The FCC has rewritten the rules on renewing wireless radio licenses. Unlike renewing, say, a car registration, these require more than an application form and a check. The FCC also wants assurance that you have been using the license. Because if you haven’t, they want to let it expire and make room for somebody else.

IMPORTANT: This is only a summary. Licensees should consult the details of the new rules, available here, starting on page 49.

In the past, dozens of wireless services and sub-services each had unique use-it-or-lose-it renewal requirements. Moving toward greater uniformity, the FCC has issued a single, blanket rule meant for all. But, because many services have different characteristics and serve different purposes, there are still differing provisions in the individual rule sections that help to determine renewal eligibility.

Past requirements sometimes combined a hard-to-apply renewal standard with more clear-cut “safe harbor” options that assured renewal if met. In a dozen or so services, for example, the general standard was:

“service that is sound, favorable, and substantially above a level of mediocre service which might minimally warrant renewal[.]”

It is hard to know what that means in any particular case.  The accompanying safe harbors were easier to assess. For example, the safe harbor for auctioned, geographical-area, fixed-service licensees was the construction of four links per million population in the license area. Some licensees questioned the appropriateness of this criterion. Some may have built useless “links to nowhere” simply to qualify. But certainly, each licensee could know whether it had met the requirement.

The new rules retain the same bifurcation: general standard and safe harbor—but with a catch we’ll come to shortly. The FCC expects safe harbors to be the more common route to renewal. These now come in a few different types, depending on the kind of license.

A site-based licensee (one authorized at a specific location) need only certify operation in line with the most recently filed construction notification (or most recent authorization, if no construction notification is required).

A geographic-area licensee must certify it has met the appropriate “performance requirement” set out on the rules for the particular service. These are different for licensees serving the public (like cell phone licenses) and those providing a business’s internal communications needs.

A party holding partitioned or disaggregated licenses must meet the appropriate performance requirement, if there is one, and otherwise must be providing service to the public or furthering the licensee’s internal business or public interest/public safety needs.

Here’s the catch: the safe harbor “performance requirement” for a few of the license categories is “a service which is sound, favorable, and substantially above a level of mediocre service which just might minimally warrant renewal.” Sound familiar? The safe harbor uses the same language as the previous general standard—which was so vague as to need a safe harbor.

A licensee unable to make use of a safe harbor must instead make a general showing that:

“over the course of the license term, the licensee(s) provided and continue to provide service to the public, or operated and continue to operate the license to meet the licensee(s)’ private, internal communications needs[.]”

These non-safe-harbor renewal applicants must provide a “detailed description” of their provision of service (or use of the spectrum for internal communications). They can expect additional scrutiny on: (1) the extent and quality of service provided; (2) the date service commenced and the duration of any interruptions; (3) service to rural areas; (4) service to qualifying tribal lands; and (5) any other factors associated with service to the public. It is unclear how these criteria would apply to licensees that use radios for their own internal business purposes.

In a new and controversial step, a renewing licensee—by safe harbor or otherwise—must certify it has substantially complied with all applicable FCC rules. This could be a problem for companies that routinely manage a lot of FCC licenses. Even the most careful licensee can have an occasional slip-up. In the past, errors in the paperwork and technical gear led to fines and, in egregious cases, loss of the license involved. But the new rules could go much farther. The existence of the requirement suggests that an error with respect to any one license could threaten the renewal of all of a licensee’s wireless authorizations. Licensees unable to make the required certification are invited to explain the circumstances and say why the FCC should grant renewal anyway. Presumably the FCC can waive past rule violations, but as yet there are no standards or guidance on how this might work.

The new rules do not apply to services that are “licensed by rule,” to certain public safety licensees, or to the Educational Broadband Service.

Implementation. Site-based licenses will have about a one-year transition period.  For them, the new rules take effect on October 1, 2018.For geographic-area license renewals, the new rules do not take effect until January 1, 2023. Exception: licensees in 700 MHz, AWS-4, H Block, AWS-3, and 600 MHz services are already subject to the new general renewal standards, and remain so. They can take advantage of the new safe harbor provisions 30 days after publication in the Federal Register.

Competing applications eliminated. In the olden days, the FCC accepted and considered competing applications for many radio services at renewal time. These applications said, in effect, “The licensee did such a poor job as to have lost its right to renewal, so give me the license instead.” The FCC has steadily cut back the right to file competing applications over the last few decades, and has now eliminated the last of them in the wireless services.

Discontinuance. A geographic-area license terminates automatically if operation ceases for 180 days; a site-based license or public safety license terminates if operation ceases for 365 days. Once terminated, licenses are ineligible for renewal. (These rules do not apply to Educational Broadband Service and certain common carrier fixed microwave licenses, which continue under their old rules.) Licensees can request an extension, but must do so at least 30 days before the end of the 180-day or 365-day period.

When to file. This is unchanged. Licensees must file renewal applications during the last 90 days of the license period. The license remains valid while the FCC considers the application. Parties that hold multiple wireless licenses can adjust the termination dates so that all of their renewal filings each year come due during the same 90-day period.

Further Notice of Proposed Rulemaking:

There may be still more changes to come. The FCC asks for comment on these issues:

  • whether licensees should have to increase their service coverage in license periods after the initial license period, and whether any such requirements should apply only to new licenses or to existing licenses as well;
  • whether licensees that met a quantitative safe harbor (such as service to a specified percentage of the population) should face increased quantitative requirements in successive license terms;
  • whether renewal safe harbors should require coverage of a specific percentage of the rural population, or alternatively, whether the rules should require geographic licensees to provide service to a percentage of the license area, rather than a percentage of the population, and whether the percentage should depend on the size of the license area;
  • whether license terms should become longer on renewal;
  • whether services that are subject to atypical technical or regulatory constraints should have different renewal requirements;
  • whether flexible-use licenses should have different renewal requirements for different uses;
  • whether renewal applications should have to include reporting on broadband adoption and affordability; and
  • whether a licensee whose coverage is insufficient to justify renewal could nonetheless retain a license for the areas it does serve, perhaps with a requirement that it offer other areas for licensing by another party.

The FNPRM also seeks comment on mechanisms for relicensing areas whose licensees were unable to achieve renewal.

Our advice, particularly as to site-based licenses, is to study the rules well before the next renewal filings come due. Geographic licensees will have another five years to learn the requirements.