7 FCC Red No. 2 Federal Communications Commission Record DA 92-54 Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of Independent Telcos of St. Croix County For Minneapolis/St. Paul MSA General Partnership File No. 01279-CL-MP-88 For authority to construct a cellular system in the Domestic Public Cellular Radio Telecommunications Service on Frequency Block B, for St. Croix County in Market 15, Minneapolis/St. Paul MSA Minneapolis SMSA Limited Partnership File No. 01038-CL-MP-88 For authority to modify and add facilities and expand its Cellular Geographic Service Area for Station KNKA 219 in the Domestic Public Cellular Radio Telecommunications Service on Frequency Block B in Market 15, Minneapolis/St. Paul MSA MEMORANDUM OPINION AND ORDER Adopted: January 9, 1992; Released: January 21, 1992 By the Chief, Common Carrier Bureau: I. INTRODUCTION 1. Before the Common Carrier Bureau are two Peti­ tions for Reconsideration filed by Independent Telcos of St. Croix County for Minneapolis/St. Paul MSA General Partnership (Independent). The first contests the dismissal of Independent's captioned application by the Mobile Ser­ vices Division (MSD). 1 The second seeks reconsideration of the MSD's grant of the captioned application of Min­ neapolis SMSA Limited Partnership (Minneapolis LP), the wireline licensee for the Minneapolis-St. Paul, Min­ nesota/Wisconsin MSA (Minneapolis MSA). For the rea­ sons set forth below, we affirm the MSD's actions on the captioned applications. II. BACKGROUND 2. On April 19, 1988, prior to the expiration of the five year "fill-in" period for the Minneapolis MSA. Minneapo­ lis LP filed its "fill-in" application to expand its CGSA within the Minneapolis MSA.2 On May 26, 1988, within sixty days of the public notice listing that application as acceptable for filing. Independent filed its application for a cellular system within the same part of the Minneapolis MSA proposed to be served by Minneapolis LP. 3 On August 9, 1988, the MSD dismissed Independent's ap­ plication as defective pursuant to Section 22.31(a)(l)(i), 515 because it was filed prior to the end of the "fill-in" period allowed for Minneapolis LP.4 On September 19, 1988, Independent filed its first petition, contending that the dismissal was in error. Subsequently. on March 28, 1989, the MSD granted the Minneapolis LP application.5 On April 25, 1989, Independent filed the second petition, requesting that the grant of Minneapolis LP's application be set aside pending action on the first petition, or, in the alternative, conditioned upon a final order of the Com­ mission and judicial review of the dismissal of Indepen­ dent's application. Both parties filed responsive pleadings. 3. For the top 30 MSAs, including the Minneapolis MSA, the Commission announced that applicants must file their initial cellular applications by a date certain, viz., June 7, 1982. Cellular Communications Systems, 89 FCC 2d 58, 87-94, further modified, 90 FCC 2d 571 ( 1982), appeal dismissed sub nom. United States v. FCC, No. 82-1526 (D.C. Cir. 1983). Neither Independent nor any of its individual wireline partners filed an initial MSA application by that date. The Commission reiterated this date certain filing policy in the Cellular Lottery Rule Making, 98 F.C.C. 2d 175, 203-04 & n.81 (1984), aff'd, Cellular Radio Service (Lottery Selection), 58 Rad. Reg. 2d (P&F) 677, 688 (1985). However, pursuant to Sections 22.903(d) and 22.913(a) of the rules. cellular permittees or licensees were allowed to modify existing authoriza­ tions by filing to expand their initial CGSAs, but the Commission stated that it would not permit mutually exclusive applications to be filed against those "fill-in" applications during the initial nationwide licensing pe­ riod. Cellular Lottery Rule Making, 98 F.C.C. 2d at 204 n.81. 4. Subsequently, the Commission dismissed as "untime­ ly filed" a competing application that had been filed by La Star Cellular Telephone, Inc. (La Star) within the sixty day period provided by the Commission's cut-off rule, Section 22.3 l(b ). against the "fill-in" application of the initial wireline licensee in the New Orleans MSA. 0 See New Orleans CGSA. Inc .. FCC 85-209 (released May 6, 1985). The Commission's dismissal of the La Star applica­ tion was set aside on appeal. Maxcell Telecom Plus, Inc. v. FCC (Maxcell), 815 F.2d 1551 (D.C. Cir. 1987). The court determined that the Commission ˇs orders prior to the 1984 order in Cellular Lottery Rule Making, 98 F.C.C. 2d at 204 n.81, had not provided adequate notice to La Star that applications filed after June 7, 1982 in response to fill-in applications would be deemed "untimely filed." Maxcell, 815 F.2d at 1556-1559. The court ordered re­ instatement of La Star's application nunc pro tune. Id. 5. Pending the appeal by La Star, the Commission initiated a notice and comment Rule Making proceeding to determine whether it should allow non-licensees to file applications competing with licensees' fill-in applications. See Further Notice of Proposed Rule Making. 1 FCC Red 499 (1986) (NPRM). Subsequent to the ruling in Maxcell, the Commission adopted Section 22.3l(a)(1 )(i) of the rules, providing for a five year period protecting the "fill-in" applications of licensees from competing applica­ tions. Second Report and Order, CC Docket No. 85-388, 2 FCC Red 2306 ( 1987), modified in part, Order on Reconsi­ deration of Second Report and Order (Reconsideration of Second Report and Order), 4 FCC Red 5377 (1989), peti­ tion for review pending, Amery Telephone Company, et. al. v. FCC, No. 89-1524 (D.C. Cir., filed Sept. 1, 1989). DA 92-54 Federal Communications Commission Record 7 FCC Red No. 2 III. DISCUSSION 6. In its first petition, Independent argues that this case is like La Star's, because it, too, filed an application to compete with the "fill-in" application of an existing li­ censee. Independent asserts that the court in Maxcell found that because the Commission had not announced prior to the date certain for filing initial MSA applica­ tions its "fill-in" policy prohibiting competing applica­ tions, La Star did not receive sufficient notice that it might lose the ability to choose whether to file an initial MSA application prior to the date certain or a competing application later. See Maxcell, 815 F.2d at 1560. Indepen­ dent says that it is in the same position as La Star, and that it did not receive sufficient notice either. It argues that the MSD's dismissal of its application is contrary to what it perceives as the Maxcell holding, that the date certain cut-off policy could not be applied to an applicant filing a competing application. Independent further con­ tends that the Commission's adoption of the five year period in Section 22.31(a)(l)(i) in a Rule Making pro­ ceeding, Second Report and Order, 2 FCC Red 2306, did no more to give Independent meaningful notice of the choice it would have to make prior to the date certain for filing initial applications than did the 1984 Cellular Lot­ tery Rule Making, 98 F.C.C. 2d at 204 n.81. 7. Minneapolis LP responds that Independent, unlike La Star. no longer had a basis to file its application, because Independent filed its competing application after Section 22.31(a) was amended. The Maxcell decision. ar­ gues Minneapolis LP, did not curtail the discretion that the Commission has to change its application filing rules and apply those rules prospectively. Multi-State Commu­ nications, Inc. v. FCC, (Multi-State) 728 F. 2d 1519 (D.C. Cir. 1984), cert. denied, 469 U.S. 1017 (1984). 8. The Commission has already addressed contentions, such as those Independent makes, of insufficient notice of the change in filing procedures to parties that seek to file competing applications. Reconsideration of Second Report and Order. 4 FCC Red at 5378. The Commission stated that Maxcell held only that the Commission had not given adequate notice of the date certain for filing cut-off proce­ dure and that an application could not be dismissed as untimely filed for failure to comply with that procedure. Id. The Commission rejected the argument that Maxcell requires it to accept applications that might be filed subse­ quent to the Rule Making proceeding to compete with an existing licensee's "fill-in" application. Id. 9. With regard to Independent, which filed its compet­ ing application subsequent to the Rule Making proceed­ ing, the holding in Maxcell is inapposite. The court in Maxcell did not address the question of whether, through a notice and comment Rule Making proceeding, the Com­ mission could adopt filing requirements that would ren­ der certain prospective applicants ineligible to apply. See Reconsideration of Second Report and Order, 4 FCC Red at 5378. The Commission's authority to take such action is well-established. See Storer Broadcasting Co. v. FCC (Storer), 351 U.S. 192 (1956). Because Section 22.31(a)(l)(i) was adopted pursuant to a notice and com­ ment Rule Making, there was explicit notice of the im­ pact of the rule on potential MSA applicants. Thus, the rule could apply prospectively, even to applicants who had not filed an initial application in the top 90 MSAs and would be frustrated in their attempts to file compet­ ing applications against "fill-in" applications by existing licensees. See Reconsideration of Second Report and Order, 516 4 FCC Red at 5378, citing Multi-State, 728 F.2d 1519.7 We find that Independent falls within this category. Indepen­ dent had not filed an initial application for the Min­ neapolis MSA (see supra, para. 3) and only filed a competing application against the fill-in application for the Minneapolis MSA well after the effective date of Section 22.31(a)(l)(i). 8 Therefore, the MSD properly ap­ plied this rule in rejecting Independent's application. 10. In view of the foregoing, we need address only briefly Independent's second petition. Independent sug­ gests that the grant of Minneapolis LP's application will prejudice the outcome of its first petition and subsequent review. Our determination herein rejecting reinstatement of Independent's application moots the second petition. See para. 2, supra. IV. ORDERING CLAUSES 11. Accordingly, the Petition for Reconsideration filed by Independent Telcos of St. Croix County for Minneapo­ lis/St. Paul MSA General Partnership of the dismissal of its application, File No. 01279-CL-MP-88, IS HEREBY DENIED and the DISMISSAL of the application by the Mobile Services Division IS AFFIRMED. 12. IT IS FURTHER ORDERED, That the Petition for Reconsideration filed by Independent Telcos of St. Croix County for Minneapolis/St. Paul MSA General Partner­ ship of the grant of the application of Minneapolis SMSA Limited Partnership, File No. 01038-CL-MP-88, IS DIS­ MISSED AS MOOT. FEDERAL COMMUNICATIONS COMMISSION Richard M. Firestone, Chief, Common Carrier Bureau FOOTNOTES 1 At the time the applications in this case were filed, Section 22.31 (a)( l)(i) provided that " ... applications by other than licensees or permittees for a ... Metropolitan Statistical Area (MSA) to serve unserved areas outside the presently authorized CGSA [Cellular Geographic Service Area] but within the MSA are prohibited from being filed and will not be considered as mutually exclusive with a licensee's or permittee's application filed under 22.903(d) herein until five years from the date of the first construction permit granted in that MSA." 47 C.F.R. § 22.31 (a)(l)(i). 2 The Commission granted Minneapolis LP's initial wireline construction authorization on June 6, 1983. See Advanced Mo­ bile Phone Service, Inc. et al., Mimeo No. 4567 (Com.Car.Bur. 1983). A "fill-in" application is an application filed by the initial licensee or grantee, after receiving initial construction authori­ zation, to serve an area within the MSA but outside the au­ thorized CGSA. This area is termed an "unserved area". as referred to in Section 22.3 l(a)( l)(i). 3 See Public Notice, Mimeo 2775 (released April 29, 1988). 7 FCC Red No. 2 Federal Communications Commission Record 4 The MSD initially granted Independent's application. See Public Notice, Mimeo 4059 (released August 8, 1988). The MSD found the grant in error and rescinded it. See Letter from Chief, MSD, to Robert M. Jackson, counsel for Independent (August 9, 1988). 5 See Public Notice, Report No. CL-89-117 (released March 28, 1989). 6 Pursuant to Section 22.3 l(b), the cut-off period for filing a conflicting application is sixty days after the date of public notice announcing the first-filed application as acceptable for filing, or one business day before final action by the Commis­ sion on the first application. See 47 C.F.R. §22.3l(b). 7 Moreover, the Commission fully explained the change in the eligibility criteria effectuated by the rule, as required by Storer, 351 U.S. at 205. See Reconsideration of Second Report and Order, 4 FCC Red at 5378-79. Further, Independent's contention that the dismissal of its application is inconsistent with Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945) overlooks that the court in Maxcell noted that Ashbacker does not apply to prospective applicants. See Maxcell, 815 F.2d at 1561, citing Reuters, Ltd. v. FCC, 781 F.2d 946, 951 (D.C. Cir. 1986). 8 Amended Section 22.31 has been applied as effective on June 5, 1987. See Reconsideration of Second Report and Order, 4 FCC Red at 5382 n.16. 517 DA 92-54