FCC Cracks Down on Part 22 Construction Requirements
By Greg Kunkle
Tuesday, October 25, 2016 | Comments

Last week, the FCC’s Wireless Telecommunications Bureau (WTB) issued an order denying requests to extend the construction deadlines for certain Part 22 paging licenses held by Intelligent Transportation & Monitoring Wireless, Skybridge Spectrum Foundation and V2G — licenses previously controlled by Warren Havens. In doing so, the FCC ruled that the licensees had not met their construction obligations and terminated the licenses as of the construction deadline, Nov. 3, 2015. The decision was notable in that it impacted more than 2,100 licenses held by the three licensees.

Part 22 paging licenses have become increasingly popular in recent years with the land mobile community. Except for a relatively small number of incumbent Part 22 site-based licenses, Part 22 paging licenses are auctioned by the FCC as exclusive wide-area geographic licenses. Spectrum is available in low band, VHF, UHF and 900 MHz and is suitable for narrowband and wideband, voice and data, and fixed and mobile applications. There is a wide range of equipment certified for both Part 22 and Part 90, making for straight-forward integration of Part 22 licenses into existing Part 90 systems. For example, a Part 22 channel may be used as the control channel in a trunked system where exclusive Part 90 channels may not otherwise be available.

Like most wireless licenses, Part 22 paging licenses are subject to construction requirements intended to ensure the spectrum is placed into use for the public interest. These construction requirements are different than the construction requirements Part 90 licensees are used to. Part 22 paging licensees are required to construct sites sufficient to cover one-third of the population in their licensed geographic area within three years of the initial grant of the license. At five years, the licensee must demonstrate it has constructed facilities sufficient to cover two-thirds of the population.

Alternatively, Part 22 licensees may elect at the three-year mark to notify the FCC that they intend to provide “substantial service” no later than five years after license grant. Licensees making such an election must then file a substantial service showing within five years of license grant.

In this case, the licensees informed the FCC in 2013 they planned to provide substantial service by Nov. 3, 2015. However, when the November 2015 substantial service showing was due, the licensees instead requested a five-year extension of the construction deadlines. The licensees said that they spent the first five years of the license term, among other things, conducting due diligence on advanced services and had recently purchased transceivers and data loggers for service tests. The licensees claimed they were investing in “meteor burst” technology, which can transmit signals hundreds of miles by reflecting radio waves off small meteor trails the size of dust particles as they burn up in the upper atmosphere. The licensees also asserted they planned to use the Part 22 licenses in connection with licenses held in other radio services to “support technologies and systems for providing, for example, nationwide delivery of Network Real Time Kinematic (NRTK) GPS/Global Navigation Satellite System (GNSS) correction data for high occupancy location (HALO)/precise Position, Navigation and Timing (pPNT).”

In denying the extension requests, the commission noted that no construction or even material progress toward construction had been completed by the deadline. The FCC found that it was the licensees’ own voluntary business decisions that caused them not to construct by the deadline. The commission said it has consistently held that voluntary business decisions are not circumstances that warrant a basis for regulatory relief. As a result, the commission ruled the 2,132 licenses were terminated as of the November 2015 construction deadline. The FCC will likely re-auction these licenses in the next few years.

The FCC has become noticeably less lenient regarding construction requirements for Part 22 auctioned licenses. In the past, the FCC would accept bare statements from license holders that they had constructed sites sufficient to meet the one-third or two-thirds population coverage requirements. It was not unheard of to see a Part 22 construction showing consisting of a single sentence.

The commission’s current practice is to require a significant demonstration of the service being provided. The FCC requires licensees to file contour maps depicting their coverage areas. Substantial service showings must include a description of the service being provided. Licensees must often file engineering information showing that the radios they use are capable of receiving service to the areas they claim they cover. Licensees that make no progress toward construction are likely to have their licenses terminated. Licensees that are making progress, but may not quite meet the FCC’s benchmarks, may be granted brief extensions to complete buildouts.

Hopefully the FCC’s new policies will free up spectrum warehoused by speculators. On the other hand, bona fide licensees should plan for construction filings well in advance of coverage deadlines or otherwise risk losing valuable licenses. The commission is granting little leeway, and licensees should know their obligations and take the commission’s construction requirements into account early in the system design and deployment process.  

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Greg Kunkle is a partner in the law firm of Keller and Heckman, practicing in telecommunications with an emphasis on assisting critical infrastructure clients and trade associations with legal and regulatory matters before the FCC. He is a member of the Federal Communications Bar Association. 

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