Metro PCS 2009 Annual Report Download - page 28

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renewal in January 2017; our AWS licenses were granted in November 2006 and are subject to renewal in
November 2021; and our 700 MHz license was granted in June 2008 and is subject to renewal in June 2019. Each
FCC license is essential to our and Royal Street’s ability to operate and conduct our and Royal Street’s business in
the area covered by that license. We also have other licenses, such as microwave licenses, which we use to provide
service. We intend to file renewal applications for our licenses when the renewal filing windows open.
The FCC may deny license renewal applications for cause after appropriate notice and hearing. The FCC will
award a renewal expectancy to broadband commercial mobile radio service, or CMRS, licensees if the licensee
meets specific performance standards. To receive a renewal expectancy, we must show that we have provided
substantial service during our past license term, and have substantially complied with applicable FCC rules and
policies and the Communications Act. If we receive a renewal expectancy, it is very likely that the FCC will renew
our existing licenses. If we do not receive a renewal expectancy, the FCC may accept competing applications for the
license renewal period, subject to a comparative hearing, and may award the license for the next term to another
entity.
Construction Obligations
The FCC has established various construction obligations for wireless licenses with different requirements often
applying to spectrum licensed at different points in time. For example, broadband PCS licensees holding licenses
originally granted as 30 MHz licenses must construct facilities to provide service covering one-third of the
population of the licensed area within five years, and two-thirds of the population of the licensed area within ten
years, or otherwise provide substantial service to the licensed area within the appropriate five- and ten-year
benchmarks of their initial license grant date. Broadband PCS licensees holding 10 MHz and 15 MHz licenses
generally must construct facilities to provide service to 25% of the licensed area within five years of their initial
license grant date, or otherwise make a showing of substantial service. The FCC defines substantial service as
service which is sound, favorable and substantially above a mediocre service level only minimally warranting
renewal. Either we or the previous licensee satisfied the applicable five-year coverage requirement for each of our
broadband PCS licenses and the ten-year requirement for those PCS licenses that have already been renewed. All
AWS licensees will be required to construct facilities to provide substantial service by the end of the initial 15-year
license term. The initial 15-year license term for our AWS licenses does not expire until November 2021.
The 700 MHz licenses are subject to more stringent performance requirements which are measured from June 12,
2009. As a licensee of an EA license block, we are required to build systems that provide wireless coverage to 35%
of the licensed geographic area in four years and 70% of the licensed geographic area by the end of the license term.
While the FCC occasionally has granted brief extensions to, and limited waivers of, license construction
requirements, any licensee failing to meet these coverage requirements risks forfeiting their license and, in some
cases, being subject to fines or monetary forfeitures.
As a result of the FCC’s concern over a shortage of needed broadband wireless spectrum, it may consider
adopting more stringent build-out requirements, possible sanctions for licensees which do not meet certain
construction thresholds or incentives for licensees to accelerate their build-out.
Revocation of Licenses
The FCC may deny applications for FCC licenses and in extreme cases revoke FCC licenses, if it finds that a
licensee lacks the requisite qualifications to be a licensee. For example, the FCC may revoke a license or deny an
application of an entity found in a judicial or administrative proceeding to have knowingly or repeatedly engaged in
conduct involving felonies, possession or sale of illegal drugs, fraud, antitrust violations or unfair competition,
employment discrimination, misrepresentations to the FCC or other government agencies, serious violations of the
Communications Act or FCC regulations, or a failure to meet construction obligations.
Transfer and Assignment of FCC licenses
The Communications Act requires prior FCC approval for assignments or transfers of control of any license or
construction permit, with limited exceptions. In granting FCC approval for assignments or transfers of control, the
FCC may prohibit or impose conditions on such assignments or transfers of control. To date, we have managed to
secure the requisite approval of the FCC to a variety of assignment and transfer of control applications without
undue delay or the imposition of conditions outside of the ordinary course. If we are acquired in the future, the FCC