[Federal Register Volume 61, Number 166 (Monday, August 26, 1996)]
[Proposed Rules]
[Pages 43721-43725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21793]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2, 22, 24, 90

[WT Docket No. 96-6; FCC 96-283]


Flexible Service Offerings in the Commercial Mobile Radio 
Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Further Notice of Proposed Rule Making the Commission 
seeks comment on the regulatory treatment of entities offering fixed 
services on CMRS spectrum. The rule amendments are necessary to respond 
to the strong support to flexible services show in the initial Notice 
of Proposed Rule Making. The comment period is necessary for 
clarification prior to making a final determination with respect to the 
regulatory treatment of licensees providing such services. The intended 
effect of this action is to provide a service that will further the 
public interest.

DATES: Comments are to be filed on or before November 25, 1996, and 
reply comments are to be filed on or before December 24, 1996.

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

FOR FURTHER INFORMATION CONTACT: David Krech, Commercial Wireless 
Division, Wireless Telecommunications Bureau, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: The First Report and Order and Further 
Notice of Proposed Rule Making in WT Docket No. 96-6, adopted on June 
27, 1996, and released on August 1, 1996, is available for inspection 
and copying during normal business hours in the FCC Reference Center, 
Room 575, 2000 M Street N.W., Washington, D.C. The complete text may 
also be purchased from the Commission's copy contractor, International 
Transcription Service, Inc., 2100 M Street N.W., Suite 140, Washington, 
D.C. 20037, (202) 857-3800.

Summary of Action

I. Introduction & Executive Summary

    1. In the Notice of Proposed Rule Making in WT Docket No. 96-6 
(``NPRM'') (Amendment of the Commission's Rules to Permit Flexible 
Service Offerings in the Commercial Mobile Radio Services, Notice of 
Proposed Rule Making, WT Docket No. 96-6, 11 FCC Rcd 2445 (1996)), 
released on January 25, 1996, 61 FR 6189 (February 16, 1996), we sought 
comment on proposals for expanding permitted offerings of fixed 
wireless service by Commercial Mobile Radio Service (``CMRS'') 
providers. In addition, we sought comment with regard to the regulatory 
treatment for such services under Section 332 of the Communications Act 
of 1934, as amended. 47 U.S.C. Sec. 332.
    2. In this Further Notice of Proposed Rule Making, we seek 
additional comment on the regulatory treatment of entities offering 
fixed services on CMRS spectrum:
     We do not intend to alter the regulatory treatment of 
licensees offering the types of ancillary, auxiliary, and incidental 
fixed services that have been offered by CMRS providers under our rules 
prior to this order.
     We propose to establish a presumption that licensees 
offering other fixed services over CMRS spectrum should be regulated as 
CMRS. We seek comment on such a presumption and, if adopted, what 
factors should be used to support or rebut this presumption.

II. Further Notice of Proposed Rule Making

    3. Discussion. Based on our review of the record in WT 96-6, we 
believe it is premature to attempt a final comprehensive determination 
regarding the regulatory treatment of these various types of fixed 
services that may be offered by licensees. While some commenters argue 
that all of the fixed offerings described above should be treated as 
sufficiently related to CMRS to justify uniform regulatory treatment, 
we believe that a uniform approach would be premature at this time. 
Instead, we believe that the regulatory issues raised by this 
proceeding require further development of the record and more specific 
analysis related to the particular fixed service offerings that 
carriers develop. Therefore, we propose to refine the approach set 
forth in the NPRM by seeking comment on additional guidelines for 
determining when fixed wireless services may fall within the scope of 
CMRS regulation.
    4. At the outset, we emphasize that our decision in the First 
Report in Order to allow carriers to offer co-primary fixed services on 
spectrum allocated for CMRS does not alter in any way our regulatory 
treatment of fixed services

[[Page 43722]]

that have been provided by CMRS providers under our prior rules. In the 
CMRS Second Report and Order, 59 FR 18493 (April 19, 1994), we stated 
that ancillary, auxiliary, and incidental services offered by CMRS 
providers fall within the statutory definition of mobile service, and 
are subject to CMRS regulation. We reaffirm that determination here. In 
the First Report and Order, however, we broadened the potential scope 
of fixed services that may be offered by CMRS providers. We therefore 
seek further comment on the regulatory treatment of such fixed services 
that may not be considered ancillary, auxiliary or incidental to mobile 
service.
    5. Several parties argue that because the definition of ``mobile 
service'' contains a clause referencing PCS licenses, Congress intended 
that all service provided through a PCS license would be treated as 
mobile. According to Omnipoint, inclusion of the PCS clause means that 
the Act, unlike FCC regulations, does not limit the amount of fixed 
service a PCS provider may offer, and the offering of fixed service by 
a PCS licensee does not change its status as a CMRS provider. AT&T and 
CTIA argue, further, that since one goal of Congress and the Commission 
is regulatory parity for similarly situated CMRS providers, all 
services provided through a license for a CMRS service, not just a PCS 
license, come within the definition of ``mobile service.'' One could 
also read the definition of ``mobile service'' to require the use of 
``mobile stations'' and the ``and includes'' language which precedes 
the description of the three enumerated services to mean that they are 
examples. In that case, a service provided with a PCS license would 
have to include the use of a ``mobile station'' to come within the 
definition of ``mobile service'' and consequently be considered in the 
definition of ``commercial mobile service.'' ``Mobile station'' is 
defined in the Act as ``a radio-communication station capable of being 
moved and which ordinarily does move.'' 47 U.S.C. Sec. 153(28). We seek 
comment on these alternative statutory interpretations and their 
regulatory consequences. Parties should submit support from the 
legislative history or prior Commission rulings for or against the 
argument that the language ``and includes'' in the definition of 
``mobile service'' sets out examples of mobile services, rather than 
listing additional services which come under the definition.
    6. CTIA also argues that the Commission has substantial discretion 
under the Act to define ``mobile services.'' CTIA states that this 
authority stems from the language in the PCS clause of the definition 
of ``mobile service'' that refers to ``any successor proceeding.'' 
According to CTIA, that language allows the Commission to establish 
alternative definitions of ``mobile service'' in successor proceedings. 
We seek comment on the breadth and scope of Commission authority under 
the PCS clause and the ``any successor proceeding'' language.
    7. As noted above, in the CMRS Second Report and Order we found 
that the definition of ``mobile service'' includes ``all auxiliary 
services provided by mobile service licensees.'' We seek comment on 
what precedential value, if any, we should give to our treatment of 
auxiliary, ancillary, and incidental services as CMRS for regulatory 
purposes when determining how to regulate other fixed wireless services 
provided by CMRS providers. For example, because we consider a fixed 
service that is ancillary to a mobile service to be CMRS, what 
implications should that have for how we should treat a wholly fixed 
service that may use no mobile stations.
    8. Some parties have also argued that because these fixed wireless 
services would be provided by CMRS providers in spectrum that has been 
allocated for CMRS, the service providers must therefore be regulated 
as CMRS. We disagree. The regulatory structure for providers of the 
primary service to which the spectrum is allocated does not necessarily 
dictate the type of regulation to which every service provider in that 
same band will be subject regardless of the particular attributes of 
that service. A pertinent example is BETRS. While BETRS is provided in 
a spectrum band allocated to Public Land Mobile Service, we have 
determined that BETRS is a fixed service, rather than a mobile service, 
and therefore BETRS providers are not subject to CMRS regulation under 
Section 332. Similarly, private service licensees in the 220 and 800 
MHz SMR bands are not subject to CMRS regulation. Likewise, we do not 
intend to base our decision here merely on the classification of the 
majority of users of the spectrum in which the fixed service in 
question is provided.
    9. We believe that, ultimately, the regulatory issues on which we 
seek comment herein may require resolution on a case-by-base basis. We 
seek comment on this conclusion, including whether we may be able to 
establish a uniform approach for determining the regulatory status of 
fixed services offered on CMRS spectrum. To provide a framework for a 
case-by-case analysis, we propose to establish a rebuttable presumption 
that any wireless service provided under a CMRS provider's license 
would be considered to come within the definition of CMRS and 
consequently regulated as CMRS. Based on the record in this proceeding, 
we believe this to be a reasonable presumption. Most of the fixed 
wireless service applications which commenters have discussed in the 
record would be provided in conjunction with a traditional CMRS 
services such as cellular or paging.
    10. Under our proposed approach, the Commission would allow any 
interested party to challenge this presumption regarding a particular 
service offered by a CMRS provider. If a party could demonstrate that 
the service provider in question does not meet the definition of CMRS 
for a particular offering, we would not regulate that particular 
offering as CMRS. We seek comment on this approach and what types of 
evidence the Commission should evaluate when considering a challenge to 
a presumption that a fixed wireless service provided by a CMRS provider 
should be regulated as CMRS. Possible factors may include: the relative 
mobility of mobile stations used in conjunction with the fixed service; 
whether the fixed service is part of a larger package which includes 
mobile services or is offered alone; the size of the service area over 
which the fixed wireless service is provided; the amount of mobile 
versus fixed traffic over the wireless system; whether the fixed 
service is offered over a discrete block of spectrum separate from the 
spectrum used for mobile services; the degree to which fixed and mobile 
services are integrated; and whether customers perceive the service to 
be a fixed service. Part of any analysis of customer perception may 
also include consideration of how the service is marketed by the CMRS 
provider to potential customers.
    11. The Commission seeks comment on the appropriateness of using 
these factors or other types of evidence that may be presented to rebut 
this presumption. We also seek comment on the extent to which services 
provided under separate licenses or by separate entities may be 
relevant to the regulatory status of a particular fixed service 
offering provided under a given license. For example, should we 
consider only the services provided under a particular license or 
consider the services provided by a common licensee under multiple 
licenses, e.g., a licensee who provides fixed service under its PCS 
license and mobile service under a cellular license in the same market. 
Similarly, in instances

[[Page 43723]]

where fixed and mobile services are provided by different corporate 
affiliates, should we look at each affiliate's service separately or at 
the services provided by the corporation as a whole? Another possible 
scenario would be where a CMRS provider provides fixed service under 
its own license and has a joint marketing arrangement or resale 
agreement with another CMRS provider in that market. How should we 
consider such arrangements in making our analysis under this 
presumption? We seek comment on our proposal for regulating fixed 
wireless service provided by a CMRS provider and we seek alternative 
suggestions for presumptive regulatory classifications.
    12. Some parties have advocated that we regulate any fixed wireless 
service provided by a CMRS provider as CMRS until such time that the 
service constitutes a substitute for land line telephone exchange 
service in a substantial portion of a state. Under this approach a 
state would have to petition the Commission under Section 332(c)(3), 
and the Commission would have to grant such a petition, before a CMRS 
provider's fixed wireless service would be subject to state regulation. 
The Commission seeks comment on this approach. We also seek comment on 
what federal regulation should be imposed on a CMRS provider's offering 
of fixed wireless service if we find that it does not come within the 
purview of CMRS. To the extent that there are interstate common carrier 
services, such services would be subject to regulation under Title II; 
if so are there any Title II regulations from which such services 
should be exempt?
    13. The Commission recognizes that we are addressing a related 
issue in the context of our proceeding on implementation of Section 251 
of the Communications Act, as amended by the 1996 Act--i.e., in what 
circumstances, if any, a CMRS provider should be regulated as a ``local 
exchange carrier'' under the Act. Herein we are concerned with whether 
service providers should be regulated as CMRS if they provide fixed 
services. While we will review and consider the comments submitted in 
the Section 251 proceeding, we do not believe that resolution of the 
issue presented in the Section 251 proceeding resolves the issues 
presented here. For example, even if we were to find that a CMRS 
provider could be considered a local exchange carrier in terms of the 
requirements in Section 251, we tentatively conclude that it could 
still be considered engaged in the provision of CMRS under Section 332 
and therefore exempt from states' regulation of intrastate rates. We 
seek comment on this tentative conclusion and whether the other 
obligations imposed on LECs have a direct relationship to the rates 
charged by CMRS providers, and thus may impact on the rate regulation 
scheme set out in Section 332.

III. Procedural Matters

A. Regulatory Flexibility Act
    14. As required by Section 603 of the Regulatory Flexibility Act, 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the expected impact on small entities of the proposals 
suggested in this document. Written public comments are requested on 
the IRFA. We also seek comment on the number of CMRS entities affected 
by the proposed rules are small businesses, and request that commenters 
identify whether they themselves are small businesses. These comments 
must be filed in accordance with the same filing deadlines as comments 
on the rest of the Further Notice of Proposed Rule Making, but they 
must have a separate and distinct heading designating them as responses 
to the Initial Regulatory Flexibility Analysis. The Secretary shall 
send a copy of this First Report and Order and Further Notice of 
Proposed Rule Making, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with paragraph 603(a) of the Regulatory 
Flexibility Act. Public Law No. 96-354, 94 Stat. 1164, 5 U.S.C. 
Sec. 601 et. seq. (1981).
1. Reason for Action
    15. This rule making proceeding was initiated to secure comment on 
proposals for allowing CMRS providers greater flexibility in the 
provision of fixed wireless services. The proposals advanced in the 
Further Notice of Proposed Rule Making are designed to determine the 
appropriate regulatory scheme for CMRS providers who wish to offer 
fixed wireless services. The Commission seeks comment on the 
appropriate role of the federal government and the states in the 
regulation of CMRS providers who offer hybrid mobile and fixed services 
on a co-primary basis.
2. Objectives
    16. The Commission proposes to establish a rebuttable presumption 
that any wireless service provided under a CMRS provider's license 
would be considered to come within the definition of CMRS and 
consequently regulated as CMRS. Under this approach, the Commission 
would allow any interested party to challenge this presumption 
regarding a particular service offered by a CMRS provider. If a party 
could demonstrate that the service provider in question does not meet 
the definition of CMRS for a particular offering, we would not regulate 
that particular offering as CMRS. We seek comment on this approach and 
what types of evidence the Commission should evaluate when considering 
a challenge to a presumption that a fixed wireless service provided by 
a CMRS provider should be regulated as CMRS. We also seek comment on 
the extent to which services provided under separate licenses or by 
separate entities may be relevant to the regulatory status of a 
particular fixed service offering provided under a given license. Some 
parties have advocated that we regulate any fixed wireless service 
provided by a CMRS provider as CMRS until such time that the service 
constitutes a substitute for land line telephone exchange service in a 
substantial portion of a state. We seek comment on this approach. We 
also seek comment on what federal regulation should be imposed on a 
CMRS provider's offering of fixed wireless service if we find that it 
does not come within the purview of CMRS.
3. Reporting, Recordkeeping, and Other Compliance Requirements
    17. The proposals under consideration in the Further Notice of 
Proposed Rule Making do not require recordkeeping, or other compliance 
requirements for small business entities.
4. Federal Rules Which Overlap, Duplicate or Conflict With These Rules
    18. None.
5. Description, and Number of Small Entities Involved
    19. Pursuant to the Contract with America Advancement Act of 1996, 
Public Law No. 104-121, 110 Stat. 847 (1996), the Commission is 
required to estimate in its Final Regulatory Flexibility Analysis the 
number of small entities to which a rule will apply, provide a 
description of such entities, and assess the impact of the rule on such 
entities. To assist the Commission in this analysis, commenters are 
requested to provide information regarding how many total CMRS entities 
would be affected by the proposed rules in the Further Notice of 
Proposed Rule Making. In particular, we seek estimates of how many CMRS 
entities are small businesses.

[[Page 43724]]

    20. There are different definitions of ``small business'' for the 
various services affected by this proceeding. Since the Commission did 
not define a small business with respect to cellular services, paging, 
and interconnected business radio service, we will utilize the Small 
Business Administration's (SBA) definition applicable to radiotelephone 
companies--i.e. an entity employing less than 1,500 persons. 13 CFR 
Sec. 121.201, Standard Industrial Classification (SIC) Code 4812. We 
seek comment on whether this definition should be refined to take into 
account the different classes of cellular, paging and for-profit 
interconnected business radio services. With respect to narrowband and 
broadband PCS, the Commission defines small business to mean firms who 
have gross revenues of not more than $40 million in each of the 
preceding three calendar years. With respect to 800 MHz and 900 MHz SMR 
services, the Commission has a two-tiered definition of small business: 
(a) ``very small businesses'' are firms who have gross revenues of not 
more than $3 million in each of the preceding three calendar years; and 
(b) ``small businesses'' are firms who have annual gross revenues of 
not more than $15 million in the each of the preceding three years. 
With respect to commercial 220 MHz services, the Commission has 
proposed a two-tiered analysis: (1) for EA licensees, a firm with 
average annual gross revenues of not more than $6 million for the 
preceding three years and (2) for regional and nationwide licensees, a 
firm with average annual gross revenues of not more than $15 million 
for the preceding 3 years.
    21. We seek comment on our use of these definitions in this 
context. Additionally, we request commenters to identify whether they 
are a ``small business'' under this definition. For commenters that are 
a subsidiary of another entity, we seek this information for both the 
subsidiary and the parent corporation or entity.
6. Significant Alternatives Minimizing the Impact on Small Entities 
Consistent With the Stated Objectives
    22. In the Further Notice of Proposed Rule Making the Commission 
proposes to establish a rebuttable presumption that any wireless 
service provided under a CMRS provider's license would be considered to 
come within the definition of CMRS and be regulated as CMRS. The 
Commission seeks comment on this approach and what types of evidence 
the Commission should evaluate when considering a challenge to such a 
presumption. Other alternatives suggested in the comment to the Notice 
of Proposed Rule Making, 61 FR 6189 (February 16, 1996), include 
regulating any fixed wireless service provided by a CMRS provider as 
CMRS until such time that the service constitutes a substitute for land 
line telephone exchange service in a substantial portion of a state. We 
seek comment on that approach and any additional significant 
alternatives presented in the comments also will be considered. If the 
fixed wireless service provided by a CMRS provider, including small 
business entities, is not regulated as CMRS, that service may be 
subject to state regulation of entry and rates. We also seek comment on 
what Federal regulation should be imposed on a CMRS provider's offering 
of fixed wireless service if that service does not come within the 
purview of CMRS. We also seek comment on what impact each alternative 
may have on small business entities.
7. Legal Basis
    23. The proposed action is authorized under Sections 4(i), 4(j), 
7(a), 303(b), 303(f), 303(g), 303(r), 332(a), and 332(c) of the 
Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i), 154(j), 
157(a), 303(b), 303(f), 303(g), 303(r), 332(a), and 332(c).
8. IRFA Comments
    24. 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 provided in paragraph 27 below.
B. Ex Parte Rules--Non-Restricted Proceeding
    25. This is a non-restricted notice and comment rule making 
proceeding. Ex parte presentations are permitted except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's rules. See generally 47 CFR Secs. 1.1202, 1.1203, and 
1.1206(a).
C. Initial Paperwork Reduction Act of 1995 Analysis
    26. The First Report and Order and Further Notice of Proposed Rule 
Making do not contain either a proposed or modified information 
collection.
D. Comment Dates
    27. Pursuant to applicable procedures set forth in Sections 1.415 
and 1.419 of the Commission's rules, 47 CFR Secs. 1.415 and 1.419, 
interested parties may file comments on or before November 25, 1996, 
and reply comments on or before December 24, 1996. To file formally in 
this proceeding, you must file an original and four copies of all 
comments, reply comments, and supporting comments. If you want each 
Commissioner to receive a personal copy of your comments, you must file 
an original plus nine copies. You should send comments and reply 
comments to the Office of the Secretary, Federal Communications 
Commission, Washington, D.C. 20554. Comments and reply comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center of the Federal Communications Commission, Room 
239, 1919 M Street, N.W., Washington, D.C. 20554.
    28. As required by Section 603 of the Regulatory Flexibility Act, 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
of the expected impact on small entities of the proposals suggested in 
the Further Notice of Proposed Rule Making. Written public comments are 
requested on the IRFA. These comments must be filed in accordance with 
the same filing deadlines as comments on the remainder of the Further 
Notice of Proposed Rule Making, but they must have a separate and 
distinct heading designating them as responses to the IRFA. The 
Secretary shall send a copy of this Further Notice of Proposed Rule 
Making, including the IRFA, the Chief Counsel for Advocacy of the Small 
Business Administration in accordance with paragraph 603(a) of the 
Regulatory Flexibility Act. Public Law No. 96-354, 94 Stat. 1164, 5 
U.S.C. Sec. 601 et. seq. (1981).
E. Contacts for Information
    29. For further information concerning this proceeding, contact 
David Krech at (202) 418-0620 (Commercial Wireless Division, Wireless 
Telecommunications Bureau).

List of Subjects

47 CFR Part 2

    Radio.

47 CFR Part 22

    Communications common carriers, Radio.

47 CFR Part 24

    Communications common carriers, Radio.

47 CFR Part 90

    Business and industry, Common carriers, Radio.


[[Page 43725]]


Federal Communications Commission
William F. Caton,
Acting Secretary.
[FR Doc. 96-21793 Filed 8-23-96; 8:45 am]
BILLING CODE 6712-01-P