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Progressive Communications LMDS Construction Extension Denial Order

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Released: November 15, 2012

Federal Communications Commission

DA 12-1846

Before the

Federal Communications Commission

Washington, D.C. 20554

In re Matter of
)
)

PROGRESSIVE COMMUNICATIONS, INC.
)
File No. 0005241577
)
Request for Extension of Time, or in the
)
alternative, Limited Waiver of Substantial Service )
Requirements for Local Multipoint Distribution
)
Service Station WPLM324
)
)

MEMORANDUM OPINION AND ORDER

Adopted: November 15, 2012

Released: November 15, 2012
By the Deputy Chief, Broadband Division, Wireless Telecommunications Bureau:

I.

INTRODUCTION

1.
In this Memorandum Opinion and Order, we deny Progressive Communications, Inc.’s
(“Progressive”) request for extension of time to demonstrate compliance with the substantial service
requirements for its Local Multipoint Distribution Service (“LMDS”) license for Station WPLM324, in
the Anderson, Indiana Basic Trading Area (BTA), as well as its associated request for waiver of the June
1, 2012 substantial service deadline. Because we deny Progressive’s request, the license for Station
WPLM324 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


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.

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DA 12-1846

megahertz of total bandwidth, and the B Block license is comprised of 150 megahertz of total bandwidth.3
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 license for Station WPLM324 was originally issued to Progressive on June 5,
1998, as a result of Auction No. 17.13
5.
Progressive was originally required to demonstrate substantial service on June 5, 2008, or
10 years after the initial license grant date.14 On May 1, 2008, Progressive filed an application for an
extension of time to demonstrate substantial service for its LMDS license.15 On June 13, 2008, the


3 See id.
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. 0000000131 (granted June 5, 1998); see also FCC Announces the Conditional Grant of Local
Multipoint Distribution Service Licenses, Public Notice, 13 FCC Rcd 16518 (WTB 1998).
14 See Second LMDS Report and Order, 12 FCC Rcd at 12657 ¶ 259.
15 File No. 0003422762 (filed May 1, 2008).
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Bureau granted Progressive an extension until June 1, 2012 to construct its LMDS licenses, resulting in a
nearly four year construction extension.16 The application was granted with a comment referring to a
2008 Bureau order where the Bureau granted extensions to other LMDS licensees.17 In the LMDS Order,
the Bureau found that LMDS licensees faced factors beyond their control, including difficulties in
obtaining viable and affordable equipment, that warranted an extension.18 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.19 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 LMDS licensees 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.20 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 LMDS licensees, under the
extended buildout deadline set by the Bureau.21
6.
On May 31, 2012, Progressive filed an application (Extension & Waiver Request),
seeking a further seven-month extension of time, until December 31, 2012, to construct Station
WPLM324.22
Invoking the Commission’s general waiver authority under Section 1.925 of the
Commission’s Rules, Progressive argues that it has made substantial effort to develop its LMDS business,
including spending several years pursuing a project contemplating RUS funding which did not become
available, partly because of questions about the availability of suitable equipment.23 Progressive explains
that it recently identified and ordered point-to-point equipment that can “probably provide reliable
backhaul service” and which was due to arrive in June 2012.24 Progressive further explains that although
it has not identified a user for its services, it is actively seeking potential users, and believes it can be
operational within sixty days of entering into an agreement with a potential customer.25


16 File No. 0003422762 (granted June 13, 2008).
17 Id., citing 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).
18 LMDS Order, 23 FCC Rcd at 5905 ¶ 24.
19 Id.
20 Id. at 5905 ¶ 25.
21 Id.
22 See File No. 0005241577 (filed May 31, 2012) (Extension Application). With the Extension Application,
Progressive filed an exhibit entitled “Request for Limited Extension of Substantial Service Deadline” (Extension &
Waiver Request).
23 Extension and Waiver Request at 2.
24 Id. at 2.
25 Id. at 3.
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7.
On October 17, 2012, Progressive filed a Supplement to its Extension and Waiver
Request.26 Therein, Progressive states that it has received the LMDS equipment that will allow it to
construct a facility, and will begin construction when it has identified a customer.27 Progressive also
states that it has approached a number of potential customers, but has been unsuccessful in establishing
any business relationships, due mainly to a lack of demand and economic considerations.28
Notwithstanding these unsuccessful attempts, Progressive feels confident that it will identify a customer
prior to the end of 2012, and if it does not, it intends to seek a further extension.29

III.

DISCUSSION

8.
We find that Progressive 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, Progressive’s
LMDS license for Station WPLM324 automatically terminated, by operation of Sections 1.946(c) and
1.955(a)(2) of the Commission’s Rules, as of June 1, 2012.30 We discuss these findings in detail below.

A.

Extension Requests

9.
Progressive requests a further seven-month extension of time, until December 1, 2012, to
demonstrate substantial service.31 As noted above, this is the second extension that Progressive has
requested for constructing these licenses, and Progressive is already anticipating that yet a third extension
might be necessary if it does not locate a customer prior to expiration of the extension it now seeks.32 To
be eligible for an extension of time to construct, Progressive must show that its “failure to meet the
construction deadline is due to involuntary loss of site or other causes beyond its control.”33 We conclude
that Progressive has not met this threshold.
10.
Progressive asserts that it has made substantial efforts to develop its LMDS business,
including the pursuit of RUS funding for several years, which it did not receive, and the pursuit of
customers such as AT&T Mobility and a local school district.34 Progressive further explains that it has
not constructed any LMDS service due to the lack of development of LMDS equipment for backhaul, and
due to its inability to secure a customer.35 The Commission has consistently found that a licensee’s own


26 Progressive Communications, Inc., Supplement to Request for Extension of Time (filed Oct. 17, 2012)
(Supplement).
27 Id. at 1.
28 Id.
29 Id.
30 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).
31 Extension and Waiver Request at 1.
32 Supplement at 1.
33 47 C.F.R. § 1.946(e)(1).
34 Extension and Waiver Request at 2-3.
35 Id.
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business decisions are not circumstances beyond the licensee’s control and are therefore not an
appropriate basis for regulatory relief.36 In view of this precedent, we find that none of the factors cited
by Progressive demonstrate that its failure to construct was caused by circumstances beyond its control.
11.
Specifically, while Progressive has investigated equipment and eventually acquired
equipment, Progressive has clearly stated that it will not construct facilities until it has a customer. While
Progressive has made some efforts to locate a customer, we note that many other licensees were able to
develop business plans and make the case for building facilities.37 Progressive’s decision to use its
LMDS facilities for backhaul and to not construct facilities until it had a customer were voluntary
business decision. Progressive had other ways to develop its service independent of the backhaul market.
Thus, its decision to put its LMDS spectrum on the shelf until the market for wireless backhaul improved
constituted a business decision voluntarily made by Progressive, not an inevitable result of circumstances
beyond its control. Moreover, even if wireless backhaul presented the only feasible use of LMDS
spectrum, Progressive’s justification for additional construction time would fail, insofar as the market for
wireless backhaul has been developing steadily. In 2005, 8.7 percent of backhaul traffic was sent by fixed
wireless.38 By 2009, that figure increased to 12.3 percent.39 Under those circumstances, we conclude that
Progressive made a voluntary decision not to construct LMDS facilities.
12.
We find that Progressive, which made no attempt to commence construction of its LMDS
licenses in advance of the construction deadline, nor subsequent to receiving the necessary equipment, is
readily distinguishable from several other licensees that attempted to build out their licenses prior to the
deadline and that ordered equipment but failed to receive timely delivery of that equipment. Although
Progressive has received the equipment it ordered, it nonetheless admits that it has no intention of placing
such equipment into operation without signing a contract with a potential customer. Thus, the mere act of
securing equipment that would “probably provide reliable backhaul service”40 without concrete plans or
commitment to placing such equipment into service does not justify granting Progressive a further
extension.


36 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).
37 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.
38 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).
39 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.
40 Extension and Waiver Request at 2.
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13.
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.41 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, Progressive made no attempt to construct LMDS facilities. We therefore
conclude that the decision to grant an extension to LMDS licensees in 2008 does not support
Progressive’s request for yet more time.

B.

Waiver Request

14.
To be granted a waiver of the June 1, 2012 construction deadline, Progressive 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.42 As is discussed more fully below, we conclude that Progressive has failed to make the
requisite showing, and we therefore deny its waiver request.
15.
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.” 43
Progressive has secured the equipment that would allow it to construct, yet it will not “physically install
point-to-point equipment unless and until the user is identified.”44 Progressive further claims that it has
“no assurance of finding a user immediately”, but that it believes “additional demand for point-to-point
service will develop…during the remainder of this year and during 2013”, and that “by having already


41 LMDS Order, 23 FCC Rcd at 5905 ¶ 25.
42 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).
43 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
, FCC 12-
87, 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.”).
44 Extension and Waiver Request at 3.
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purchased its equipment, [it] intends to hit the ground running and be there at the front of this wave.”45 In
its Supplement, Progressive demonstrates that it is in the same position it was in prior to receiving its
equipment, because although it is “sending a sales representative into the market again in order to obtain a
suitable customer,” it has been unsuccessful in its sales solicitations due to the fact that such potential
customers already have backhaul solutions and are not in a position to expand due to economic
situations.46 Indeed, Progressive admits that it does not intend to construct until it obtains a customer. In
contrast, many other licensees have built their facilities. Granting Progressive a further extension despite
its lack of commitment to develop its LMDS spectrum would be inconsistent with the underlying purpose
of the substantial service requirement.
16.
We also conclude that Progressive 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, Progressive’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.47
17.
Authorizations for LMDS licenses automatically terminate if the licensee fails to meet
construction or coverage requirements.48 In light of our decision to deny Progressive’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, Progressive’s license automatically terminated, by operation of Sections 1.946(c) and
1.955(a)(2) of the Commission’s Rules,49 as of June 6, 2012.

IV.

CONCLUSION AND ORDERING CLAUSES

18.
Progressive has failed to justify an extension of time to meet the substantial service
deadline for its LMDS station or to justify a waiver of the June 1, 2012 deadline for establishing
substantial service. We therefore deny the Extension and Waiver Request. Accordingly, Progressive’s
license to operate LMDS station WPLM324 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 a waiver and application for extension of time to
demonstrate substantial service (File No. 0005241577) filed by Progressive Communications, Inc., on
May 31, 2012 IS DENIED.


45 Id.
46 Supplement at 1.
47 See note 36, supra.
48 47 C.F.R. §§ 1.946(c) and 1.955(a)(2).
49 Id.
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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 license issued to Progressive Communications, Inc. for Local Multipoint
Distribution Service Station WPLM324 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
8

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