“Automatic Termination of Licenses”
Liz Sachs - Partner, Lucas Nace Gutierrez & Sachs and Regulatory
Counsel, EWA
Is the coast clear? No hurricanes, tornadoes, forest fires or other natural disasters in sight that could derail once again the FCC’s most recent effort to (1) maintain the accuracy of the ULS database and/or (2) assume its meter maid role and collect fines (a/k/a waiver fees) for late-filed construction notifications? In either case, it is apparent that this Commission initiative has confused a number of land mobile licensees and could use some clarification.
The Commission issued a Public Notice on December 20, 2005 (perhaps not an optimal date for catching the public’s eye) announcing that February 1, 2006 would be the “Implementation Date of the Automatic Feature in its Universal Licensing System That Identifies Unconstructed Stations Resulting in Automatic Termination of Licenses.” Even in the pre-holiday, present-buying, party-going frenzy, the last four words in that Notice did succeed in attracting attention – “Automatic Termination of Licenses.” The Notice advises wireless licensees, including those in the Part 90 services, that the failure to submit a timely construction notification for a station that has a construction deadline will trigger a notification to the licensee that the authorization has terminated automatically and a Public Notice announcing the same. It also urges licensees to check whether any stations have outstanding obligations and, if so, to submit late-filed notifications with appropriate waiver requests.
Of course, every Part 90 license issued over the last 50 years or so has had a construction deadline. Therefore, the Public Notice has prompted some licensees to panic, for fear that they need to file construction notifications (and waiver requests at $155 per call sign because the notifications are “late-filed”) for systems that may have been on the air for decades. The waiver fee can quickly add up to four figures for large systems, to say nothing of the hassle of figuring out exactly when these stations were placed in operation. However, there are a few key factors that were not spelled out in the Notice that should give most Part 90 licensees a sense of relief.
First, and most important, the construction notification obligation applies only to construction deadlines that arose after the service was converted to ULS, typically in the 2000-2001 timeframe. Prior to ULS, Part 90 licensees did not have an affirmative obligation to notify the FCC when a station was constructed. You had to build the station within the required time period, but there was no process for notifying the FCC when you had done so. There was a rule requiring licensees to request cancellation of an authorization for an unbuilt station, and the FCC simply assumed that all licenses that weren’t returned for cancellation had been constructed, except in the rare instance when a third party raised an issue about timely build-out.
Of course, FCC staff involved in licensing knew that very few parties actually notified the Commission when they didn’t construct. Many didn’t even know they were supposed to, assuming they realized that they held an FCC license at all, but that failure was viewed generally as a “no harm, no foul” violation. When all channels were shared, the license for an unbuilt station didn’t necessarily preclude another party from being authorized to use the same channel in the same general area.
The situation changed with the allocation of the 800/900 MHz bands when the Part 90 services, for the first time, contained a promise of channel exclusivity within a geographic area, provided certain criteria were satisfied. Realizing the importance of knowing the construction status of these stations, the FCC began to send what became known as “800A” letters to SMR licensees, and later to Business and Industrial/Land Transportation licensees, requiring certification as to the date, location and extent of system construction. There still was no rule requiring a licensee to affirmatively notify the Commission about its operational status, but a failure to respond to an 800A letter could result in license cancellation.
It was only when the Part 90 services were converted to ULS that the general Commission construction notification obligation became applicable to licensees in those services. Unfortunately, with all the changes involved in moving to the then not-so-wonderful ULS world of electronic filings, the requirement to submit a construction notification wasn’t one that was highlighted by the FCC or clearly understood by most licensees. In fact, it was more than a year after conversion before the FCC began to send Part 90 licensees notifications about their upcoming construction deadlines. Not surprisingly, a significant number of licensees whose construction deadlines arose post-ULS, but pre-automatic FCC notification, failed to submit their construction notifications.
The good news is that it is easy to tell whether a particular license or even individual channels associated with an authorization trigger an affirmative obligation to notify the FCC about the construction status. The FCC actually provides that information right on the face of the license itself. Each authorization now includes a column to the far right labeled “Construct Deadline Date.” If there is a date in this column, the FCC believes that the deadline arose post-ULS and requires notification. If the column is empty, the deadlines are presumed to have passed before conversion to ULS and no filing is required. (The multi-year PLMR audit was intended to capture the construction status of those channels.) You then can determine whether the FCC has been notified properly by drilling down on each frequency in ULS and seeing whether there is a date on which the notification was received. If that box is empty, you should assume that the notification was not received and a late-filed submission should be made along with a waiver request. Be sure to submit notifications for both base and mobile transmit frequencies since they are identified separately.
The even better news is that the FCC already has announced one more safety valve before a license is actually terminated when no construction notification has been received. In a Public Notice dated January 21, 2005 (pre-Katrina and all the other storms that caused the FCC to delay activating this automatic termination feature in ULS), the Commission clarified that there would be a 30-day petition for reconsideration period once a Public Notice was issued identifying automatic license terminations. Licensees whose stations were timely constructed and which have remained in operation can provide the Commission with documentation confirming the active status of the stations even at that point and preserve the license. Once that 30-day period passes, however, the license status will be changed from “active” to “terminated” and the spectrum is fair game for other parties under whatever channel assignment rules are applicable for the particular service.
The industry is still adjusting to the advantages and disadvantages of operating in the electronic, highly automatic ULS world. When you need spectrum to expand an existing system or deploy a new one, you applaud processes that make seemingly unused spectrum available for reassignment. Of course, if you or your customers just haven’t gotten around to notifying the FCC about your construction status, it can be a somewhat scary, a bit costly, and a modestly time-consuming process to request waiver relief and ensure that the license remains valid. You have less than a month before the FCC will start issuing automatic cancellation letters. Don’t wait to receive one before getting your licensing house in order.
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