Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) PrimeCo Personal Communications, L.P. ) ) File No. WB/ENF-98-2403 Licensee of Personal Communications Service ) Licenses KNLF207, KNLF214, KNLF226 ) KNLF228, KNLF230, KNLF234, KNLF240 ) KNLF246, KNLF266, KNLF274, KNLF294 ) MEMORANDUM OPINION AND ORDER Adopted: May 21, 1999 Released: May 24, 1999 By the Chief, Enforcement and Consumer Information Division Wireless Telecommunications Bureau: I. INTRODUCTION 1. The Chief, Enforcement and Consumer Information Division, Wireless Telecommunications Bureau, has under consideration: (a) a Petition for Order to Show Cause Why the PCS Licenses of PrimeCo Personal Communications, L.P. Should Not Be Revoked ("Petition"), filed on October 27, 1998, by Brazos Electric Power Cooperative, Inc., ("Brazos"); (b) an Opposition and Request to Dismiss the Petition, filed on November 12, 1998, by PrimeCo Personal Communications, L.P. ("PrimeCo"); and (c) a Reply, filed on November 24, 1998, by Brazos. For the reasons set forth below, we conclude that Brazos' Petition fails to raise a substantial and material question of fact as to PrimeCo's fitness to remain a licensee. We therefore deny Brazos' petition and terminate this proceeding. II. BACKGROUND 2. Prior to 1997, the 2 GHz band (1850-1990 MHz) was reserved for the provision of Fixed Microwave Services ("FMS"). In 1997, however, in an effort to expedite the introduction of new communications services to American consumers, the Commission determined that it would serve the public interest to auction off spectrum in the 2 GHz band to providers of emerging technologies ("ET"), such as Personal Communications Services ("PCS"). In order to minimize potential interference between incumbent FMS stations and new ET facilities and to facilitate the orderly transition of incumbent FMS stations to other frequencies, the Commission established a three-phased plan. First, FMS and ET operators are encouraged to negotiate voluntary agreements during the two-year period in which the Commission deems both ET and incumbent FMS operators co-primary users of the spectrum. This period is referred to as the "voluntary negotiation period." If the licensees are unable to negotiate a voluntary relocation agreement, the ET operator may initiate mandatory good faith negotiations. Lastly, if the licensees cannot arrive at a relocation agreement during the mandatory stage, the "ET licensee may initiate involuntary relocation procedures under the Commissions rules." 3. Turning to the instant case, Brazos, a rural electric cooperative serving 66 counties in Texas, is an incumbent licensee of fixed microwave service stations operating on 82 paths in the 2 GHz band. PrimeCo, a wireless telecommunications service provider, was awarded licenses to operate a PCS system in the 2 GHz band in the Dallas-Fort Worth, San Antonio, and Houston MTAs. It is undisputed that during the voluntary relocation period, Brazos and PrimeCo entered into a relocation contract in which PrimeCo agreed to pay Brazos to relocate and upgrade Brazos' microwave network. The contract also contemplated that PrimeCo would obtain the use of Brazos' property for antenna and/or tower siting. 4. On October 27, 1998, Brazos initiated two proceedings against PrimeCo. In one proceeding, Brazos filed a civil suit in Texas district court alleging that PrimeCo had breached the relocation contract by failing to relocate and upgrade a significant portion of Brazos' network. Brazos is seeking specific performance in that lawsuit. In the other proceeding, Brazos filed the instant Petition asking the Commission to commence a revocation hearing against PrimeCo. III. DISCUSSION 5. In its Petition, Brazos maintains that PrimeCo acted in bad faith and abused the Commission's voluntary negotiation process by failing to relocate all of Brazos' microwave stations. According to Brazos, a finding that PrimeCo entered into a contract in bad faith raises questions as to whether PrimeCo will deal candidly with the Commission. Brazos asks the Commission to hold the Petition in abeyance pending the outcome of the Texas litigation if the Commission believes the Texas court should resolve the contract litigation before the Commission rules on PrimeCo's qualifications. 6. In its Opposition, PrimeCo asserts that the Petition should be dismissed because it deals with a private contractual dispute that is outside the Commission's jurisdiction. PrimeCo further asserts that the Petition fails to allege facts that warrant the commencement of a revocation hearing. PrimeCo suggests that Brazos may have filed the Petition in an attempt to enhance its litigation posture in the pending civil action. In a reply brief, Brazos argues that PrimeCo's failure to deny the allegations establishes a prima facie case warranting a hearing into PrimeCo's qualifications. 7. We note that the Commission does not recognize a formal right to seek revocation of a license. The Commission, however, has treated such requests as informal requests for action pursuant to Section 1.41 of the Commission's Rules. We also note that Brazos has not argued that it has formal standing to bring the petition. Accordingly, we will treat the Brazos filing as an informal request for Commission action. 8. Revoking an operator's license is a serious matter which the Commission will not undertake lightly. The decision to institute revocation proceedings against a licensee is a matter wholly within the Commission's discretion. In this case, Brazos argues, "By refusing to abide by the terms of the contract, PrimeCo has also refused to honor the Commission's voluntary negotiation and relocation structure." Brazos also speculates that PrimeCo may have negotiated in bad faith when it entered into the voluntary relocation agreement. PrimeCo, on the other hand, states that the dispute involves a contractual matter that should be left to the courts and that Brazos has not alleged conduct that would justify a revocation proceeding. 9. We find that Brazos fails to establish that PrimeCo's conduct vis-a-vis the relocation contract provides a basis for inquiring into PrimeCo's basic qualifications to remain a Commission licensee. The Commission has defined FCC-related misconduct as "any violations of the Communications Act, Commission Rules, or Commission policies." Brazos has not persuaded us that the specific conduct in question would constitute a violation of our rules or policies. Brazos and PrimeCo voluntarily entered into a relocation agreement during the voluntary negotiation period established by Section 101.71 of the Commission's Rules. That rule provides that during the voluntary negotiation period, the negotiations "are not defined by any parameters." In contrast, during the mandatory negotiation period, there is a requirement to negotiate in good faith. Assuming, arguendo, that PrimeCo had breached the voluntary relocation agreement or that PrimeCo had negotiated in bad faith, Brazos has not shown that the specific conduct it alleges would constitute a violation of any of the Commission's rules or policies. Indeed, the Commission has stated that in the case of voluntary relocation agreements, "we anticipate that parties will pursue common law contract remedies if a dispute arises." Brazos has correctly pursued such remedies by filing a breach of contract suit in state court. 10. Brazos has also failed to allege the type of non-FCC misconduct that would affect PrimeCo's basic qualifications. In the Character Policy Statement, the Commission found it "appropriate to focus generally on three types of adjudicated misconduct which are not specifically proscribed by the Act or our rules and policies: (1) fraudulent statements to government agencies; (2) certain criminal convictions; and (3) violations of broadcast related anti-competitive and antitrust statutes." Brazos does not allege that PrimeCo has engaged in any of those types of misconduct. IV. CONCLUSION AND ORDERING CLAUSES 11. Brazos has failed to allege facts that would call into question PrimeCo's qualifications to remain a Commission licensee. Furthermore, Brazos' arguments have no factual basis in the absence of an adjudication that PrimeCo breached its contract with Brazos. Brazos' Petition will therefore be denied. 12. ACCORDINGLY, IT IS ORDERED, that the above-captioned Petition for an Order to Show Cause filed by Brazos Electric Power Cooperative, Inc., on October 27, 1998 against PrimeCo Personal Communications, L.P., IS DENIED. 13. IT IS FURTHER ORDERED that this proceeding IS TERMINATED. FEDERAL COMMUNICATIONS COMMISSION Catherine W. Seidel Chief, Enforcement and Consumer Information Division Wireless Telecommunications Bureau