Subject: [NEXTEL-1] James A. Kay Jr., Mr.Finder’s Preference Denied Again

From: [email-masked]
Date: Fri, 12 Dec 2003 16:45:49 -0500

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

In the Matter of

Request of James A. Kay Jr.
Seeking a Finder’s Preference
 for Call Sign WNPA325

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File No. 93F627

ORDER

    Adopted:  December 8, 2003 Released: December 11, 2003

By the Commission:

I.  INTRODUCTION

1. We have before us an Application for Review filed by James A. Kay Jr. (“Kay”)
on September 30, 2002.  Kay seeks Commission review of a decision by the
Wireless Telecommunications Bureau’s (“Bureau”) Commercial Wireless Division,
Policy and Rules Branch (“Branch”), which denied Kay’s petition for
reconsideration of a decision by the Bureau’s former Office of Operations
denying a finder’s preference request against SMR station WNPA325, licensed to
William F. Kelsey d/b/a AVCOM Company (“AVCOM”).   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.  The Commission
discontinued the finder’s preference program for the 800 MHz service in 1995
after transitioning from site-by-site licensing to geographic area licensing.
3. On October 11, 1993, Kay filed a finder’s preference request against AVCOM’s
station WNPA325, licensed to operate on 854.7125 MHz in Banning, California.
Kay alleged that AVCOM violated: (i) rule section 90.157(a), which provides that
a license cancels automatically upon permanent discontinuance of operations; and
(ii) rule section 90.157(b), which provides that any station that has not
operated for one year or more is considered to have permanently discontinued
service.   In support of his Finder’s Preference Request, Kay provided
Commission licensing records that reflected no authorized end users associated
with target station WNPA325.  Kay alleged that station WNPA325 did not operate
during the one year period following the departure of AVCOM’s last authorized
end user, Cardin Asphalt, Inc. (“Cardin”), from AVCOM’s SMR system, thereby
eliminating required “loading” on the channel.   Kay also noted that AVCOM
failed to pursue an alternative option for system loading, i.e. modifying its
SMR license to directly add control or mobile units to the system.   As a
result, Kay argued that station WNPA325 cancelled automatically through
permanent discontinuation of operations because of a lack of authorized users
for a period of one year or more, as Commission rules require associated
licensed units on the system to be deemed “operational.”

4. At the time Kay filed the Finder’s Preference Request, the licensing status
of AVCOM’s SMR station WNPA325 had been under review by Commission staff for
approximately eight months in connection with the alleged fraudulent assignment
of Cardin’s end user license from Cardin to L.A. Scrap Iron & Metal Corporation
(“L.A. Scrap”), a customer of Kay.   That review was initiated by the filing of
Petitions to Deny by AVCOM on February 4, 1993,  and Cardin on March 29, 1993
(collectively, Petitions to Deny). The Petitions to Deny were filed in response
to an Application for Modification filed by Kay,  which sought to add 854.7125
MHz to Kay’s trunked SMR station WNJL306.  The Petitions to Deny alleged that
the fraudulent assignment of Cardin’s end user license to L.A. Scrap caused the
applicable frequency coordinator, Industrial Telecommunications Association
(ITA), to mistakenly certify that station WNPA325 was not loaded and therefore
non-operational.  This action allowed Kay to seek modification to add 854.7125
MHz to his trunked SMR station for exclusive use without the prior written
concurrence of AVCOM, the co-channel licensee, which would otherwise have been
required under Commission rules.   AVCOM and Cardin requested that the
Commission invalidate the alleged fraudulent assignment and return the end user
license to Cardin.

5. Under the finder’s preference program, finder’s were required to present
prima facie evidence of a violation of the Commission’s construction and
operational rules, and the Commission placed certain restrictions on the
timeliness of finder’s preference requests.   For example, a preference request
based on a construction or placed-in-operation violation filed less than 180
days after the construction deadline of the target license was considered
untimely.   Further, former rule 90.173(k)(2) provided that “[a] request
targeting a license under Commission review or investigation is also considered
untimely.”    On October 5, 1995, the Office of Operations dismissed Kay’s
Finder’s Preference Request, finding that no preference was available for the
license associated with station WNPA325 because “the target license was the
subject of a Commission compliance action at the time of the filing of the
finder’s preference request.”   On October 12, 1995, the Office of Operations
determined that the assignment of Cardin’s end user license was unauthorized and
reinstated Cardin’s end user license.

6. On November 6, 1995, Kay filed a Petition for Reconsideration of the
dismissal of his Finder’s Preference Request, arguing, inter alia, that there
was no “compliance action” pending against station WNPA325 at the time he filed
his Finder’s Preference Request, and that the Bureau must reconsider its
dismissal and reinstate his Finder’s Preference Request.   On November 20, 1995,
Kay filed a separate Petition for Reconsideration of the former Office of
Operations’ decision to reinstate and renew AVCOM’s license under call sign
WNPA325 and deny the Kay Modification Application.   On August 30, 2002, the
Branch denied Kay’s request for reconsideration of the dismissal of his Finder’s
Preference Request, finding that: (i) a finder’s preference was not available
under former Commission rule 90.173(k)(2) where a license was the subject of
normal compliance activities or Commission investigation or review; and (ii) Kay
failed to provide the Commission with new information regarding that operational
status of the target license.   On September 30, 2002, Kay filed the instant
Application for Review.

III.  DISCUSSION

7. We deny Kay’s Application for Review.  We agree with the Office of
Operation’s and Branch’s determination that Kay’s Finder’s Preference Request
was untimely under former rule section 90.173(k)(2).   Kay argues that former
section 90.173(k)(2) does not apply because the Commission’s investigation did
not constitute a “compliance” action affecting the “validity” of station
WNPA325.   We note that the decision here does not turn on whether the Office of
Operations properly characterized the status of the Commission’s investigation
of the alleged unauthorized assignment of the end user license from Cardin to
L.A. Scrap as a “compliance action.”  Former rule section 90.173(k)(2)   applies
in this case, because Kay’s Finder’s Preference Request targeted a station with
a licensing status that was the subject of an existing Commission review or
investigation.  Former section 90.173(k)(2) provided, without limitation, that a
finder’s preference is not available if the finder’s request is “related to any
case scheduled for review as a part of normal compliance activities” or to “any
case under Commission review or investigation.”   Here, the case under
Commission review and investigation arose from the filing of the Petitions to
Deny alleging unauthorized assignment of the sole end user license of the SMR
system Kay targeted.

8. Kay argues that the review of the Cardin assignment was “peripheral” to call
sign WNPA325, and that former rule 90.173 (k)(2) required the Commission
investigation to be directly related to the specific violations complained of in
the Finder’s Preference Request.   However, there is no authority for such a
narrow reading of the rule.  Moreover, we disagree that the existing
investigation into the alleged unauthorized assignment of Cardin’s license was
“peripheral” to the status of call sign WNPA325.  In fact, the alleged
unauthorized assignment of Cardin’s license provided the direct basis for Kay’s
Finder’s Preference Request alleging that station WNPA325 permanently
discontinued operations in violation of the Commission’s rules.  Were it not for
the assignment of the last end user from AVCOM’s SMR system, Kay could not have
argued in his Finder’s Preference Request that AVCOM permanently discontinued
operations as a result of a lack of authorized users.  We recognize that Kay has
sought reconsideration of the former Office of Operations’ determination that
the assignment of Cardin’s end user license was fraudulent.  Notwithstanding the
outcome of that proceeding, Kay’s finder’s preference request was filed eight
months after the initiation of a Commission review or investigation surrounding
issues that directly impacted the licensing status of target station WNPA325.
Accordingly, Kay’s finder’s preference request is untimely under former section
90.173(k)(2).

9. Kay further argues that his Finder’s Preference Request should be granted
because he furnished the information leading to the investigation and that
denying his request would create a “disincentive” to report such violations to
the Commission.  Kay states that “the Commission never intended former section
90.173(k)(2) to be used to disqualify a finder due to information that he
himself presented to the Commission.”   The fact that the Commission review or
investigation arose from Kay’s separate attempt to obtain the frequency
associated with call sign WNPA325 through the filing of a modification
application does not invalidate rule 90.173(k)(2), nor its application to a
filing involving an allegation of permanent discontinuance of operations.
Moreover, while the Commission recognized that imposing limitations on the
availability of a finder’s preference might prove a “disincentive” to some
filers, the Commission has previously stated “it was never [the Commission’s]
intention to offer finder’s preference on an unrestricted basis.”

10. Finally, we find no merit to Kay’s general allegations that delay in the
processing of Kay’s Finder’s Preference Request and Petition for Reconsideration
is the result of staff bias.   Kay has presented no evidence that any delay in
deciding this matter was the result of bias or improper motive on behalf of the
Bureau.

IV.  ORDERING CLAUSE

 11. ACCORDINGLY, IT IS ORDERED that, pursuant to sections 4(i), 5(c)(5), and
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
155(c)(5), 303(r), and section 1.115 of the Commission’s rules, 47 C.F.R. §
1.115, the Application for Review filed by James A. Kay, Jr. on September 30,
2002, IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch
Secretary

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