When the Federal Communications Commission began the “finder’s preference” program late in 1991, it was hailed by the industry as a win-win situation. The FCC would receive help in the enforcement of its rules and the members of the industry would receive badly needed frequencies as payment for their assistance in identifying rules violations.
Today, FCC officials are proud of the program and its successes in spectrum management. And they are gearing up to deal with the continuing flow of new finder’s preference applications filed with the commission. However, some in the industry are not as pleased with how finder’s preference has worked out, and the future of the program is uncertain.
The finder’s preference program provides a formal mechanism whereby eligible entities can provide the FCC with evidence of violations of construction or placed-in-operation rules by existing private land mobile licensees on exclusive channels.
In cases where the FCC recovered the channels as a result of information provided by a “finder,” the commission would grant the “finder” a license to operate on the channels.
The finder’s preference claim must be accompanied by a fee of $125 per channel. Public-safety entities are exempt from the fee. If the preference is granted, the finder has 90 days to file an acceptable application with the standard application fees.
As originally conceived, the finder’s preference program operated in the public interest. The commission envisioned a program that would “expedite reassignment of channels that are not being utilized effectively.” As a spectrum management tool, finder’s preference would promote “reassignment of channels to persons who will use them productively,” according to the FCC.
40 new claims per month
FCC staff attorney Anne Marie Wypijewski is pleased with the results of the finder’s preference program. “This program has been very successful,” she said. “Those frequencies would not otherwise have been available to the finders. The channels are usually in wait-listed areas.”
As of June 28th, the FCC has awarded 272 finder’s preferences and denied 209 requests. The finder’s preference claims are processed by Wypijewski and William Kellett, also an FCC staff attorney.
The popularity of this program can be seen in the large numbers of people who are traveling around the country in search of channels for which they can file a finder’s preference.
In fact, tower owners report that potential “finders” interview them on a regular basis to see if any of the antennas are not in use.
It all began with the first claim on Jan. 21, 1992, and, today, the FCC has seen a total of 1,210 finder’s preference claims. An average of 40 new claims come into the FCC’s Licensing Division every month creating a backlog. As of June 28th, there were 483 cases pending action with 31 duplicates and 68 requests for reconsideration. As of July 31, there were 22 pending claims in the 900 MHz band. Some have been withdrawn.
The backlog has created delays that have tested the tempers of some. “The backlog causes delays that allow the target to cover their tracks. And then you never get a preference grant,” said Samuel Klein, Cellular Design Corp., Deer Park, N.Y. “Unless these things can be done in a timely manner, this program will not work.”
Because of the backlog and the rapid influx of new cases, the commission has just brought in three law students from Dickinson School of Law, Carlisle, Pa., as interns on a volunteer basis to help process the less difficult cases. Their names are Joel Cheskis, Albert Griffith and Jason Beccaris. They will be supervised by Wypijewski and Kellett.
Prima facie evidence
To prove a finder’s preference claim, one must provide prima facie evidence of a rules violation. The reasons that finder’s preferences are granted, according to Wypijewski, include failure to construct in time, failure to operate in time and failure to operate for a full year. The FCC as of June 5 has changed the definition of “failure to operate.” Now it applies to licensees who do not operate their systems for 90 days, as opposed to a one-year span. But a finder also may file a claim if the “target” licensee’s station is not constructed on the same coordinates as those that appear on the license.
“A lot of these cases are fairly cut-and-dried,” said Wypijewski. “Often, we can’t locate the target licensee. It’s obvious that they are not using the channels.”
Wypijewski noted that the finder’s preference program was not set up to deal with de minimis variations in authorized coordinates. “The whole idea [of finder’s preference] is to deal with conclusive evidence in an expeditious manner,” Wypijewski said. “If a licensee is inadvertantly constructed a short distance from its authorized location, it would be too harsh and unfair to take the frequencies … that would not be in the public interest.”
In one case, Lawrence E. Vaughn Jr. urged the FCC to reclaim channels from a station licensed to Ross Shade Trust, which was constructed approximately one-half mile from its licensed coordinates. The FCC denied Vaughn’s request, saying that it would not award a finder’s preference in cases where the authorized coordinates are less than one mile from the actual coordinates.
Finder’s preference misused
Some have taken advantage of the finder’s preference rules, however. They have used minor discrepancies between the coordinates reflected on a station license and the site at which the station is actually constructed to file finder’s preference claims against legitimate, operating specialized mobile radio companies. To address these situations, the Council of Independent Communication Suppliers recently petitioned the FCC to expand the one-mile standard established in the Vaughn Order to two miles.
“The program is no longer simply a mechanism for ensuring that unused channels are put to good use,” CICS wrote in its petition. “Rather, on many occasions, `finders’ have used the established procedures to harass licensees and to capitalize on ministerial mistakes that occurred during the application process.”
Richard T. (Tim) Jones, Metropolitan Communications, Carrollton, Ga., said, “Sometimes, mistakes are made in constructing a system. But that does not justify someone trying to steal the frequencies.” Finder’s preference should primarily be for unconstructed systems, he added.
There are a number of reasons why an antenna site location would not agree with the coordinates filed with the FCC. An applicant may misread a map, or make a `typo’ on the application, or rely on faulty information supplied by the previous owner of the system.
Klein noted the difficulty of the FCC’s job. “If you have an operator that is licensed properly and is operating in a proper manner and has made a minor mistake, he should be given the opportunity to cure it. It is hard, however, to discern what is a mistake and what is a purposeful oversight.”
An uncertain future
Since 1991, the finder’s preference program has been encountering a changing land mobile regulatory environment. The FCC’s freeze of SMR channels in the 800 MHz band, begun in August 1994, has stymied the introduction of new systems, but it has not proven to be an impediment to finder’s preference. An exception to the freeze has been made if the finder applies for a license having the same footprint or service area as the original licensee. The finder may not expand the service area or move the site.
Last year, the FCC proposed in a Further Notice of Proposed Rule Making to auction off geographic licenses in the 800 MHz band. Also, 900 MHz SMR frequencies will be sold this fall in the form of geographic licenses. These plans would appear to spell trouble for the finder’s preference program, which is predicated on giving spectrum to operators. Finder’s preference is also based on a site-by-site licensing regimen, not geographic licenses.
“In reference to the future of the finder’s preference p
rogram, much of it involves the 800 channels that the FCC has proposed to auction in an overlay fashion. With respect to those channels, the two are not compatible,” Kellett said. “With respect to the rest of the program, it is hard to say where the program will go.”
Some have said a similar finder’s preference-type program should be implemented in the fixed, point-to-point microwave channels, Kellett added.
One industry source said he has heard from a number of different people in the industry that the finder’s preference program is going to be discontinued. “[The FCC] wants to sell spectrum … They want to auction it off,” Jones said. “If you find it, they’ll put it under the gavel.”
J. Sharpe Smith is manager of communications for Washington, D.C.-based Industrial Telecommunications Association.
