Subject: [NEXTEL-1] FCC On JAMES A. KAY, JR.-Request for a Finder’s Preference for Station WNJF770

From: Marcel <[email-masked]>
Date: Wed, 23 Apr 2003 19:08:56 -0400

Before the
Federal Communications Commission
Washington, D.C. 20554

In the Matter of

JAMES A. KAY, JR.

Request for a Finder’s Preference for Station WNJF770 Licensed to Stanley W. Harris d/b/a
Western Communications Company on Base Station Frequency 852.7875 MHz at Heaps Peak (San
Bernardino) California

File No. 93F746

MEMORANDUM OPINION AND ORDER

   Adopted:  April 10, 2003 Released: April 18, 2003

By the Commission:

I. INTRODUCTION
1. The Commission has before it an Application for Review filed by James A. Kay, Jr. (Kay)
on November 14, 2001.  Kay seeks review of an order by the Commercial Wireless Division
(Division) of the Wireless Telecommunications Bureau (Bureau), which denied Kay’s finder’s
preference request.   For the reasons discussed below, we deny Kay’s Application for
Review.

II. BACKGROUND

2. The Commission created the finder's preference program in order to relieve the scarcity
of spectrum in certain frequency bands by creating "new incentives for persons to provide
[the Commission with] information about unconstructed, non-operational, or discontinued
private land mobile radio systems. . . ."   Under the program, a person could file a
finder’s preference request by presenting the Commission with evidence of a licensee’s
noncompliance with certain regulations.  Upon recovering channels from a target licensee
deemed to be in violation of those regulations, the Commission would then award a
dispositive preference for those frequencies to the finder.

3. On January 5, 1994, Kay filed a finder’s preference request against call sign WNJF770,
a conventional Specialized Mobile Radio (SMR) station, formerly licensed in the 800 MHz
General Category frequency pool to Stanley W. Harris d/b/a Western Communications Company
(Harris) in San Bernadino, CA.   In his request, Kay alleged that Harris violated former
rule section 90.155(a), which provided that, if a conventional 800 MHz station is not
placed in operation within eight months from the date of grant, the authorization cancels
automatically.  The rule also required that to be considered operational, the station must
have at least one associated mobile unit in operation.   Kay argued that Harris violated
this rule by failing to have any mobile units operating on the station by the eight-month
deadline.   Kay also alleged that Harris violated former rule section 90.157, which held
that any station that has not operated for one year or more is considered to be
permanently discontinued and therefore cancels automatically.   In support of his
allegations, Kay relied exclusively on the absence from the Commission’s loading records
of any record of mobiles associated with Harris’ station.

4. On October 17, 2001, the Division denied Kay’s finder’s preference request.  The
Division found that because the request relied entirely on Commission loading records, it
was insufficient to justify award of a finder’s preference.   The Division further noted
that in establishing the finder’s preference program, the Commission had specifically
excluded loading violations from the types of target licensee rule violations that could
result in the award of a preference.  The Division concluded that Kay’s request fell
within this exclusion, and therefore could not result in a finder’s preference award.

5. In his Application for Review, Kay does not dispute that the Commission excluded
loading violations from the scope of the finder’s preference program, but instead argues
that the Bureau incorrectly characterized his request as alleging a loading violation.
Kay contends that the request was not a loading complaint at all, but properly alleged
that Harris had failed to construct and commence operations, thus violating rules that
were within the scope of the finder’s preference program.   Kay also argues that the
loading records on which it relied should be regarded as Commission “licensing records,”
and that the absence from these records of any mobiles associated with station WNJF770
demonstrated that Harris could not have complied with his construction and operation
requirements.

III. DISCUSSION

6. The Division denied Kay’s petition based on the conclusion that Kay had alleged a
loading violation that fell outside the scope of the finder’s preference program.    As a
threshold matter, we agree with Kay that the Division erred in reaching this conclusion,
and that Kay’s finder’s preference request did in fact allege violation of the
Commission’s rules relating to construction and operation rather than loading.
Nonetheless, we find that Kay’s request fails on other grounds.  First, Kay is not
entitled to a finder’s preference because the finder’s preference program applied only to
exclusively licensed frequencies, and the target frequency in this case was not
exclusively licensed to Harris.  Second, the sole evidence provided by Kay in support of
his preference request came from existing, publicly available Commission records.  Because
this information was readily available to Commission staff, it does not constitute the
type of information, taken alone, that merits award of a finder's preference.

7. At the time that Kay filed its request, the loading rules applicable to conventional
SMR stations required a licensee to load a channel with 70 mobiles in order to obtain
exclusive use of that channel.   Licensees were further required to report the number of
mobiles loaded on their systems to the Commission, which maintained this information in
its loading records. A licensee who failed to report this information accurately (e.g., by
reporting more mobiles than were actually in use) would of course be in violation of
Commission rules.  However, in establishing the finder’s preference program, the
Commission concluded that loading violations should not be the subject of finder’s
preference requests, because loading was inherently “dynamic,” could vary from day to day,
and violations would therefore be difficult to prove conclusively.   Instead, the
Commission limited the availability of finder’s preferences to violations of the
construction and operation rules, which it regarded as “lend[ing] themselves to conclusive
and expeditious action.”

8. On review of the record in this case, we agree with Kay that the alleged rule violation
that formed the basis of his finder’s preference request was not a loading violation of
the type discussed above.  The essential allegation in Kay’s request was not that Harris
had falsely reported non-existent mobiles, but that the Commission’s records accurately
indicated that Harris had no mobiles associated with his station, and therefore was in
violation of the Commission’s construction and operation rules that required operation of
at least one mobile on the station by the end of the construction period, and required
continued operation of one mobile to avoid the station being considered permanently
discontinued.   Because these rules were within the scope of the finder’s preference
program, we conclude that the Division erred in concluding that Kay’s request alleged a
rule violation outside the scope of the program.

9. We further conclude, however, that Kay’s finder’s preference request fails on other
grounds.  Because the Division erroneously found Kay’s request to be based on a loading
violation, it did not reach the issue of whether Kay was entitled to a finder’s preference
based on Harris’ alleged violation of the construction and operation rules.  We address
this issue below, and conclude that Kay was not entitled to a preference.

10. First, Kay was not entitled to a finder’s preference because the channel at issue was
not licensed exclusively to Harris.  In the Finder’s Preference Order, the Commission
limited application of the finder’s preference program to channels assigned on an
exclusive basis.   The Commission did not apply the finder’s preference program to shared
channels because there was “no preclusion of eligible new applicants from being licensed
on shared spectrum,” and a “preference awarded to an applicant for a shared channel would,
therefore, offer no greater opportunity for acquiring a particular channel than that which
is already available . . . .”

11. In this case, as noted above, the rules applicable to conventional SMR stations
required a licensee to load a channel with 70 mobiles in order to obtain exclusive use of
that channel.   Failure to load the station with 70 mobiles rendered the channel open to
sharing, allowing any other applicant to apply for the same channel.   The record clearly
reflects that Harris failed to license 70 mobiles on the system, and therefore did not
have exclusive use rights.  However, the non-exclusive status of the channel also
precludes the award of a finder’s preference to Kay: because the channel was not
exclusively licensed to Harris, any other applicant, including Kay, could apply for it in
any event, and the finder’s preference program was therefore inapplicable.

12. Second, we find that Kay’s evidentiary submission in support of his preference
request, which was based entirely on Commission records, does not constitute the type of
information, taken alone, that could support a finder's preference claim.   As the
Commission noted in the Finder’s Preference proceeding, the finder’s preference program
was designed to “supplement rather than duplicate our compliance efforts,”  and was
intended to “reward persons who constructively and effectively assist us in ensuring
proper use of the private radio spectrum.”   In this case, Kay submitted no independent
evidence that would supplement information already in the Commission’s possession, and
provided no assistance to the Commission’s own efforts to ensure proper spectrum use.  We
see no reason to award a finder’s preference to Kay for providing information the
Commission already possessed and equally available to any other member of the public.

IV. ORDERING CLAUSE

13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 5(c)(5) of the Communications
Act, as amended, 47
U.S.C. § 155(c)(5), and Section 1.115(g) of the Commission’s rules, 47 C.F.R. § 1.115(g),
the Application for Review filed by James A. Kay, Jr. on November 14, 2001 in the
above-captioned proceeding IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch
Secretary

<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-86A1.doc>
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-86A1.pdf>
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-86A1.txt>

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