[Federal Register Volume 59, Number 224 (Tuesday, November 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28760]


[[Page Unknown]]

[Federal Register: November 22, 1994]


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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 90

[PR Docket No. 93-144, PP Docket No. 93-253; FCC 94-271]

 

Facilitation of Future Development of SMR Systems in the 800 MHz 
Frequency Band; Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, 800 MHz SMR

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission has adopted a Further Notice of Proposed Rule 
Making (Further Notice) aimed at establishing a flexible regulatory 
scheme for Specialized Mobile Radio (SMR) systems in the 800 MHz band. 
The intended effect of this Further Notice is to solicit comment on 
assignment of blocks of SMR spectrum in defined market-based service 
areas that will facilitate the development of wide-area, multi-channel 
SMR systems that are comparable to and compete with cellular and 
broadhand Personal Communications Services (PCS) systems; how the needs 
of smaller SMR systems primarily seeking to provide local service can 
best be accommodated under the proposed licensing scheme; regulatory 
treatment of existing SMR systems; application and licensing procedures 
for both the wide-area SMR spectrum blocks and locally licensed SMR 
channels; continued licensing of SMR systems on 800 MHz General 
Category channels or on other non-SMR channels through inter-category 
sharing; and competitive bidding procedures for resolution of mutually 
exclusive 800 MHz SMR applications.

DATES: Comments must be filed on or before December 5, 1994, and reply 
comments must be filed on or before December 20, 1994.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:
D'wana Speight, (202) 632-7125 (Private Radio Bureau, Land Mobile and 
Microwave Division).

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rule Making, PR Docket No. 93-144, PP Docket 
No. 93-253, FCC 94-271, adopted October 20, 1994, and released November 
4, 1994. The full text of the Further Notice is available for 
inspection and copying during normal business hours in the FCC Public 
Reference Center, Room 239, 1919 M Street, N.W., Washington, DC. The 
complete text may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., 2100 M Street, N.W., Suite 
140, Washington, DC 20037, (202) 857-3800.

Summary of Further Notice of Proposed Rule Making

    1. The Further Notice is intended to build upon and refine the 
Commission's previous efforts to promote the development of wide-area 
SMR service in the 800 MHz band, particularly its 1993 Notice of 
Proposed Rule Making that initiated this docket (8 FCC Rcd 3950 (1993), 
58 FR 33062 (June 15, 1993)). The proposals presented in the Further 
Notice also are part of the Commission's continuing implementation of 
the new regulatory framework for mobile radio services enacted by 
Congress in the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-
66, 107 Stat. 312, 392 (Budget Act).
    2 . In implementing the Budget Act, the Commission previously 
determined that its SMR channel assignment rules should be revised to 
facilitate licensing in some portion of the 800 MHz SMR band on a Major 
Trading Area (MTA) basis. In the Further Notice, the Commission 
proposes to divide the existing 14 MHz of SMR spectrum into two 
categories for future licensing: (a) the 10 MHz ``upper block'', 
comprised of the 200 contiguous SMR channels (Channels 401 to 600), 
would be licensed on an MTA basis; (b) the remaining 4 MHz, comprised 
of the 80 non-contiguous SMR channels, would be licensed in groups of 
five channels on a local basis. The Commission tentatively concludes 
that the 10 MHz upper block of SMR spectrum is best suited for wide-
area licensing because of its contiguity.
    3. The Commission also seeks comment on its tentative conclusion 
that the 80 non-contiguous SMR channels should be licensed on a local 
basis. The Commission seeks comment on whether dividing the 800 MHz 
band spectrum in this fashion is fair and equitable and also solicits 
alternative allocations that would fairly balance the interests of 
wide-area and local SMR systems.
    4. The Commission proposes to divide the upper 10 MHz ``MTA block'' 
into four blocks of 2.5 MHz, corresponding to 50 channels per block 
under our existing frequency allocation rules. The Commission seeks 
comment on whether the proposed allocation is a fair division of 
channels within the MTA and will lead to efficient spectrum use and the 
appropriateness of alternative block sizes both smaller and larger than 
2.5 MHz.
    5. In addition, the Commission tentatively concludes that a limit 
on the aggregation of 800 MHz SMR spectrum by a single licensee within 
a particular MTA is unnecessary. The Commission previously concluded 
that 45 MHz cap on aggregation of broadband PCS, cellular, and SMR 
spectrum, combined with existing service-specific caps for cellular and 
PCS, was sufficient to maintain a competitive commercial mobile radio 
service market. The Commission nonetheless seeks comment on whether 
there should be such an aggregation limit for 800 MHz SMR.
    6. The Commission further propose to continue licensing SMR systems 
on the ``lower 80'' channels on a local basis in order to provide 
opportunities for SMR operators who seek to provide local service. The 
Commission solicits comment on two alternative approaches to local SMR 
licensing. The first alternative would be to continue licensing these 
channels under the same geographic separation and channelization 
criteria that exist in the Commission's current SMR rules. The second 
alternative would be to discontinue site-specific licensing and instead 
offer licenses for individual channels or small channel blocks covering 
defined geographic areas. The Commission also seeks comment on any 
possible licensing alternatives for the ``lower 80'' channels that 
might further promote the SMR operators' ability to quickly gain access 
to spectrum and to provide efficient service to the public.
    7. The Commission also proposes that MTA licensees will be entitled 
to use any available border area channels within their spectrum blocks, 
subject to the relevant rules regarding international assignment and 
coordination of such channels. The Commission seeks comment on this 
proposal and on how to license the channels in border areas that are 
not contained in the proposed MTA block, which include both lower 80 
SMR channels and channels that are allocated to non-SMR services 
outside the border areas. The Commission proposes to license these 
channels on a channel-by-channel basis.
    8. The Commission believes that a key element in any new licensing 
scheme for wide-area SMR sytems is that licensees be extended the same 
flexibility, to the extent feasible, as cellular and PCS licensees in 
terms of the location, design, construction, and modification of their 
facilities throughout their service area. Thus, the Commission 
tentatively concludes that MTA licensees in the 800 MHz band should be 
authorized to construct stations at any available site and on any 
available channel within their MTAs (subject to their obligation to 
provide co-channel protection to incumbents as discussed infra). It 
also proposes to allow MTA licensees to add, subtract, move, and 
otherwise modify their base station facilities without any need for 
prior Commission consent, provided they notify the Commission of the 
coordinates and certify compliance with other applicable FCC technical 
requirements.
    9. The Commission proposes that if an incumbent fails to construct, 
discontinues operations, or otherwise has its license terminated by the 
Commission, the spectrum covered by that incumbent's authorization 
should automatically revert to the MTA licensee who has obtained the 
contingent rights to that spectrum. An additional proposal is that the 
MTA license confer the right to negotiate with incumbent systems within 
the MTA to purchase or relocate their facilities. In this regard, the 
Commission proposes that any request for transfer or assignment of an 
incumbent authorization to the MTA licensee be presumptively considered 
in the public interest. The Commission seeks comment on these proposals 
and other alternatives, including the costs and benefits associated 
with each alternative in markets that are heavily occupied by incumbent 
licensees.
    10. The commission tentatively concludes that incumbent SMR systems 
should not be required to relocate new frequencies, but that decisions 
regarding relocation should instead be left to the parties involved and 
the marketplace. Thus, it asks commenters to address: (a) whether 
relying on voluntary negotiations between MTA licensees and incumbents 
will continue to provide sufficient inducement for incumbents to 
relocate; (b) whether the Commission should intervene if incumbents 
refuse ``reasonable'' inducements to relocate; and, (c) what 
constitutes a ``reasonable'' inducement and the specific form of 
intervention, if any, that should be taken by the Commission in those 
instances when the incumbent has refused such inducements. The 
Commission also seeks further comment on mandatory relocation as an 
alternative to voluntary arrangements between MTA licensees and 
incumbents similar to the Commission's provisions for relocation of 
microwave licensees from the 2 GHz PCS band. In addition, the 
Commission solicits comment on possible mechanisms for ensuring that 
all relocation costs to incumbents would be guaranteed by the MTA 
licensee, descriptions of specific costs, both direct and indirect, 
that would be associated with relocation (including whether they should 
be fully reimbursable by the MTA licensee), and whether MTA licensees 
should be required to offer some form of premium over cost (e.g., 
additional channels or improved facilities) if they seek to invoke a 
mandatory relocation option.
    11. Also, the Commission tentatively concludes that incumbent 
systems should not be allowed to expand beyond their existing service 
areas on MTA-licensed channels without the consent of the MTA licensee. 
The Commission also proposes to allow incumbent licenses to freely 
modify their facilities provided such modifications do not expand their 
service areas. The Further Notice requests comment regarding the 
advantages and disadvantages of these proposals and specific examples 
of circumstances under which incumbents should be permitted to modify 
their systems.
    12. The Commission seeks comment on whether a fixed-radius 
protected service area (e.g., 30 kilometers which approximates the 40 
dBu signal strength contour of an SMR station operating with maximum 
facilities) should be established for incumbent SMR systems so that 
such systems may construct new base stations within the existing 
station's 40 dBu signal strength contour. The Commission asks 
commenters to include a technical analysis of this proposal and any 
alternative proposals that permit greater flexibility for locally 
licensed SMR systems.
    13. The Commission has previously concluded that the co-channel 
interference protection obligations of SMR MTA licensees with respect 
to other MTA licensees would be similar to those imposed in the 
cellular and PCS services where licensees are required to comply with 
interference protection criteria between Commission-defined service 
areas only at service area borders. Thus, the Commission tentatively 
concludes that wide-area SMR licensees in the 800 MHz band should not 
be allowed to exceed a signal level of 22 dBuV/m at their service area 
boundaries (unless they negotiate a different signal strength limit 
with all potentially affected adjacent licensees).
    14. In addition, the Commission proposed to apply out-of-band 
emission rules only to the ``outer'' channels included in a MTA license 
and to spectrum adjacent to interior channels used by incumbents. The 
proposed 800 MHz SMR emission mask rule is that for any frequency 
outside an MTA licensee's frequency block, the power of any emission 
shall be attenuated below the transmitter power (P) by at least 43 plus 
10 log 10 (P) decibels or 80 decibels, whichever is the lesser 
attenuation. The Further Notice seeks comment on this proposal 
including a request for technical analysis of the proposal and 
discussion of any alternatives.
    15. The Commission previously established a uniform 12-month period 
for constructing a standard base station in all CMRS services licensed 
on a channel-by-channel basis. The Further Notice proposed to no longer 
grant extended construction periods on non-MTA channels under 
Sec. 90.629 of the Commission's rules. The Commission seeks comment on 
whether strict enforcement of this construction period will be an 
adequate protection against spectrum warehousing on frequencies 
occupied by local SMR systems.
    16. The Commission tentatively concludes that MTA licensees should 
have five years to construct their systems. Because some existing wide-
area SMR licensees have already been granted extended implementation 
periods of up to five years, the Commission requests comment on how 
existing licensees with extended implementation periods should be 
treated. It also asks commenters to address what is a reasonable 
timeframe for completing such systems given the technologies presently 
available in the SMR market.
    17. The Commission proposes that MTA-based 800 MHz SMR licensees be 
required to provide coverage to one-third of the MTA population within 
three years of initial license grant and to two-thirds of the 
population by the end of their five-year construction period. The 
Commission further proposed that an MTA licensee must satisfy these 
requirements regardless of the extent of the presence of incumbents 
within its MTA block. The Commission also seeks comment on whether a 
specific definition of what constitutes coverage should be adopted for 
this service, e.g., should single channel coverage be sufficient or 
should a mult-channel coverage requirement be imposed.
    18. The Commission also tentatively concludes that an MTA 
licensee's failure to meet the coverage requirements imposed either at 
the third or fifth years of its construction period should result in 
forfeiture of the license. This penalty for failure to comply with 
coverage requirements is consistent with the penalties provided in the 
Commission's broadband PCS rules and would allow the spectrum to be 
made available to other qualified applicants.
    19. The Commission tentatively concludes that the eligibility rules 
for the General Category channels and Industrial/Land Transportation 
and Business Category Channels (collectively, ``Pool Channels'') should 
be revised to prohibit SMR and non-SMR applicants from applying for the 
same channels in the future. The Commission seeks comment, however, on 
how the spectrum should be allocated to address the relative demand for 
SMR and non-SMR services. One alternative would be to eliminate SMR 
eligibility for all future licensing on General Category and Pool 
Channels. Another alternative would be to prohibit future inter-
category sharing by SMR applicants on Pool Channels, but to designate a 
portion of the General Category for SMR-only licensing while the 
remaining channels would be available only to non-SMR licensees. A 
third alternative would be to designate the entire General Category for 
future licensing exclusively to SMR applicants. In light of the 
proposed restriction on future SMR use of Pool Channels, and possibly, 
General Category channels that are designated for non-SMR use, the 
Commission also tentatively concludes that other Part 90 services 
should be restricted from future eligibility for licenses on SMR 
Category channels. The Further Notice seeks comment on this proposal, 
including whether incumbent SMRs on the General Category or Pool 
Channels should be allowed to apply for new authorizations on these 
channels.
    20. The Commission proposes that both existing licensees and new 
applicants should be eligible for MTA licenses as well as for local 
licenses in the 800 MHz SMR band. It requests comment on this proposal, 
including whether there is any need to restrict eligibility for MTA 
licenses to incumbent licensees (or to restrict eligibility based on 
other criteria) if competitive bidding procedures are used.
    21. For 800 MHz SMR MTA licenses, the Commission proposes to use 
application procedures similar to those used for licensing of PCS based 
on the common use of Commission-defined geographic areas and spectrum 
blocks to define the scope of licenses in both services. The Commission 
seeks comment on this view, and on any alternative procedural approach 
that commenters may consider appropriate. It also proposes (1) to treat 
all MTA applicants as initial applicants for public notice, application 
processing, and competitive bidding purposes, (2) to require applicants 
for MTA-based SMR licenses to file an initial ``short-form'' 
application to qualify for competitive bidding, after which the 
successful bidder files a ``long form'' application, and (3) to adopt 
rules analogous to its PCS rules with respect to application content, 
amendment and modification of applications, return of defective 
applications, waiver procedures, and petitions to deny. In addition, 
the Commission proposes to allow a limited opportunity for MTA 
applicants to cure minor defects in their short-form applications (but 
not to allow major amendments after the expiration of the short-form 
filing window) and to adopt rules regarding major and minor 
modification of MTA licenses and petition to deny procedures (including 
``greenmail'' restrictions limiting payments that a petitioner may 
receive in exchange for agreeing to withdraw a petition) that are 
consistent with its PCS rules.
    22. The Commission also seeks comment on licensing procedures for 
local SMR channels. If local licensing is based on defined service 
areas, the Commission proposes to use application procedures similar to 
those used for the licensing of MTA blocks. If, on the other hand, 
site-specific licensing is adopted for the locally licensed SMR 
channels, the Commission proposes to use application procedures similar 
to those recently adopted for non-cellular Part 22 licensees. To the 
extent that 800 MHz SMR channels continue to be licensed on a site-
specific basis, the Commission proposes to classify the following as 
``initial'' applications for new authorizations: all applications for 
new frequencies or for stations more than 2 kilometers from an existing 
facility using the same channel.
    23. In addition, the Commission recently indicated that for CMRS 
providers licensed on a site-specific basis, major modifications 
include a change in frequency, an increase in the effective radiated 
power or antenna height above average terrain in any azimuth, or a 
change in location. The Commission seeks comment on the applicability 
of this definition to locally licensed SMR systems and whether there 
are other types of modifications that should be deemed major in this 
context. The Commission proposes that major modification applications 
would be subject to filing window and cutoff procedures and processed 
on a first-come, first-served basis, except that (1) modification 
applications that are mutually exclusive with initial or modification 
applications filed on the same day would be classified as members of a 
``same day filing group,'' and (2) modification applications filed 
within the 30-day public notice period of a competing initial 
application would be considered part of the 30-day filing group. In 
both cases, the mutually exclusive group of applications would be 
designated for comparative hearing (unless the parties negotiate a 
legal settlement) because the Budget Act does not permit the use of 
competitive bidding procedures to determine whether a modification 
application should be granted. The Further Notice seeks comment on 
whether our proposed definitions and procedures for dealing with 
modification applications are appropriate for licensing of local SMR 
channels. It also proposes adoption of petition to deny procedures for 
local SMR licensing similar to those proposed for MTA-based licensing. 
The Commission seeks comment, however, on whether petitions to deny 
locally licensed SMR applications should be filed within the initial 
30-day public notice period following acceptance of such applications, 
or only after an auction winner has been determined, as is proposed in 
the case of MTA applications. In either case, the Commission intends to 
review only petitions filed against the auction winner.
    24. The Commission proposes to classify all MTA licensees 
presumptively as CMRS providers because they are likely to provide 
interconnected service as part of their service offering. It further 
proposes that such presumption may be overcome by demonstrating that 
their service does not fall within the CMRS definition. In addition, 
the Further Notice proposes not to apply this presumption prior to 
August 10, 1996 in the case of any MTA licensee who was previously 
licensed in the SMR service as of August 10, 1993, and is therefore not 
subject to CMRS regulation for three years from the Budget Act's 
enactment date. It also seeks comment on whether the presumption of 
CMRS status should apply to licensees authorized for the 80 locally 
licensed channels.
    25. The Commission believes that multiple bidding methodologies may 
be required for licensing of 800 MHz SMR service because the two 
proposed categories of licenses (MTA-based and local) will vary 
significantly from one another in terms of expected value and 
interdependence. In addition, it believes that competitive bidding in 
the 800 MHz SMR service presents a number of variables that have not 
been presented in other services for which auction rules have been 
developed. In particular, the proposed licensing of local SMR channels 
on a site-specific basis requires examination of how competitive 
bidding would work in a context where mutually exclusive applicants 
have applied for overlapping rather than identical authorizations.
    26. The Commission tentatively concludes that simultaneous multiple 
round bidding is most likely to award MTA licenses to bidders who value 
them most highly. the Further Notice asks commenters whether any other 
competitive bidding designs might be more appropriate for the MTA-based 
licensing of 800 MHz SMR spectrum. Assuming simultaneous multiple round 
auctions are used, the Commission also seeks comment on which blocks 
should be auctioned together, the intervals between rounds in each 
auction, and the sequencing of each auction. Its tentative view is that 
all MTA licenses should be auctioned simultaneously because of the 
relatively high value and significant interdependence of the licenses. 
The Further Notice seeks comment on its view and on possible 
alternatives for grouping of licenses.
    27. The Commission tentatively concludes that a simpler and less 
costly auction method, such as single round sealed bid auctions, should 
be used for licensing the 80 local SMR channels. The Further Notice 
also asks commenters to suggest alternative bidding designs. For 
example, if these channels are licensed on a site-specific basis, one 
alternative would be to allow mutually exclusive applications to use 
negotiated settlements or coordination to minimize the number of 
overlapping applications that would require resolution by competitive 
bidding. Another alternative would be to divide the local 80 SMR 
channels into defined geographic areas (e.g., BTAs) and small blocks of 
channels (e.g., five or ten channels) and conduct a series of separate 
auctions for mutually exclusive applications within each area/block 
combination. The Commission seeks comment on the practicality of these 
alternatives, whether these auctions for the local licenses should be 
conducted separately or simultaneously, and how such licenses should be 
ordered for auction purposes.
    28. The Commission also seeks comment on bidding procedures to be 
used in 800 MHz SMR auctions, including bid increments, duration of 
bidding rounds, stopping rules, and activity rules. Assuming that 
simultaneous multiple round auctions are used for MTA-based SMR 
licenses, the Commission generally proposed to use the same or similar 
bidding procedures to those used in simultaneous multiple round bidding 
for MTA-based PCS licenses. In the case of locally licensed 800 MHz SMR 
channels, the Further Notice seeks comment on bidding procedures that 
would be appropriate depending on whether single round sealed bid 
auctions or an alternative auction methodology is used. It generally 
proposed to follow the procedural, payment, and penalty rules 
established in Subpart Q of Part 1 of the Commission's Rules, but seeks 
comment on whether any service-specific modifications of these rules 
are needed based on the particular characteristics of the 800 MHz SMR 
service.
    29. As in the case of other auctionable services, the Commission 
proposes to require SMR auction participants to tender in advance to 
the Commission a substantial upfront payment as a condition of bidding. 
It seeks comment on whether the standard upfront payment formula of 
$0.02 per pop per MHz for the largest combination of MHz-pops a bidder 
anticipates bidding on in any single round of bidding is appropriate 
for 800 MHz SMR services. The Commission also proposes to require that 
winning bidders for 800 MHz SMR licenses supplement their upfront 
payments with a down payment sufficient to bring their total deposits 
up to 20 percent of their winning bid(s).
    30. The Commission further proposes to adopt bid withdrawal, 
default, and disqualification rules for 800 MHz SMR licensing based on 
its general competitive bidding rules and seeks comment on these 
proposals. Under these procedures, any bidder who withdraws a high bid 
during an auction before the Commission declares bidding closed, or 
defaults by failing to remit the required down payment within the 
prescribed time, would be required to reimburse to the Commission the 
difference between its high bid and the winning bid amount the next 
time the license is offered by the Commission, if the subsequent 
winning bid is lower. A defaulting auction winner would be assessed an 
additional penalty of three percent of the subsequent winning bid or 
three percent of the amount of the defaulting bid, whichever is less. 
In the event that an auction winner defaults or is otherwise 
disqualified, we propose to re-auction the license either to existing 
or new applicants. The Commission would retain discretion, however, to 
offer the license to the next highest bidder at its final bid level if 
the default occurs within five business days of the close of bidding.
    31. The Further Notice also proposes to adopt the transfer 
disclosure requirements contained in Section 1.211(a) of the 
Commission's rules for all 800 MHz SMR licenses obtained by competitive 
bidding and specific rules governing unjust enrichment by designated 
entities. Generally, applicants transferring their licenses within 
three years after the initial license grant will be required to file, 
together with their transfer application, the associated contracts for 
sale, option agreements, management agreements, and all other documents 
disclosing the total consideration received in return for the transfer 
of its license.
    32. The Commission also proposes to apply its previously adopted 
special rules prohibiting collusive conduct in the context of 
competitive bidding to the 800 MHz SMR service and seeks comment on 
this proposal.
    33. The Further Notice proposes specific measures and eligibility 
criteria for designated entities, i.e., businesses owned by minorities 
and/or women, small businesses, and rural telephone companies. The 
Commission seeks comment on these proposals, and specifically on 
identifying special provisions that will create meaningful incentives 
and opportunities for such entities that are tailored to the unique 
characteristics of the 800 MHz SMR service.
    34. The Commission proposes to utilize bidding credits and a tax 
certificate program to encourage participation by businesses owned by 
women and minorities in auctions for the 800 MHz SMR service. It seeks 
comment on whether the likely value of MTA-based SMR licenses would 
support a 40 percent bidding credit, but proposes a bidding credit of 
25 percent for the ``lower 80'' channel licenses given their expected 
lower value. To prevent unjust enrichment by women and minorities 
trafficking in licenses acquired through the use of bidding credits, 
the Further Notice proposes imposition of a forfeiture requirement on 
transfers of such licenses to entities that are not owned by women or 
minorities.
    35. The Commission also proposes to establish a tax certificate 
program under which tax certificates would be issued to: (a) non-
controlling initial investors in minority and women-owned 800 MHz SMR 
applicants and licensees, upon the sale of their non-controlling 
interests; and, (b) 800 MHz SMR licensees who assign or transfer 
control of their licenses to minority and women-owned entities. It also 
proposes to impose a one-year holding requirement on the transfer or 
assignment of 800 MHz SMR licenses obtained through the benefit of tax 
certificates.
    36. In terms of eligibility criteria, the Commission proposes that 
in order to be deemed a business owned by minorities and/or women, 
minorities or women must have at least 50.1 percent equity ownership 
and a 50.1 controlling interest in the designated entity. For limited 
partnerships, the general partner must be a minority and/or a woman (or 
an entity 100 percent owned and controlled by minorities and/or women) 
that owns at least 50.1 percent of the partnership equity. In the PCS 
context, the Commission established an alternative definition for 
minority- and female-owned businesses whereby women and/or minority 
principals control the applicant and own at least 25 percent of the 
equity and 50.1 percent of the voting stock (in the case of 
corporations). The Further Notice seeks comment on which of these 
definitions is most appropriate for purposes of determining designated 
entity eligibility in the 800 MHz SMr service, or whether both 
definitions should be adopted in the alternative. It also proposes to 
apply to the 800 MHz SMR applicants the same affiliation and 
attribution rules for calculating equity and stock ownership previously 
adopted in the PCS context.
    37. The Commission proposes to adopt installment payments for small 
businesses bidding for 800 MHz SMR licenses. To ensure that large 
businesses do not become the unintended beneficiaries of installment 
payment provisions meant for small businesses, the Commission also 
proposes to make the unjust enrichment provisions in its general 
competitive bidding rules applicable to installment payments by SMR 
applicants. The Commission seeks comment on this proposal including 
whether additional unjust enrichment provisions are necessary for the 
800 MHz SMR service.
    38. In terms of eligibility criteria, the Commission presents two 
alternatives for a small business definition. One alternative is the 
existing SBA net worth/net income size standard where an entity would 
qualify as a small business if its net worth is not in excess of $6 
million with average net income after Federal income taxes for the two 
preceding years not in excess of $2 million. A second alternative is 
adoption of a gross revenue standard like that used in the broadband 
PCS context. The Further Notice requests commenters to address whether 
the SBA definition or a gross revenue standard should be used and the 
appropriate gross revenue threshold for the 800 MHz SMR context.
    39. The Commission seeks comment on Whether bidding credits or 
other special provisions should be provided for rural telephone 
companies, but does not propose to adopt such special provisions.
    40. In addition to the special provisions proposed above for 
designated entities, the Commission solicits comment on the following 
alternatives and related issues for the 800 MHz SMR service: (1) 
expansion of eligibility for installment payments to designated 
entities other than small businesses; (2) reduction in upfront payment 
for any class of designated entities; (3) the costs and benefits with 
respect to auction administration and designated entity participation 
associated with a reduced upfront payment in the 800 SMR service in the 
absence of a spectrum set-aside; and (4) whether the ``lower 80'' 
channels should be designated as an ``entrepreneurs' block.'' The 
Commission tentatively concludes that it would not be feasible to 
designate an MTA channel block as an entrepreneur's block because the 
large number of incumbents already licensed throughout the proposed MTA 
band make it virtually impossible to identify a particular block that 
would be suitable. On the other hand, an entrepreneurs' block approach 
could be more feasible for the ``lower 80'' channels, which we 
contemplate will be used primarily, if not exclusively, for operation 
of local SMR systems.
    41. In addition, if the Commission adopts an entrepreneurs' block 
approach, it seeks comment on how eligibility for the block should be 
defined. Specifically, commenters are asked to address whether 
applicants other than designated entities should be eligible to bid for 
entrepreneurs' block licenses, whether the same financial caps should 
be applied for determining eligibility for SMR entrepreneurs' block 
licenses, how designated entities should be treated within the 
entrepreneurs' block in terms of eligibility criteria and special 
provisions. The Further Notice also requests comment on whether the 
definitions for small businesses and business owned by minorities and/
or women should be different for purposes of determining eligibility 
for the entrepreneurs' block, what specific special provisions should 
be afforded to designated entities within the entrepreneurs' block, 
what type of attribution and affiliation rules should apply, and what 
additional measures are needed to protect against unjust enrichment.

Initial Regulatory Flexibility Analysis

    As required by Section 603 of the Regulatory Flexibility Act, the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IREA) of the expected impact on small entities of the policies and 
rules proposed in this Further Notice of Proposed Rule Making. Written 
public comments are requested on the IRFA.

A. Reason for Action

    This rule making proceeding was initiated to secure comment on 
proposals for establishing a flexible regulatory scheme for the 800 MHz 
SMR service that would promote efficient licensing and enhance the 
service's competitive potential in the commercial mobile radio 
marketplace. The proposals advanced in the Further Notice are also 
designed to implement Congress's goal of regulatory symmetry in the 
regulation of competing commercial mobile radio services as described 
in Sections 3(n) and 332 of the Communications Act, 47 U.S.C. 153(n), 
332, as amended by Title VI of the Omnibus Budget Reconciliation Act of 
1993 (Budget Act). The Commission also seeks to adopt rules regarding 
competitive bidding in the 800 MHz SMR service based on Section 309(j) 
of the Communications Act, 47 U.S.C. 309(J), which delegates authority 
to the Commission to use auctions to select among mutually exclusive 
applications in certain services, including 800 MHz SMR.

B. Objectives

    The Commission proposes changes to its rules for the 800 MHz SMR 
service that are intended to promote the growth of both traditional 
local SMR service and emerging wide-area SMR services, and to enhance 
the ability of all SMR providers to compete in the larger commercial 
mobile services market. Specifically, the Commission seeks to designate 
a block of contiguous spectrum in the 800 MHz SMR band for licensing to 
wide-area systems to enable them to use innovative wideband 
technologies and compete more effectively against Personal 
Communications Services and cellular, which also use contiguous 
spectrum. The Commission proposes to license non-contiguous spectrum in 
the 800 MHz SMR band on a local basis to provide opportunities for 
smaller SMR systems that seek to provide local niche services. It also 
seeks to encourage more efficient use of spectrum in congested areas 
and to accommodate technologically advanced systems. Finally, the 
Further Notice seeks to establish a new licensing mechanism for the 800 
MHz SMR service that will significantly streamline the processing of 
applications, reducing the administrative burden for both applicants 
and the Commission.

C. Legal Basis

    The proposed action is authorized under the Budget Act, Pub. L. No. 
103-66, title VI, Section 6002, and Sections 2(a), 3(n), 4(i), 302, 
303(g), 303(r), 309(i), 309(j), 332(a), 332(c), and 332(d) of the 
Communications Act of 1934, 47 U.S.C. 152(a), 153(n), 154(i), 302, 
303(g), 303(r), 309(i), 309(j), 332(a), 332(c) and 332(d), as amended.

D. Reporting, Recordkeeping, and Other Compliance Requirements

    Under the proposal contained in the Further Notice, SMR licensees 
who obtain MTA-based licenses may be required to report information 
regarding location of their facilities and coverage of their service 
areas. SMR applicants seeking treatment as ``designated entities'' may 
also be subject to reporting and recordkeeping requirements to 
demonstrate compliance with our competitive bidding rules.

E. Federal Rules Which Overlap, Duplicate or Conflict With These Rules

    None.

F. Description, Potential Impact, and Number of Small Entities Involved

    The Further Notice potentially affects numerous small entities 
already operating 800 MHz SMR systems on frequencies that would be 
designated for licensing on a wide-area bases. The Further Notice of 
proposed Rule making tentatively concludes that existing licensees on 
these frequencies should be allowed to continue operating under their 
existing authorizations, but also seeks to encourage voluntary 
frequency transfers or other arrangements to allow for efficient 
spectrum use. The competitive bidding proposals contained in the 
Further Notice also could affect small entities seeking initial 
licenses in the 800 MHz SMR service. The Further Notice proposes 
special provisions in the Commission's auction rules to benefit 
``designated entity'' applicants, including small businesses. After 
evaluating comments filed in response to the Further Notice, the 
Commission will examine further the impact of all rule changes on small 
entities and set forth its findings in the Final Regulatory Flexibility 
Analysis.

G. Significant Alternatives Minimizing the Impact on Small Entities 
Consistent With the Stated Objectives

    This Further Notice solicits comment on a variety of alternatives. 
Any additional significant alternatives presented in the comments will 
also be considered.

H. IRFA Comments

    We request written public comment on the foregoing Initial 
Regulatory Flexibility Analysis. Comments must have a separate and 
distinct heading designating them as responses to the IRFA and must be 
filed by the deadlines specified in the summary above.

List of Subjects in 47 CFR Part 90

    Radio.

Amendatory Text

    Part 90 of Chapter I of Title 47 of the Code of Federal Regulations 
is proposed to be amended as follows:

PART 90--PRIVATE LAND MOBILE RADIO SERVICES

    1. The authority citation for Part 90 continues to read as follows:

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

    2. Section 90.7 is amended by adding the following definitions in 
alphabetical order to read as follows:


Sec. 90.7  Definitions.

* * * * *
    Major Trading Areas (MTAs). A total of 51 licensing regions based 
on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd 
Edition, at pages 38-39, with the exceptions and additions set forth 
below. The Guide is available for public inspection at the Office of 
Engineering and Technology's Technical Information Center, Room 7317, 
2025 M St. NW., Washington, DC.
    (1) Alaska is separate from the Seattle MTA and is licensed as a 
single MTA-like area separately.
    (2) Guam and Northern Mariana Islands are licensed as a single MTA-
like area.
    (3) Puerto Rico and the U.S. Virgin Islands are licensed as a 
single MTA-like area.
    (4) American Samoa is licensed as a single MTA-like area.
* * * * *
    MTA-based or MTA license. A license authorizing the right to use a 
specified block of SMR spectrum within one of the 51 Major Trading 
Areas.
* * * * *
    3. Section 90.609 is amended by adding paragraph (e) to read as 
follows:


Sec. 90.609  Special limitations on amendment of applications for 
assignment or transfer of authorizations for radio systems above 800 
MHz.

* * * * *
    (e) Assignments and transfers of SMR Category stations in the 816-
821/861-866 band licensed on or before August 9, 1994, must follow the 
procedures detailed in Sec. 90.667.
    4. Section 90.617 is amended by revising the introductory text of 
paragraphs (b), (c), (d), and Table 4A in paragraph (d) to read as 
follows:


Sec. 90.617  Frequencies in the 809.750-824/854.750-869 MHz, and 896-
901/935-940 MHz bands available for trunked or conventional system use 
in non-border areas.

* * * * *
    (b) The channels listed in Table 2A are available to eligible 
applicants in the Industrial/Land Transportation Category (consisting 
of the Power, Petroleum, Forest Products, Film and Video Production, 
Relay Press, Special Industrial, Manufacturers, Telephone Maintenance, 
Motor Carrier, Railroad, Taxicab and Automobile Emergency Radio 
Services). These frequencies are available in areas farther than 110 km 
(68.4 miles) from the U.S./Mexico border and farther than 140 km (87.0 
miles) from the U.S./Canada border. Specialized Mobile Radio Systems 
(SMRS) will not be authorized on these frequencies.
* * * * *
    (c) The channels listed in Table 3A are available to eligible 
applicants in the Business Radio Category. This category does not 
include Specialized Mobile Radio Systems as defined in Sec. 90.603(c). 
These frequencies are available in areas farther than 110 km (68.4 
miles) from the U.S./Mexico border and farther than 140 km (87.0 miles) 
from the U.S./Canada border. Specialized Mobile Radio Systems will not 
be authorized on these frequencies. These channels are available for 
inter-category sharing as indicated in Sec. 90.621(g).
* * * * *
    (d) The channels listed in Tables 4A and 4B are available only to 
eligibles in the SMR category which consists of Specialized Mobile 
Radio (SMR) stations and eligible end users. The frequencies listed in 
Table 4A are available to SMR eligibles desiring to be authorized on 
MTA service areas in accordance with Section 90.661. SMR licensees 
licensed on Channels 400-600 on or before August 9, 1994 may continue 
to utilize these frequencies within their existing service areas. This 
paragraph deals with the assignment of frequencies only in areas 
farther than 110 km (68.4 miles) from the U.S./Mexico border and 
farther than 140 km (87 miles) from the U.S./Canada border. See 
Sec. 90.619 for the assignment of SMR frequencies in these border 
areas. For stations located within 113 km (70 miles) of Chicago, 
channels 401-600 will be assigned in groups as outlined in Table 4C.

        Table 4A.--SMR Category 806-821/851-866 MHz Band Channels       
                         [MTA-Based SMR Systems                         
------------------------------------------------------------------------
   Group                           Spectrum block                       
------------------------------------------------------------------------
A.........  816.0000/861.0000 to 817.2500/862.2500 (Channel Nos. 401-   
             450)                                                       
B.........  817.2500/862.2500 to 818.5000/863.5000 (Channel Nos. 451-   
             500)                                                       
C.........  818.5000/863.5000 to 819.7500/864.7500 (Channel Nos. 501-   
             550)                                                       
D.........  819.7500/864.7500 to 821.0000/866.0000 (Channel Nos. 551-   
             600)                                                       
------------------------------------------------------------------------


                            Local Channels\1\                           
------------------------------------------------------------------------
                   Group No.                           Channel Nos.     
------------------------------------------------------------------------
201............................................      201-241-281-321-361
202............................................      202-242-282-322-362
203............................................      203-243-283-323-363
204............................................      204-244-284-324-364
205............................................      205-245-285-325-365
206............................................      206-246-286-326-366
207............................................      207-247-287-327-367
208............................................      208-248-288-328-368
221............................................      221-261-301-341-381
222............................................      222-262-302-342-382
223............................................      223-263-303-343-383
224............................................      224-264-304-344-384
225............................................      225-265-305-345-385
226............................................      226-266-306-346-386
227............................................      227-267-307-347-387
228............................................      228-268-308-348-388
------------------------------------------------------------------------
\1\These frequencies are available to SMR eligibles on a local basis.   

* * * * *
    5. Section 90.619 is amended by revising the introductory text of 
paragraphs (a)(3) and (a)(5), Table 4A in paragraph (a)(5), (b)(8) 
Table 12, (b)(9) Table 16, (b)(10) Table 20, and (b)(11) Table 24 to 
read as follows:


Sec. 90.619  Frequencies available for use in the U.S./Mexico and U.S./
Canada border areas.

    (a) * * *
    (3) Tables 2A and 2B list the channels that are available for 
assignment to eligible applicants in the Industrial/Land Transportation 
Category (consisting of the Power, Petroleum, Forest Products, Video 
Production, Relay Press, Special Industrial, Manufacturers, Telephone 
Maintenance, Motor Carrier, Railroad, Taxicab and Automobile Emergency 
Radio Services). Specialized Mobile Radio Systems (SMRS) will not be 
authorized in this category.
* * * * *
    (5) Tables 4A and 4B list the channels that are available for 
assignment for the SMRS Category (consisting of Specialized Mobile 
Radio Systems (SMRS) as defined in Sec. 90.603(c)). These channels are 
not available for inter-category sharing.

 Table 4A.--United States-Mexico Border Area, SMRS Category 806-821/851-
                       866 MHz Band (95 Channels)                       
------------------------------------------------------------------------
                    Group                         Offset channel No.    
------------------------------------------------------------------------
                  MTA-Based SMR Category (30 Channels)                  
                                                                        
A...........................................     429-431-433-435-437-439
B...........................................     469-471-473-475-477-479
C...........................................    509-511-513-515-517-519-
                                                                     549
D...........................................    551-553-555-557-559-589-
                                                     591-593-595-597-599
                                                                        
               SMR Category--Local Channels (65 Channels)               
                                                                        
228.........................................         228-268-308-348-388
229.........................................         229-269-309-349-389
230.........................................         230-270-310-350-390
231.........................................         231-271-311-351-391
232.........................................         232-272-312-352-392
233.........................................         233-273-313-353-393
234.........................................         234-274-314-354-394
235.........................................         235-275-315-355-395
236.........................................         236-276-316-356-396
237.........................................         237-277-317-357-397
238.........................................         238-278-318-358-398
239.........................................         239-279-319-359-399
240.........................................         240-280-320-360-400
------------------------------------------------------------------------

* * * * *
    (b) * * *

                  Table 12.--SMRS Category--95 Channels                 
                          [Regions 1, 4, 5, 6]                          
------------------------------------------------------------------------
              Group                             Channel No.             
------------------------------------------------------------------------
                  MTA-Based SMR Category (90 Channels)                  
                                                                        
A................................  None.                                
B................................  463 through 480, 493 through 500.    
C................................  501 through 510, 523 through 540.    
D................................  553 through 570, 583 through 600.    
                                                                        
                SMR Category--Local Channels (5 Channels)               
                                                                        
30...............................  30-60-90-120-150                     
------------------------------------------------------------------------

* * * * *
    (9) * * *

                  Table 16.--SMRS Category--60 Channels                 
                               [Region 2]                               
------------------------------------------------------------------------
              Group                             Channel No.             
------------------------------------------------------------------------
                  MTA-Based SMR Category (55 Channels)                  
                                                                        
A................................  None.                                
B................................  None.                                
C................................  518 through 528, 536 through 546.    
D................................  554 through 564, 572 through 582, 590
                                    through 600.                        
                                                                        
                SMR Category--Local Channels (5 Channels)               
                                                                        
18...............................  18-36-54-72-90                       
------------------------------------------------------------------------

    (10) * * *

                 Table 20.--SMRS Category--135 Channels                 
                               [Region 3]                               
------------------------------------------------------------------------
              Group                             Channel No.             
------------------------------------------------------------------------
                  MTA-Based SMR Category (120 Channels)                 
                                                                        
A................................  417 through 440.                     
B................................  457 through 480, 497 through 500.    
C................................  501 through 520, 537 through 550.    
D................................  551 through 560, 577 through 600.    
                                                                        
               SMR Category--Local Channels (15 Channels)               
                                                                        
38...............................  38-78-118-158-198                    
39...............................  39-79-119-159-199                    
40...............................  40-80-120-160-200                    
------------------------------------------------------------------------

    (11) * * *

          Table 24.--(Regions 7, 8) SMRS Category--190 Channels         
------------------------------------------------------------------------
              Group                             Channel No.             
------------------------------------------------------------------------
                  MTA-Based SMR Category (80 Channels)                  
                                                                        
A................................  425 through 440.                     
B................................  465 through 480.                     
C................................  505 through 520, 545 through 550.    
D................................  551 through 560, 585 through 600.    
                                                                        
               SMR Category--Local Channels (110 Channels)              
                                                                        
35...............................  35-75-115-155-195                    
36...............................  36-76-116-156-196                    
37...............................  37-77-117-157-197                    
38...............................  38-78-118-158-198                    
39...............................  39-79-119-159-199                    
40...............................  40-80-120-160-200                    
225..............................  225-265-305-345-385                  
226..............................  226-266-306-346-386                  
227..............................  227-267-307-347-387                  
228..............................  228-268-308-348-388                  
229..............................  229-269-309-349-389                  
230..............................  230-270-310-350-390                  
231..............................  231-271-311-351-391                  
232..............................  232-272-312-352-392                  
233..............................  233-273-313-353-393                  
234..............................  234-274-314-354-394                  
235..............................  235-275-315-355-395                  
236..............................  236-276-316-356-396                  
237..............................  237-277-317-357-397                  
238..............................  238-278-318-358-398                  
239..............................  239-279-319-359-399                  
240..............................  240-280-320-360-400                  
------------------------------------------------------------------------

* * * * *
    6. Section 90.621 is amended by revising paragraphs (e)(2) and 
(e)(4) to read as follows:


Sec. 90.621  Selection and assignment of frequencies.

* * * * *
    (e) * * *
    (2) Channels in the Industrial/Land Transportation and Business 
categories will not be available to SMR systems for inter-category 
sharing.
* * * * *
    (4) Channels in the SMRS category will not be available to 
Industrial/Land Transportation and Business category systems for inter-
category sharing.
* * * * *
    7. Section 90.629 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 90.629  Extended implementation period.

* * * * *
    (e) SMR Systems licensed after August 9, 1994 will not be eligible 
for extended implementation periods under this section.
    8. Subpart S is amended by adding a new heading following 
Sec. 90.659 to read as follows:

Policies Governing the Licensing and Use of MTA-Based SMR Systems in 
the 816-821/861-866 Band

    9. A new Sec. 90.661 is added to subpart S to read as follows:


Sec. 90.661  MTA-based SMR service areas.

    MTA licenses for SMR spectrum blocks in the 816-821/861-866 band 
listed in Table 4A of Sec. 90.617(d) are available in 51 Major Trading 
Areas (MTAs) as defined in Sec. 90.7.
    10. A new Sec. 90.663 is added to subpart S to read as follows:


Sec. 90.663  MTA-based SMR system operations.

    (a) MTA-based licensees authorized in the 816-821/861-866 MHz band 
pursuant to section 90.661 may construct and operate base stations 
using any frequency identified in their spectrum block anywhere within 
their authorized MTA, provided that:
    (1) The MTA licensee affords protection, in accordance with 
Sec. 90.621(b), to all previously authorized co-channel stations that 
are not associated with another MTA license.
    (2) The MTA licensee complies with any rules and international 
agreements that restrict use of frequencies identified in their 
spectrum block, including the provisions of section 90.619 relating to 
U.S./Canadian and U.S./Mexican border areas.
    (3) The MTA licensee limits its field strength at any location on 
the border of the MTA service area in accordance with Sec. 90.771.
    (b) In the event that the authorization for a previously authorized 
co-channel station within the MTA licensee's authorized spectrum block 
is terminated or revoked, the MTA licensee's co-channel obligations to 
such station will cease upon deletion of the facility from the 
Commission's licensing record. The MTA licensee then will be able to 
construct and operate base stations using such frequency.
    11. A new section 90.665 is added to subpart S to read as follows:


Sec. 90.665  Authorization, construction and implementation of MTA 
licenses.

    (a) MTA licenses in the 816-821/861-866 MHz band will be issued for 
a term not to exceed ten years.
    (b) MTA licensees in the 816-821/861-866 band will be permitted 
five years to construct their stations. This five-year period will 
commence with the issuance of the MTA-wide authorization and will apply 
to all of the licensee's stations within the MTA spectrum block, 
including any stations that may have been subject to an earlier 
construction deadline arising from a pre-existing authorization.
    (c) MTA licensees in the 816-821/861-866 MHz band must, within 
three years, construct and place into operation a sufficient number of 
base stations to provide coverage to at least one-third of the 
population of the MTA. Further, each MTA licensee must provide coverage 
to at least two-thirds of the population of the MTA within five years.
    12. A new section 90.667 is added to subpart S to read as follows:


Sec. 90.667  Special provisions regarding assignments and transfers of 
authorizations for incumbent SMR licensees in the 816-821/861-866 MHz 
band.

    An SMR licensee initially authorized on any of the channels listed 
in Table 4A of Section 90.617 on or before August 9, 1994 may transfer 
or assign its channel(s) to another entity subject to the provisions of 
Sections 90.153 and 90.609(b). If the proposed transferee or assignee 
is the MTA licensee for the spectrum block to which the channel is 
allocated, such transfer or assignment presumptively will be deemed to 
be in the public interest.
    13. A new Section 90.771 is added to Subpart S to read as follows:


Sec. 90.771  Field strength limits.

    The predicted or measured field strength at any location on the 
border of the MTA service area for MTA licensees shall not exceed 22 
dBuV/m unless all bordering MTA licensees agree to a higher field 
strength. In the event that this standard conflicts with the MTA 
licensee's obligation to provide co-channel protection to incumbent 
licensees under Section 90.621(b), the requirements of Section 
90.621(b) shall prevail.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-28760 Filed 11-21-94; 8:45 am]
BILLING CODE 6712-01-M