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Ruvin Lerman LMDS Construction Extension Denial Order

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Released: October 22, 2012

Federal Communications Commission

DA 12-1696

Before the

Federal Communications Commission

Washington, D.C. 20554

In re Matter of
)
)

RUVIN I. LERMAN
)
File Nos. 0005237278-0005237281
)
Requests for Extension of Time, or in the
)
alternative, Limited Waiver of Substantial Service )
Requirements for Local Multipoint Distribution
)
Service Licenses WPOH479, WPOH480,
)
WPOH481, and WPOH482
)
)

MEMORANDUM OPINION AND ORDER

Adopted: October 22, 2012

Released: October 22, 2012

By the Deputy Chief, Broadband Division, Wireless Telecommunications Bureau:

I.

INTRODUCTION

1.
In this Memorandum Opinion and Order, we deny Ruvin I. Lerman’s (“Lerman”)
requests for extension of time to demonstrate compliance with the substantial service requirements for his
Local Multipoint Distribution Service (“LMDS”) licenses. 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” license 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


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.

Federal Communications Commission

DA 12-1696

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 licenses in question here were originally issued to Mr. Lerman on June 24, 1998
as a result of Auction No. 17.13

5.
Lerman was originally required to demonstrate substantial service by June 24, 2008, or
10 years after the initial license grant date.14 On April 14, 2008, Mr. Lerman filed applications for an


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. 0000000122 (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 WPOH479 (Sheboygan, WI), WPOH480 (Rock Springs, WY), WPOH481 (Flagstaff, AZ), and
WPOH482 (Logan, UT).
14 See Second LMDS Report and Order, 12 FCC Rcd at 12657 ¶ 259.
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DA 12-1696

extension of time to demonstrate substantial service for his LMDS licenses.15 The applications were
granted on June 13, 2008 with a comment referring to a 2008 Bureau order where the Bureau granted
extensions to other LMDS licensees.16 In the LMDS Order, the Wireless Telecommunications Bureau
(the “Bureau”) granted the requests for extension of the construction deadlines filed by a large group of
LMDS licensees 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.17 The Bureau found that
these 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 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 29, 2012, Mr. Lerman filed applications pursuant to Section 1.946(e) of the
Commission’s Rules seeking a further two or 2.5 year extension of time to construct his four LMDS
licenses.22 Mr. Lerman is a telecommunications engineer with almost 50 years of experience.23 His plan
was to use his LMDS licenses to sell backhaul services to wireless operators.24 In 2010, he purchased
land in Colorado.25 In 2011, he contracted with Orion Building Systems to build a road and building that
would be used to house equipment for his proposed operations.26 According to Lerman, the supplier


15 File Nos. 0003396207, 0003396251- 0003396253 (filed Apr. 14, 2008).
16 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).
17 LMDS Order.
18 Id. at 5905 ¶ 24.
19 Id.
20 Id. at 5905 ¶ 25.
21 Id.
22 See File Nos. 0005237278-0005237281 (filed May 29, 2012) (Extension Applications). With each Extension
Application, Lerman filed an exhibit entitled “Request for Buildout Extension” (Extension Request).
23 Extension Request.
24 Id.
25 Id.
26 Id.
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Federal Communications Commission

DA 12-1696

declared bankruptcy and received a discharge in bankruptcy without performing the contracted work.27
Mr. Lerman seeks an extension based on the financial hardship caused by the supplier’s bankruptcy.28 He
states that the income from his employment and his wife’s employment should allow them to construct
the licenses in two or 2.5 years.29

III.

DISCUSSION

7.
We find that Lerman has not justified a grant of an extension of time for its LMDS
licenses. And without such extension, Lerman’s LMDS licenses have automatically cancelled, by
operation of Sections 1.946(c) and 1.955(a)(2) of the Commission’s Rules, as of June 1, 2012.30
8.
Lerman requests a further extension of time of at least two years, or until June 1, 2014, to
demonstrate substantial service.31 As noted above, this is the second extension that Lerman has requested
for constructing these licenses. To be eligible for an extension of time to construct, Lerman must show
that its “failure to meet the construction deadline is due to involuntary loss of site or other causes beyond
its control.” 32 We conclude that Lerman has not met this threshold.
9.
Lerman’s Extension Request suffers from two fatal defects. First, the Commission’s rules
prohibit granting extensions based on a failure to have financing.33 Second, “[i]t is well established that
failed business decisions do not qualify as grounds for relief of our regulatory requirements.”34 While it
is unfortunate that Lerman’s supplier did not perform, Lerman made the business decision to rely on that
supplier. 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.35 Accordingly, we deny the Extension Request.


27 Id.
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 47 C.F.R. § 1.946(e)(1).
33 See 47 C.F.R. § 1.946(e)(2) (“Extension requests will not be granted for failure to meet a construction or coverage
deadline due to delays caused by a failure to obtain financing…”).
34 See Stephen E. Coran, Esquire, Letter, 22 FCC Rcd 1921, 1923 (WTB MD 2007).
35 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,
4

Federal Communications Commission

DA 12-1696

10.
Authorizations for LMDS licenses automatically terminate if the licensee fails to meet
construction or coverage requirements.36 In light of our decision to deny Lerman’s requests for an
extension of the construction requirements on the ground that grant of such request is not in the public
interest, Lerman’s licenses automatically terminated, by operation of Sections 1.946(c) and 1.955(a)(2) of
the Commission’s Rules,37 as of June 1, 2012.

IV.

CONCLUSION AND ORDERING CLAUSES

11.
Lerman has failed to justify an extension of time to meet the June 1, 2012 substantial
service deadline for his LMDS stations. We therefore deny the Extension Request. Accordingly,
Lerman’s licenses to operate LMDS stations have automatically terminated, by operation of Commission
rule, as of June 1, 2012.
12.
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 Section 1.946 of the Commission’s Rules, 47
C.F.R. § 1.946, that the applications for extension of time to demonstrate substantial service (File Nos.
0005237278-0005237281) filed by Ruvin I. Lerman on May 29, 2012 ARE DENIED.
13.
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 Ruvin I. Lerman for Local Multipoint Distribution
Service Stations WPOH479, WPOH480, WPOH481, and WPOH482 TERMINATED as of June 1, 2012.
14.
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





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).
36 47 C.F.R. §§ 1.946(c) and 1.955(a)(2).
37 Id.
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