[Federal Register Volume 59, Number 121 (Friday, June 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15263]


[[Page Unknown]]

[Federal Register: June 24, 1994]


_______________________________________________________________________

Part VI





Federal Communications Commission





_______________________________________________________________________



47 CFR Part 2, et al.



New Personal Communication Services; Rule
FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2, 15, and 24

[GEN Docket No. 90-314; FCC 94-144]

 

New Personal Communications Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: By this Memorandum Opinion and Order (MO&O) the Commission 
amends certain aspects of its rules governing broadband personal 
communications services (PCS). The MO&O modifies these rules to 
consolidate broadband PCS into the 1850-1990 MHz band from the 1850-
1970, 2130-2150, and 2180-2200 MHz bands originally allocated. This 
action will result in lower costs for the broadband PCS industry and 
lower prices for consumers. This action facilitates implementation of a 
broad range of new wireless services and participation in the broadband 
PCS industry by small businesses, rural telephone companies, and 
businesses owned by women and minorities.

EFFECTIVE DATE: July 25, 1994, except that Secs. 15.311 and 
24.204(f)(1), (2), (3)(i), and (3)(ii) are effective September 22, 
1994.

FOR FURTHER INFORMATION CONTACT:
Robert Pepper or Donald Gips, Office of Plans and Policy, (202) 418-
2030.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order, adopted June 9, 1994, and released June 
13, 1994. The full text of this Commission decision is available for 
inspection and copying during regular business hours in the FCC 
Reference Center (Room 239), 1919 M Street NW., Washington, DC. The 
complete text of this decision also may be purchased from the 
Commission's duplication contractor, International Transcription 
Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite 140, 
Washington, DC 20037. The following collection of information is being 
submitted to the Office of Management and Budget for review under 
Section 3504(h) of the Paperwork Reduction Act (44 U.S.C. 3504(h)). 
Persons wishing to comment on this collection of information should 
direct their comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: Desk Officer for 
Federal Communications Commission. A copy of any comments filed with 
the Office of Management and Budget should also be sent to the 
following address at the Commission: Federal Communications Commission, 
Office of Managing Director, Paperwork Reduction Project, Washington, 
DC 20554. For further information contact Judy Boley, 632-7513.
    OMB Number: None.
    Title: Part 24, Amendment of the Commission's Rules to Establish 
New Personal Communications Services (GEN Docket No. 90-314).
    Respondents: Businesses or other for profit.
    Estimated annual burden and frequency of response: Five hundred and 
ninety-five 30 Mhz broadband PCS licensees will need to spend 
approximately 7,000 hours total at the two construction benchmarks, and 
1,972 10 MHz broadband PCS licensees will need to spend approximately 
2,000 hours at a single construction benchmark to verify to the 
Commission that the construction requirements have been met. Total 
burden-hours on all licensees will therefore be approximately 9,000.
    Needs and Uses: Information received by the Commission will be used 
to verify that each broadband PCS licensee has met its construction 
requirements. Without this information, such verification would be 
impossible.

Summary of Memorandum Opinion and Order

Introduction and Executive Summary

    1. By this action, the Commission amends certain aspects of its 
rules governing broadband personal communications services (PCS). It 
takes this action in response to 67 petitions for reconsideration or 
clarification of the rules and policies adopted in the Second Report 
and Order\1\ in this proceeding.
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    \1\See Second Report and Order, GEN Docket No. 90-314, 58 FR 
59174 (November 8, 1993).
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    2. PCS encompasses a broad range of new radio communications 
services that will free individuals from the limitations of the 
wireline public switched telephone network and will enable individuals 
to communicate when they are away from their home or office telephones. 
Broadband PCS devices are likely to be portable and have their own 
unique telephone numbers. A basic feature of PCS is expected to be the 
ability to communicate person-to-person, rather than station-to-
station.
    3. The Commission takes this action to foster rapid creation of a 
competitive market to deliver these new mobile digital voice and data 
services to the American public. Personal communications needs are 
changing rapidly as our society becomes more mobile and people demand 
rapid communications no matter where they are or what time it is. A 
competitive market is the best way to introduce broadband PCS to help 
meet these demands. The Commission expects that PCS will provide a 
variety of mobile services competitive with existing cellular, paging 
and other land mobile services as well as new services offering 
communications capabilities not currently available. These services 
will be provided on an entire family of new communications devices that 
will include small, lightweight multi-function portable phones, 
portable facsimile and other imaging devices, new types of multi-
channel cordless phones, and advanced paging devices with two-way data 
capabilities. The Commission expects that these new services and 
devices will affect the future development and configuration of all 
telecommunications networks by significantly improving their 
flexibility and increasing the number of functions they can perform.
    4. The Commission is amending the broadband PCS spectrum allocation 
and regulatory structure to better achieve what have been and continue 
to be its four primary goals in this proceeding: competitive delivery, 
a diverse array of services, rapid deployment, and wide-area coverage. 
Furthermore, the PCS rules as modified will partner with the 
Commission's competitive bidding procedures to meet Congressional 
objectives that include promoting economic growth and competition, 
enhancing widespread access to telecommunications service offerings, 
and ensuring that PCS licenses are disseminated to a wide variety of 
applicants.
    5. The actions the Commission is taking are designed to enable PCS 
providers to compete effectively with each other and with other 
wireless providers so that the American public can enjoy the greatest 
benefit from the delivery of these new services. To promote competitive 
delivery, the Commission has modified its band plan to ensure there is 
an opportunity for a sufficient number of competitors to offer PCS 
services. Further, providers will have the flexibility to determine the 
amount of spectrum needed for their particular service or services. 
However, the Commission has also set limits on the total amount of 
spectrum that can be acquired by new entrants and by incumbent cellular 
providers. This ensures that there will be a significant number of 
competitors in each area.
    6. The Commission purposely adopted a broad definition of PCS to 
encourage a variety of firms with their own visions of PCS to bid for 
various combinations of licenses and to provide a diverse array of new 
services. Firms will compete not only on price, but also on quality and 
the types of new products and services they offer. The Commission has 
allocated spectrum both in different sized blocks and in different 
sized service areas because it wants to encourage businesses to be able 
to acquire the spectrum and service areas that best suit their business 
plans. This additional flexibility will result in a greater diversity 
of products and services for consumers.
    7. Rapid deployment is important so that consumers do not have to 
wait for the benefits of the new services. To ensure rapid deployment, 
the Commission has allocated two different sized spectrum blocks, which 
can be aggregated to form other block sizes. It has also altered the 
allocation of some of the PCS spectrum to reduce the cost of moving 
microwave incumbents that must be relocated. Both of these decisions 
will allow more rapid introduction of service because of the reduced 
costs of microwave relocation.
    8. The revised bank plan also will reduce the cost of service and 
equipment to consumers. In addition, the Commission has increased the 
power level available for PCS service. Together with the decisions to 
license some Basic Trading Areas (BTAs) and 10 MHz blocks, these 
changes will make PCS service more viable in rural areas, help ensure 
wide-area coverage and increase access for all Americans.
    9. Many of the actions taken are directed toward ensuring that a 
wide variety of applicants have an opportunity to acquire PCS licenses. 
In addition to providing for different and spectrum blocks and 
geographic areas, the Commission is modifying its ownership rules to 
encourage participation in PCS by rural telephone companies, small 
businesses and businesses owned by minorities and women.
    10. The most significant of the changes involves modification of 
the band plan that was adopted in the Second Report and Order. In that 
Order, the Commission allocated 120 MHz of spectrum to PCS, some of 
which was in the lower portion of the 2 GHz band allocated for emerging 
technologies and some of which was in the upper portion of that band. 
Under the revised plan, all of the 120 MHz of spectrum allocated to PCS 
is located in the lower band. The previous band plan would have 
required those who wished to operate in both the upper and lower bands 
to utilize more expensive dual mode handsets capable of operating on 
both bands. Providing PCS licenses in only the 1850-1990 MHz band will 
lower costs to consumers by permitting use of a single-band handset. 
Reducing the costs of equipment to customers should also increase 
consumer demand and strengthen the economic viability of the PCS 
providers. Placing all the licensed and unlicensed spectrum in a single 
contiguous band also will decrease the cost of handsets that can 
operate in both licensed and unlicensed blocks. In addition, these 
changes will preserve spectrum in the upper band that is allocated 
internationally for the emerging Mobile Satellite Services (MSS) 
industry to provide worldwide service. Taken together, these changes 
will increase the competitiveness of PCS service providers in urban, 
suburban, and rural areas which should lower prices and stimulate 
demand, thereby increasing investment and economic growth. Lower prices 
will also enhance consumer access to PCS services.
    11. Having all blocks in a single contiguous band also will 
increase the value of the 10 MHz blocks. These blocks would have been 
less desirable in the upper band because upper band equipment is 
expected to be available from manufacturers twelve or more months after 
lower bank equipment. In addition, the upper band contains a higher 
concentration of microwave facilities that would have had to share 
spectrum with broadband PCS licensees or be relocated from the 
broadband PCS spectrum to avoid interference. This action avoids the 
expense and potential delay associated with relocating the numerous 
microwave links currently operating in the upper band. The change made 
to the band plan also makes it more feasible to aggregate a 10 MHz 
block with a 30 MHz block for a total of 40 MHz. Taken together, these 
factors will reduce the time and the cost of PCS providers offering 
their services to the American public. The overall allocation of 120 
MHz for broadband PCS remains unchanged.
    12. In the Second Report and Order, the Commission divided 120 MHz 
of spectrum into seven blocks: two 30 MHz blocks, one 20 MHz block, and 
four 10 MHz blocks. In this Order, the Commission is amending its band 
plan to provide six blocks: three 30 MHz blocks and three 10 MHz 
blocks. The Commission changed the 20 MHz block to a 30 MHz block and 
eliminated one 10 MHz block primarily because it was persuaded that a 
single 20 MHz block would not provide enough spectrum to support a 
viable competitor to the 30 MHz PCS MTA licensees, or to the two 
existing cellular licensees currently serving most areas. As a primary 
goal of the proceeding was to promote competitive delivery of PCS 
services, the Commission believes that it is essential to make 
available an additional 30 MHz block. The Commission anticipates that 
the three 10 MHz blocks will be used in a variety of ways that may 
include ``niche services'' and other functions, or as an enhancement 
for PCS or cellular providers that choose to purchase a 10 MHz block to 
complement a 30 MHz or 25 MHz block, respectively. Thus, the revised 
band plan provides for an additional competitor to cellular service and 
to the other PCS providers, while also providing three 10 MHz blocks 
for multiple uses.
    13. In addition to modifying the band plan, the Commission also 
makes significant amendments to the rules relating to participation in 
PCS by holders of cellular interests. In the Second Report and Order, 
the Commission recognized that unfettered participation in PCS by 
cellular operators could lessen the potential competition that could 
develop between PCS and cellular systems. At the same time, it 
recognized that cellular licensees could foster rapid development of 
PCS for a variety of reasons, including their expertise with commercial 
mobile radio services. Promoting competition and providing for rapid 
deployment of PCS are both among the objectives that Congress 
instructed the Commission to promote in Section 309(j) of the 
Communications Act, as amended by the Reconciliation Act. The 
Commission has balanced those competing interests by allowing entities 
with a 20 or more percent investment interest in a cellular license to 
acquire a 10 MHz PCS license in the same area. The Commission adheres 
to that decision. However, it has decided that as of January 1, 2000, 
it will afford cellular operators the same overall 40 MHz spectrum cap 
as other PCS operators, and allow them to acquire an additional 5 MHz 
for a total of 15 MHz of PCS spectrum in the same service areas as 
their cellular interests. Each cellular operator currently holds 25 MHz 
of spectrum.
    14. In Section 309(j), Congress also directed the Commission to 
promote economic opportunity by disseminating licenses to a wide 
variety of applicants, including small businesses, rural telephone 
companies, and businesses owned by members of minority groups and women 
(``designated entities''). The Commission is modifying its PCS cellular 
eligibility rules to promote that goal as well. Specifically, it is 
relaxing its cellular ownership attribution rules to allow designated 
entities with up to a 40 percent non-controlling interest in a cellular 
license to obtain a PCS license in the same area. One effect of this 
change will be to allow some rural telephone companies with non-
controlling cellular interests, to provide PCS service in areas that 
might otherwise not be served in a timely manner.
    15. The Commission also is relaxing its cellular attribution rules 
to allow any entity with up to a 40 percent non-controlling ownership 
interest in a cellular license covering 10 percent or more of the 
population in a PCS service area to also attain a non-controlling 
investment interest in a PCS license held by a business owned by 
minorities or women. While there is some risk that relaxing the 
cellular eligibility rule will limit the vigor of competition in some 
markets, the Commission thinks that risk is sufficiently limited where 
the party holding interests in two licenses holds a minority interest 
in the cellular license and the PCS license is controlled by another 
entity. The Commission has concluded that it should take that risk in 
order to advance the goal of promoting economic opportunity for these 
groups.
    16. The Commission's cellular eligibility rules balance the goals 
that Congress has established--promoting competition, ensuring rapid 
deployment of PCS, and providing economic opportunity for designated 
entities. It has decided that limited participation by cellular 
providers will serve the public interest by promoting rapid deployment 
of PCS, participation by designated entities, and overall competition.
    17. The Commission has made a number of minor modifications to its 
rules. With these changes, it intends to proceed expeditiously toward 
licensing providers of broadband personal communications services. The 
following is a summary of all of the specific actions taken to promote 
the goals outlined above:
    a. Adopting a band plan that provides for three 30 MHz licenses 
(Blocks A, B, and C) and three 10 MHz licenses (Blocks D, E, and F), 
all of which are within the 1850-1990 MHz band;
    b. Providing that the A and B Blocks be licensed within 51 service 
areas based on the Major Trading Areas (MTAs) and that the C, D, E, and 
F Blocks be licensed within 493 smaller service areas based on the 
Basic Trading Areas (BTAs) set forth in the Rand McNally Commercial 
Atlas & Marketing Guide (123rd ed. 1992);\2\
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    \2\The current rules provide 492 service areas based upon BTAs. 
In response to a request the Commission is dividing the Puerto Rico 
service area into two areas.
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    c. Maintaining the allocation of spectrum at 1910-1930 MHz for 
unlicensed PCS devices, and committing to initiate a proceeding in the 
near future to examine allocation of additional spectrum for unlicensed 
PCS operations. Within this band, the Commission has adopted a 1.25 MHz 
channelization scheme for isochronous (voice) devices and eliminated 
channelization requirements for asynchronous (data) devices;
    d. Continuing to permit all eligible entities to acquire broadband 
PCS spectrum up to a cap of 40 MHz;
    e. Retaining the five percent equity attribution threshold for PCS 
licenses so that the same entity may not own more than five percent of 
PCS licenses constituting more than 40 MHz within the same area;
    f. Retaining the cellular attribution threshold of 20 percent 
equity ownership of a cellular licensee and the service area overlap 
test of 10 percent of the population of the relevant PCS market, so 
that the same entity generally may not own more than 20 percent of the 
cellular license and more than 5 percent of PCS license(s) that would 
place the entity above the spectrum limit in an overlapping service 
area;
    g. Relaxing the eligibility rules to permit entities with 
attributable interests in cellular companies whose combined cellular 
geographic service areas overlap between 10 and 20 percent of the PCS 
service area population to submit bids for more than 10 MHz of PCS 
spectrum provided that, prior to the auction, they commit to divest 
themselves of sufficient cellular interests to come into compliance 
with the eligibility rules within 90 days of license grant;
    h. Providing that voting stock, general partnership interests, 
interlocking directorates and certain other controlling interests and 
relationships will be considered in determining attributable interests 
under the spectrum caps;
    i. Raising from a 20 percent to a 40 percent non-controlling 
interest the threshold for determining attributable cellular equity 
ownership for rural telephone companies, small businesses and 
businesses owned by minorities and women that are collectively termed 
``designated entities'' under 47 U.S.C. 309(j);
    j. Increasing from a 20 percent to a 40 percent non-controlling 
interest the threshold for determining attributable cellular equity 
ownership to allow non-designated entities to make non-controlling 
investments in PCS licenses owned and controlled by minority- and 
women-owned businesses;
    k. Permitting entities with attributable cellular interests 
covering 10 or more percent of the population in a PCS service area to 
acquire 10 MHz of PCS spectrum within the PCS service area and, after 
January 1, 2000, to acquire an additional 5 MHz for a total of 15 MHz 
of PCS spectrum in their cellular service areas;
    l. Relaxing construction requirements to provide that (a) 30 MHz 
broadband PCS licensees must provide coverage to one-third of their 
service area population within five years of initial licensing and two-
thirds within ten years and (b) 10 MHz licensees must provide coverage 
to twenty five percent of their service area population within five 
years of initial licensing or, submit a showing of equivalent or 
substantial service;
    m. Increasing the maximum power level permitted for broadband PCS 
base stations to 1640 watts equivalent isotropically radiated power 
(e.i.r.p.), which is equivalent to 1000 watts effective radiated power 
(e.r.p.);
    n. Retaining with minor amendment rules ensuring compliance with 
minimum standards for exposure to radio frequency (RF) energy emitted 
by PCS devices;
    o. Committing to initiate a proceeding in the near future to 
allocate additional spectrum for mobile satellite services (MSS) and to 
work toward having additional spectrum allocated to MSS at the World 
Radio Conference to be held in 1995 (WRC-95); and
    p. Pledging to examine management contracts and spectrum leases in 
the CMRS docket for the purpose of determining whether other interests 
in PCS licenses should be limited in order to foster vigorous 
competition.
    18. The Commission began its investigation of broadband PCS in 
1989.\3\ Since then the Commission has addressed broadband PCS in this 
docket by issuing a Notice of Inquiry, holding an En Banc meeting, and 
adopting a Policy Statement and Order, a Notice of Proposed Rule Making 
and Tentative Decision, and a Second Report and Order;\4\ and held a 
Public Forum on broadband PCS.\5\ It has also allocated 220 MHz of 
spectrum between 1850 and 2200 MHz for emerging technologies that 
include PCS;\6\ provided for band sharing or negotiated relocation of 
microwave facilities occupying 2 GHz PCS spectrum;\7\ provided spectrum 
to accommodate the existing 2 GHz facilities that relocated;\8\ and 
adopted technical, licensing and auction rules for narrowband PCS.\9\ 
It also considered 50 pioneer's preference requests related to 
broadband PCS.\10\ Finally, the Commission made recommendations and 
participated in an international allocation conference at which 
decisions were made that recognize and permit use of 2 GHz spectrum for 
PCS.\11\ Numerous telecommunications companies and associations have 
actively participated in the PCS proceedings, and over 100 companies 
have applied for and received more than 220 experimental licenses to 
develop and test PCS services and technologies.
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    \3\Petitions for Rule Making requesting establishment of PCS 
were filed by Cellular 21, Inc., in September 1989, RM-7140; and PCN 
America, Inc. (PCN America), in November 1989, RM-7175. 
Subsequently, in February 1991, Apple, RM-7618, proposed that 40 MHz 
from the 1850-1990 MHz band be allocated for unlicensed high-speed 
local-area data communications services connecting personal 
computers.
    \4\See GEN Docket No. 90-314; Notice of Inquiry, 5 FCC Rcd 3995 
(1990); Policy Statement and Order, 56 FR 56937 (November 7, 1991); 
Notice of Proposed Rule Making and Tentative Decision, 57 FR 11458 
(April 3, 1992); and Second Report and Order, 58 FR 59174 (November 
8, 1993).
    \5\See FCC, Transcripts of PCS Public Forum, April 11-12, 1994 
(Transcripts of the PCS Public Forum). The transcripts are available 
for public viewing at both the FCC Reference Center and the Library, 
1919 M Street, NW., Washington, DC. The transcripts also may be 
purchased from the Commission's duplication contractor.
    \6\See First Report and Order and Third Notice of Proposed Rule 
Making, ET Docket No. 92-9, 57 FR 49020 (October 29, 1992).
    \7\See ET Docket No. 92-9; First Report and Order and Third 
Notice of Proposed Rule Making, 57 FR 49020 (October 29, 1992); 
Second Report and Order, 58 FR 49220 (September 22, 1993); Third 
Report and Order and Memorandum Opinion and Order, 58 FR 46547 
(September 2, 1993); Memorandum Opinion and Order, 59 FR 19642 
(April 25, 1994), petition for further recon. pending.
    \8\See Second Report and Order, ET Docket No. 92-9, 58 FR 49220 
(September 22, 1993).
    \9\See First Report and Order, GEN Docket No. 90-314 and ET 
Docket No. 92-100, 58 FR 42681 (August 11, 1993) (initial narrowband 
rules); Memorandum Opinion and Order, GEN Docket No. 90-314 and ET 
Docket No. 92-100, 59 FR 14115 (March 25, 1994) (adopting certain 
narrowband PCS rule amendments on reconsideration); Third Report and 
Order, PP Docket No. 93-253, FCC 93-98, released May 10, 1994 
(design of narrowband auctions).
    \10\See Third Report and Order, GEN Docket No. 90-314, 59 FR 
9419 (February 28, 1994), recon. pending, appeal pending sub nom. 
Pacific Bell v. FCC, No. 94-1148 (D.C. Cir., filed March 1, 1994). 
The Commission intends to address shortly the petitions for 
reconsideration of its pioneer's preference decisions.
    \11\A worldwide allocation for PCS was discussed at the 1992 
International Telecommunication Union (ITU) World Administrative 
Radio Conference (WARC-92) in Torremolinos, Spain. The conference 
decided to maintain primary fixed and mobile allocations at 2 GHz in 
Region II (which includes the United States), and to make additional 
primary mobile-satellite service allocations in the 1930-2010 and 
2120-2200 MHz bands. It added a footnote stating that future public 
land mobile telecommunications systems, similar in concept to PCS, 
are expected to use the 1885-2025 MHz and 2110-2200 MHz bands on a 
worldwide basis. See Report, GEN Docket No. 89-554, 56 FR 31095 
(July 9, 1991); ITU, Final Acts of the World Administrative Radio 
Conference for Dealing with Frequency Allocations in Certain Parts 
of the Spectrum (Malaga-Torremolinos, 1992).
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    19. On August 10, 1993, the President signed the Omnibus Budget 
Reconciliation Act of 1993 (Reconciliation Act),\12\ which amended 
Sections 3(n), 309(j) and 332 of the Communications Act of 1934, as 
amended (Communications Act). Section 309(j) for the first time 
authorized the Commission to select licensees by competitive bidding 
and establishes objectives for the bidding process, including rapid 
deployment of new technologies, promotion of economic opportunity, 
competition and public access, wide dissemination of licenses, and 
efficient use of the spectrum. The Reconciliation Act also amended 
Sections 3(n) and 332 to provide that PCS is a mobile service and to 
establish a new framework for regulatory treatment of mobile services.
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    \12\Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-
66, Title VI, Secs. 6002(b)(2) (A), (B), 107 Stat. 312, 392 (1993).
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    20. On September 23, 1993, shortly after the Reconciliation Act was 
enacted, the Commission adopted the Second Report and Order 
establishing regulations and policies for broadband PCS that are under 
review here. In the Second Report and Order, the Commission enumerated 
goals of competitive delivery, diversity of services, speed of 
deployment, and wide-area service. The Commission took a number of 
actions to help meet these goals.
    Specifically, the Commission:
    a. Defined PCS as ``radio communications that encompass mobile and 
ancillary fixed communication that provide services to individuals and 
businesses and can be integrated with a variety of competing 
networks'';
    b. Allocated spectrum at 2 GHz for PCS, including 120 MHz of 
spectrum for licensed broadband PCS and 40 MHz for unlicensed PCS 
devices;
    c. Provided for two 30 MHz licenses and one 20 MHz license in the 
``lower'' band of the emerging technologies spectrum, and four 10 MHz 
licenses in the ``upper'' band, in each geographic area;
    d. Provided that the two 30 MHz licenses would be authorized within 
51 service areas based on the Rand McNally Major Trading Areas (MTAs) 
and that the 20 MHz and 10 MHz licenses would be authorized within 492 
service areas based on the Rand McNally Basic Trading Areas (BTAs);
    e. Established eligibility requirements that limit entities with 
certain cellular interests to 10 MHz of PCS spectrum where there is 
significant overlap between a PCS service area and the cellular service 
area (i.e., 10 percent or more of the PCS service area population);
    f. Limited broadband PCS licensees to 40 MHz of spectrum, and 
established certain licensing and renewal mechanisms;
    g. Established a maximum power level of 100 watts e.i.r.p. for PCS 
base stations, and adopted technical specifications to avoid harmful 
interference to other operations while leaving maximum technical 
flexibility to permit development of new technologies;
    h. Adopted rules to minimize radio frequency (RF) exposure risk; 
and
    i. Noted an intent to continue participating in international 
efforts to provide standards and consistent spectrum allocations for 
international deployment of worldwide terrestrial mobile and global 
satellite services.
    21. In related proceedings, the Commission provided a transition 
plan to govern PCS licensees sharing their authorized spectrum with 
existing 2 GHz fixed microwave facilities or relocating those 
facilities to other spectrum;\13\ determined that broadband PCS 
presumptively will be classified as a commercial mobile radio service 
(CMRS) under Section 332 of the Communications Act as amended by the 
Reconciliation Act;\14\ and found that broadband PCS is within the 
Commission's competitive bidding authority, when it adopted generic 
competitive bidding rules and procedures.\15\ With regard to 
competitive bidding for broadband PCS licenses, the Commission proposed 
to set aside two blocks of spectrum--the 20 MHz block (Block C) and a 
10 MHz block (Block D)--that would be reserved for bidding purposes to 
``designated entities'', (small businesses, rural telephone companies 
and businesses owned by members of minority groups and women), and 
proposed other measures to ensure economic opportunity for designated 
entities.\16\ These proposals remain pending. The proposed set-aside 
and other outstanding issues concerning broadband PCS auctions will be 
decided in a forthcoming Order (in PP Docket No. 93-253) addressing 
competitive bidding rules.
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    \13\See First Report and Order and Third Notice of Proposed Rule 
Making, ET Docket No. 92-9, 57 FR 49020 (October 29, 1992).
    \14\See Second Report and Order, GN Docket No. 93-252, 59 FR 
18493 (April 19, 1994) (CMRS Second Report and Order), recon. 
pending.
    \15\See Second Report and Order, PP Docket No. 93-253, FCC 94-
61, released April 20, 1994.
    \16\See PP Docket No. 93-253; Notice of Proposed Rule Making, 58 
FR 53489 (October 15, 1993); Second Report and Order, FCC 94-61, 
released April 20, 1994.
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    22. In response to the Second Report and Order, 67 parties filed 
petitions requesting reconsideration or clarification. Of the 67 
petitions, 58 primarily addressed issues relating to licensed PCS 
services and 9 primarily addressed issues relating to unlicensed PCS 
operations. The petitioners collectively request reconsideration of the 
spectrum allocation and frequency block plan, eligibility and 
attribution matters, construction requirements, technical standards, 
microwave interference criteria, power limits, radio frequency (RF) 
hazard requirements, and matters related to unlicensed PCS devices. The 
Commission received comments addressing the petitions for 
reconsideration from 44 parties and replies from 54 parties.
    23. On March 17, 1994, the Commission established an intra-agency 
task force to coordinate the reconsideration of PCS policies and rules. 
On April 11 and 12, 1994, the task force conducted a series of public 
panel discussions on PCS issues. The panelists included potential PCS 
service providers, technical experts, members of the financial 
community, economists and representatives of designated entities. The 
presentations of the panelists and transcripts of the panel discussions 
were placed in the record of this proceeding, and 30 interested parties 
filed statements in the record responding to the panel discussions.

Spectrum Issues and Service Areas

    24. Allocation, Block Plan, and Service Areas. In the Second Report 
and Order, the Commission allocated 120 MHz for licensed PCS and 40 MHz 
for unlicensed PCS from the 220 MHz of emerging technologies spectrum. 
Specifically, (lower band) 1850-1890 MHz and 1930-1970 MHz, and the 
(upper band 2130-2150 MHz and 2180-2200 MHz, were allocated for 
licensed PCS; and the 1890-1930 MHz band was allocated for unlicensed 
PCS devices. In addition, 60 MHz remained in reserve for future 
allocations to emerging technologies such as MSS or other applications. 
The frequency plan for licensed PCS included two 30 MHz frequency 
blocks, one 20 MHz block, and four 10 MHz blocks. Service areas were 
defined based on Rand McNally's ``Major Trading Areas'' (MTAs) and 
``Basic Trading Areas'' (BTAs). The two 30 MHz blocks were in the lower 
band and licensed on an MTA basis; the 20 MHz block also was in the 
lower band, but licensed on a BTA basis; and the four 10 MHz blocks 
were in the upper band and licensed on a BTA basis.
    25. Twenty-eight parties argued for reconsideration of various 
aspects of the allocation and frequency block plan adopted in the 
Second Report and Order. In general, the petitioners address: (1) 
alternatives for the PCS frequency block plan, including the number of 
PCS providers, PCS service areas, and issues relating to the 
aggregation or subdivision of PCS spectrum; (2) whether spectrum should 
be designated for private PCS use; and (3) the impact of the PCS 
allocation on the international allocations for mobile satellite 
service (MSS).
    26. In response to these filings, the Commission is revising the 
band plan to move the 10 MHz blocks from the upper band to the lower 
band, increase the size of 20 MHz block to 30 MHz, and reduce the 
number of 10 MHz blocks from four to three. The revised band plan is 
depicted in Appendix D, ``Broadband PCS Band Plan,'' and detailed in 
the following table.

----------------------------------------------------------------------------------------------------------------
     Frequency block         Amount of spectrum        Geographic scope                Frequency range          
----------------------------------------------------------------------------------------------------------------
A.......................  30 MHz.................  MTA....................  1850-1865/1930-1945 MHz             
B.......................  30 MHz.................  MTA....................  1870-1885/1950-1965 MHz             
C.......................  30 MHz.................  BTA....................  1895-1910/1975-1990 MHz             
D.......................  10 MHz.................  BTA....................  1865-1870/1945-1950 MHz             
E.......................  10 MHz.................  BTA....................  1885-1890/1965-1970 MHz             
F.......................  10 MHz.................  BTA....................  1890-1895/1970-1975 MHz             
Unlicensed..............  20 MHz.................  Nationwide.............  1910-1930 MHz                       
----------------------------------------------------------------------------------------------------------------

    27. This plan provides for three large blocks and three small ones. 
This will allow potential licensees to aggregate varying amounts of 
spectrum in different geographic areas depending on their individual 
business plans. The three large 30 MHz blocks ensure that these 
licensees have sufficient spectrum to begin service rapidly. The three 
small 10 MHz licenses will allow the provision of services that might 
not require a full 30 MHz, or for aggregation with a 30 MHz PCS license 
or an existing cellular license. As noted above, moving the 10 MHz 
blocks from the upper band to the lower band provides a number of 
important procompetitive benefits: consumer equipment costs will be 
significantly lower, costs of relocating incumbent fixed microwave 
links will be significantly reduced for new PCS entrants, the ability 
to aggregate spectrum will be increased, and valuable spectrum will be 
preserved that can be used to provide mobile satellite service on a 
worldwide basis. This revised plan reduces the amount of spectrum for 
unlicensed devices, but will increase the ability of new consumer 
equipment to work on both a licensed and unlicensed basis, increasing 
the utility of the devices for consumers. The improvement in this band 
plan will increase competition, lower equipment costs and provide other 
benefits. As a result, consumers will receive lower-cost and higher-
quality service.
    28. The Commission initially authorized 10 MHz blocks in the upper 
PCS band. Many parties, however, argue that the upper band blocks would 
be of little value in the near term because equipment would not be 
developed for this spectrum for a year or more. In addition, handsets 
that can bridge the upper and lower bands are predicted to cost about 
25 percent more and to be bulkier than handsets operating only on the 
lower frequencies. In addition, dual mode handsets would be heavier and 
have shorter battery life. Several parties argued that dual band 
handsets were essential to the success of upper band service because 
PCS operators would be likely to aggregate upper and lower band 
spectrum and consumers would want to be able to receive service on both 
bands, both to permit roaming across geographic areas and to facilitate 
changing service providers. These parties contended that the higher 
costs, delay, and other limitations associated with the upper band 
presented serious impediments to achieving the goals of fostering a 
competitive market, rapid deployment, opportunities for designated 
entities, and fostering a wide diversity of services. Upon 
reconsideration, the Commission concludes that MSS and PCS services can 
both be accommodated by using only lower band spectrum for licensed and 
unlicensed PCS services.
    29. Moving licensed PCS from the upper band to the lower band 
provides a number of procompetitive benefits. First, the cost of 
interoperability between licensed and unlicensed PCS will be reduced. 
As noted above, equipment costs to consumers are predicted to be 
reduced by 25 percent. Moreover, under the revised plan, manufacturers 
will concentrate on a single band with uniform frequency spacing, which 
should result in greater economies of scale in manufacturing that 
reduce consumer equipment prices. This additional cost for 
interoperability between bands was not evident to the Commission when 
it made its earlier decision. Increased interoperability has the 
additional benefit of reducing lock-in costs for consumers, giving them 
greater ability to switch providers, and thereby resulting in a more 
competitive market. Because of the less expensive handsets and the 
ability to combine adjacent blocks, aggregation is much more desirable. 
This will benefit all new providers, including designated entities, 
because they will be able to reduce costs and compete more effectively. 
Furthermore, there appear to be a number of different potential uses 
for the 10 MHz blocks: innovative niche services that are unlikely to 
be provided initially on the 30 MHz blocks, aggregation with the 30 MHz 
blocks, aggregation with other 10 MHz blocks, service extensions for 
incumbent cellular providers, and opportunities for designated entities 
to provide service with lower capital cost. Moving the 10 MHz blocks 
from the upper band to the lower band will enhance the value of some, 
if not all, of these uses and allow licensees to decide the most 
valuable use for the spectrum.
    30. Second, the cost and time required to relocate incumbent fixed 
microwave links should be significantly less in the lower band because 
the number of microwave links in the upper band is higher than the 
number in the lower band. While the bandwidth used by the upper band 
microwave incumbents is much less, making it easier to find some clear 
spectrum immediately, the ultimate requirement to clear the spectrum 
would result in significantly higher costs for PCS licensees.
    31. Third, equipment should be available for the lower band at an 
earlier date. Manufacturers have spent significant time and resources 
developing lower band equipment but the record indicates that they have 
not done much work on developing equipment for the upper band. As a 
result, some parties assert that the availability of upper band 
equipment trails the availability of lower band equipment by about one 
year. Time to market is a critical factor in the rollout of PCS 
services that will compete against existing cellular and enhanced 
specialized mobile radio (ESMR) entities. Thus, earlier equipment 
availability is a significant factor in developing a competitive PCS 
service.
    32. Fourth, many cellular companies have expressed a desire to 
operate PCS systems both outside and inside their current cellular 
service areas. By moving the PCS spectrum to the lower band, PCS and 
cellular providers will have the ability to provide service over a 
large geographic area even though they desire (or are required) to have 
different amounts of PCS spectrum in different areas. This capability 
could lower costs to the benefit of consumers because cellular 
companies will be able to compete using PCS spectrum inside and outside 
of their service areas.
    33. Finally, moving all the PCS spectrum to the lower band will 
better meet the needs of the emerging MSS industry. The Commission 
believes that this action will increase the value of the unlicensed 
spectrum because interoperability with licensed PCS will increase.
    34. Accordingly, the Commission finds that moving all of the PCS 
spectrum to the lower band will increase competition, reduce both 
consumer equipment and system costs, and increase equipment 
functionality. This new band plan has significant industry support, as 
evidenced by numerous recent filings submitted in the record by a 
variety of interests supporting the proposal to move all of the PCS 
spectrum to the lower band.
    35. In developing the original plan, the Commission concluded that 
10 MHz blocks could support viable and competitive PCS services through 
the use of advanced digital techniques, such as Code Division Multiple 
Access (CDMA) and Time Division Multiple Access (TDMA), and 
microcellular technology. It also stated that some types of PCS 
operations would require more than 10 MHz of spectrum. In addition, the 
Commission recognized that initially PCS is required to share spectrum 
with fixed microwave operations and therefore the full amount of 
spectrum will not be available initially in many locations. The 
Commission also stated that some types of PCS operations would require 
more than 10 MHz of spectrum. In addition, the Commission recognized 
that initially PCS is required to share spectrum with fixed microwave 
operations and therefore the full amount of spectrum will not be 
available initially in many locations. The Commission concluded that 20 
and 30 MHz frequency blocks were needed to support the rapid 
development and implementation of the fullest range of PCS services and 
also permitted most licensees to aggregate up to 40 MHz of broadband 
PCS spectrum in each service area, except that cellular licensees were 
limited to 10 MHz where their cellular geographic service area (CGSA) 
overlapped with the PCS service area. For these reasons, the Commission 
concluded that the combination of 10, 20, and 30 MHz licenses would 
allow users to acquire the amount of spectrum appropriate for their 
applications.
    36. In the Second Report and Order, the Commission allocated two 30 
MHz blocks, one 20 MHz block and four 10 MHz blocks. Its intent was to 
encourage participation of as many viable new PCS entrants as possible 
while maintaining sufficient spectrum to ensure the viability of both 
MSS and unlicensed devices. Based on the reasoning presented below, and 
on information provided by the petitioners and other responding 
parties, including presentations made by industry experts as its panel 
discussions, the Commission finds that its goals will be better served 
by two modifications to the band plan: (a) An increase in the size of 
the 20 MHz block to 30 MHz; and (b) a reduction in the number of 10 MHz 
blocks from four to three. Overall, the total amount of spectrum 
allocated for licensed PCS remains unchanged.
    37. One of the goals in this proceeding is to stimulate competition 
in the wireless and wireline industries, thus reducing costs and 
improving quality for consumers. In so doing, the Commission must 
balance two objectives. First, the Commission wants to maximize the 
number of opportunities for new viable competitors to emerge. It also 
wants to allow market forces to guide how many competitors survive. The 
Commission has endeavored to provide as many opportunities as possible 
to aggregate blocks into viable service offerings to ensure that 
several strong competitors emerge to provide service. Its desire to 
maximize competition must be tempered, however, because (1) spectrum is 
limited and (2) for new entrants to be viable sufficient spectrum must 
be provided to begin service quickly with reasonable upfront capital 
costs. The Commission believes that the combination of microwave 
incumbents occupying part of this spectrum and economies of scale lead 
to the conclusion that the set of three 30 MHz blocks will support the 
rapid introduction of competitive PCS services whereas 20 MHz blocks 
could lead to PCS service start-up delays or a reduction in the number 
of viable competitors.
    38. The Commission believes that its new band plan is superior to 
uniform 20 MHz blocks, as advocated by several petitioners. The 
combination of three 30 MHz blocks and three 10 MHz blocks allows the 
aggregation of a variety of license sizes that could not occur with 
uniform 20 MHz blocks.\17\ As a result, the Commission finds that the 
allocation of six 20 MHz blocks would not provide as many benefits as 
either the allocation adopted in the Second Report and Order on the 
modified plan it adopts in this order and it might lead to fewer new 
service providers with sufficient spectrum to provide service quickly. 
It also rejects the plan of twelve 10 MHz blocks, because such an 
arrangement might seriously delay the implementation of PCS, since the 
process of aggregating so many spectrum blocks could be time consuming 
and costly. It also could dramatically increase complexity and 
transaction costs at and after the auction. Finally, the Commission 
believes that dividing the spectrum into 40 MHz blocks would be 
inefficient for many applications and would foreclose innovative niche 
services.
---------------------------------------------------------------------------

    \17\It also believes that fewer new viable PCS competitors might 
emerge under the six blocks of 20 MHz plan, given a spectrum 
aggregation limit of 40 MHz and the head start of cellular 
incumbents.
---------------------------------------------------------------------------

    39. The record indicates significant concern that a 20 MHz block 
may not provide sufficient spectrum to enable a PCS provider to compete 
effectively with other PCS licensees operating on 30 MHz spectrum 
blocks or with other commercial mobile radio service providers. Some 
parties argue that 20 MHz will provide sufficient capacity in the long 
run, while others feel that with only 20 MHz, there could be a 
significantly larger portion of each service area where the licensee 
has no usable spectrum due to the presence of microwave incumbents. The 
presence of fixed microwave links requires that, on the average, a 
licensee with 20 MHz initially will have to relocate more microwave 
links than a 30 MHz license before PCS service can begin, which could 
significantly delay the commencement of service and increase the 
upfront cost of initiating service. In addition, certain parties state 
that the ability of a microwave incumbent to delay or extract a premium 
for relocating its link because its microwave path fully blocks service 
diminishes significantly with a 30 MHz spectrum block. While incumbent 
microwave links are 20 MHz wide, the Commission feels that the 
advantages of being able to work around specific links with a 30 MHz 
block outweigh the additional transaction costs which result from not 
matching the incumbent fixed microwave assignments identically.
    40. Other parties support the notion that a 30 MHz block will help 
new PCS entrants compete more effectively with existing wireless and 
wireline providers. The Commission also believes that limiting one 
licensee to 20 MHz could be a disadvantage for future competition. The 
ability to provide a complete package of mobile voice and data services 
could become a significant competitive advantage in the future. Such a 
package of wireless services, however, may require more than 20 MHz of 
spectrum. Other services may require less spectrum and are better 
suited to the 10 MHz blocks.
    41. Due in large part to these concerns, the investment community 
has stated that financing would be much more difficult to obtain for 
the licensees on the 20 MHz block than on the other blocks. These 
handicaps are of particular concern to us because the 20 MHz block was 
proposed to be reserved for designated entities.\18\ The competitive 
handicaps of a 20 MHz block relative to 30 MHz blocks would not have 
served the goal of providing a viable competitive opportunity for 
designated entities.
---------------------------------------------------------------------------

    \18\In the Notice of Proposed Rule Making in the competitive 
bidding proceeding, PP Docket No. 93-253, the Commission indicated 
that it would consider setting aside Blocks C and D for small 
businesses, rural telephone companies, and businesses owned by 
minorities or women. Reconciliation Act Sec. 6002(a), 107 Stat. at 
389. See H.R. Rep. No. 103-213, 103d Cong., 1st Sess. at 482-484 
(1993) (Conference Report); H.R. Rep. No. 103-111, 103d Cong., 1st 
Sess. at 255 (1993).
---------------------------------------------------------------------------

    42. Increasing the third license from a 20 MHz block to a 30 MHz 
block appears to eliminate any competitive disadvantages stemming from 
the band plan. The A, B and C blocks each will have a roughly 
equivalent portion of its service area completely blocked by incumbent 
microwave users in any geographic area. As a result, the costs and 
delay due to incumbent relocation should be similar on each of the 
blocks. This change should also reduce the difficulty faced by the C 
block licensee in obtaining financing. The Commission concludes, 
therefore, that three equal sized 30 MHz blocks will facilitate 
competition and the rapid development and implementation of the fullest 
range of PCS services and ensure that PCS is more fully competitive 
with other mobile radio services. Accordingly, the Commission is 
changing the single 20 MHz license to a 30 MHz license. Providing a 
combination of 30 MHz and 10 licenses MHz provides the benefits of 40 
MHz licenses, without restricting the options of firms nor affecting 
competition.
    43. Consistent with its decision to formulate a flexible definition 
of PCS, the Commission allocated four 10 MHz blocks in the Second 
Report and Order that could serve a variety of needs. The Commission 
continues to believe that 10 MHz blocks, both on their own and in 
combination with the 30 MHz blocks or with each other, are useful to 
support a variety of PCS services. Throughout this proceeding, several 
parties have indicated that 10 MHz blocks would be suitable for 
providing services ranging from specialized or ``niche'' applications 
to services comparable to those now provided by cellular systems. In 
addition, the 10 MHz blocks will be beneficial both for cellular 
licensees, who have limited eligibility for PCS participation in 
region, and possibly also for augmenting SMR. Finally, commenters 
discussed the desire to aggregate the 10 MHz blocks with the larger 
blocks in order to increase capacity for PCS services in heavy demand 
areas.
    44. For these reasons, the Commission believes that public interest 
is best served by continuing the allocation of licenses on 10 MHz 
channel blocks in addition to the 30 MHz licenses. The number of 10 MHz 
blocks must be limited to three for any given area, however, because of 
the need to reserve spectrum for other uses such as MSS. Allowing the 
flexibility to aggregate spectrum blocks of different sizes will help 
ensure that efficient providers succeed. The Commission believes that 
120 MHz will provide sufficient spectrum to promote competition rapidly 
and that flexibility in the provision of service will provide 
incentives for efficient use of the spectrum.
    45. In sum, the Commission believes that a band plan that provides 
for three 30 MHz licenses and three 10 MHz licenses, all in the lower 
band, compared to the earlier plan, will better ensure that PCS 
services are available promptly and competitively to the American 
public.
    46. A number of petitioners request clarification of, or changes 
to, the policies regarding the aggregation or subdivision of PCS 
spectrum and PCS service areas. In the Second Report and Order, the 
Commission limited any party's ability to aggregate PCs spectrum to an 
attributable interest in 40 MHz. Companies that were deemed to hold 
attributable interests in cellular license(s) covering 10 percent or 
more of the population in a PCS service area were limited to holding a 
single 10 MHz PCS license in that area. The Commission did not address 
the issue of whether it would allow disaggregation of spectrum.
    47. The Commission believes that the 40 MHz limit for PCS spectrum 
is appropriate. No new information has been presented to indicate that 
each licensee in a market would require more than 40 MHz to provide 
broadband PCS service. Although at least one party argued that this 
limit should be amended to allow greater aggregation in rural areas, 
the Commission does not believe that greater aggregation is needed. In 
particular, the demand in rural areas is expected to be sufficiently 
low that there should be no need for more than 40 MHz by any one 
provider. If demand in rural areas is not sufficient to meet than 40 
MHz of spectrum to one entity, it would be preferable to have 
additional competitors serve these customers rather than to license 
more than 40 MHz of spectrum to one entity.
    48. One of the goals in this proceeding is to promote competitive 
delivery of wireless services. As a result, the Commission feels that 
not only is an overall cap on PCS spectrum important to prohibit 
excessive spectrum aggregation, but that a comparable separate limit 
should be placed on cellular providers since they already hold 25 MHz 
of clear spectrum and already have a large number of existing wireless 
customers. To ensure competitive parity, cellular carriers will be 
subject to an overall spectrum cap of 35 MHz for their combined PCS and 
cellular spectrum. The Commission is persuaded by the argument, raised 
by a number of parties, that because of cellular's ``headstart'' in the 
wireless telephone market, existing infrastructure and large base of 
customers, cellular carriers might be able to dominate the wireless 
market if they receive more than 10 MHz of PCS spectrum. It also 
recognizes that new entrants face a possibly lengthy process to 
relocate existing microwave users so they can use all of their 
spectrum. Cellular carriers already have 25 MHz of clear spectrum in 
operation whereas new entrants may have to relocate microwave users to 
gain access to that much spectrum, even if they acquire 40 MHz at the 
auction. In addition, the Commission is concerned that additional 
spectrum acquired by cellular entities may reduce the amount of 
spectrum available to new entrants and increase the costs to new 
entrants. To promote the ability of new entrants to acquire spectrum 
and rapidly begin service as strong competitors to in-region cellular 
carriers, the Commission has decided to continue to permit cellular 
carriers to acquire and hold only a single 10 MHz license in any PCS 
service area where they are considered in-region. However, because the 
market advantages enjoyed by cellular carriers should decrease as 
competitive PCS offerings are implemented, cellular carriers will be 
allowed to acquire an additional 5 MHz after January 1, 2000. This will 
allow cellular carriers to acquire the same total amount of spectrum 
(40 MHz) as other entities. Limiting in-region cellular carriers to 10 
MHz of PCS spectrum for five years will not disadvantage them relative 
to the new entrants who must contend with microwave relocation over 
their entire spectrum block(s) and do not necessarily have an 
established customer base or comparable infrastructure advantages.\19\
---------------------------------------------------------------------------

    \19\Because the Commission is prohibiting spectrum 
disaggregation until the year 2000, cellular entities will have an 
opportunity to acquire 5 MHz of additional spectrum at that time.
---------------------------------------------------------------------------

    49. The Commission rejects the contention that the aggregation 
limit be raised to 45 MHz to permit cellular entities to acquire an 
additional 20 MHz. If such aggregation to 45 MHz through the 
disaggregation of 30 MHz blocks were allowed, the number of full 
service competitors could be reduced to the detriment of realizing the 
goals defined for PCS. If the Commission were to allow aggregation to 
45 MHz through the aggregation of 10 MHz blocks, there would not be 
enough blocks to assure both full cellular participation and the 
participation of other parties who desire 10 MHz licenses. The 
Commission concludes that 40 MHz remains an appropriate limit on PCS 
spectrum because it protects the competitive structure, provides 
sufficient spectrum for efficient provision of wireless services, and 
encourages a wide diversity of firms to participate in the industry. 
Furthermore, the Commission is seeking comment in another proceeding as 
to whether and how the aggregation limit may be applied uniformly to 
all mobile communications providers. Extending the PCS spectrum 
aggregation limit to include other mobile services, such as SMR and 
wide-area SMR services, is beyond the scope of this proceeding. The 
Commission therefore intends to address issues relating to spectrum 
aggregation across other commercial mobile radio services in a separate 
proceeding.\20\
---------------------------------------------------------------------------

    \20\See Further Notice of Proposed Rule Making, GN Docket No. 
93-252, FCC 94-100, released May 20, 1994.
---------------------------------------------------------------------------

    50. Although, as stated above, the Commission believes that 
spectrum disaggregation should be permitted, there is concern that 
there may initially be anticompetitive incentives to disaggregate 
spectrum. Two or three entities might purchase a viable 30 MHz license 
and disaggregate it to reduce the number of new entrants. Thus, 
disaggregation of spectrum by any licensee will be permitted only after 
that licensee meets the five year construction requirement. The five 
year point will allow the PCS market to take shape. Entities desiring 
to use small amounts of spectrum before the prohibition on 
disaggregation ends can either purchase the 10 MHz blocks of spectrum 
if they wish to provide service using less than 30 MHz or enter into 
joint ventures or resale arrangements to facilitate their access to 
spectrum. The Commission expects to conduct a further proceeding to 
specify the rules for spectrum disaggregation, which will also explore 
the possibility of permitting disaggregation for other commercial 
mobile radio services.
    51. The Commission agrees with the suggestions of the petitioners 
and responding parties that PCS entities should eventually be permitted 
to disaggregate spectrum. It feels that, in the future, disaggregation 
will complement the three 30 MHz and three 10 MHz channel plan by 
allowing subdivision of spectrum blocks where service providers find 
that economic or other conditions warrant it. Allowing spectrum 
disaggregation, even if it is prohibited until the first construction 
benchmark, will provide appropriate incentives for service providers to 
conserve their use of spectrum and to invest in spectrum conserving 
technologies. Because PCS licensees have paid for the use of the 
spectrum and have the ability to sell it in the future, they should be 
especially sensitive to the value of the resource they are using and 
will be motivated to ensure that it is used in the most valuable way.
    52. In determining the appropriate placement of the 10 MHz blocks 
within the lower band, the Commission seeks to promote the development 
of an efficient market structure and to ensure that no subset of 
license has any inherent competitive disadvantage due to placement of 
licenses in the band plan. In particular, the benefits of aggregating 
the 30 MHz blocks with the 10 MHz blocks must be compared to the 
benefits of aggregating the 10 MHz blocks themselves. Interspersing the 
10 MHz blocks between each 30 MHz block facilitates aggregation to 40 
MHz by allowing combination of each contiguous 30 MHz and 10 MHz 
license pair. This also facilitates relocations of the existing fixed 
microwave operations by matching fixed microwave channels with PCS 
channels. This will keep to a minimum the number of parties responsible 
for each relocation which will reduce relocation negotiation, timing 
and costs. On the other hand, keeping all 10 MHz licenses contiguous 
would allow more efficient aggregation of these licenses as a 
substitute strategy for obtaining one of the three 30 MHz blocks. The 
Commission concludes that interspersing the 10 MHz licenses between the 
30 MHz licenses to permit efficient aggregation up to 40 MHz should the 
market favor that outcome is the best approach. Recognizing that 
aggregation of the 10 MHz licenses may be attractive to some parties, 
however, the Commission is also making two of the 10 MHz licenses 
contiguous so as to permit this aggregation to 20 MHz, should some 
parties favor 20 MHz over 30 MHz.
    53. In the Second Report and Order, the Commission specified that 
the two 30 MHz blocks would be licensed on an MTA basis and that the 20 
MHz block and four 10 MHz blocks would be licensed on a BTA basis. It 
adopted this plan to promote the rapid deployment and ubiquitous 
coverage of PCS and felt that these areas would follow the natural flow 
of commerce.
    54. The Commission has decided to retain the geographic license 
areas definitions for PCS licenses adopted in the Second Report and 
Order. It rejects the arguments that all licenses should have the same 
geographic scope and rejects any attempt at re-drawing the boundaries 
along cellular MSA/RSA lines.
    55. The Commission rejects the use of cellular MSA/RSA boundaries 
for a number of reasons. The ten-year history of the cellular industry 
provides evidence generally that these service areas have been too 
small for the efficient provision of regional or nationwide mobile 
service. The large transaction costs to aggregate MSAs and RSAs that 
have been incurred over the past ten years in the cellular industry 
have frequently been directed towards geographic aggregation to provide 
wider service areas for consumers and to lower costs of providing 
service. Rather than forcing replication of this costly and time-
consuming process, the Commission is beginning with larger service 
areas, which it expects to minimize the need for costly post-auction 
transactions. The Commission also hopes to spur market competition from 
new PCS providers by starting with larger initial geographic service 
areas to alleviate the cellular headstart advantage. It realizes that 
the MTA and BTA license boundaries do not coincide with existing 
cellular license boundaries, but feels that the costs imposed by these 
different license boundaries will be outweighed by the benefits of 
larger initial service areas. The Commission is cognizant of problems 
created by overlaps between the PCS and cellular service areas, and 
intends to provide some relief from these problems.
    56. The Commission also rejects the suggestion that all licenses 
should have the same geographic scope whether MTAs, BTAs, or Department 
of Commerce Economic Areas. While identical geographic areas may impose 
more initial competitive parity, the Commission does not believe that 
this will maximize competitiveness and participation in the provision 
of PCS services. Licensing all blocks on an MTA basis might increase 
competitiveness with cellular, but it would limit the ability of 
cellular companies and designated entities to participate in the 
provision of PCS. Cellular companies could be restricted because of 
overlaps with MTAs that might not occur with BTAs. Designated entities 
are likely to be better able to finance the construction of PCS across 
a BTA than an MTA. Thus, by licensing some blocks on a BTA basis, the 
Commission complies with Congress' directive that it prescribe area 
designations that promote economic opportunity for a wide variety of 
applicants, including small businesses, rural telephone companies, and 
businesses owned by members of minority groups and women.
    57. The Commission therefore continues to feel that a combination 
of MTA and BTA licenses will give licensees the opportunity to select 
and combine service areas and promote broad participation in the 
provision of PCS services by firms of various sizes. Licensing two of 
the 30 MHz blocks on an MTA basis will permit these licensees to 
operate in large service areas which will facilitate interoperability 
and roaming across wide geographic areas. Licensing the third 30 MHz 
block on a BTA basis will not preclude such efficiencies because of the 
ability to aggregate licenses geographically. In addition, in much the 
same way as the variety of spectrum block sizes allows various 
strategies, the variety of geographic sizes will allow firms to 
determine the optimal geographic strategy they wish to pursue. This 
will also help to meet the statutory objectives of disseminating 
licenses to a wide variety of licensees. In addition, allocating four 
of the six licenses on a BTA basis addresses the concern the rural 
buildout would not occur with MTA licenses.
    58. Finally, with regard to the Puerto Rico service area, the 
Commission will provide two separate BTA service areas in Puerto Rico, 
one for Mayaguez/Aguadilla-Ponce and the other for San Juan. This 
action recognizes the difficulties created by the mountain range 
separating these two areas. No parties opposed this request, and the 
Commission finds this adjustment to be in the public interest.
    59. The Commission agrees with the parties which oppose permitting 
geographic partitioning at this time, since there is a significant risk 
that partitioning can be used to circumvent construction requirements. 
While there may be efficiency enhancing geographic partitions, much of 
the benefit can be obtained through other arrangements that do not 
raise the same concerns about circumvention of the construction rules. 
On balance, the Commission concludes that it should not adopt a policy 
allowing general geographic partitioning, but should rather recognize 
that the balance may be different for particular groups of service 
providers, such as rural telephone companies or to create PCS ownership 
opportunities for companies owned by minorities or women. Therefore, 
the Commission will consider the issue of geographic partitioning for 
rural telephone companies and other designated entities in its 
forthcoming Order, to adopt specific competitive bidding rules for 
broadband PCS in PP Docket No. 93-253. There the Commission will 
address other designated entity preferences and will rely on the record 
in both proceedings in making final determinations on this matter. 
Also, the Commission will address whether it should recover the 
unserved PCS areas at the end of the ten-year construction period, in a 
later proceeding after it has had an opportunity to assess the scope of 
system build-outs.
    60. In developing a band plan for PCS, the Commission has had to 
weigh the spectrum requirements of licensed PCS with the amount of 
spectrum allocated for unlicensed PCS. For reasons described above, the 
new band plan moves all of licensed PCS to the lower band. As a result 
of this change, the amount of spectrum available for the operation of 
unlicensed PCS devices has been reduced from 40 to 20 MHz. This is the 
amount of spectrum originally proposed for unlicensed devices. Despite 
having less spectrum available for unlicensed PCS devices in the near 
term, the Commission believes that the new band plan will have an 
overall positive effect for consumers in terms of the diversity and 
utility of unlicensed devices available on the market, as well as the 
rapid deployment of competitive licensed PCS Services.
    61. One reason the Commission reaches this conclusion is that even 
without this change it is unlikely that the 20 MHz reallocated to 
licensed from unlicensed would have been used in the near term for 
unlicensed. The spectrum at 1890 to 1910 MHz was regarded as less 
desirable than the 20 MHz retained for unlicensed PCS at 1910-1930 MHz 
because it contains significantly more microwave incumbents. The 
Commission's expectation was that unlicensed devices first would 
operate on the 1910-1930 MHz spectrum because the cost of clearing this 
spectrum is significantly less. Licensed PCS providers, by contrast, 
provide ample evidence in the record that they are ready to begin the 
relocation of microwave incumbents in the lower band and provide 
service in the near term and can use the spectrum from 1890-1910 MHz 
rapidly. Thus, consumers are more likely to obtain immediate benefits 
if the Commission allocates this spectrum to licensed PCS rather than 
for unlicensed PCS devices.
    62. Another benefit of the new band plan is that the licensed and 
unlicensed PCS spectrum will be located in close proximity on the lower 
band. Consumers will have more choices for equipment that operates on 
both unlicensed and licensed PCS bands, and will not have to buy 
higher-priced equipment that operates on both the lower and upper PCS 
bands to have available the full array of service options with a single 
piece of equipment. Finally, the Commission intends that the initial 20 
MHz allocation for unlicensed PCS devices meet the near term spectrum 
requirements for unlicensed devices. To consider the long-term spectrum 
requirements of unlicensed PCS devices, the Commission intends to issue 
a Notice of Proposed Rule Making in the near future to identify 
additional spectrum for unlicensed PCS devices.
    63. For the reasons set forth above, therefore, the Commission 
concludes that consumers and manufacturers of equipment intended for 
use on the unlicensed band will benefit from the new band plan. This 
does not diminish the concern that there be sufficient spectrum 
allocated for unlicensed PCS devices to accommodate expected demand, 
and therefore as noted above, the Commission is committed to 
instituting a further rule making for this purpose to meet the long 
term requirements for unlicensed PCS devices, including those potential 
unlicensed uses that may not be accommodated readily in the initial 20 
MHz allocation.
    64. Private Use. The Commission agrees with the parties who argue 
that both commercial PCS service and unlicensed PCS devices will be 
able to meet many of the communications requirements of private 
entities. The PCS licensees will be permitted to tailor specific 
service applications to the particular needs of individual 
organizational customers. Any such service applications, of course, 
must be consistent with policies established for the regulation of 
commercial mobile radio services under Title II of the Communications 
Act.\21\ Such applications could include the use of dedicated capacity. 
Where such arrangements might not be satisfactory, entities desiring 
spectrum solely for internal private use could, of course, bid for 
licensed PCS spectrum individually or as a group intending to share the 
licensed facilities. Companies that value private use of the spectrum 
highly could win a license at auction; otherwise they could contract 
with a licensee to provide the services they need, or procure such 
services from resellers. Moreover, as many commenters argue, the 
Commission believes that setting aside spectrum for private interests 
would not help to achieve the goals set forth for PCS, and at the same 
time, could detrimentally affect competitive service provision and the 
efficient allocation of scarce spectrum resources. Also, the extent to 
which additional spectrum is required for private and public safety use 
is being considered in a separate proceeding that addresses allocation 
of spectrum below 5 GHz transferred from Federal government use.\22\ 
Accordingly, the Commission will not set aside a portion of the 
spectrum allocated to PCS exclusively for private PCS operations.
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    \21\See CMRS Second Report and Order, 9 FCC Rcd at 1439 n.130:
    The terms and conditions for different classes of customers may, 
of course, vary. Whether such differences are lawful would be a 
question of whether there is unreasonable discrimination under 
Section 202(a) of the [Communications] Act. In the case of 
individualized or customized service offerings made by CMRS 
providers to individual customers, the Commission intends to 
classify and regulate such offerings as CMRS, regardless of whether 
such offerings would be treated as common carriage under existing 
case law, if the service falls within the definition of CMRS.
    \22\See Notice of Inquiry, ET Docket No. 94-32, 59 FR 25589 (May 
17, 1994). This proceeding addresses, inter alia, a Petition for 
Rule Making filed by the Coalition of Private Users of Emerging 
Multimedia Technologies (COPE) for the development of an ``Advanced 
Private Communications Service,'' using 75 of the 200 MHz to be 
transferred to the Commission's jurisdiction from Federal government 
spectrum in compliance with the terms of the Omnibus Budget 
Reconciliation Act of 1993.
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    65. Mobile Satellite Services (MSS) Issues. The Commission 
recognizes the potential value of MSS as a service provider to rural 
areas that may not be economically served by PCS. It has thus given the 
petitions of MSS interests, including the various alternatives they 
suggest, careful consideration. Having been instrumental in obtaining 
the international MSS allocations at WARC-92, the Commission would not 
wish unnecessarily to reduce its flexibility to implement those 
allocations in the U.S. On the other hand, the large potential value of 
PCS, which is a matter of record in this proceeding, must be 
recognized. It should be noted that these MSS bands are also allocated 
internationally to fixed and mobile services. PCS, as it has been 
broadly defined, within the international definition of fixed and 
mobile services and is thus consistent with international agreements on 
the use of this spectrum. Because spectrum is a limited resource, the 
Commission finds that to satisfy the goal of allocating sufficient 
spectrum for a competitive PCS service, it must allocate to PCS a 
portion of the spectrum internationally designated for MSS. The 
Commission believes that the new plan it is adopting today strikes an 
appropriate balance between these two services and will provide maximum 
benefits to U.S. consumers.
    66. The Commission disagrees with the assertion of several parties 
that they were provided insufficient notice and opportunity for comment 
on the possibility that the Commission might allocate a portion of the 
internationally designated MSS spectrum to PCS. The PCS Notice sought 
comment on a wide range of allocation options for licensed PCS ranging 
from three to five spectrum blocks of from 20 to 40 MHz each. Several 
of the possible combinations of block size and number of blocks would 
require the use of spectrum in the bands designated internationally for 
MSS, and at least one option (i.e., five blocks of 40 MHz each) would 
require virtually all of that spectrum. The Commission specifically 
called attention to the fact that some of these options would 
necessarily require the use of spectrum in other emerging technologies 
bands, and it did not exclude emerging technologies bands that had been 
designated internationally for worldwide or Region II MSS. Thus, 
contrary to petitioners' contentions, the Commission believes that 
parties were given adequate notice of the possibility that the final 
PCS allocation could include some or even all of the internationally 
allocated MSS spectrum in these bands.
    67. Under the new band plan, the entire allocation to broadband PCS 
is located in the 1850-1990 MHz band. The 2180-2200 MHz band, which was 
allocated to PCS in the Second Report and Order has been returned to 
reserve status for future allocation potentially to MSS, as requested 
by the MSS interests. The new band plan, however, removes an equal 
amount of spectrum from potential consideration for MSS in the band 
1970-1990 MHz band, 10 MHz of which can be used for Region II MSS 
service. The Commission believes that its new band plan accommodates 
the future potential of MSS more fully than its original plan and 
therefore addresses the concerns of a majority of the MSS industry.
    68. By shifting the PCS allocation out of the 2180-2200 MHz band 
the Commission has preserved the option of allocating some or all of 
that spectrum to MSS in the future. This preserves 50 MHZ of the 60 MHz 
allocated worldwide and thus fits more closely with the international 
agreements. Twenty MHz of this worldwide MSS spectrum is paired with 
spectrum inside the current broadcast auxiliary band. In the future, 
this spectrum could potentially be reallocated for MSS use on a shared 
basis, if feasible, or exclusively, if suitable replacement spectrum 
could be found for broadcast auxiliary service. The commission intends 
to initiate a proceeding to investigate these additional allocation 
possibilities in the near future, with the purpose of accommodating MSS 
operations within the remaining internationally designated bands, while 
at the same time maintaining sufficient spectrum for broadcast 
auxiliary use. It also intends to pursue additional international 
allocations for MSS at WRC-95.\23\
---------------------------------------------------------------------------

    \23\See Preparation for International Telecommunication Union 
World Radio Communication Conferences, IC Docket No. 94-31, FCC 94-
96, released May 5, 1994.
---------------------------------------------------------------------------

Ownership Rules and Cellular Eligibility

    69. In the Second Report and Order, the Commission recognized that 
permitting cellular licenses to participate in PCS could foster rapid 
development of PCS by taking advantage of cellular providers' 
expertise, economies of scope between PCS and cellular service, and 
existing infrastructures. The Commission also recognized that new 
entrants would foster competition and expressed concern about potential 
anticompetitive conduct by parties with cellular and PCS interests in 
the same geographic area. To balance these competing interests, 
cellular licensees were permitted to obtain PCS licenses outside of 
their cellular service areas, but restricted them each to one 10 MHz 
PCS license within their respective cellular service areas.
    70. For the purposes of its PCS rules, the Commission defined an 
attributable cellular interest as ownership of 20 or more percent of a 
cellular license. If an entity has attributable cellular interests in a 
license or licenses individually or jointly covering 10 or more percent 
of the population in a PCS service area, then that entity would be 
restricted to one 10 MHz PCS license in that area. If an entity holds 
interest of less than 20 percent in a cellular license, these interests 
are not considered attributable and the population covered by that 
cellular license area is not counted towards the 10 percent population 
threshold. If an entity holds attributable cellular interests, i.e., 
interests of 20 percent or more, in licenses that individually or 
jointly cover less than 10 percent of the population in a PCS service 
area, that entity may hold licenses for up to 40 MHz of PCS spectrum in 
that PCS service area. Entities that have attributable interests that 
put them over the 10 percent population overlap threshold in a PCS 
service area are deemed ``in market'' cellular entities and as such may 
only hold 10 MHz of PCS spectrum in that PCS service area.
    71. The 20 percent attribution rule applies on a cumulative basis 
to all parties with ownership interests in cellular operations. Thus, 
for example, if four participants in a PCS venture each have an 
ownership interest of 5 percent in the same cellular licensee serving 
more than 10 percent of the population of a BTA, the PCS venture in 
which they all have an interest is deemed to have a 20 percent cellular 
ownership interest and is restricted to one 10 MHz frequency block in 
that BTA. However, if the four parties to a PCS application each own 5 
percent interests in four different cellular licensees, each of which 
serves 10 or more percent of the BTA, together they are not restricted 
to one MHz block because they do not exceed the 20 percent attribution 
threshold as to any single cellular license. Therefore, in the latter 
instance, the parties are permitted to purchase a full 40 MHz PCS 
spectrum block.
    72. Twenty-four parties petitioned for reconsideration of various 
aspects of the cellular eligibility rules and general attribution 
standard used for invoking the PCS ownership limits. The petitioners 
addressed: (1) eligibility of cellular licensees; (2) the 20 percent 
attribution standard; (3) the 10 percent population standard; (4) post-
auction compliance by cellular licensees with the ownership 
restrictions; (5) exemptions from the eligibility restrictions for 
certain cellular providers; and (6) the interests that should be deemed 
attributable for purposes of calculating ownership and control of a PCS 
or cellular license.
    73. Eligibility of Cellular Licensees for PCS Licenses. Six parties 
advocate eliminating all eligibility restrictions on cellular 
providers. Fourteen parties agree with the concept that there should be 
some restrictions on cellular participation in PCS. These latter 
parties' positions range from agreeing with the standards of the Second 
Report and Order to arguing for different measures of both coverage and 
ownership to favoring different standards entirely, but these parties 
all accept the idea that there should be limitations on cellular 
entities holding PCS licenses.
    74. The Commission has decided to retain restrictions on cellular 
participation in PCS. In making this decision, the Commission is aware 
of the benefits that the cellular industry has to offer PCS, including 
capital, economies of scope, and experience and expertise in the 
provision of mobile communications services. For this reason, the 
Commission will continue to allow cellular participation in PCS. In 
addition, the Commission will make some changes in the specific 
standards of the Second Report and Order, but it remains convinced that 
restrictions on in-market cellular providers are necessary to achieve 
its goal of maximizing the number of new viable and vigorous 
competitors. In reaching this conclusion the Commission does not assume 
that in-market cellular providers will engage in illegal 
anticompetitive behavior; the goal in crafting these rules should not 
be to prevent anticompetitive behavior which may or may not 
materialize, but rather, to promote competition. The Commission 
concludes that the public interest would be best served by maximizing 
the number of viable new entrants in a given market.
    75. Finally, while some petitioners point out that SMR and MSS 
providers are not subject to the same eligibility restrictions as 
cellular providers, only one affirmatively requests that the 
eligibility restrictions of the Second Report and Order be extended to 
wide-area SMR services. The Commission feels that imposing eligibility 
restrictions is beyond the scope of this proceeding. It is, therefore, 
addressing in another proceeding the eligibility of wide-area SMRs and 
other commercial radio services to participate in PCS.
    76. Attribution Rules. In the Notice of Proposed Rule Making in 
this proceeding, the Commission noted its expectation that PCS and 
cellular licensees serving the same area will compete on price and 
quality of service. If therefore stated that competitive benefits might 
be reduced if cellular licensees are permitted to acquire PCS licenses 
within their service areas and proposed an outright prohibition on 
cross-ownership of PCS licenses by entities with cellular interests, 
except that ownership interests of less than one percent (or less than 
five percent for publicly traded companies) would not be considered. In 
the Second Report and Order, the Commission found this approach too 
restrictive. Although the Commission still sought to avoid the 
potential for undue market power by entities with significant existing 
market share, it balanced that goal against recognition of the 
expertise that cellular licensees would bring the PCS markets. It also 
noted that many entities possess non-controlling interests in cellular 
licensees exceeding 5 percent but, due to the non-controlling nature of 
their equity interests, create little potential four anti-competitive 
behavior.
    77. The Commission therefore adopted a simple, bright-line 20 
percent cross-ownership attribution standard, pursuant to which 
entities with 20 percent or greater ownership of a cellular operator 
were limited to one 10 MHz BTA license for broadband PCS in the same 
region as their attributable cellular interests. It did not distinguish 
between different types of ownership such as voting and non-voting 
stock and general and limited partnership interests. The Commission 
noted, however, that while a clear 20 percent ownership threshold may 
be more administratively efficient, a concern remained that some 
parties with cellular ownership interests will use the rules as an 
opportunity to control local cellular licensees while retaining less 
than 20 percent ownership. Since such occurrences would undermine the 
intent to limit cellular ownership in PCS, the Commission said that it 
would review carefully this decision, and it explicitly put parties on 
notice that it would reconsider this limit if its intent to ensure 
competition between cellular and PCS would be undermined under the 
ownership rules adopted in the Second Report and Order.
    78. With respect to ownership interests in multiple PCS licensees 
in a single market, the Commission adopted a 5 percent attribution 
threshold for purposes of the 40 MHz PCS spectrum limit and for 
purposes of determining cellular ownership in a PCS licensee. It stated 
that PCS ownership interests of 5 percent or more will be attributed to 
the holder of the interest. In adopting this standard, the Commission 
cited similar market-based concerns, noting its desire to ``ensure that 
[no entity] is able to exert undue market power through partial 
ownership in multiple PCS licensees in a single service area.'' The 5 
percent threshold is consistent with the ownership thresholds applied 
to cellular and broadcast licensees. The Commission did not find any 
potential advantages possessed by any existing PCS licensees inasmuch 
as there are no such licensees. Similarly, it did not discuss the need 
to accommodate settlements among PCS licensees resulting in non-
controlling interests of between 5 and 20 percent because there are no 
such settlements in the PCS context. The Commission therefore adopted 
this 5 percent limit for application to PCS multiple ownership, whereas 
it appeared too restrictive in the cellular-PCS cross-ownership context 
given the realities of existing historical cellular settlements.
    79. Twelve parties petitioned for reconsideration of the cellular 
ownership attribution standard. The petitioners recommend the following 
alternatives: (1) raising the 20 percent level of permissible ownership 
in cellular licensees; (2) attribution based on control rather than 
ownership; (3) applying an affiliation standard like that in the 
Commission's telco-cable cross-ownership rules; (4) applying an 
attribution standard based on the rules used to enforce the alien 
ownership restrictions under Section 310 of the Communications Act; and 
(5) applying the same attribution rules to PCS as those applied to 
broadcast interests.
    80. The Commission continues to believe that the PCS and cellular 
ownership attribution decisions adopted in the Second Report and Order, 
with certain modifications, are appropriate and strike a reasonable 
balance between promoting vigorous competition and the advantages of 
allowing experienced mobile communications operators such as cellular 
licensees to participate as PCS licensees. The Commission disagrees 
with those parties which suggest the same 20 percent attribution limits 
should apply to cellular/PCS cross-ownership and to PCS multiple 
ownership. Generally, the 5 percent standard for all cross-ownership 
situations would be preferable, to maximize competition. The Commission 
is adopting an attribution threshold of 5 percent for multiple PCS 
ownership purposes to prevent any party from exerting market power 
through substantial partial ownership in multiple PCS licensees in the 
same service area. There is no countervailing reason to risk reducing 
competition by raising this 5 percent limit for PCS multiple ownership 
limits. Moreover, the 5 percent threshold is consistent with ownership 
thresholds applied to cellular and broadcasting.
    81. Such a strict rule for PCS/cellular cross-ownership, however, 
would not recognize the history of cellular licensing. The 20 percent 
ownership attribution standard for cellular operators was adopted, in 
part, because settlements during the initial phase of cellular 
licensing resulted in partial and often non-controlling interests in 
those licensees. In light of this history, it would be unfair and 
unduly restrictive to place the same 5 percent limit on cellular/PCS 
cross-ownership. For this reason, the Commission decided to allow a 20 
percent cellular ownership interest. Further, the Commission believes 
that given the nature of these settlement agreements, permitting this 
level of ownership will not decrease the incentives for competition. 
Therefore, divestiture to a lower level of ownership will not be 
required. The 20 percent standard permits many entities with partial, 
non-controlling cellular interests to participate in PCS. In adopting 
the 20 percent standard, the Commission recognized that participation 
by cellular operators in PCS would offer benefits that include 
promoting early development of PCS by taking advantage of cellular 
providers' expertise and permitting attainment of economies of scope 
between PCS and cellular service and existing infrastructure. The 
Commission is therefore making an exception to its usual treatment of 
cross-ownership for purposes of cellular-PCS cross-ownership.
    82. The Commission disagrees with those entities that argue for a 
higher cellular ownership attribution threshold such as 35 percent and 
believes that 20 percent is the proper standard. A higher attribution 
threshold (i.e., above 20 percent) for all incumbent cellular entities 
would tend to suppress competition, because the licensee would have 
economic incentives not to compete vigorously against competitors in 
which it holds a substantial equity interest. These standards, with 
exceptions discussed below related to certain designated entities, 
remain appropriate, and accordingly the Commission affirms them.
    83. The Commission's goals here include ensuring that the holder of 
the PCS license has strong incentives to compete against the cellular 
licensees in the same geographic market. A PCS licensee that has a 
large equity stake (i.e., more than 20 percent) in a cellular license 
in the same area has less incentive to compete vigorously against its 
own equity interest in a cellular provider, even though it may not 
exercise legal control over the cellular licensee. The attribution 
rules provide the right balance between maximizing competition and 
allowing cellular entities to bring their expertise to PCS. The 
Commission therefore will not adopt a rule that would require finding 
that a party had a ``controlling interest'' in a cellular licensee 
before it would be prohibited from investing in a PCS licensee in the 
same area. Such a rule could substantially delay the licensing of PCS 
and would not serve the goal of promoting vigorous competition between 
PCS and cellular licensees in the same area. The Commission believes 
that the bright-line rules being adopted will result in a faster, less 
burdensome licensing process.
    84. The Commission also rejects the suggestion that it prohibit all 
``affiliations'' between cellular and PCS licensees in the same market, 
along the lines of its telco-cable cross-ownership rules. These rules, 
which are even more restrictive than the broadcast attribution rules, 
would not provide the flexibility to recognize the history of 
settlement agreements in cellular licensing and would not allow us to 
draw on the experience and expertise provided by cellular providers who 
have low equity stakes. They also might have the effect of restricting 
contracts between PCS licensees and companies financing their equipment 
and the build-out of their PCS systems, which could seriously impair 
rapid investment in and deployment of PCS systems.
    85. The Commission also disagrees that the alien ownership rules 
provide a clearer guide than the present attribution standards. Because 
the alien ownership restrictions set forth in section 310(b) of the 
Communications Act were created specifically to avoid an undue 
concentration of foreign influence in the direction of entities 
involved in communications, the attribution thresholds defined in that 
section are more complicated than the 5 percent/20 percent bright-line 
thresholds adopted here. Further, unlike the rules in the broadcast 
context, the Commission will not allow use of a ``multiplier'' in the 
case of multi-tiered entities; the interest of the subsidiary is 
attributed in full to the parent. The Commission agrees, however, that 
both voting and non-voting stock should be included in determining 
percentage of ownership of PCS and cellular entities.
    86. In determining attributable interests for the purposes of both 
the 20 percent cellular/PCS cross-ownership rule and the 5 percent PCS/
PCS multiple ownership rule, the Commission agrees with some of the 
commenting parties that some clarifications and modifications to the 
attribution rules are warranted. The attribution rules must be simple 
for applicants to understand because they are essential to enforcement 
of the PCS spectrum cap and the PCS/cellular cross-ownership rules. In 
the Second Report and Order, the Commission stated that it would 
consider all equity ownership, including voting and non-voting stock 
and limited partnership interests, in calculating the percentages of 
attributable ownership interest in a PCS or cellular licensee. It 
explained that it would count these interests even if they did not 
confer on the holder meaningful participation, because the public 
interest would best be served by a ``bright-line'' test. The Commission 
continues to believe that the ownership rules should be clear and easy 
to administer, and, to that end, it will provide further clarification 
about which of the ownership rules from the broadcast regime will be 
applied to PCS. The Commission declines to adopt the full panoply of 
attribution rules that it applies in the broadcast and in the telco/
cable contexts because it believes that the restrictions being adopted 
will be sufficient to prevent undue influence and preserve competition.
    87. The Commission clarifies that, for purposes of these ownership 
rules, controlling interests per se are attributable. As in other 
contexts, ``control'' means not only majority equity ownership, but 
includes any general partnership interest, or any means of actual 
working control over the operation of the licensee, in whatever manner 
exercised. The Commission will rely on existing case law for making 
control determinations where such issues arise.
    88. The Commission also clarifies that PCS equity investments of 5 
percent or more, and cellular equity investments of 20 percent or more, 
also are attributable. These equity interests are attributable because 
they support the goals of developing a competitive PCS service and 
reducing the incentive for any entity to retard the capability of the 
new PCS licensee to compete with the cellular or any other PCS licensee 
in which the entity has an attributable interest. Specifically, the 
following equity investments will be counted: voting stock, non-voting 
stock, and limited partnership interests.\24\ The percentage of 
ownership interest in a limited partnership will be based on the 
partner's economic interest in the partnership. Therefore, the 
Commission will assess the percentage of the partner's capital 
contribution as well as the percentage of profits and losses allocated 
to the partner. As noted above, general partnership interests are 
deemed attributable regardless of equity percentage because of the 
control conferred on general partners by the nature of their interest. 
The following investments are not attributable for multiple or cross-
ownership purposes: debt interests, including loans secured by the 
equipment used in the licensed system, and equity interests below the 
20 percent and 5 percent thresholds. These interests are of less 
consequence to or independent of the entity's performance and therefore 
provide little incentive to delay or dilute the participation of the 
new PCS license in the market. In addition, consistent with other 
multiple- and cross-ownership attribution standard, convertible debt 
instruments or options with rights of conversion to equity interests 
shall not be attributed unless and until conversion is effected.
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    \24\Thus, in a stock company, PCS and cellular interests of 5 or 
20 percent, respectively, of the total outstanding stock as well as 
interests of 5 or 20 percent, respectively, of the outstanding 
voting stock will be attributable.
---------------------------------------------------------------------------

    89. The Commission also clarifies that the interests of a cellular 
or PCS licensee, or entity in control of a licensee, are attributed to 
the officers and directors of that entity. The Commission remains 
concerned about the ability of such individuals to exert influence over 
companies in which they have significant managerial responsibility. 
Therefore, if an officer of a company wishes to invest in a PCS market, 
he or she may only do so if this company itself could make the same 
investment in compliance with its rules.
    90. The Commission also will not allow an exemption for minority 
investors in companies controlled by a single majority shareholder. 
Although these rules are used in the broadcast area to exempt from 
attribution entities not believed to be able to exercise control over a 
licensee, in the context of PCS not allowing use of a ``multiplier'' 
serves the goal of maximizing competition. These rules will help ensure 
against undue influence, short of control, by minority stockholders and 
distant stockholders in parent or intermediate corporations.
    91. Through an ongoing proceeding concerning multiple ownership of 
CMRS licensees, the Commission will address whether it should change 
its rules to restrict or attributable resale, management agreements or 
other ownership arrangements that could confer possible anticompetitive 
incentives on parties with multiple CMRS interests. This proceeding 
will examine whether and to what extent such arrangements could be used 
to exert control over more spectrum than is permitted under the PCS 
spectrum cap (40 MHz) or the proposed CMRS spectrum cap.
    92. Attribution Rules for Certain Designated Entities. The 
Commission agrees that relaxing the cellular eligibility restrictions 
is appropriate for designated entities. It recognizes that many 
designated entities are merely passive investors in cellular operators 
and, because of their size, are unlikely to influence pricing 
decisions. In addition, the Commission seeks to address Congress' goal 
of encouraging the participation of designated entities in the auction 
process and in the provision of spectrum-based services. The Commission 
believes that designated entities which have some interests in cellular 
operations may be especially effective PCS competitors because of their 
cellular experience. This will help ensure that service is brought 
quickly to underserved areas and that designated entities become viable 
competitors. In particular, it believes that rural telephone companies 
and some small cellular companies, due to their existing 
infrastructure, are uniquely positioned rapidly to introduce PCS 
services into their service areas or adjacent areas. However, 
designated entities are not entirely exempted from the cellular 
eligibility rules, because such an exemption could foreclose 
competition from a new PCS entrant. To the extent that designated 
entities are involved in the control of cellular services, there is 
potential for some of these parties to compete less vigorously in the 
nascent PCS industry. In balancing these interests, the Commission 
concludes that increasing the cellular attribution threshold for 
designated entities from 20 percent to 40 percent, if non-controlling, 
would be appropriate and would further the Congressional mandate noted 
above. Accordingly, the Commission will permit a designated entity to 
hold a non-controlling equity interest of up to 40 percent in a 
cellular licensee without being subject to the cellular PCS eligibility 
restrictions.
    93. The Commission has decided to increase the cellular attribution 
threshold from 20 percent to 40 percent for any entity proposing to 
invest in businesses controlled by members of minority groups and/or 
women. An entity may hold up to a 40 percent interest in cellular 
licensees before its cellular interest will be deemed attributable, but 
must limit its participation in a PCS licensee controlled by women or 
minority group members to a non-controlling interest. This action will 
encourage entities with attributable cellular interests to make non-
controlling investments in businesses owned by minorities and/or women, 
furthering Congress' objective of ensuring the participation of these 
entities in the competitive bidding process by encouraging an 
alternative source of financing. The record indicates that the main 
challenge that minorities and women face when seeking to participate in 
telecommunications licensing is ready access to capital. Investments by 
cellular providers in these designated entities should increase the 
entities changes for success in the actions and later in service 
competition by providing access to capital and valuable industry 
experience.
    94. The Commission is not granting a blanket exemption to in-region 
cellular parties with 40 percent or greater equity or control to 
participate in consortia that include designated entities. Such an 
exemption would allow a cellular entity to control a cellular license 
and create the potential for the entity to influence the PCS licensee 
to compete less vigorously. The potential for a cellular entity to 
exercise undue influence over the PCS licensee, especially absent 
limits on the control exercised by the cellular carrier over the 
designated entity and its own cellular license, is too great, given the 
superior knowledge and experience of cellular providers. Therefore, the 
Commission has relaxed the cellular attribution standard to permit 
entities that hold up to 40 percent non-controlling equity in cellular 
licensees in the same service area to make non-controlling investments 
in PCS licensees controlled by woman- or minority-owned businesses. 
Because their investment will be non-controlling in both the PCS and 
cellular license, the threat to competition is diminished. This relaxed 
standard encourages availability of capital to PCS businesses owned by 
women and minorities, yet guards against the dominance of these 
designated entities by entities which also control a cellular license 
in the same service area.
    95. The Commission will not exempt non-wireline cellular carriers 
from the PCS attribution rules, since this action, which was considered 
in the Second Report and Order, could impair successful achievement of 
the goal of creating the maximum number of new competitors.
    96. These important modifications will increase the efficacy of our 
cellular eligibility rules by guarding against the improper exercise of 
market power by cellular providers through controlling interest in PCS 
systems overlapping their cellular coverage areas. These changes will 
better address concerns regarding reduced competition without 
unnecessarily restricting the ability of cellular providers to 
participate in PCS, and will provide further incentives for investment 
in and participation by designated entities in PCS.
    97. Population Standard. When the Commission adopted regulations 
restricting the eligibility of certain cellular licensees to hold PCS 
licenses within their cellular service areas, it noted assertions that 
cellular operators might have unfair competitive advantages over PCS 
licensees. On the other hand, it also noted the valuable contributions 
that the expertise of cellular providers could provide to the PCS 
industry. Finally, the Commission noted that, because of different 
geographic licensing boundaries for cellular and PCS, there was a 
potential for excluding cellular providers from PCS markets even though 
the degree of overlap was minimal. The Commission decided that such an 
exclusion was neither fair nor desirable for maximizing competition. In 
resolving these conflicting interests, the Commission adopted the 20 
percent ownership attribution rule to define cellular ownership for 
purposes of the PCS rules. For entities at or exceeding 20 percent 
ownership, it applied a 10 percent population coverage overlap test to 
determine whether the cellular licensee would be restricted to a single 
10 MHz PCS license.
    98. The Commission has decided to retain the 10 percent population 
overlap threshold adopted in the Second Report and Order. The goal is 
to provide for entry into the PCS market for the maximum number of 
viable competitors. The Commission remains concerned about the 
potential for cellular operators to exercise market power and to reduce 
the number of viable competitors in the PCS market. The Commission 
believes that the 10 percent population overlap figure is justified and 
should foster robust competition and prevent competitive abuse. 
Balancing the potential benefits of the participation in PCS of 
cellular providers and the potential harms of reduced competition, the 
Commission is convinced that the 10 percent coverage threshold is 
appropriate. This limit ensures the opportunity for the emergence of 
the maximum number of competitors that the market will support for 90 
percent of the population. Increasing this limit beyond 10 percent 
would create greater risk that consumers would be denied the benefit of 
vigorously competing service providers. This threshold is also an 
important means of encouraging new entrants in each area, thereby 
enhancing competition. On balance, the Commission concludes that the 10 
percent population coverage threshold promotes competition among 
licensees serving a significant percentage of the population, while 
providing some recognition of the overlaps that will result from the 
different licensing areas for PCS and cellular. In addition, as 
discussed below, divestiture will be allowed for those entities with 
CGSA/PCS service area population overlaps between 10 and 20 percent. In 
reaffirming the 10 percent threshold, the Commission rejects proposals 
to adopt a national population measure or to use a multiplier formula.
    99. The Commission does not believe that a national population test 
would achieve the goal of providing the maximum number of new 
competitors in each market. PCS is being licensed on a local and 
regional, not national basis. A cellular entity which operates in one 
city but has no presence in another city would be a new competitor in 
the latter city. The Commission seeks to encourage that entity's PCS 
participation in the second city, because of the likelihood that the 
experience and economics it brings from its cellular business will 
stimulate PCS development in the market and promote vigorous 
competition to other PCS licensees.
    100. The Commission does not believe that this ``effective POP'' 
attribution rule, based on a figure reached by multiplying the 
percentage overlap of the population in the PCS and cellular service 
areas by the percentage ownership in the cellular provider, would 
achieve the goal of maximizing the number of new competitors. Under 
this rule, an entity could have a majority equity interest in cellular 
licenses covering 40 percent of the population in that service area and 
remain eligible for 40 MHz of PCS spectrum. This would result in fewer 
competitive choices for 40 percent of the consumers in that market. 
This would not achieve the goal of maximizing competitive choices for 
as many consumers as possible.
    101. Post-Auction Divestiture. The Commission concludes that it 
would be reasonable to permit incumbent cellular operators, in certain 
defined circumstances, to divest their cellular interests in order to 
become PCS licensees. These operators could become eligible for 40 MHz 
of PCS spectrum by either reducing population overlap or ownership 
levels to below the standards discussed above. Either could be 
accomplished before the auction, but that would involve selling the 
cellular interests on an assumption that the operator would be the 
successful bidder for a 30 MHz license.
    102. Further, the Commission believes that allowing unlimited 
divestiture of the cellular interest after the auction raises concerns 
that abuses could occur during or after the bidding process. If 
afforded an unlimited opportunity to divest, cellular operators with 
significant areas of overlap could have incentives to use the bidding 
process to forestall licensing of new competitors in the market, 
because the cellular operator would be in control of both a cellular 
system and one of the three or four possible 30 MHz broadband PCS 
licenses. There are instances, however, in which such abuses are 
unlikely to occur. A cellular operator with less than 20 percent 
population coverage in the PCS service areas would have little 
incentive to risk incurring penalties for abusing the bidding process 
when PCS offers greater potential to serve the entire MTA or BTA. These 
cellular operators have more to gain by broadening their customer base 
by offering competitive PCS services in place of their overlapping 
cellular interests in excess of 10 percent than they do by abusing the 
bidding process to forestall competition. Operators with population 
overlaps in excess of 20 percent have increasingly greater incentives 
not to start competitive PCS businesses.
    103. It is appropriate to allow cellular operators to divest 
themselves of attributable cellular interests that do not comply with 
the cellular/PCS cross ownership restriction after winning more than 10 
MHz of PCS spectrum in the PCS auctions, provided that the divestiture 
occurs within the short time frame set forth below. However, because a 
cellular operator with significant overlaps may have incentives to 
delay the rapid introduction of PCS service, the Commission will permit 
cellular divestiture only for cellular operators that serve less than 
20 percent of the PCS service area. If the overlap consists of several 
cellular licenses, the incumbent may sell some of the licenses and keep 
others if the result is in compliance with the attribution and 
population overlap thresholds. This will help achieve the goals of 
rapid introduction of PCS service and competitive delivery because 
those entities with cellular operations near a PCS service area may be 
able to combine the operation into a single efficient operation that 
would benefit consumers.
    104. The Commission has decided to allow the post-auction partial 
sale of attributable cellular interests so that entities may come into 
compliance with the cellular eligibility rules. Procedurally, it will 
require that a PCS applicant that meets the criteria for post-auction 
divestiture submit with the PCS license application (short-form) a 
statement that, if successful in obtaining more than 10 MHz of 
spectrum, it will come into complete compliance with the cellular/PCS 
cross-ownership restriction within 90 days of the PCS license grant. If 
more than 10 MHz is obtained, the long-form application for PCS 
licensing must be accompanied by a signed statement from the applicant 
that the cellular property causing the applicant to be in excess of the 
10 percent population overlap, or enough equity to bring the entity 
into compliance with the attribution threshold, will be divested within 
90 days of the PCS license grant to bring ownership interest below the 
permitted attributable ownership limits. If the PCS applicant is 
otherwise qualified, the PCS application will be granted subject to a 
condition that the PCS licensee come into compliance with the PCS/
cellular cross-ownership rule within 90 days of grant.
    105. As a condition of its PCS license, within 90 days of PCS 
license grant the PCS licensee must certify to the Commission that the 
applicant and all parties to the application have come into compliance 
with the PCS-cellular cross-ownership rules. If the PCS licensee fails 
to submit this certification within 90 days, the Commission will invoke 
the condition on the PCS license, cancelling it immediately and 
retaining all monies tendered. In addition, the Commission may 
investigate whether the certifications on divestiture are evidence of 
misrepresentations that call into question the party's qualification to 
hold its cellular license. The PCS licensee may divest the prohibited 
interest to an interim independent trustee if a buyer has not been 
secured in the required time frame as long as the applicant has no 
interest in or control of the trustee, and the trustee may dispose of 
the license as it sees fit.

Construction Requirements

    106. In the Second Report and Order, the Commission stated its 
expectations that broadband PCS would be a highly competitive industry 
and that licensees would have the incentive to construct facilities to 
meet the demand for service in their licensed areas. The Commission 
concluded that specific channel loading requirements are unnecessary; 
however, it required licensees to meet specified construction 
benchmarks to ensure efficient spectrum utilization and service to the 
public. Specifically, it required licensees to offer service to one-
third of the population in their service area within five years of 
licensing, two-thirds of the population in their service area within 
seven years, and 90 percent of the population within ten years. The 
Commission stated that failure to meet these requirements would result 
in forfeiture of the license and the licensee would be ineligible to 
regain it.
    107. The Commission believes that PCS will be a highly competitive 
service and that licensees will have incentives to construct facilities 
to meet the service demands in their licensed service areas. Further, 
it believes that the use of competitive bidding for PCS licensing and 
the restrictions on the amount of spectrum that a licensee may control 
in a geographic area will limit the likelihood that spectrum will be 
warehoused. Nevertheless, the Commission continues to believe that 
minimum construction requirements are necessary to ensure that PCS 
service is made available to as many communities as possible and that 
the spectrum is used effectively. The Reconciliation Act amendments 
require the Commission to impose performance requirements, but the 
Commission believes that relaxation of the requirements is desirable to 
ensure an economical deployment of the service to promote opportunities 
for PCS ``niche'' services, and to facilitate a competitive market.
    108. Accordingly, the construction requirements are amended as 
follows. All 30 MHz broadband PCS licensees will be required to 
construct facilities that provide coverage to one-third of the 
population of their service area within five years of initial license 
grant and to two-thirds of the population of their service area within 
ten years. The 10 MHz licensees will be required to meet a single 
construction requirement of providing coverage to one-fourth of the 
population of their service area within five years; or alternatively, 
they may submit an acceptable showing to the Commission demonstrating 
that they are providing substantial service. The Commission recognizes 
that these requirements are less than the requirement for narrowband 
PCS licensees, but it believes that this difference is appropriate 
given the higher expected construction costs involved for broadband 
PCS. Moreover, since licensees must purchase their licenses, they will 
have added economic incentives to construct their systems as rapidly as 
possible and introduce service to a significant percentage of the 
population. In this regard, the Commission also believes that these 
relaxed construction requirements may increase the viability and value 
of some broadband licenses, especially those in less densely populated 
service areas. Finally, since most areas are already served by cellular 
and SMR providers, it is unnecessary to require PCS licensees to 
provide identical or similar services to areas where it is uneconomic 
to do so. With regard to the 10 MHz licensees, the reduced construction 
requirement will make these licenses more attractive to applicants 
intending to provide residential, cutting-edge niche services or 
services to business and educational campuses where the population may 
be small except during business or school hours.
    109. At the five-year benchmark the Commission will require all 
licensees, and again at the 10-year benchmark for 30 MHz licensees, to 
file a map and other supporting documentation showing compliance with 
the construction requirements. Licensees failing to meet the population 
coverage requirements described above will be subject to the license 
forfeiture penalties adopted in the Second Report and Order. Even with 
these requirements, factors such as incumbent microwave operation or 
sparse population density in some instances could make compliance 
difficult. In instances where the circumstances are unique and the 
public interest would be served, the Commission will consider waiving 
the requirements on a case-by-case basis. These revised construction 
requirements will ensure efficient spectrum utilization and promote 
significant nationwide coverage without imposing substantial cost 
penalties on licensees that serve less densely populated areas. In this 
regard, the Commission believes that these changes generally address 
the concerns of those parties that suggested lowering the construction 
requirements for designated entities or for BTA service areas.
    110. The Commission also recognizes the desirability of encouraging 
more than one provider to serve a diverse geographic area, and notes 
that resale of a licensee's geographic area to other entities, subject 
to the licensee's control, is not prohibited by its rules. Accordingly, 
it recognizes that licensees may resell spectrum, and believes that 
this will facilitate the deployment of PCS. Whether or not the licensee 
enters into resale arrangements, it will be responsible for insuring 
that the coverage requirement and all the other requirements of the 
rules are met. The reseller will not be a separate licensee, but 
rather, will operate subject to the control of the licensee. Resale 
will encourage service provision, particularly to rural areas, and 
allow smaller, predominantly rural companies to participate in PCS. The 
Commission intends to examine in another proceeding whether resale 
arrangements confer attributable interests on the reseller.
    111. In summary, these relaxed construction requirements will 
foster provision of PCS services and will promote diversity in their 
provision. Permitting licensees to resell service subareas, subject to 
the licensee's control, will permit smaller, rural companies to provide 
PCS without participating in the competitive bidding process. Finally, 
the development of PCS in rural and other under-served areas will be 
closely monitored, and, if necessary, these construction requirements 
will be readdressed to ensure that the Commission's goals for wide area 
service are met.

Technical Standards

    112. Roaming and Interoperability Standards. In the Second Report 
and Order, the Commission provided maximum flexibility in technical 
standards to allow PCS to develop in the most rapid, economically 
feasible and diverse manner. Specific technical standards were 
prescribed only to the extent necessary to avoid harmful interference. 
The Commission recognized that several industry technical and standards 
groups were addressing matters related to PCS technical standards. It 
encouraged those groups to consider ways of ensuring that PCS users, 
service providers, and equipment manufacturers could incorporate 
roaming, interoperability and other important features in the most 
efficient and least costly manner, noting that PCS will be more useful 
to the extent that users are not limited by geography or by their 
ability to use their equipment with different systems.
    113. The Commission continues to believe that a flexible approach, 
applying only those standards necessary to prevent interference, is 
appropriate. As indicated in the Second Report and Order, this will 
allow PCS to develop in the most rapid, economically feasible and 
diverse manner. Interoperability for PCS is an important and beneficial 
goal; however, acceptable interoperability is likely to emerge between 
PCS licenses in a timely manner without the Commission's intervention. 
The Commission's decisions to provide for large regional MTA licenses, 
to move all PCS licenses to the lower band, and to permit further 
aggregation of spectrum blocks across geographic regions all foster 
wide-area roaming and interoperability. In addition, competitive 
bidding for PCS licenses will facilitate the development of regional or 
nationwide systems.
    114. The Commission is also aware that the industry is now working 
aggressively to complete several voluntary interoperability standards 
for PCS in a timely manner. It strongly supports these efforts and 
continues to encourage the industry's work in this area. The 
availability of interoperability standards will deliver important 
benefits to consumers and help achieve the objectives of universality, 
competitive delivery of PCS, that includes the ability of consumers to 
switch between PCS systems at low cost, and competitive markets for PCS 
equipment.
    115. Interoperability, not only nationwide on one block but also 
between PCS spectrum blocks, should be in the business interest of all 
PCS providers. Such broad interoperability will increase the economies 
of scale in manufacturing PCS equipment such as handsets, will made 
more likely to subscribe to PCS because they can easily move from 
carrier to carrier without having to purchase new handsets, and will 
make it easier for PCS licensees to aggregate blocks of PCS spectrum up 
to 40 MHz and to create wide-area or national PCS systems. For these 
reasons, the Commission believes that it is in the public interest for 
the industry eventually to achieve compatible interoperability 
standards for all PCS spectrum blocks. Nevertheless, it understands 
that the industry is not yet ready to arrive at any standard. In 
addition, the Commission does not want to discourage innovation in 
designing PCS services. Therefore, at this time the Commission is not 
mandating that the industry arrive at a single interoperability 
standard across all PCS spectrum blocks.
    116. The Commission intends to monitor the industry's progress in 
developing and implementing PCS technical standards in the particular 
hope that some of the standards proposed for PCS will be adopted or 
near completion at the time of the broadband PCS auction. If the 
development of PCS technology is not proceeding in a manner that will 
accommodate roaming and interoperability, the Commission may revisit 
this issue and consider what actions the Commission may take to 
facilitate the more rapid development of appropriate standards. 
Finally, to facilitate international acceptance of U.S. PCS technology, 
the Commission will be receptive to requests seeking its endorsement of 
completed ANSI standards, provided that such endorsement does not limit 
the flexibility of PCS licensees to select standards and technologies 
best suited to their needs.
    117. PCS Power Limits. In the Second Report and Order, the 
Commission established a maximum e.i.r.p. of 100 watts and a maximum 
antenna height above average terrain (HAAT) of 300 meters for PCS base 
stations. The Commission recognized that most PCS experimental systems 
operated at a maximum power of 10 watts e.i.r.p., but adopted a limit 
of 100 watts e.i.r.p. for base stations to permit additional 
flexibility in the design of PCS systems. It also specified a maximum 
power limit of 2 watts e.i.r.p. for mobile units.
    118. The Commission believes that increasing the maximum base 
station power limit to 1640 watts e.i.r.p. will improve PCS licensees' 
ability to configure their systems to best serve the needs of their 
customers and to compete with other mobile services such as cellular 
and wide-area SMR. Higher power will allow individual PCS base stations 
to serve larger geographic areas more effectively. The ability to serve 
larger geographic areas will also promote the goal of service to less 
populated areas. The flexibility to use higher power will provide PCS 
system operators greater flexibility in determining system 
architecture, i.e., the number of base stations deployed to serve a 
given area, based on service demands rather than adequate coverage 
considerations. This change will also facilitate the use of new 
technologies, such as high-gain, directional antennas, as well as 
potential improvements to the design of subscriber products. Further, 
there is no reason to restrict licensed PCS operations to afford 
additional protection to unlicensed devices. Such a limit would be 
detrimental to licensed PCS services and unfairly disadvantage blocks A 
and C that are adjacent to the unlicensed spectrum. In addition, 
unlicensed operations will be relatively short range and therefore can 
be designed to resist adjacent channel interference. Accordingly, the 
Commission is amending the rules to allow PCS base stations to operate 
with up to 1640 watts e.i.r.p. It is also amending PCS power/HAAT 
coordination distance requirements to reflect this increased maximum 
power level.
    119. While the Commission believes that the power limit for base 
stations should be increased to 1640 watts e.i.r.p., this increase in 
power should not be used in such a manner that the resulting PCS system 
becomes unbalanced so that mobile units are unable to communicate with 
the base station. To ensure balanced base-to-mobile and mobile-to-base 
communications, the Commission is also limiting the transmitter output 
power of the base station to 100 watts. By limiting the transmitter 
output power as well as e.i.r.p., it intends to promote the use of the 
high gain, directional antennas to achieve the larger coverage areas 
sought by the petitioners.
    120. The Commission disagrees with those parties requesting higher 
power for certain mobile and portable units. A lower power output limit 
minimizes exposure to radio frequency energy, see infra Section VIII. 
Further, increasing the power output limit for subscriber units would 
necessitate unreasonably stringent and unenforceable coordination 
requirements. Unless the location of such higher power mobile units 
could be strictly controlled, interference could result to fixed 
microwave operations and/or to other PCS systems in adjacent service 
areas. For these reasons, the maximum power limit for mobile and 
portable PCS transmitters will not be increased.
    121. Protection of Fixed Microwave Operations. In the Second Report 
and Order, the Commission stated that a principal concern in the 
authorization of PCS in the 2 GHz band is that existing fixed microwave 
operations be protected. It adopted the following approach for 
providing such protection: 1) required PCS licensees to provide the 
same level of protection to microwave operations that they currently 
provide under Part 94 of the Commission's Rules and through the use of 
EIA/TIA Bulletin TSB10-E criteria and methodology; 2) specified antenna 
height and power limits for PCS; 3) adopted requirements for PCS 
licensees to coordinate with fixed microwave operators; and, 4) 
provided methods for calculating interference from PCS to incumbent 
microwave operations.
    122. Specifically, in the Second Report and Order, the Commission 
adopted carrier-to-interference criteria for protection of short and 
medium length microwave links of 25 km (about 15 miles) or less. For 
path lengths longer than 25 km, where reliability is more dependent on 
the relative noise threshold and faded signal level, it limited the 
level of an interfering signal to that which would cause a 1 decibel 
(dB) degradation in the signal-to-noise ratio for analog systems or 
which would cause an increase in bit-error-rate (BER) from 10-6 to 
10-5 for digital systems. Finally, the Commission endorsed 
procedures for calculating interference to microwave operations.
    123. In the Second Report and Order, the Commission stated that 
with certain modifications, the level of protection provided under Part 
94 of its rules and through application of TSB10-E criteria and 
methodology is appropriate and will provide adequate protection to 
microwave users from PCS operations. It also stated that it would 
accept the new TSB10-F procedures, when adopted by EIA/TIA, for use in 
demonstrating compliance with the technical standards for PCS to fixed 
microwave interference. Although many parties request that operators be 
required to use TSB10-F exclusively instead of that set out at Appendix 
D of the Second Report and Order, the Commission cannot adopt this 
standard as the only acceptable method for determining interference to 
microwave operations from PCS operations until it has had a chance to 
evaluate its merits and provide it to the public for comment. 
Therefore, the Commission will maintain the procedures adopted in the 
Second Report and Order with some modifications.
    124. A prior coordination procedure is necessary to ensure that 
potential issues of interference are resolved before deployment of PCS 
systems. The Part 21 coordination requirements are appropriate for 
coordination of PCS and microwave facilities. These coordination 
procedures are generally familiar to the parties involved and are 
sufficient to address potential interference problems. Accordingly, the 
Commission will amend the PCS rules to include coordination procedures 
similar to those contained in Part 21. Coordination under Part 21 does 
not require written notification, and there is no reason to require 
that the PCS-to-microwave coordination be treated differently.
    125. Further, the Commission believes that permitting PCS entities 
to pay for and upgrade incumbent microwave operation, such as providing 
better antennas or filters that would prevent interference, would 
facilitate the implementation of PCS. Specifically it would provide 
more choices and opportunity for sharing between the two services. 
However, mandating such upgrades of the incumbents' facilities would be 
difficult to regulate. Therefore, the Commission will allow for such 
upgrades when all parties agree but will not mandate them.
    126. The Commission is concerned that excess fade margins in 
incumbent systems will inhibit the ability of PCS entities and 
microwave operations to share spectrum. However, it also recognizes 
that microwave systems vary in size, complexity and degree of 
reliability needed. Therefore, there is no way of adopting general 
rules mandating an acceptable fade margin that would apply fairly in 
all cases. Accordingly the Commission will not set limits on the amount 
of allowable fade margin in a microwave system, but it suggests, that 
incumbent licensees limit the fade margin in their systems to only that 
necessary for reliable service so as to help facilitate the 
implementation of PCS.
    127. Further, the Commission notes that its Rules contain out-of-
band radiation limits that must be met by PCS entities and that under 
the revised allocation PCS is only allocated spectrum in the 1850-1990 
MHz band, so there is 120 MHz of separation between PCS and PPMRS 
operations. In addition, the current PCS rules provide for strict out-
of-band emission limits, which are sufficient to protect microwave 
operations in adjacent bands, and, therefore, the Commission will not 
adopt any additional coordination or protection requirements for PCS 
operations.
    128. The Commission does not believe that PCS licensees should be 
required to submit separate applications and obtain separate 
authorizations for each transmitter in their system. The information 
that would be submitted on their applications is unnecessary to the 
Commission, and its filing would be overly burdensome for PCS 
licensees.
    129. Finally, the Commission believes automatic penalties on PCS 
operations that interfere with fixed microwave users are unnecessary 
and inappropriate. As the Commission stated in the Second Report and 
Order, a principal concern in the authorization of PCS in the 2 GHz 
band is that existing fixed microwave operations be protected. If 
interference were to occur, the PCS licensee would be expected to take 
appropriate action to resolve that interference. In cases where the PCS 
licensee did not take appropriate action, the Commission's current 
remedies, either forfeitures or revocation of licenses, are sufficient.
    130. PCS-to PCS Interference Standards. In the Second Report and 
Order, the Commission established a limit for spurious emissions 
appearing outside of the spectrum allocated to PCS. No limit was 
specified for spurious emissions appearing within the PCS spectrum. The 
Commission also adopted minimal standards for PCS transmitter frequency 
stability, stating only that the stability must be sufficient to ensure 
that the fundamental emission remains within the authorized frequency 
block.
    131. The Commission believes that limits on spurious emissions 
outside of the frequency block employed by a PCS licensee are needed to 
reduce the potential for harmful interference to other PCS operations 
as well as other radio services operating on spectrum outside of the 
PCS bands. Accordingly, it is amending the rules to indicate that the 
spurous emissions limits apply to emissions appearing on all 
frequencies outside of the frequency block employed by a licensee. It 
also clarifies that, when testing to show compliance with the spurious 
emission limits, the fundamental emission from the transmitter must be 
located as close the edge of the adjacent band as the transmitter is 
designed to operate. This will ensure that the emission limits are met 
under all normal operating conditions.
    132. The Commission does not agree that the limits for spurious 
emissions should be further restricted when those emissions fall within 
the frequency bands allocated for unlicensed PCS devices but does feel 
that the standards for measuring spurious emissions need to be 
clarified. The measured levels of spurious emissions are dependent, to 
an extent, on the bandwidth of the measuring instrument. Specifying a 
minimum resolution bandwidth will eliminate confusion within the rules 
and provide repeatable measurement results. However, the Commission 
does not accept the proposed bandwidth of 1.0 percent of the emission 
bandwidth. Limits are placed on spurious emissions in order to reduce 
the potential for causing harmful interference. Ideally, the resolution 
bandwidth of the measuring instrument should be adjusted as close as 
possible to the bandwidth of the receiver for which interference 
protection is being provided. Near the frequency bands employed for 
PCS, typical receiver bandwidths can range from tens of kilohertz to 
several megahertz. Since the resolution bandwidth on most measuring 
instruments does not go above 1 MHz, this is typically the bandwidth 
employed by the Commission when measuring spurious emissions above 1000 
MHz. The Commission believes that the use of a resolution bandwidth of 
1 MHz is also appropriate for PCS equipment and is amending the rules 
to add this specification.
    133. The Commission also clarifies that these limits apply to both 
the transmitter, as tested during type acceptance, and the operating 
system, as installed by the licensee. The level of the spurious 
emissions can be affected by the type of antenna employed by a 
licensee. It is for this reason, among others, that the Commission also 
may require a licensee to provide additional attenuation to spurious 
emissions, even beyond those limits stated in the regulations, when 
these emissions cause harmful interference to other users of the RF 
spectrum. The Commission is further clarifying the rules to note that 
additional attenuation can be required under such circumstances.
    134. The measurement procedures for testing frequency stability are 
already specified in the regulations. As the frequency stability 
standard requires only that the fundamental emission stay within the 
authorized frequency block, the transmitter must be tested with the 
fundamental emission located as close to the edge of the authorized 
frequency block as the transmitter is designed to operate in order to 
demonstrate compliance under all normal operating conditions.
    135. Enhanced 911 Standards. In the Second Report and Order, the 
Commission indicated that it would address matters relating to enhanced 
911 (E-911) capability in PCS, cellular, and other mobile services in a 
future rule making proceeding. The development of an E-911 standard 
will necessitate consideration of issues affecting matters beyond PCS 
and therefore is more appropriately addressed in a separate proceeding. 
The Commission expects to begin this proceeding shortly and will 
address the issue of a single E-911 standard at that time.

Unlicensed PCS

    136. Spectrum Allocation. In the Second Report and Order, the 
Commission allocated 40 MHz of spectrum for unlicensed PCS devices. The 
1900-1920 MHz band was designated for asynchronous (primarily data) 
devices, and the 1890-1910 MHz and 1920-1930 MHz band was designated 
for isochronous (primarily voice) devices. The Commission concluded 
that this 40 MHz of spectrum would be sufficient to meet the demands of 
both nomadic and non-nomadic data and voice applications. Further, it 
noted that this band plan provides both asynchronous and isochronous 
operations an equal share of the 1910-1930 MHz band, which has fewer 
incumbent fixed microwave facilities that must be relocated before full 
use of the band can be made for unlicensed PCS.
    137. As noted above, the Commission has amended the allocation and 
frequency plan for licensed PCS. Under this reallocation the amount of 
spectrum provided for unlicensed PCS devices is reduced from 40 to 20 
MHz. Specifically, the 20 MHz of unlicensed PCS spectrum at 1890-1910 
MHz is being reallocated to licensed PCS operations. The decision to 
reallocate this spectrum preserves the 1910-1930 MHz band for 
unlicensed devices. The Commission notes that this band is the most 
lightly loaded portion of the PCS spectrum and is the spectrum where 
most unlicensed equipment was expected to operate initially. Further, 
since unlicensed operations are restricted to very low power, they 
should be able to share or ``reuse'' the available spectrum very 
efficiently. Accordingly, the Commission believes that this reduction 
will not have a major effect in the near term on devices that will be 
able to operate on the unlicensed PCS bands. As noted above, in the 
near future the Commission will initiate a proceeding to consider 
allocation of additional spectrum to meet long term spectrum 
requirements for unlicensed PCS devices.
    138. Taking into account this reduction in the total amount of 
spectrum available for unlicensed operations, the Commission finds that 
the interests of all concerned parties would be best served by 
retaining the plan to provide 10 MHz at 1910-1920 MHz for asynchronous 
or data devices, and 10 MHz at 1920-1930 MHz for isochronous or voice 
devices. This approach is balanced and treats both voice and data 
proponents fairly and equitably. Further, this approach will encourage 
the clearing of all existing microwave users from the entire 1910-1930 
MHz band, thereby permitting the rapid introduction of nomadic voice 
and data devices. Accordingly, the Commission is amending its spectrum 
plan for unlicensed devices, as indicated above.
    139. Coordination. In the Second Report and Order, the Commission 
designated UTAM as the coordinating body to manage the transition of 
spectrum from fixed microwave to unlicensed PCS. The Commission 
conditioned this designation on UTAM's submission and the Commission's 
acceptance of: (1) a funding plan that is equitable to all prospective 
manufacturers of unlicensed devices, and (2) a plan for band clearing 
that will permit the implementation of nomadic devices, in particular, 
nomadic data PCS devices, as promptly as possible. It stated that UTAM 
would be responsible for administering the transition, including 
negotiating costs of relocation, ensuring that comparable facilities 
are provided, and resolving disputes of interference to fixed microwave 
from unlicensed PCS operations. Further, it required that any 
unlicensed PCS device or system be coordinated through UTAM before 
being initially deployed or subsequently relocated. The Commission also 
required that all applicants for FCC equipment authorization of 
unlicensed PCS devices be participants in UTAM.
    140. The Commission continues to believe that its basic approach 
for regulation of unlicensed PCS devices is appropriate. Based on the 
record, UTAM is the most suitable entity to act as the coordinator for 
unlicensed PCS devices. The Commission believes that UTAM is making 
good faith efforts to be open and to include the participation of all 
interested parties, including representatives of the data community. 
Neither additional guidance nor requirements are needed for UTAM at 
this time; there is no merit in eliminating UTAM's designation in the 
rules at this time. There will be ample opportunity to review UTAM's 
designation as the coordinator for unlicensed devices during the 
Commission's review of its funding and band-clearing plans. If UTAM is 
found unacceptable as a result of the review process, the Commission 
can amend its rules at that time to designate another entity.
    141. The Commission intends to consider conditional equipment 
approvals for nomadic devices at the appropriate future time. When 
spectrum is available, or soon will be available, for the operation of 
nomadic devices, it will issue a Public Notice announcing that it will 
begin accepting and processing applications for certification of 
nomadic devices. If the Commission accepts such applications before the 
spectrum is fully cleared for use by nomadic devices, the applications 
will be processed, but the actual grants withheld until an announcement 
is made that coordination is no longer required. At that time, the 
grants, if justified, will be immediately issued. This approach 
addresses any concerns that manufacturers will be able quickly to 
introduce new nomadic equipment.
    142. The Commission believes that the labels for coordinatable 
unlicensed PCS equipment should also indicate that any relocation of 
the device must also be coordinated through, and approved by, UTAM and 
should include a toll-free number to assist users in contacting UTAM. 
This additional information will not impose additional burden on 
equipment manufacturers and will improve compliance with the 
coordination requirements for unlicensed PCS devices. It does not 
believe, however, that a more rigorous definition of a ``coordinatable 
PCS device'' is needed. The current definition is adequate to protect 
existing microwave operations from interference and also provides 
equipment manufacturers flexibility in designing their equipment to 
avoid such interference.
    143. The Commission understands that the determination of whether 
and to what degree an unlicensed PCS device is coordinatable may place 
UTAM in a position of potential conflict of interest with its own 
members. Nevertheless, UTAM, as the coordinator for unlicensed device 
use, is responsible for ensuring that such devices do not cause 
interference to existing microwave operations. Accordingly, the 
Commission believes that it is entirely reasonable and prudent to 
require that UTAM make a finding with regard to the degree to which an 
unlicensed device can be coordinated and deployed. It intends that UTAM 
make such determinations in concert with the requirements of Section 
15.307(b) of the rules. In this regard, the Commission also feels that 
a broad interpretation of the rules for preventing interference by 
unlicensed devices, such as the requirement for verification that an 
unlicensed device is being used at an authorized location, is 
appropriate. This will afford UTAM latitude to develop its own policies 
and interpretations for the wide range of unlicensed devices that are 
expected to be developed. UTAM will therefore be allowed broad 
flexibility in establishing the means it uses to fulfill its 
responsibility for ensuring that unlicensed devices do not interfere 
with existing microwave operations. Such means could include, where 
appropriate, the use of authorized installers to ensure that unlicensed 
devices do not cause interference.
    144. Further, as part of its equipment authorization process, the 
Commission will review closely the technical aspects of each unlicensed 
device. This review will include all technical matters related to the 
device's ability to be coordinated, as well as other measures that may 
be imposed by UTAM on the operation of the device. This review will 
provide oversight to ensure that such measures developed by UTAM are 
sufficient to protect existing microwave from harmful interference.
    145. The Commission believes that some modification of the rules is 
appropriate to clarify the showings necessary to demonstrate compliance 
with the activation and disabling requirements of Section 15.307. 
Accordingly, it is amending the rules to indicate that each application 
for certification must contain an explanation of all measures for 
ensuring that the device cannot be activated until installation at its 
authorized location as verified by UTAM and for automatically disabling 
the device in the event that it is relocated outside the coordinated 
geographic area. Such showings shall include all procedural safeguards, 
such as the mandatory use of licensed technicians to install and 
relocate the equipment, and a complete description of all technical 
features controlling activation and disabling of the device. These 
showings, in addition with the findings required by UTAM, will be 
adequate to demonstrate that a device is coordinatable and can be used 
in a manner that will not cause interference.
    146. The Commission concludes that the current test and measurement 
procedures are adequate and will allow authorization of equipment to 
commence without delay. The ANSI C63 Committee has already begun work, 
in cooperation with WINForum, to develop specific procedures for 
unlicensed PCS equipment. The Commission will address specific test and 
measurement procedures developed by recognized national standards 
bodies, such as ANSI C63, when they are completed.
    147. Spectrum Etiquette. In the Second Report and Order, the 
Commission adopted technical operating requirements for unlicensed PCS 
devices. These requirements were based largely on a spectrum 
``etiquette'' developed on a consensus basis by an association of 
manufacturers and other interested parties known as the WINForum. The 
Commission made some minor modifications to the WINForum etiquette to 
take into account the allocation of additional spectrum for unlicensed 
PCS, to improve spectrum efficiency and to address specific comments 
and concerns. In particular, it divided the 40 MHz of spectrum for 
unlicensed devices into two equal 20 MHz allocations; one for 
isochronous transmissions at 1890-1900 MHz and 1920-1930 MHz and one 
for asychronous transmissions at 1900-1920 MHz. The Commission adopted 
WINForum's 1.25 MHz channelization for the 1920-1930 MHz band, but 
provided for up to 5 MHz channels in the 1890-1900 MHz band. The 
asynchronous spectrum at 1900-1920 MHz was divided into two 10 MHz 
channels. Separate technical requirements were specified for each 
transmission method.
    148. The Commission's initial decision provided spectrum for both 
wideband and narrowband isochronous applications, but it is now 
reducing the spectrum available for isochronous devices from 20 MHz to 
10 MHz. With this reduction, it is important that the remaining 
spectrum be used as efficiently as possible. In this regard, the 
Commission believes that a 1.25 MHz channelization plan will foster 
more efficient spectrum utilization. As indicated by those parties, 
such a plan will more readily prevent a single user or system from 
monopolizing the spectrum at a given location. A plan that provides 
wider channels or no channelization at all could result in inefficient 
use of the spectrum and preclude other parties from using the spectrum. 
Further, a spectrum occupancy limit, as suggested by some parties, 
would be practical or enforceable. A 1.25 MHz channel plan will 
simplify equipment design and permit better management of spectrum use. 
Accordingly, the Commission is adopting such a channelization plan for 
the 10 MHz of isochronous spectrum. If in the future information is 
presented that shows that wider channels can be accommodated without 
compromising spectrum efficiency or monopolizing the spectrum (i.e., 
through use of reduced power levels for wideband systems, or 
establishing a spectrum efficiency standard, etc.), this matter may be 
revisited.
    149. With regard to the asynchronous band, channelization is not as 
critical for such transmissions, since asynchronous transmissions will 
be of very short duration and not occupy the spectrum continuously. 
Accordingly, the Commission is eliminating the channelization 
requirements for the asynchronous spectrum.
    150. The Commission does not believe that the power specification 
should be based on mean rather than peak power. Given that a wide 
variety of modulation methods will be permitted, measurement of mean 
power could become complex and subject to differing interpretations. 
This could lead to equipment design uncertainties and potential delays 
and complications in equipment authorization. Measurement of peak power 
is straightforward and will not unduly penalize any technology. The 
Commission is therefore not altering the method specified in the rules 
for measuring the output power of unlicensed PCS devices. Further, it 
believes that a longer frame period could potentially reduce spectrum 
efficiency and remains unconvinced that an increase in the frame period 
would improve the likelihood of compatibility with future technical 
standards for licensed PCS equipment. Therefore the rules in this 
regard are not being modified.
    151. With regard to the channel search requirements, the Commission 
is amending the rules to permit a device to begin its search for an 
unused channel at any point within a range of frequencies from a band 
edge, as requested by the several petitioners. This will permit 
manufacturers greater flexibility to use guard bands, if needed, while 
retaining most of the spectrum efficiency advantages gained by orderly 
selection of channels. The channel search rule does not significantly 
increase the potential for two devices attempting to seize the same 
channel at the same instant in time, nor does this requirement impede 
the use of coordinated multi-cell systems. The existing requirement for 
accuracy in monitoring signal levels should be deleted, since the 
existing monitoring threshold requirements are sufficient to ensure 
that unlicensed devices do not interfere with another.
    152. The Commission believes that a requirement of periodic 
acknowledgement of transmissions is necessary to ensure that a device 
does not monopolize the spectrum. Therefore, it is modifying the 
etiquette to require a transmitter to receive an acknowledgement of 
transmissions from a system participant every 30 seconds and to cease 
transmission if such acknowledgement is not received. It will also 
permit control and signaling information to be transmitted for 30 
seconds without acknowledgement, as requested by several parties.
    153. With regard to duplex operation, some changes are appropriate. 
While it recognizes that performing the listen-before-talk operation at 
only one transmitter location may increase the potential for 
interference, the Commission believes that this increase is low and is 
outweighed by the benefits of simpler, most cost effective equipment 
design. Therefore, provisions for paired duplex channel operation are 
being incorporated into the rules. Further, the Commission feels that 
an exception to the listen-before-talk provisions is appropriate for 
systems that employ multicarrier shared antennas. Monitoring the 
receive channel rather than the transmit channel should not 
significantly increase the risk of causing interference to other 
unlicensed PCS spectrum users and the rules are amended to allow this 
approach.
    154. The frequency stability requirements for unlicensed PCS 
devices should be relaxed. The Commission believes that unlicensed PCS 
devices will generally operate under the same range of temperature and 
voltage conditions specified for other Part 15 devices. Accordingly, 
the Commission is requiring that the operating frequency of unlicensed 
PCS devices be maintained within 10 ppm over a temperature 
range of -20 deg. C to +50 deg. C at normal supply voltage and for 
variation in the primary voltage of 15 percent at 20 deg. 
C. While the stability requirement 10 ppm is more strict 
than for other Part 15 devices, this is necessary to ensure the proper 
function of the etiquette. It is also relaxing from 40 dB to 30 dB the 
limit for suppression of spurious emissions in the first adjacent 
channels as requested by Ericsson and WINForum. This will reduce 
equipment costs while still providing adequate interference protection 
between unlicensed PCS systems.

Radio Frequency Exposure Limits

    155. In the Second Report and Order, the Commission required PCS 
licensees and equipment to comply with the standards set forth in ANSI/
IEEE C95.1-1992, ``Safety Levels with Respect to Human Exposure to 
Radio Frequency Electromagnetic Fields, 3 kHz to 300 GHz'' (ANSI/IEEE 
guidelines).\25\ The Commission stated that for purposes of determining 
compliance with these standards, all handheld PCS equipment will be 
considered to operate in an ``uncontrolled'' environment. It also noted 
that the exclusions for low power devices contained in the ANSI/IEEE 
guidelines only apply to transmitters operating at 1500 MHz and below. 
Therefore, the Commission indicated that, pending an interpretation 
from the IEEE, PCS equipment must demonstrate compliance with the ANSI/
IEEE guidelines for maximum specific absorption rates (SAR).\26\
---------------------------------------------------------------------------

    \25\The Commission stated that these standards will apply to PCS 
operations pending completion of its complete review of standards 
for RF exposure. See Notice of Proposed Rule Making, ET Docket No. 
93-62, 58 FR 19393 (April 14, 1993). The Commission further 
indicated that any RF exposure standards adopted in the instant 
proceeding that do not conform with the final rules adopted later in 
ET Docket No. 93-62 will be modified as appropriate.
    \26\The Commission also indicated that it had requested a formal 
interpretation from the IEEE as to whether the formula for 
determining the power threshold for the exclusion from the standards 
can be extrapolated up to 2200 MHz. See Letter from Thomas P. 
Stanley to Andrew G. Salem, IEEE Standards Board (June 2, 1993).This 
provision exempts a device from the SAR testing requirements, if the 
device operates with power output below a certain threshold level. 
Extrapolating the formula for this threshold up to 2200 MHz would 
allow PCS transmitters to operate with about 330 milliwatts of 
power.
---------------------------------------------------------------------------

    156. The Commission feels that the guidelines for RF exposure from 
PCS base stations should apply according to the type of environment in 
which the exposure takes place. Further, there is no need to employ the 
uncontrolled exposure limits in those areas in the vicinity of a PCS 
base station where there is restricted access by the general public and 
exposure to the RF field is unlikely. Accordingly, the Commission is 
amending the rules to include both the uncontrolled and controlled 
limits for PCS base stations. The definitions of ``controlled'' and 
``uncontrolled'' environments specified in ANSI/IEEE C95.1-1992 will 
govern which limits will apply.
    157. As noted above, the Commission requested a formal 
interpretation from the IEEE as to whether the formula for determining 
the threshold level for the exclusion from the RF exposure standards 
can be extrapolated to the 2 GHz range. The IEEE radiated power 
exclusion applies when a 2.5 cm separation distance is maintained 
between the body and the radiating structure. In its response to this 
request, IEEE stated that, while it cannot predict whether such an 
extension of the standard would be incorporated into the next revision 
of C95.1, extrapolation of the current formula to frequencies up to 2.2 
GHz would be conservative.\27\ The Commission is therefore amending the 
rules to apply the ANSI/IEEE radiated power exclusions for low power 
devices to PCS devices. In implementing this change, however, it is 
appropriate to provide an additional margin to ensure that devices 
approved for operation under the exclusion will comply with any changes 
to the RF exposure guidelines that may be adopted in the future. 
Accordingly, PCS devices that operate with output power of 100 
milliwatts or less will be excluded from the SAR testing requirements. 
PCS devices operating at higher powers must be subjected to SAR testing 
to determine compliance with the RF exposure guidelines.
---------------------------------------------------------------------------

    \27\See Letter to Thomas P. Stanley from Eleanor R. Adair, Co-
Chairman, SC-4, Standards Coordinating Committee 28, IEEE (October 
11, 1993).
---------------------------------------------------------------------------

Conclusion

    158. The Commission is amending its rules as described above to 
ensure that the American public benefits from new mobile digital voice 
and data services. It believes that the rules, as amended, will foster 
rapid development of a competitive market that will provide consumers 
with access to a diverse array of high-quality, low-cost PCS services 
and products on a wide-area basis. With adoption of these amendments, 
the rules are finalized, and the Commission now intends to proceed 
expeditiously to license broadband PCS services through the competitive 
bidding process.

Procedural Information

    159. The analysis required by the Regulatory Flexibility Act of 
1980, 5 U.S.C. Section 608, is contained in an Appendix to this 
Memorandum Opinion and Order.
    160. Accordingly, it is ordered, That parts 2, 15, and 24 of the 
Commission's Rules are amended as specified below, effective 30 days 
after publication in the Federal Register; except that amendments to 
Secs. 15.311 and 24.204(f) (1), (2), (3)(i), (3)(ii) are effective 90 
days after publication in the Federal Register. This action is taken 
pursuant to Sections 4(i), 7(a), 302, 303(c), 303(f), 303(g), and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 
Sections 154(i), 157(a), 302, 303(c), 303(f), 303(g), and 303(r). 
Furthermore, it is ordered, That the petitions for reconsideration are 
granted, to the extent described above and denied in all other 
respects.

List of Subjects

47 CFR Part 2

    Radio.

47 CFR Part 15

    Radio frequency devices, Radio.

47 CFR Part 94

    Personal communications services, Radio.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Final Rules

    Parts 2, 15 and 24 of chapter I of title 47 of the Code of Federal 
Regulations are amended as follows:

PART 2--FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL 
RULES AND REGULATIONS

    1. The authority citation for part 2 is revised to read as follows:

    Authority: Sec. 4, 302, 303, and 307 of the Communications Act 
of 1934, as amended, 47 U.S.C. Sections 154, 302, 303 and 307, 
unless otherwise noted.

    2. Section 2.106, the Table of Frequency Allocations, is amended as 
follows:
    a. In the 1850-1990 MHz band and the 2110-2200 MHz band, revise 
columns 4 through 7 to read as follows:


Sec. 2.106   Table of frequency allocations.

* * * * *

                                                                                                                                                        
                                                                                                                                                        
               International table                       United States table                                 FCC use designators                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Region 1-        Region 2-       Region 3-      Government     Non-Government                                                                       
 allocation MHz   allocation MHz  allocation MHz  allocation MHz   allocation MHz              Rule part(s)                 Special-use frequencies     
(1)                          (2)             (3)             (4)  (5).............  (6)..............................  (7)                              
                                                                                                                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
                                                                      * * * * * * *                                                                     
                                                       1850-1990  1850-1990.......  Personal communications services   Emerging technologies.           
                                                                  Fixed...........   (24).                                                              
                                                                  Mobile..........  Private operational-fixed                                           
                                                                                     microwave (94).                                                    
                                                                  US331...........  Radio frequency devices (15).....                                   
                                                                                                                                                        
                                                                      * * * * * * *                                                                     
                                                       2110-2200  2110-2150.......  Domestic public fixed (21).......  Emerging technologies.           
                                                                  Fixed...........  Private operational-fixed                                           
                                                                                     microwave (94).                                                    
                                                                  Mobile..........  Public mobile (22)                                                  
                                                                  US111US252......                                                                      
                                                                  NG23NG153.......                                                                      
                                                                  2150-2160.......                                                                      
                                                                  Fixed...........  Multipoint distribution (21).....                                   
                                                                  NG23............  Private operational-fixed                                           
                                                                                     microwave (94)                                                     
                                                                  2160-2200.......  .................................  Emerging technologies.           
                                                                  Fixed...........  Domestic public fixed (21).......                                   
                                                                  Mobile..........  Private operational-fixed                                           
                                                                                     microwave (94).                                                    
                                                                                    Public mobile (22)                                                  
                                                  US111US252US33  NG23NG153.......                                                                      
                                                               1                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                      * * * * * * *                                                                     

    b. The text of footnote US331 in the United States footnotes and 
footnote NG153 in the Non-Government footnotes is revised to read as 
follows:

United States (US) Footnotes

* * * * *
    US331 In the frequency band 1850-1990 MHz, the only fixed PCS 
services permitted are ancillary services used in support of mobile 
personal communications services.
* * * * *

Non-Government (NG) Footnotes

* * * * *
    NG153 The 2110-2150 MHz and 2160-2200 MHz bands are reserved for 
future emerging technologies on a co-primary basis with the fixed 
and mobile services. Allocations to specific services will be made 
in future proceedings.
* * * * *

PART 15--RADIO FREQUENCY DEVICES

    1. The authority citation for part 15 continues to read as follows:

    Authority: Sec. 4, 302, 303, 304, and 307 of the Communications 
Act of 1934, as amended, 47 U.S.C. Sections 154, 302, 303, 304, and 
307.

    2. Section 15.301 is revised to read as follows:


Sec. 15.301  Scope.

    This subpart sets out the regulations for unlicensed personal 
communications services (PCS) devices operating in the 1910-1930 MHz 
frequency band.
    3. Sections 15.303 (g) and (j) are revised to read as follows:


Sec. 15.303  Definitions.

* * * * *
    (g) Personal Communications Services (PCS) Devices [Unlicensed]. 
Intentional radiators operating in the frequency band 1910-1930 MHz 
that provide a wide array of mobile and ancillary fixed communication 
services to individuals and businesses.
* * * * *
    (j) Thermal noise power. The noise power in watts defined by the 
formula N=kTB where N is the noise power in watts, K is Boltzmann's 
constant, T is the absolute temperature in degrees Kelvin (e.g., 
295 deg. K) and B is the emission bandwidth of the device in hertz.
* * * * *
    4. Section 15.307 is amended by revising the introductory portion 
of paragraph (a), paragraph (d), and paragraph(e) as follows:


Sec. 15.307  Coordination with fixed microwave service.

    (a) UTAM, Inc., is designated to coordinate and manage the 
transition of the 1910-1930 MHz band from Private Operational-Fixed 
Microwave Service (OFS) operating under Part 94 of this Chapter to 
unlicensed PCS operations, conditioned upon submittal to and acceptance 
by the Commission of:
* * * * *
    (d) A coordinatable PCS device is required to incorporate means 
that ensure that it cannot be activated until its location has been 
coordinated by UTAM, Inc. The application for certification shall 
contain an explanation of all measures taken to prevent unauthorized 
operation. This explanation shall include all procedural safeguards, 
such as the mandatory use of licensed technicians to install the 
equipment, and a complete description of all technical features 
controlling activation of the device.
    (e) A coordinatable PCS device shall incorporate an automatic 
mechanism for disabling operation in the event it is moved outside the 
geographic area where its operation has been coordinated by UTAM, Inc. 
The application for certification shall contain a full description of 
the safeguards against unauthorized relocation and must satisfy the 
Commission that the safeguards cannot be easily defeated.
* * * * *
    5. Section 15.311 is revised to read as follows:


Sec. 15.311  Labelling requirements.

    In addition to the labelling requirements of Sec. 15.19(a)(3), all 
devices authorized under this subpart must bear a prominently located 
label with the following statement:

    Installation of this equipment is subject to notification and 
coordination with UTAM, Inc. Any relocation of this equipment must 
be coordinated through, and approved by UTAM. UTAM may be contacted 
at [insert UTAM's toll-free number].

    6. Paragraphs (a) and (i) of Sec. 15.319 are revised to read as 
follows:


Sec. 15.319  General technical requirements.

    (a) The 1910-1920 MHz sub-band is limited to use by asynchronous 
devices under the requirements of Section 15.323. The 1920-1930 MHz 
sub-band is limited to use by isochronous devices under the 
requirements of Sec. 15.321.
* * * * *
    (i) The device must comply with IEEE C95.1-1991 (ANSI/IEEE C95.1-
1992), ``Safety Levels with Respect to Human Exposure to Radio 
Frequency Eletromagnetic Fields, 3 kHz to 300 GHz.'' Measurement 
methods are specified in IEEE C95.3-1991, ``Recommended Practice for 
the Measurement of Potentially Hazardous Electromagnetic Fields--RF and 
Microwave.'' Copies of these standards are available from the IEEE 
Standards Board, 445 Hoes Lane, P.O. Box 1331, Piscataway, NJ 08855-
1331, telephone 1-800-678-4333. All equipment shall be considered to 
operate in an ``uncontrolled'' environment. The application for 
certification must contain a statement confirming compliance with IEEE 
C95.1-1991. Technical information showing the basis for this statement 
must be submitted to the Commission upon request. PCS hand-held devices 
whose radiated power is 100 milliwatts or less are excluded from SAR 
testing requirements as long as a 2.5 cm separation is maintained 
between the radiating structure and the body of the user. The ANSI/IEEE 
standard uses the term ``radiated power'' as meaning the input power to 
the antenna.


Secs. 15.321 and 15.323  [Redesignated as Secs. 15.323 and 15.321]

    7. Sections 15.321 and 15.323 are redesignated as Secs. 15.321 and 
15.323, respectively.
    8. In new redesignated Sec. 15.321, paragraph (g) is removed, and 
the section heading and paragraphs (a), (b), (c)(1), (c)(4), (c)(6), 
(d), and (e) are revised to read as follows:


Sec. 15.321  Specific requirements for asynchronous devices operating 
in the 1910-1920 MHz sub-band.

    (a) Operation shall be contained within the 1910-1920 MHz sub-band. 
The emission bandwidth of any intentional radiator operating in this 
sub-band shall be no less than 500 kHz.
    (b) All systems of less than 2.5 MHz emission bandwidth shall start 
searching for an available spectrum window within 3 MHz of the sub-band 
edge at either 1910 or 1920 MHz, while systems of more than 2.5 MHz 
emission bandwidth will first occupy the center half of the sub-band. 
Devices with an emission bandwidth of less than 1.0 MHz may not occupy 
the center half of the sub-band if other spectrum is available.
    (c) * * *
    (1) Immediately prior to initiating a transmission, devices must 
monitor the spectrum window they intend to use for at least 50 
microseconds.
* * * * *
    (4) After completion of a transmission, an individual device or 
cooperating group of devices must cease transmission and wait a 
deference time randomly chosen from a uniform random distribution 
ranging from 50 to 750 microseconds, after which time an attempt to 
access the band again may be initiated. For each occasion that an 
access attempt fails after the initial inter-burst interval, the range 
of the deference time chosen shall double until an upper limit of 12 
milliseconds is reached. The deference time remains at the upper limit 
of 12 milliseconds until an access attempt is successful. The deference 
time is re-initialized after each successful access attempt.
* * * * *
    (6) The monitoring system shall use the same antenna used for 
transmission, or an antenna that yields equivalent reception at that 
location.
 * * * * *
    (d) Emissions shall be attenuated below a reference power of 112 
milliwatts as follows: 30 dB between the channel edges and 1.25 MHz 
above or below the channel; 50 dB between 1.25 and 2.5 MHz above or 
below the channel; and 60 dB at 2.5 MHz or greater above or below the 
channel. Compliance with the emissions limits is based on the use of 
measurement instrumentation employing a peak detector function with an 
instrument resolution bandwidth approximately equal to 1.0 percent of 
the emission bandwidth of the device under measurement.
    (e) The frequency stability of the carrier frequency of intentional 
radiators operating in this sub-band shall be 10 ppm over 
10 milliseconds or the interval between channel access monitoring, 
whichever is shorter. The frequency stability shall be maintained over 
a temperature variation of -20 deg. to +50 deg. Celsius at normal 
supply voltage, and over a variation in the primary supply voltage of 
85 percent to 115 percent of the rated supply voltage at a temperature 
of 20 degrees Celsius. For equipment that is capable of operating only 
from a battery, the frequency stability tests shall be performed using 
a new battery without any further requirement to vary supply voltage.
* * * * *
    9. In the new redesignated Sec. 15.323, the section heading and 
paragraphs (a), (b), (c)(1), (c)(4), (c)(6), (c)(8), (d), and (f) are 
revised and new paragraphs (c)(10), (c)(11), and (c)(12) are added to 
read as follows:


Sec. 15.323  Specific requirements for isochronous devices operating in 
the 1920-1930 MHz sub-band.

    (a) Operation shall be contained within one of eight 1.25 MHz 
channels starting with 1920-1921.25 MHz and ending with 1928.75-1930 
MHz. Further sub-division of a 1.25 MHz channel is permitted with a 
reduced power level, as specified in Section 15.319(c), but in no event 
shall the emission bandwidth be less than 50 kHz.
    (b) Intentional radiators with an intended emission bandwidth less 
than 625 kHz shall start searching for an available time and spectrum 
window within 3 MHz of the sub-band edge at 1920 MHz and search upward 
from that point. Devices with an intended emission bandwidth greater 
than 625 kHz shall start searching for an available time and spectrum 
window within 3 MHz of the sub-band edge at 1930 MHz and search 
downward from that point.
    (c) * * *
    (1) Immediately prior to initiating transmission, devices must 
monitor the combined time and spectrum windows in which they intend to 
transmit to determine if the access criteria are met.
* * * * *
    (4) Once access to specific combined time and spectrum windows is 
obtained an acknowledgment from a system participant must be received 
by the initiating transmitter within one second or transmission must 
cease. Periodic acknowledgments must be received at least every 30 
seconds or transmission must cease. Channels used exclusively for 
control and signaling information may transmit continuously for 30 
seconds without receiving an acknowledgment, at which time the access 
criteria must be repeated.
* * * * *
    (6) If the selected combined time and spectrum windows are 
unavailable, the device may either monitor and select different windows 
or seek to use the same windows after waiting an amount of time, 
randomly chosen from a uniform random distribution between 10 and 150 
milliseconds, commencing when the channel becomes available.
* * * * *
    (8) The monitoring system shall use the same antenna used for 
transmission, or an antenna that yields equivalent reception at that 
location.
* * * * *
    (10) An initiating device may attempt to establish a duplex 
connection by monitoring both its intended transmit and receive time 
and spectrum windows. If both the intended transmit and receive time 
and spectrum windows meet the access criteria, then the initiating 
device can initiate a transmission in the intended transmit time and 
spectrum window. If the power detected by the responding device can be 
decoded as a duplex connection signal from the initiating device, then 
the responding device may immediately begin transmitting on the receive 
time and spectrum window monitored by the initiating device.
    (11) An initiating device that is prevented from monitoring during 
its intended transmit window due to monitoring system blocking from the 
transmissions of a co-located (within one meter) transmitter of the 
same system, may monitor the portions of the time and spectrum windows 
in which they intend to receive over a period of at least 10 
milliseconds. The monitored time and spectrum window must total at 
least 50 percent of the 10 millisecond frame interval and the monitored 
spectrum must be within the 1.25 MHz frequency channel(s) already 
occupied by that device or co-located co-operating devices. If the 
access criteria is met for the intended receive time and spectrum 
window under the above conditions, then transmission in the intended 
transmit window by the initiating device may commence.
    (12) The provisions of (c)(10) or (c)(11) of this section shall not 
be used to extend the range of spectrum occupied over space or time for 
the purpose of denying fair access to spectrum to other devices.
    (d) Emissions shall be attenuated below a reference power of 112 
milliwatts as follows: 30 dB between the channel edges and 1.25 MHz 
above or below the channel; 50 dB between 1.25 and 2.5 MHz above or 
below the channel; and 60 dB at 2.5 MHz or greater above or below the 
channel. Systems that further sub-divide a 1.25 MHz channel into X sub-
channels must comply with the following mission mask: In the bands 
between 1B and 2B measured from the center of the emission bandwidth 
the total power emitted by the device shall be at least 40 dB below the 
transmit power permitted for that device; in the bands between B and 3B 
measured from the center of the emission bandwidth the total power 
emitted by an intentional radiator shall be at least 50 dB below the 
transmit power permitted for that radiator; in the bands between 3B and 
the 1.25 MHz channel edge the total power emitted by an intentional 
radiator in the measurement bandwidth shall be at least 60 dB below the 
transmit power permitted for that radiator. ``B'' is defined as the 
emission bandwidth of the device in hertz. Compliance with the emission 
limits is based on the use of measurement instrumentation employing a 
peak detector function with an instrument resolution bandwidth 
approximately equal to 1.0 percent of the emission bandwidth of the 
device under measurement.
* * * * *
    (f) The frequency stability of the carrier frequency of the 
intentional radiator shall be maintained within 10 ppm over 
1 hour or the interval between channel access monitoring, whichever is 
shorter. The frequency stability shall be maintained over a temperature 
variation of -20 deg. to +50 deg. C at normal supply voltage, and over 
a variation in the primary supply voltage of 85 percent to 115 percent 
of the rated supply voltage at a temperature of 20 deg. C. For 
equipment that is capable only of operating from a battery, the 
frequency stability tests shall be performed using a new battery 
without any further requirement to vary supply voltage.

PART 24--PERSONAL COMMUNICATIONS SERVICES

    1. The authority citation for part 24 continues to read as follows:

    Authority: Secs. 4, 301, 302, 303, and 332, 48 Stat. 1066, 1082, 
as amended; 47 U.S.C. Sections 154, 301, 302, 303, and 332, unless 
otherwise noted.

    2. In Section 24.1, paragraph (b) is revised to read as follows:


Sec. 24.1  Basis and purpose.

* * * * *
    (b) Purpose. This part states the conditions under which portions 
of the radio spectrum are made available and licensed for PCS.
* * * * *
    3. Section 24.3 is revised to read as follows:


Sec. 24.3  Permissible communications.

    PCS licensees may provide any mobile communications service on 
their assigned spectrum. Fixed services may be provided only if 
ancillary to mobile operations. Broadcasting as defined in the 
Communications Act is prohibited.
    4. Section 24.10 is revised to read as follows:


Sec. 24.10  Scope.

    This subpart contains some of the procedures and requirements for 
filing applications for licenses in the personal communications 
services. One also should consult Subparts F and G of this part. Other 
Commission rule parts of importance that may be referred to with 
respect to licensing and operation of radio services governed under 
this part include 47 CFR parts 0, 1, 2, 5, 15, 17 and 20.
    5. Section 24.11 is revised to read as follows:


Sec. 24.11  Initial authorization.

    (a) An applicant must file an application for an initial 
authorization in each market and frequency block desired.
    (b) Blanket licenses are granted for each market and frequency 
block. Applications for individual sites are not required and will not 
be accepted.
    6. Section 24.52 is revised to read as follows:


Sec. 24.52  RF hazards.

    (a) Licensees and manufacturers are required to ensure that their 
facilities and equipment comply with IEEE C95.1-1991 (ANSI/IEEE C95.1-
1992), ``Safety Levels With Respect to Human Exposure to Radio 
Frequency Electromagnetic Fields, 3 kHz to 300 GHz.'' Measurement 
methods are specified in IEEE C95.3-1991, ``Recommended Practice for 
the Measurement of Potentially Hazardous Electromagnetic Fields--RF and 
Microwave.'' Copies of these standards are available from IEEE 
Standards Board, 445 Hoes Lane, P.O. Box 1331, Piscataway, NJ 08855-
1331. Telephone: 1-800-678-4333. The limits for both ``controlled'' and 
``uncontrolled'' environments, as defined by IEEE C95.1-1991, will 
apply to all PCS base and mobile stations, as appropriate. The 
application for equipment authorization must contain a statement 
confirming compliance with IEEE C95.1-1991. Technical information 
showing the basis for this statement must be submitted to the 
Commission upon request.
    (b) PCS hand-held devices whose maximum radiated power is 100 
milliwatts or less are not required to be evaluated for compliance with 
ANSI/IEEE SAR (specific absorption rate) requirements, as long as a 2.5 
cm separation distance is maintained between the radiating structure 
and the body of the user. (The ANSI/IEEE standard uses the term 
``radiated power,'' meaning input power to the antenna.)
    (c) For further information on the Commission's environmental rules 
see Secs. 1.1301 through 1.1319 of this chapter.
    7. Subpart E is revised to read as follows:

Subpart E--Broadband PCS

Sec.
24.200  Scope.
24.202  Service areas.
24.203  Construction requirements.
24.204  Cellular eligibility.
24.229  Frequencies.
24.232  Power and antenna height limits.
24.235  Frequency stability.
24.236  Field strength limits.
24.237  Interference protection.
24.238  Emission limits.

Appendix I to Subpart E--A Procedure for Calculating PCS Signal Levels 
at Microwave Receivers (Appendix E of the Memorandum Opinion and Order)

Subpart E--Broadband PCS


Sec. 24.200  Scope.

    This subpart sets out the regulations governing the licensing and 
operations of personal communications services authorized in the 1850-
1910 and 1930-1990 MHz bands.


Sec. 24.202  Service areas.

    Broadband PCS service areas are Major Trading Areas (MTAs) and 
Basic Trading Areas (BTAs) as defined below. MTAs and BTAs are based on 
the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd 
Edition, at pages 38-39 (``BTA/MTA Map''). Rand McNally organizes the 
50 states and the District of Columbia into 47 MTAs and 487 BTAs. The 
BTA/MTA Map is available for public inspection as the Office of 
Engineering and Technology's Technical Information Center, room 7317, 
2025 M Street, NW., Washington, DC.
    (a) The MTA service areas are based on the Rand McNally 1992 
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38-39, with 
the following exceptions and additions:
    (1) Alaska is separated from the Seattle MTA and is licensed 
separately.
    (2) Guam and the Northern Mariana Islands are licensed as a single 
MTA-like area.
    (3) Puerto Rico and the United States Virgin Islands are licensed 
as a single MTA-like area.
    (4) American Samoa is licensed as a single MTA-like area.
    (b) The BTA service areas are based on the Rand McNally 1992 
Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38-39, with 
the following additions licensed separately as BTA-like areas: American 
Samoa; Guam; Northern Mariana Islands; Mayaguez/Aguadilla-Ponce, Puerto 
Rico; San Juan, Puerto Rico; and the United States Virgin Islands. The 
Mayaguez/Aguadilla-Ponce BTA consists of the following municipalities: 
Adjuntas, Aguada, Aguadilla, Anasco, Arroyo, Cabo Rojo, Coamo, Guanica, 
Guayama, Guayanilla, Hormigueros, Isabela, Jayuya, Juana Diaz, Lajas, 
Las Marias, Mayaguez, Maricao, Maunabo, Moca, Patillas, Penuelas, 
Ponce, Quebradillas, Rincon, Sabana Grande, Salinas, San Germain, Santa 
Isabel, Villalba, and Yauco. The San Juan BTA consists of all other 
municipalities in Puerto Rico.


Sec. 24.203  Construction requirements.

    (a) Licensees of 30 MHz blocks must serve with a signal level 
sufficient to provide adequate service to at least one-third of the 
population in their licensed area within five years of being licensed 
and two-thirds of the population in their licensed area within 10 years 
of being licensed. Licensees may choose to define population using the 
1990 census or the 2000 census. Failure by any licensee to meet these 
requirements will result in forfeiture or non-renewal of the license 
and the licensee will be ineligible to regain it.
    (b) Licensees of 10 MHz blocks must serve with a signal level 
sufficient to provide adequate service to at least one-quarter of the 
population in their licensed area within five years of being licensed, 
or make a showing of substantial service in their licensed area within 
five years of being licensed. Population is defined as the 1990 
population census. Licensees may elect to use the 2000 population 
census to determine the five-year construction requirement. Failure by 
any licensee to meet these requirements will result in forfeiture of 
the license and the licensee will be ineligible to regain it.
    (c) Licensees must file maps and other supporting documents showing 
compliance with the respective construction requirements within the 
appropriate five- and ten-year benchmarks of the date of their initial 
licenses.


Sec. 24.204  Cellular eligibility.

    (a) 10 MHz Limitation. Until January 1, 2000, no license(s) for 
broadband PCS in excess of 10 MHz shall be granted to any party 
(including all parties under common control) if the grant of such 
license(s) will result in significant overlap of the PCS licensed 
service area(s) (MTAs or BTAs) and the cellular geographic service 
area(s) (CGSA) of licensee(s) in the Domestic Public Cellular Radio 
Telecommunications Service directly or indirectly owned, operated, or 
controlled by the same party.
    (b) 15 MHz Limitation. After January 1, 2000, no license(s) for 
broadband PCS in excess of 15 MHz shall be granted to any party 
(including all parties under common control) if the grant of such 
license(s) will result in significant overlap of the PCS licensed 
service area(s) (MTAs or BTAs) and the cellular geographic service 
area(s) (CGSA) of licensee(s) in the Domestic Public Cellular Radio 
Telecommunications Service directly or indirectly owned, operated, or 
controlled by the same party.
    (c) Significant Overlap. For purposes of paragraphs (a) and (b) of 
this section, significant overlap of a PCS licensed service area and 
CGSA(s) occurs when ten or more percent of the population of the PCS 
service area, as determined by the 1990 census figures for the counties 
contained therein, is within the CGSA(s).
    (d) Ownership Attribution.
    (1) For purposes of paragraphs (a) and (b) of this section, 
``control'' means majority voting equity ownership, any general 
partnership interest, or any means of actual working control (including 
negative control) over the operation of the licensee, in whatever 
manner exercised.
    (2) For purposes of applying paragraphs (a) and (b) of this 
section, and for purposes of Sec. 24.229(c) (40 MHz limit in same 
geographic area), ownership and other interests in broadband PCS 
licensees or applicants and cellular licensees will be attributed to 
their holders pursuant to the following criteria:
    (i) Partnership and other ownership interests and any stock 
interest amounting to 5 percent or more of the equity, or outstanding 
stock, or outstanding voting stock of a broadband PCS licensee or 
applicant will be attributable.
    (ii) Partnership and other ownership interests and any stock 
interest amounting to 20 percent or more of the equity, or outstanding 
stock, or outstanding voting stock of a cellular licensee will be 
attributable, except that ownership will not be attributed unless the 
partnership and other ownership interests and any stock interest amount 
to 40 percent or more of the equity, or outstanding stock, or 
outstanding voting stock of a cellular licensee if the ownership 
interest is held by a small business, a rural telephone company, or a 
business owned by minorities and/or women, as these terms are defined 
in Sec. 1.2110 of this chapter, or if the ownership interest is held by 
an entity with a non-controlling equity interest in a broadband PCS 
licensee or applicant that is a business owned by minorities and/or 
women.
    (iii) Stock interests held in trust shall be attributed to any 
person who holds or shares the power to vote such stock, to any person 
who has the sole power to sell such stock, and, in the case of stock 
held in trust, to any person who has the right to revoke the trust at 
will or to replace the trustee at will. If the trustee has a familial, 
personal or extra-trust business relationship to the grantor or the 
beneficiary, the grantor or beneficiary, as appropriate, will be 
attributed with the stock interests held in trust.
    (iv) Non-voting stock shall be attributed as an interest in the 
issuing entity if in excess of the amounts set forth above.
    (v) Debt and instruments such as warrants, convertible debentures, 
options or other interests (except non-voting stock) with rights of 
conversion to voting interests shall not be attributed unless and until 
conversion is effected, except that this provision does not apply in 
determining whether an entity is a small business, a rural telephone 
company, or a business owned by minorities and/or women, as these terms 
are defined in Sec. 1.2110 of this chapter or other provisions of the 
Commission's Rules.
    (vi) Limited partnership interests shall be attributed to limited 
partners and shall be calculated according to both the percentage of 
equity paid in and the percentage of distribution of profits and 
losses.
    (vii) Officers and directors of a broadband PCS licensee or 
applicant or a cellular licensee shall be considered to have an 
attributable interest in the entity with which they are so associated. 
The officers and directors of an entity that controls a PCS licensee or 
applicant or a cellular licensee shall be considered to have an 
attributable interest in the broadband PCS licensee or applicant or a 
cellular licensee.
    (e) [Reserved]
    (f) Cellular Divestiture. Parties holding controlling or 
attributable ownership interests in cellular licensees may be a party 
to a broadband PCS application (i.e., have a controlling or 
attributable interest in a broadband PCS applicant), and such PCS 
applicant will be eligible for more than one 10 MHz broadband PCS 
license and/or 30 MHz broadband PCS license(s) pursuant to the 
divestiture procedures set forth in paragraph (f) (1) through (3) of 
this section; Provided, however, that these divestiture procedures 
shall be available only for parties with controlling or attributable 
ownership interests in cellular licensees where the CGSA(s) covers 20 
percent or less of the PCS service area population.
    (1) The broadband PCS applicant shall certify on its short-form 
auction application, filed in accordance with Sec. 24.305, that it and 
all parties to the application will come into compliance with the 
limitations on common ownership of cellular and broadband PCS interests 
set forth in this section.
    (2) If such an applicant is a successful bidder, it must submit 
with its long-form application (see Sec. 24.307) a signed statement 
describing its efforts to date and future plans to come into compliance 
with the limitations on common ownership of cellular and broadband PCS 
interests set forth in this section.
    (3) If such an applicant is otherwise qualified, its application 
will be granted subject to a condition that the licensee shall come 
into compliance with the limitations on common ownership of cellular 
and broadband PCS interests set forth in this section within ninety 
(90) days of final grant.
    (i) Parties holding controlling interests in cellular licensees 
that conflict with the attribution threshold or service overlap 
limitations set forth above will be considered to have come into 
compliance if they have submitted to the Commission an application for 
assignment of license or transfer of control of the cellular licensee 
(see Sec. 22.39 of this chapter) by which, if grant, such parties no 
longer would have an attributable interest in the cellular license. If 
no such assignment or transfer application is tendered to the 
Commission within ninety (90) days of final grant, the Commission may 
consider the short-form certification and the long-form divestiture 
statement to be material, bad faith misrepresentations and will invoke 
the condition on the PCS license, cancelling it automatically, retain 
all monies paid to the Commission, and, based on the facts presented, 
take any other action it may deem appropriate. Divestiture may be to an 
interim trustee if a buyer has not been secured in the required time 
frame, as long as the applicant has no interest in or control of the 
trustee, and the trustee may dispose of the license as it sees fit.
    (ii) Where parties to broadband PCS applications hold less-than-
controlling (but still attributable) interests in cellular licensee(s), 
they shall submit, within ninety days of final grant, a certification 
that the applicant and all parties to the application have come into 
compliance with the limitations on common ownership of cellular and 
broadband PCS interests set forth in this section.

    Note 1: For purposes of the cellular ownership attribution 
limit, all ownership interests in cellular operations that serve 10 
or more percent of the population of the PCS service area should be 
included in determining the extent of a PCS applicant's cellular 
ownership.
    Note 2: When a party owns an attributable interest in more than 
one cellular system that overlaps a PCS service area, the total 
population in the overlap area will apply on a cumulative basis.
    Example 1: Company A holds a 15 percent non-controlling 
ownership interest in Cellular Licensee X and a 15 percent non-
controlling ownership interest in Cellular Licensee Y. Cellular 
Licensee X covers 30 percent of the population of the PCS service 
area and Cellular Licensee Y covers 10 percent of the population of 
the PCS service area. A broadband PCS applicant in which Company A 
holds an attributable ownership interest will be eligible for a 
broadband PCS license or licenses for more than 10 MHz because 
Company A does not hold attributable ownership interests in cellular 
operations which together include ten or more percent of the 
population of the PCS service area.
    Example 2: (1) Cellular Company A owns a 45 percent non-
controlling interest in cellular license 1, and a 22 percent non-
controlling interest in both cellular licenses 2 and 3. Cellular 
license 1 includes 15 percent of the pops in BTA 1. Cellular license 
2 covers 7 percent of the pops in BTA 2 and 5 percent of the pops in 
BTA 3. Cellular license 3 covers 7 percent of the pops in BTA 3. 
Together Cellular licenses 1, 2 and 3 cover 9 percent of the pops in 
MTA 1.
    (2) If Cellular Company A is not a designated entity, it can 
purchase 40 MHz of spectrum in BTA 2 or in MTA 1. It can acquire 
only 10 MHz in BTA 1 or BTA 3 because it is considered to have 
ownership interests in 15 percent of the pops in BTA 1 and 12 
percent of the pops in BTA 3.
    (3) If Cellular Company A wants to acquire 40 MHz of spectrum in 
BTA 3 it can either agree to divest either cellular license 2 or 3, 
or it can invest as a non-controlling investor in a PCS license that 
is held and controlled by a business owned by minorities and/or 
women.
    (4) If Cellular Company A wants to acquire 40 MHz of spectrum in 
BTA 1 it can agree to divest its interests in cellular license 1. It 
cannot invest as a non-controlling investor in a business owned by 
minorities and/or women because its 45 percent ownership of license 
1 will be attributed, since it is greater than the 40 percent 
threshold.
    (5) If Cellular Company A is a designated entity, it can acquire 
40 MHz of PCS spectrum in every area except BTA 1, where it is 
considered to have an ownership interest in 25 MHz of spectrum 
already because it is over 40 percent threshold.
    Example 3: (1) Cellular Company A owns a 45 percent non-
controlling interest in cellular license 1 that covers 5 percent of 
the pops in BTA 1. Cellular Company A also owns a 21 percent non-
controlling interest in cellular license 2 that covers 9 percent of 
the pops in BTA 1. If Cellular Company A is not a designated entity, 
then it can buy only 10 MHz of spectrum, because it is considered to 
have an ownership interest of 14 percent of the pops in BTA 1. If it 
wants to buy 30 MHz it would have to certify before the auction that 
it will divest either cellular license 1 or 2.
    (2) If Cellular Company A is a designated entity, then it would 
be considered to have an ownership interest in only 5 percent of the 
pops in BTA 1 and would thus be eligible to buy up to 40 MHz in BTA 
1.
    Example 4: Company A holds a 10 percent interest in Cellular 
Licensee 1. Company B holds a 10 percent interest in Cellular 
Licensee 1. Cellular Licensee 1 covers more than 10 percent of the 
population of the PCS service area. Neither Company A nor Company B 
is a designated entity. A PCS entity with interests held by Company 
A and Company B is ineligible for a 30 MHz PCS license because the 
attributable ownership in cellular license 1 is 20 percent.
    Example 5: Same as Example 4 except that Company A and Company B 
are designated entities. The PCS entity is eligible for a 30 MHz PCS 
license because the attributable cellular ownership is less than 40 
percent.


Sec. 24.229  Frequencies.

    The frequencies available in the Broadband PCS service are listed 
in this section in accordance with the frequency allocations table of 
Section 2.106 of this chapter.
    (a) The following frequency blocks are available for assignment on 
an MTA basis:

Block A: 1850-1865 MHz paired with 1930-1945 MHz; and
Block B: 1870-1885 MHz paired with 1950-1965 MHz.

    (b) The following frequency blocks are available for assignment on 
a BTA basis:

Block C: 1895-1910 MHz paired with 1975-1990 MHz;
Block D: 1865-1870 MHz paired with 1945-1950 MHz;
Block E: 1885-1890 MHz paired with 1965-1970 MHz; and
Block F: 1890-1895 MHz paired with 1970-1975 MHz.

    (c) PCS licensees shall not have an ownership interest in frequency 
blocks that total more than 40 MHz and serve the same geographic area. 
For the purpose of this section, PCS licensees are entities having an 
ownership interest of 5 or more percent or other attributable ownership 
interest, as defined in Section 24.204(d), in a PCS license.

    Example 1: Company A, which is a rural telephone company with no 
cellular interests, buys a 7 percent stake in a 30 MHz BTA that 
constitutes 8 percent of the population in MTA 1, which encompasses 
BTA 1. It is then offered an opportunity to buy 8 percent of the 
equity in a 30 MHz license in MTA 1. It cannot accept this offer 
because it would be over the 5 percent threshold on two overlapping 
PCS licenses. Its status as a rural telephone company has no impact 
on the 5 percent threshold for PCS licensees.
    Example 2: (1) Company A has two investors, Company B and 
Company C. Company B owns 15 percent of Company A. Company C, a 
rural telephone company, owns 25 percent of Company A. Company B and 
Company C do not have any interests in each other.
    (2) Company B has 100 percent ownership of cellular license 1 
that covers 20 percent of the pops in BTA 1 and 6 percent of the 
pops in MTA 1. Company C owns 25 percent of cellular license 2 that 
covers 20 percent of the pops in BTA 2 and 6 percent of the pops in 
MTA 1. Company A has no separate cellular interests. MTA 1 
encompasses both BTA 1 and BTA 2.
    (3) Company A cannot purchase 30 MHz of spectrum in BTA 1. Such 
a purchase would put Company B over the aggregation limit of 40 MHz 
in BTA 1 because it would have over 5 percent ownership of the PCS 
license in addition to its cellular license.
    (4) Company A can, however, purchase 30 MHz in BTA 2 or MTA 1 
because Company C is a rural telephone company, and thus Company C's 
interest in cellular license 2 falls below the 40 percent threshold 
and is not counted against the spectrum cap. If Company C were not a 
rural telephone company, then Company A could not acquire 30 MHz in 
BTA 2 or MTA 1 because its partners in those licenses would be over 
the spectrum cap.
    (5) Company B can also buy 30 MHz in BTA 2 or MTA 1 as long as 
Company A does not also buy 30 MHz in BTA 2 or MTA 1 because Company 
B and Company C have no joint ownership.
    (6) Company C can also buy 30 MHz in BTA 1 or 2 or MTA 1 as long 
as Company A does not also buy in the region where Company C buys. 
If Company A were to buy a 30 MHz MTA 1 license, then Company B and 
C would be prohibited from acquiring either of the BTAs because they 
would be over the 5 percent threshold for PCS spectrum in the same 
region.

    (d) After January 1, 2000, licensees that have met the 5-year 
construction requirement may assign portions of licensed PCS spectrum. 
In no case may an assignee aggregate more than 40 MHz of PCS/cellular 
spectrum.


Sec. 24.232  Power and antenna height limits.

    (a) Base stations are limited to 1640 watts peak equivalent 
isotropically radiated power (e.i.r.p.) with an antenna height up to 
300 meters HAAT. See Sec. 24.53 for HAAT calculation method. Base 
station antenna heights may exceed 300 meters with a corresponding 
reduction in power; see Table 1 of this section. In no case may the 
peak output power of a base station transmitter exceed 100 watts. The 
service area boundary limit and microwave protection criteria specified 
in Section 24.236 and Section 24.237 apply.

Table 1.--Reduced Power for Base Station Antenna Heights Over 300 Meters
------------------------------------------------------------------------
                                                                Maximum 
                        HAAT in meters                          e.i.r.p.
                                                                (watts) 
------------------------------------------------------------------------
300...............................................      1,640
500...............................................      1,070
1,000.............................................        490
1,500.............................................        270
2,000.............................................        160
------------------------------------------------------------------------

    (b) Mobile/portable stations are limited to 2 watts e.i.r.p. peak 
power and the equipment must employ means to limit the power to the 
minimum necessary for successful communications.
    (c) Peak transmit power must be measured over any interval of 
continuous transmission using instrumentation calibrated in terms of an 
rms-equivalent voltage. The measurement results shall be properly 
adjusted for any instrument limitations, such as detector response 
times, limited resolution bandwidth capability when compared to the 
emission bandwidth, sensitivity, etc., so as to obtain a true peak 
measurement for the emission in question over the full bandwidth of the 
channel.


Sec. 24.235  Frequency stability.

    The frequency stability shall be sufficient to ensure that the 
fundamental emission stays within the authorized frequency block.


Sec. 24.236  Field strength limits.

    The predicted or measured median field strength at any location on 
the border of the PCS service area shall not exceed 47 dBuV/m unless 
the parties agree to a higher field strength.


Sec. 24.237  Interference protection.

    (a) All licensees are required to coordinate their frequency usage 
with the co-channel or adjacent channel incumbent fixed microwave 
licensees in the 1850-1990 MHz band. Coordination must occur before 
initiating operations from any base station. Problems that arise during 
the coordination process are to be resolved by the parties to the 
coordination. Licensees are required to coordinate with all users 
possibly affected, as determined by Appendix I to this subpart E 
(Appendix E of the Memorandum Opinion and Order, GEN Docket No. 90-314, 
FCC 94-144; TIA Telecommunications Systems Bulletin 10-F, 
``Interference Criteria for Microwave Systems,'' May 1994, (TSB10-F)); 
or an alternative method agreed to by the parties.
    (b) The results of the coordination process need to be reported to 
the Commission only if the parties fail to agree. Because broadband PCS 
licensees are required to protect fixed microwave licensees in the 
1850-1990 MHz band, the Commission will be involved in the coordination 
process only upon complaint of interference from a fixed microwave 
licensee. In such a case, the Commission will resolve the issues.
    (c) In all other respects, coordination procedures are to follow 
the requirements of Sec. 21.100(d) of this chapter to the extent that 
these requirements are not inconsistent with those specified in this 
part.
    (d) The licensee must perform an engineering analysis to assure 
that the proposed facilities will not cause interference to existing 
OFS stations within the coordination distance specified in Table 2 of a 
magnitude greater than that specified in the criteria set forth in 
paragraph (e) and (f) of this section, unless there is prior agreement 
with the affected OFS licensee. Interference calculations shall be 
based on the sum of the power received at the terminals of each 
microwave receiver from all of the applicant's current and proposed PCS 
operations.

                                                     Table 2.--Coordination Distances In Kilometers                                                     
                                                        [PCS Base Station Antenna HAAT in Meters]                                                       
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  e.i.r.p. (W)                       5      10      20      50      100     150     200     250     300     500    1000    1500    2000 
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.1.............................................      90      93      99     110     122     131     139     146     152     173     210     239     263
0.5.............................................      96     100     105     116     128     137     145     152     158     179     216     245     269
1...............................................      99     103     108     119     131     140     148     155     161     182     219     248     272
2...............................................     120     122     126     133     142     148     154     159     164     184     222     250     274
5...............................................     154     157     161     168     177     183     189     194     198     213     241     263     282
10..............................................     180     183     187     194     203     210     215     220     225     240     268     291     310
20..............................................     206     209     213     221     229     236     242     247     251     267     296     318     337
50..............................................     241     244     248     255     264     271     277     282     287     302     331     354     374
100.............................................     267     270     274     282     291     297     303     308     313     329     358     382     401
200.............................................     293     296     300     308     317     324     330     335     340     356     386     409  ......
500.............................................     328     331     335     343     352     359     365     370     375     391     421  ......  ......
1000............................................     354     357     361     369     378     385     391     397     402     418  ......  ......  ......
1200............................................     361     364     368     376     385     392     398     404     409  ......  ......  ......  ......
1640............................................     372     375     379     338     397     404     410     416     421  ......  ......  ......  ......
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: If actual value does not match table values, round to the closest higher value on this table. See Section 24.53 for HAAT calculation method.      

    (e) For microwave paths of 25 kilometers or less, interference 
determinations shall be based on the C/I criteria set forth in TIA 
Telecommunications Systems Bulletin 10-F, ``Interference Criteria for 
Microwave Systems,'' May 1994 (TSB10-F).
    (f) For microwave paths longer than 25 kilometers, the interference 
protection criterion shall be such that the interfering signal will not 
produce more than 1.0 dB degradation of the practical threshold of the 
microwave receiver for analog system, or such that the interfering 
signal will not cause an increase in the bit error rate (BER) from 10E-
6 to 10E-5 for digital systems.
    (g) The development of the C/I ratios and interference criteria 
specified in paragraphs (e) and (f) of this section and the methods 
employed to compute the interfering power at the microwave receivers 
shall follow generally acceptable good engineering practices. The 
procedures described for computing interfering signal levels in 
(Appendix I to this subpart E Appendix E of the Memorandum Opinion and 
Order, GEN Docket No. 90-314, FCC 94-144) shall be applied. 
Alternatively, procedures for determining interfering signal levels and 
other criteria as may be developed by the Electronics Industries 
Association (EIA), the Institute of Electrical and Electronics 
Engineers, Inc. (IEEE), the American National Standards Institute 
(ANSI) or any other recognized authority will be acceptable to the 
Commission.


Sec. 24.238  Emission limits.

    (a) On any frequency outside a licensee's frequency block, the 
power of any emission shall be attenuated below the transmitter power 
(P) by at least 43 plus 10 log10 (P) decibels or 80 decibels, 
whichever is the lesserattenuation.

    Note: The measurements of emission power can be expressed in 
peak or average values, provided they are expressed in the same 
parameters as the transmitter power.

    (b) When an emission outside of the authorized bandwidth causes 
harmful interference, the Commission may, at its discretion, require 
greater attenuation than specified in this section.

Appendix I to Subpart E--A Procedure for Calculating PCS Signal 
Levels at Microwave Receivers (Appendix E of the Memorandum Opinion 
and Order)

    The new Rules adopted in Part 24 stipulate that estimates of 
interference to fixed microwave operations from a PCS operation will 
be based on the sum of signals received at a microwave receiver from 
the PCS operation. This appendix describes a procedure for computing 
this PCS level.
    In general, the procedure involves four steps:
    1. Determine the geographical coordinates of all microwave 
receivers operating on co-channel and adjacent frequencies within 
the coordination distance of each base station and the 
characteristics of each receiver, i.e., adjacent channel 
susceptibility, antenna gain, pattern and height, and line and other 
losses.
    2. Determine an equivalent isotropically radiated power 
(e.i.r.p.) for each base station and equivalent e.i.r.p. values for 
the mobiles and portables associated with each base station. 
Determine the values of pertinent correction and weighting factors 
based on building heights and density and distribution of portables. 
Close-in situations, prominent hills, and extra tall buildings 
require special treatment.
    3. Based on PCS e.i.r.p. values, correction and weighting 
factors, and microwave receiving system characteristics determined 
above, calculate the total interference power at the input of each 
microwave receiver, using the Longley-Rice propagation model.
    4. Based on the interference power level computed in step 3, 
determine interference to each microwave receiver using criteria 
described in Part 24 and EIA/TIA Bulletin 10-F.
    The interference from each base station and the mobiles and 
portables associated with it is calculated as follows:

Prbi=10Log 
(ptbi)-Lbi-UCi+Gmwi-Ci-BPi
Prmi=10Log 
(nmi x ptmi)-Lmi-UCi+Gmwi-Ci
Prpsi=10Log 
(npsi x ptpsi)-Lpsi-UCi+Gmwi-Ci
Prpbi=10Log 
(npbi x ptpbi)-Lpbi-UCi-(BPi-BHi) 
+Gmwi-Ci
Prpri=10Log 
(npri x ptpri)-Lpri-(UCi-BHi)+Gmwi-Ci


where:
P refers to Power in dBm
p refers to power in milliwatts
Prbi=Power at MW receiver from ith base station in dBm
ptbi=e.i.r.p. transmitted from ith base station in milliwatts, 
which equals average power per channel x number of channels x 
antenna gain with respect to an isotropic antenna--line loss
Lbi=Path loss between MW and base station site in dB
UCi=Urban correction factor in dB
Gmwi=Gain of MW antenna in pertinent direction (dBi)
Ci=Channel discrimination of MW system in dB
Prmi=Power at MW receiver from mobiles associated with ith base 
station
ptmi=e.i.r.p. transmitted from mobiles associated with ith base 
station
nmi=Number of mobiles associated with ith base station
Lmi=Path loss between MW and mobile transmitters in dB
Prpsi=Power at MW receiver from outdoor portables (s for 
sidewalk)
ptpsi=e.i.r.p. transmitted from outdoor portables associated 
with ith base station
npsi=Number of outdoor portables associated with ith base 
station
Lpsi=Path loss between MW and outdoor portables in dB
Prpbi=Power at MW receiver from indoor portables (b for 
building)
ptpbi=e.i.r.p. transmitted from indoor portables associated 
with ith base station
npbi=number of indoor portables associated with ith base 
station
Lpbi=Path loss in dB between MW and base station site (using 
average building height divided by 2 as effective antenna height)
Prpri=Power at MW receiver from rooftop portables (r for 
rooftop)
ptpri=e.i.r.p. transmitted from rooftop portables associated 
with ith base station
npri=Number of rooftop portables associated with ith base 
station
Lpri=Path loss in dB between MW and base station site (using 
average building height as effective antenna height)
BPi=Building penetration loss at street level in dB
BHi=Height gain for portables in buildings dB=2.5 x (nf-1), 
where nf is number of floors

    Note: where Ci varies from channel-to-channel, which often 
is the case, the summation process is more complex, requiring 
summation at a channel level first.

    Finally, the total PCS interference power at a given microwave 
receiver from all the base stations in a given frequency band is 
found by summing the contributions from the individual stations. 
Likewise, the total interference power at a given microwave receiver 
from all mobiles and portables operating in a given frequency band 
is found by summing the contributions from the mobiles and portables 
associated with each cell.

TR24JN94.017

    Base Stations. Interference from each base station to each 
microwave should normally be considered independently. A group of 
base stations having more or less (within  50 percent) 
the same height above average terrain, the same e.i.r.p., basically 
the same path to a microwave receiving site, and subtending an angle 
to that receiving site of less than 5 degrees, may be treated as a 
group, using the total power of the group and the average antenna 
height of the group to calculate path loss, L.
    Mobile Stations. The e.i.r.p. from mobile transmitters is 
weighted according to the number of base station channels expected 
to be devoted to mobile operation at any given time. The antenna 
height of mobiles used in calculating path loss, L, is assumed to be 
2 meters.
    Portable Stations. The e.i.r.p. from the portable units 
associated with each base station is weighted according to the 
estimated portion of portables associated with that cell expected to 
be operated inside buildings at any given time and the portion which 
could be expected to be operating from elevated locations, such as 
balconies or building rooftops. For example, in the case of service 
intended for business use in an urban area, one might expect that 
perhaps 85 percent of the portables in use at any given time would 
be operating from within buildings and perhaps 5 percent might be 
operating from rooftops or balconies. The remaining 10 percent would 
be outside at street level.
    Calculation of an equivalent e.i.r.p. for cells in suburban 
areas will involve different weighting criteria.
    Urban Correction Factor. The urban correction factor (UC) 
depends on the height and density of buildings surrounding a base 
station. For the core area of large cities, it is assumed to be 35 
dB. For medium size cities and fringe areas of large cities (4- to 
6-story buildings with scattered taller buildings and lower 
buildings and open spaces) it is assumed to be 25 dB; for small 
cities and towns, 15 dB, and for suburban residential areas (one- 
and two-story, single family houses with scattered multiple-story 
apartment buildings, shopping centers and open areas), 10 dB.
    The unadjusted urban correction factor, UC, should not be 
applied to base station antenna heights that are greater than 50 
percent of the average building height for a cell.
    Building Height and Building Penetration Factors. The building 
height correction, BH, is a function of the average building height 
within the nominal coverage area of the base station. It is used in 
conjunction with the building penetration loss, BP, to adjust the 
expected interference contribution from that portion of the 
portables transmitting from within buildings. The adjustment is 
given by:

BP=20 dB in urban areas
BP=10 dB in suburban areas
BH=2.5 x (nf-1) dB

where nf is the average height (number of floors) of the buildings 
in the area.
    (Note that this formula implies a net gain when the average 
building height is greater than 8 floors). All buildings more than 
twice the average height should be considered individually. The 
contribution to BH from that portion of portables in the building 
above the average building height should be increased by a factor of 
20Log(h) dB, where h is the height of the portables above the 
average building height in meters.
    Channel Discrimination Factor. A factor based on the 
interference selectivity of the microwave receiver.
    Propagation Model. The PCS to microwave path loss, L, is 
calculated using the Longley-Rice propagation model, Version 1.2.2., 
in the point-to-point mode. The Longley-Rice [1] model was derived 
from NBS Technical Note 101 [2], and updated in 1982 by Hufford [3]. 
Version 1.2.2 incorporated modifications described in a letter by 
Hufford [4] in 1985. Terrain elevations used as input to the model 
should be from the U.S. Geological Survey 3-second digitized terrain 
database.
    Special Situations. If a cell size is large compared to the 
distance between the cell and a microwave receiving site so that it 
subtends an angle greater than 5 degrees, the cell should be 
subdivided and calculations should be based on the expected 
distribution of mobiles and portables within each subdivision.
    If terrain elevations within a cell differ by more than a factor 
of two-to-one, the cell should be subdivided and microwave 
interference calculations should be based on the average terrain 
elevation for each subdivision.
    If a co-channel PCS base station lies within the main beam of a 
microwave antenna (5 degrees), there is no intervening 
terrain obstructions, and the power at the microwave receiver from 
that base station, assuming free space propagation, would be 3 dB or 
less below the interference threshold, interference will be assumed 
to exist unless the PCS licensee can demonstrate otherwise by 
specific path loss calculations based on terrain and building 
losses.
    If any part of a cell or cell subdivision lies within the main 
beam of a co-channel microwave antenna, there is no intervening 
terrain obstructions, and the accumulative power of 5 percent or 
less of the mobiles, assuming free space propagation would be 3 dB 
or less below the interference threshold, interference will be 
assumed to exist unless the PCS licensee can demonstrate otherwise 
by specific path loss calculations based on terrain and building 
losses.
    If a building within a cell or cell subdivision lies within the 
main beam of a co-channel microwave antenna, there is no intervening 
terrain obstructions, and the cumulative power of 5 percent or fewer 
of the portables, assuming free space propagation, would be 3 dB or 
less below the interference threshold, interference will be assumed 
to exist unless the PCS licensee can demonstrate otherwise by 
specific path loss calculations based on terrain and building 
losses.

References:

    1. Longley, A.G. and Rice, P.L., ``Prediction of Tropospheric 
Radio Transmission Loss Over Irregular Terrain, A Computer Method-
1968'', ESSA Technical Report ERL 79-ITS 67, Institute for 
Telecommunications Sciences, July 1968.
    2. Rice, P.L. Longley, A.G., Norton, K.A., Barsis, A.P., 
``Transmission Loss Predictions for Tropospheric Communications 
Circuits,'' NBS Technical Note 101 (Revised), Volumes I and II, U.S. 
Department of Commerce, 1967.
    3. Hufford, G.A., Longley, A.G. and Kissick, W.A., ``A Guide to 
the use of the ITS Irregular Terrain Model in the Area Prediction 
Mode'', NTIA Report 82-100, U.S. Department of Commerce, April 1982. 
Also, Circular letter, dated January 30, 1985, from G.A. Hufford, 
identifying modifications to the computer program.
    4. Hufford, G.A., Memorandum to Users of the ITS Irregular 
Terrain Model, Institute for Telecommunications Sciences, U.S. 
Department of Commerce, January 30, 1985.

Appendix: Final Regulatory Flexibility Analysis

    Note: This appendix will not appear in the Code of Federal 
Regulations.

    Pursuant to 5 U.S.C. Section 603, an initial Regulatory 
Flexibility Analysis was incorporated in the Notice of Proposed Rule 
Making and Tentative Decision in combined ET Docket No. 92-100 and 
GEN Docket No. 90-314. Written comments on the proposals in the 
Notice of Proposed Rule Making, including the Regulatory Flexibility 
Analysis, were requested. A Final Regulatory Flexibility Analysis 
was incorporated in the Second Report and Order in GEN Docket No. 
90-314.
    A. Need for and Objective of Rules: Our objective is to provide 
spectrum allocations, licensing and authorization rules, and 
technical standards for broadband PCS at 2 GHz. Authorizing this new 
service will make available a broad range of new services and 
technologies to both business users and consumers. The revised PCS 
rules will provide licensees and developers of unlicensed equipment 
the flexibility to introduce a wide variety of new and innovative 
telecommunications services and equipment.
    B. Issues Raised by the Public in Response to the Initial and 
Final Analyses: A number of parties supported regulations that would 
facilitate participation in PCS by small businesses. Specifically, 
these parties argue that small frequency blocks, small service 
areas, and special consideration for small businesses in the 
licensing of PCS would facilitate small businesses participation in 
providing PCS services. The FCC empaneled a Small Business Advisory 
Committee (SBAC) that also assessed the policy implications of this 
proceeding for small businesses and filed a report with the 
Commission on September 15, 1993. The SBAC concluded that small 
frequency blocks with multiple licensees in each service area and a 
frequency block designated for qualified small, female, and minority 
businesses would assist entrepreneurial entry in PCS. The SBAC also 
suggested that the Commission consider other mechanisms to foster 
entry opportunities and capital formation for such groups. These 
issues and associated filings have been considered and addressed in 
the Second Report and Order and this Memorandum Opinion and Order, 
except issues related to licensee selection procedures. Licensing 
issues are the subject of a separate proceeding (PP Docket No. 93-
253) that will establish rules to implement competitive bidding in 
broadband PCS. A Report and Order in that proceeding will be issued 
in the near future.
    C. Any Significant Alternative Minimizing Impact on Small 
Entities and Consistent with Stated Objectives: We have reduced 
burdens wherever possible. The regulatory burdens we have retained 
are necessary to ensure that the public receives the benefits of 
broadband PCS in a prompt and efficient manner. We will continue to 
examine alternatives in the future with the objectives of 
eliminating unnecessary regulations and minimizing any significant 
impact on small entities.

[FR Doc. 94-15263 Filed 6-23-94; 8:45 am]
BILLING CODE 6712-01-M