Editorial Did Nextel receive special treatment with ESMR license grants?
Attorney Dennis C. Brown of the Washington, DC-based law firm of Brown and Schwaninger has requested the FCC to cancel certain enhanced specialized mobile radio (ESMR) licenses held by Nextel Communications, McLean, VA, and to dismiss the applications on which the license grants were based. Although the law firm represents many small businesses that compete with Nextel, no clients were named in the petition filed June 25, 1996, by Brown. Robert H. Schwaninger Jr., Brown’s partner, is our regulatory consultant and columnist.
If the relief sought by the petition is granted, it is possible that licenses for thousand of channels held by Nextel would be cancelled, perhaps freeing them for use by other SMR businesses. Nextel has not constructed repeater stations for a large portion of the channels for which it holds licenses, some of which would be affected by Brown’s petition.
Brown examined a random selection of the large number of ESMR license applications granted on Oct. 31, 1995, to Nextel, its subsidiaries and companies that since have merged with Nextel. His analysis finds that at least 71% of the sampled applications are defective on their faces and should not have been granted.
Brown requested 42 applications; the FCC supplied 35, giving no reason for not supplying six of the seven that were omitted; Brown found 25 of the 35 applications were defective, a rate of 71%. The average number of channels per application is 150. An estimated 36,000 frequencies are represented on the 600 pages that list licenses granted to Nextel, its subsidiaries and acquired companies on Oct. 31, 1995. If the deficiency rate of 71% affects them all, then about 26,000 channels would be affected.
Application defects Here are some of the defects that Brown found: 1. Required engineering documentation and evidence of frequency coordination had not been filed.
2. Applications for which a waiver would have been required but for which no waiver was requested and for which no fee had been paid at the time of the filing of a waiver request.
3. Applications for which no waiver was requested, but for which a waiver was granted without the payment of a waiver request filing fee.
4. Applications that did not demonstrate compliance with the interference criteria that were in effect at the time that the applications were processed.
5. An application that should have been barred by the freeze on filing of applications.
6. An application for which the location of the proposed station could not be ascertained within the application.
For any applications that are defective, there is ample precedent to indicate that the FCC should cancel the corresponding licenses and dismiss the applications, thereby giving Nextel no opportunity to cure the defects. That is the relief that Brown seeks.
Can’t have it both ways One important point is that, one way or another, a fee should have been paid. Either an application has frequency coordination and the coordination fee is paid, or an application includes a waiver request and a waiver fee is paid. Apparently, neither fee was paid with these applications.
It is uncertain exactly how fees would have been charged for these applications, and exactly what proportion of the applications for licenses for the 36,000 channels were submitted without proper fees. The following estimates use the 71% proportion, or 26,000 channels, as an example.
If the FCC had applied its $105 waiver fee to each license for an average of 150 frequencies each, the fees for 26,000 channels would have amounted to about $18,000. If it had applied the fee to each channel, the fees would have reached about $2.7 million. The FCC usually is a real stickler for dismissing applications that are not accompanied by the necessary fees. Why were these applications processed?
Frequency coordinators At least two frequency coordinators, the Personal Communications Industry Association (PCIA) and the Industrial Telecommunications Association (ITA), offer coordination services for ESMR applications. At the minimum $17 per frequency per site charged by one particular frequency coordinator, PCIA, the coordination fee would amount to $442,000 for 26,000 frequencies. At the maximum $150 per frequency per site charged by PCIA and ITA, the fee would be $3.9 million. Were frequency coordinators deprived of revenues to which they otherwise would have been entitled?
ESMR channels are given a value of $50,000 each by business brokers. Using that figure, the 26,000 channels that Brown’s analysis indicates could be subject to license cancellation are worth $1.3 billion.
Imagine that you operate a small SMR business, and you applied for some additional frequencies.
If your application required a waiver, but you didn’t pay the waiver fee, would it be granted?
If your application required frequency coordination, but you didn’t submit evidence of such coordination, would it be granted?
If your application required engineering exhibits to support proposed short-spacing to other radio communications facilities, but you didn’t include such exhibits, would it be granted?
If these applications for thousands of channels required waiver requests, frequency coordination or engineering exhibits, not to mention the necessary fees, and they were submitted without them, why were they granted? –Don Bishop