DA 12-1798

We therefore deny the Extension and Waiver Request. Accordingly, ACSI’s licenses to operate LMDS
stations automatically terminated, by operation of Commission rule, as of June 1, 2012.
19.
Accordingly, IT IS ORDERED, pursuant to Sections 4(i) and 309 of the Communications
Act of 1934, as amended, 47 U.S.C. §§ 154(i), 309, and Sections 1.925 and 1.946 of the Commission’s
Rules, 47 C.F.R. §§ 1.925, 1.946, that the request for waivers and the applications for extension of time to
demonstrate substantial service (File Nos. 0005238986, 0005239072, 0005239099 and 0005239219) filed
by Advantage Cellular Systems, Inc. on May 30, 2012 ARE DENIED.
20.
IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and 303(r) of the
Communications Act, as amended, 47 U.S.C. §§ 154(i), 303(r), and Section 1.955(a)(2) of the
Commission’s Rules, 47 C.F.R. § 1.955(a)(2), that the Universal Licensing System SHALL BE
UPDATED to reflect that the licenses issued to Advantage Cellular Systems, Inc. for Local Multipoint
Distribution Service Stations WP0H497, WPOH498, WPOH499, and WPOH500 TERMINATED as of
June 1, 2012.
21.
These actions are taken under delegated authority pursuant to Sections 0.131 and 0.331 of
the Commission’s Rules, 47 C.F.R. §§ 0.131, 0.331.
FEDERAL COMMUNICATIONS COMMISSION
John J. Schauble
Deputy Chief, Broadband Division
Wireless Telecommunications Bureau
7

Note: We are currently transitioning our documents into web compatible formats for easier reading. We have done our best to supply this content to you in a presentable form, but there may be some formatting issues while we improve the technology. The original version of the document is available as a PDF, Word Document, or as plain text.

close
FCC

You are leaving the FCC website

You are about to leave the FCC website and visit a third-party, non-governmental website that the FCC does not maintain or control. The FCC does not endorse any product or service, and is not responsible for, nor can it guarantee the validity or timeliness of the content on the page you are about to visit. Additionally, the privacy policies of this third-party page may differ from those of the FCC.