[Federal Register Volume 62, Number 193 (Monday, October 6, 1997)]
[Proposed Rules]
[Pages 52078-52081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26414]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 90

[PR Docket No. 93-61, FCC 97-305]


Automatic Vehicle Monitoring Systems

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In the Further Notice of Proposed Rule Making (``FNPRM''), the 
Commission proposes rules and procedures governing competitive bidding 
for multilateration Location and Monitoring Service (``LMS'') 
frequencies.

DATES: Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested 
parties may file comments on or before November 5, 1997, and reply 
comments on or before November 20, 1997.

ADDRESSES: To file formally in this proceeding, interested parties must 
file an original and four copies of all comments, reply comments, and 
supporting comments. If parties want each Commissioner to receive a 
personal copy of comments, an original plus nine copies must be filed. 
Comments and reply comments must be sent to the Office of the 
Secretary, Federal Communications Commission, Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: David Furth or Linda Chang at (202) 
418-0620.

SUPPLEMENTARY INFORMATION: This summarizes the Commission's Further 
Notice of Proposed Rule Making in FCC 97-305, PR Docket No. 93-61, 
adopted August 28, 1997, and released September 16, 1997. The complete 
text of this FNPRM is available for public inspection and copying 
during normal business hours in the FCC Dockets Branch, Room 239, 1919 
M Street N.W., Washington, D.C. 20036. The complete text may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., 1231 20th Street, N.W., Washington, D.C. 
20036 (telephone number: (202) 857-3800). 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.

[[Page 52079]]

Synopsis of Further Notice of Proposed Rule Making

I. Competitive Bidding for Multilateration LMS Licensees

    1. In the LMS Report and Order, PR Docket No. 93-61, 60 FR 15248 
(March 23, 1995), the Commission decided to use competitive bidding to 
select from mutually exclusive applications for multilateration LMS 
licenses. The Commission reached this decision based on its conclusion 
that the statutory criteria for auctioning licenses, which are set 
forth in section 309(j) of the Communications Act, 47 U.S.C. 309(j), 
are satisfied. More specifically, the Commission found (1) that its 
decision to offer multilateration LMS licenses on an exclusive basis 
makes it likely that mutually exclusive applications for such licenses 
will be filed; (2) that multilateration LMS licenses will be used 
principally to offer for-profit, subscriber-based services; and, (3) 
that the use of competitive bidding for these licenses will promote the 
public interest objectives set forth in section 309(j)(3).
    2. Under the spectrum plan the Commission adopted in the LMS Report 
and Order, and reaffirms in the Memorandum Opinion & Order, PR Docket 
No. 93-61, FCC 97-305 three blocks of spectrum are allocated to 
multilateration LMS systems: (1) 904.000-909.750 MHz and 927.750-
928.000 MHz; (2) 919.750-921.750 MHz and 927.500-927.750 MHz; and, (3) 
921.750-927.250 MHz and 927.250-927.500 MHz. One license will be 
awarded for each of these spectrum blocks in each of 176 EAs and EA-
like areas. Thus, there are a total of 528 multilateration LMS licenses 
to be auctioned.
    3. The Commission anticipates conducting the auction for 
multilateration LMS frequencies in conformity with the general 
competitive bidding rules proposed to be included in part 1, subpart Q 
of the Commission's Rules, and substantially consistent with the 
auctions that have been employed in other wireless services. Amendment 
of part 1 of the Commission's Rules--Competitive Bidding, Order, 
Memorandum Opinion and Order and Notice of Proposed Rule Making, WT 
Docket No. 97-82, 62 FR 13540 (March 21, 1997). The Commission proposes 
to adopt for the LMS auction the simultaneous multiple round 
competitive bidding design used in the PCS auctions. Multiple round 
bidding should provide more information to bidders than single round 
bidding during the auction about the values of the licenses. The 
Commission seeks comment on this proposal. The Commission also 
tentatively concludes that the LMS auction will follow the general 
competitive bidding procedures of part 1, subpart Q. The Commission 
seeks comment on this tentative conclusion.
    4. Small Businesses. The Commission's auction rules for other 
services generally include special provisions--such as bidding credits 
and installment payments--designed to fulfill its statutory mandate to 
ensure that small businesses have the opportunity to participate in the 
provision of spectrum-based services. In the Second Memorandum Opinion 
and Order in the competitive bidding docket, the Commission indicated 
that it would establish definitions for ``small business'' on a 
service-by-service basis. Second Memorandum Opinion and Order, PP 
Docket No. 93-253, 59 FR 44272 (August 26, 1994). The Commission 
therefore seeks comment regarding the establishment of a small business 
definition for multilateration LMS. Commenters should discuss the level 
of capital commitment that is likely to be required to purchase a 
multilateration LMS license at auction and create a viable business. 
The Commission also seeks comment on what small business provisions 
should be offered to multilateration LMS small business entities. Its 
goal, should the Commission adopt a special provision(s) for one or 
more categories of small businesses, will be to remove entry barriers 
so as to ensure the participation of small businesses in the auction 
and in the provision of service. If the Commission adopts special 
provisions for small businesses, the Commission proposes that its 
unjust enrichment rules apply as set forth in part 1, subpart Q. 47 CFR 
1.2111.
    5. In other services the Commission also adopted attribution rules 
for purposes of determining small business status. The Commission 
tentatively concluded that for LMS the Commission should attribute the 
gross revenues of all controlling principals in the small business 
applicant as well as its affiliates. The Commission seeks comment on 
this tentative conclusion. The Commission also seeks comment on whether 
small business provisions are sufficient to promote participation by 
businesses owned by minorities, women, or rural telephone companies. To 
the extent that commenters propose additional provisions to ensure 
participation by minority-owned or women-owned businesses, the 
Commission asks them to address how such provisions should be crafted 
to meet the relevant standards of judicial review.
    6. Partitioning and Disaggregation. The Commission proposes to 
allow multilateration LMS licensees to partition their geographic 
license area and disaggregate portions of their spectrum. The 
Commission anticipates that this will, among other things, help to 
remove entry barriers for small businesses. The Commission seeks 
comment on this proposal.
    7. If the Commission determines that special provisions for small 
business are appropriate for LMS auctions, the Commission tentatively 
concludes that a qualified small business that applies to partition or 
disaggregate its license to a non-small business entity should be 
required to repay any benefits it received from special small business 
provisions. The Commission seeks comment on the type of unjust 
enrichment requirements that should be placed as a condition for 
approval of an application to partition or disaggregate a license owned 
by a qualified small business licensee to a non-small business entity. 
This could include, for example, repayment of any bidding credit that 
the Commission may adopt for small businesses, and would be applied on 
a proportional basis. Similarly, if a small business licensee 
partitions or disaggregates to another qualified small business that 
would not qualify for the same level of bidding credit, the 
transferring licensee should be required to repay a portion of the 
benefit it received. The Commission seeks comment on these tentative 
conclusions. Alternatively, the Commission seek comment on whether the 
Commission should restrict the partitioning or disaggregation of such 
licenses when the partitionee or disaggregatee is not within the 
definition of an entity eligible for such special provisions, or 
whether, at some point (e.g., a term of years), such restriction on 
partitioning and disaggregation be removed and the unjust enrichment 
provisions would apply. The Commission also seeks comment on how such 
unjust enrichment amounts should be calculated, especially in light of 
the difficulty of devising a methodology or formula that will 
differentiate the relative market value of the opportunities to provide 
service to various partitioned areas or to use the amount of spectrum 
disaggregated.

II. Procedural Matters and Ordering Clauses

    8. Ex Parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte 
presentations are permitted, except during the Sunshine

[[Page 52080]]

Agenda period, provided they are disclosed as provided in Commission 
Rules. See generally 47 CFR 1.1202, 1.1203, 1.1206.
    9. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act, 3 U.S.C. Sec. 603, the Commission has 
prepared an Initial Regulatory Flexibility Analysis of the expected 
impact on small entities of the policies and rules proposed and adopted 
in the Further Notice section of the Memorandum Opinion and Order and 
Further Notice of Proposed Rulemaking. Written public comments are 
requested on the IRFA and must be filed by the deadlines for comments 
on the Memorandum Opinion and Order and Further Notice of Proposed 
Rulemaking.
    10. Reason for Action: This FNPRM was initiated to secure comment 
on proposals for revising rules for the auction of multilateration 
Location and Monitoring Service frequencies. Such changes to the rules 
for multilateration LMS would promote efficient licensing and enhance 
the service's competitive potential in the Commercial Mobile Radio 
Service marketplace. The adopted and proposed rules are based on the 
competitive bidding authority of section 309(j) of the Communications 
Act of 1934, as amended, 47 U.S.C. Sec. 309(j), which authorized the 
Commission to use auctions to select among mutually exclusive initial 
applications in certain services, including multilateration LMS.
    11. Objectives of this Action: The Omnibus Budget Reconciliation 
Act of 1993 (Budget Act), Public Law 103-66, Title VI, Sec. 6002, and 
the subsequent Commission actions to implement it are intended to 
establish a system of competitive bidding for choosing among certain 
applications for initial licenses, and to carry out statutory mandates 
that certain designated entities, including small businesses, are 
afforded an opportunity to participate in the competitive bidding 
process and in the provision of multilateration LMS services.
    12. Legal Basis: The proposed action is authorized under the Budget 
Act and in sections 4(i), 303(r), and 309(j) of the Communications Act 
of 1934, as amended, 47 U.S.C. Secs. 154(i), 303(r) and 309(j).
    13. Reporting, Recordkeeping, and Other Compliance Requirements: 
The Commission does not anticipate any additional reporting or 
recordkeeping requirements resulting from this FNPRM.
    14. Federal Rules Which Overlap, Duplicate or Conflict With These 
Rules: None.
    15. Description, Potential Impact, and Number of Small Entities 
Involved: The FNPRM would establish certain multilateration LMS 
spectrum blocks for bidding by smaller entities as well as larger 
entities, and would grant special provisions to certain eligible 
entities bidding within those blocks. 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 entities, existing and 
potential, would be affected by the proposed rules in the FNPRM. In 
particular, the Commission seeks estimates of how many such entities 
will be considered small businesses.
    16. Geographic Partitioning and Spectrum Disaggregation. The 
partitioning and disaggregation rule changes proposed in this 
proceeding will affect all small businesses which avail themselves of 
these rule changes, including small businesses currently holding 
multilateration LMS licenses who choose to partition and/or 
disaggregate and small businesses who may acquire licenses through 
partitioning and/or disaggregation.
    17. 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 entities, existing and potential, would be affected by the 
proposed rules in the FNPRM. In particular, the Commission seeks 
estimates of how many such entities will be considered small 
businesses. As explained in the Final Regulatory Flexibility Analysis 
for the Memorandum Opinion and Order, the Commission is utilizing the 
SBA definition applicable to radiotelephone companies, i.e., an entity 
employing less than 1,500 persons.1 The Commission seeks 
comment on whether this definition is appropriate for multilateration 
LMS licensees in this context. Additionally, the Commission requests 
each commenter to identify whether it is a small business under this 
definition. If a commenter is a subsidiary of another entity, this 
information should be provided for both the subsidiary and the parent 
corporation or entity.
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    \1\ 13 CFR 121.201, Standard Industrial Classification Code 
4812.
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    18. The number of small entities that will be affected is unknown. 
New entrants could obtain multilateration LMS licenses through the 
competitive bidding procedure, and take the opportunity to partition 
and/or disaggregate a license or obtain an additional license through 
partitioning or disaggregation. Additionally, entities that are neither 
incumbent licensees nor geographic area licensees could enter the 
market by obtaining a multilateration LMS license through partitioning 
or disaggregation. The Commission cannot estimate how many licensees or 
potential licensees could take the opportunity to partition and/or 
disaggregate a license or obtain a license through partitioning and/or 
disaggregation, because it has not yet determined the size or number of 
multilateration LMS licenses that will be granted in the future. Given 
the fact that nearly all wireless communications companies have fewer 
than 1,000 employees, and that no reliable estimate of the number of 
future multilateration LMS licensees can be made, the Commission 
assumes for purposes of the IRFA that all of the licenses will be 
awarded to small businesses. It is possible that a significant number 
of the potential licensees who could take the opportunity to partition 
and/or disaggregate a license or who could obtain a license through 
partitioning and/or disaggregation will be small businesses.
    19. Any Significant Alternatives Minimizing the Impact on Small 
Entities Consistent with the Stated Objectives: With respect to 
partitioning and disaggregation, the Commission tentatively concludes 
that unjust enrichment provisions should apply when a licensee has 
benefitted from the small business provisions in the auction rules and 
applies to partition or disaggregate a portion of the geographic 
license area to another entity that would not qualify for such 
benefits. The alternative to applying the unjust enrichment provisions 
would be to allow an entity who had benefitted from the special bidding 
provisions for small businesses to become unjustly enriched by 
partitioning or disaggregating a portion of their license area to 
parties that do not qualify for such benefits.
    20. The FNPRM proposes certain provisions for smaller entities 
designed to ensure that such entities have the opportunity to 
participate in the competitive bidding process and in the provision of 
multilateration LMS services. Any significant alternatives

[[Page 52081]]

presented in the comments will be considered.
    21. IRFA Comments. The Commission requests 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 the Memorandum 
and Order/Further Notice of Proposed Rulemaking.
    22. Paperwork Reduction. The FNPRM has been analyzed with respect 
to the Paperwork Reduction Act of 1995 and was found to impose no new 
or modified information collection requirement on the public. 
Implementation of any new or modified requirement will be subject to 
approval by the Office of Management and Budget, as prescribed by the 
Act.
    23. Authority. This action is taken pursuant to sections 4(i), 
5(b), 5(c)(1), 303(r), and 309(j) of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 155(b), 156(c)(1), 303(r), and 309(j).

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-26414 Filed 10-3-97; 8:45 am]
BILLING CODE 6712-01-P