[Federal Register Volume 64, Number 137 (Monday, July 19, 1999)] [Proposed Rules] [Pages 38617-38621] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-18248] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 1, 22 and 101 [WT Docket No. 97-81; FCC 99-101] Multiple Address Systems AGENCY: Federal Communications Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This document addresses the impact of the Balanced Budget Act of 1997 (Balanced Budget Act) on the ongoing Multiple Address Systems (MAS) rulemaking proceeding. The Commission's objective is to supplement the record received in response to a previous Notice, which was released prior to the passage of the Balanced Budget Act. This document examines the impact of the Balanced Budget Act on various proposals in the Notice, seeks comment on whether the [[Page 38618]] Balanced Budget Act has affected the proposals in the Notice, seeks comment on how to resolve mutually exclusive MAS applications received from parties filing applications in some of the MAS bands, assuming that channels in these bands are reserved for public safety radio services, seeks comment on specific size standards to be applied to the ``small business'' definition for bidding credits, and the proposed offering of ``tiered bidding credits'' for the different sizes of small businesses, and suspends the acceptance and processing of applications in the 928/952/956 MHz bands. DATES: Comments are due on or before September 17, 1999. Reply comments are due on or before October 19, 1999. ADDRESSES: Federal Communications Commission, Room TW-B204F, 445 12th St., SW, Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: Ronald E. Quirk, Jr. or Shellie Blakeney, Wireless Telecommunications Bureau, Public Safety and Private Wireless Division, Policy and Rules Branch, (202) 418-0680, or via E- mail to ``[email protected]'' or ``[email protected]''. TTY: (202) 418- 7233. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Further Notice of Proposed Rule Making and Order (Further Notice), WT Docket No. 97-81, FCC 99-101, adopted May 18, 1999, and released on July 1, 1999. The full text of this Further Notice is available for inspection and copying during normal business hours in the FCC Reference Center, 445 Twelfth Street, SW, Room CY-A257, Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, International Transcription Services, 1231 20th Street, NW, Washington, DC 20036, telephone (202) 857-3800, facsimile (202) 857- 3805. Alternative formats (computer diskette, large print, audio cassette and Braille) are available to persons with disabilities by contacting Martha Contee at (202) 418-0260, TTY (202) 418-2555, or, at [email protected]. The full text of the Further Notice can also be downloaded at: http://www.fcc.gov/Bureaus/Wireless/Orders/1999/fcc99101.txt or http://www.fcc.gov/Bureaus/Wireless/Orders/1999/fcc99101.txt.wp Summary of the Further Notice of Proposed Rule Making and Order 1. On August 10, 1993, Congress enacted the Omnibus Budget Reconciliation Act of 1993 (1993 Budget Act) which authorized the Commission to select licensees applying for initial license grants by competitive bidding for certain classes of radio licenses. The 1993 Budget Act, inter alia, permitted the Commission to employ competitive bidding procedures to choose among mutually exclusive applications wherein the ``principal use'' of the spectrum would involve receiving compensation for their services (i.e. ``subscriber-based services''). See 47 U.S.C. 309(j)(2)(A) (1993). 2. In 1997, the Commission released the Notice (62 FR 11407, March 12, 1997) which sought comment on various Commission proposals to streamline the MAS service rules, increase technical and operational flexibility for MAS licensees, license most MAS channels by geographic area, and award mutually exclusive licenses by competitive bidding. In the Notice, the Commission tentatively concluded that, because the vast majority of pending applications for the 932/941 MHz bands proposed subscriber-based services, the 932/941 MHz bands should be designated for subscriber-based services, and thus be subject to competitive bidding. Accordingly, the Commission proposed to dismiss, without prejudice, all the pending 932/941 MHz band applications, which were originally slated to be awarded by random selection procedures. The Commission also tentatively concluded that because the majority use of the 928/959 MHz bands was to provide subscriber-based services, the 928/959 MHz bands should be designated for such services, and be subject to competitive bidding. Additionally, the Commission tentatively concluded that some MAS channels should be exempted from competitive bidding. The Commission, therefore, proposed to: (a) Set aside five channel pairs in the 932/941 MHz bands for public safety/ Federal Government use; (b) designate the 928/952/956 MHz bands exclusively for private, internal use; and (c) exempt applications for these bands from competitive bidding. Additionally, the Commission suspended acceptance of applications for new licenses, amendments and major modifications for the 932/941 MHz bands, the 928/959 MHz bands, and applications to provide subscriber-based services in the 928/952/ 956 MHz bands. 3. Subsequently, Congress enacted the Balanced Budget Act, which eliminated the Commission's authority to use lotteries (with an exception not relevant to the MAS context) to assign any license issued after July 1, 1997, 47 U.S.C. 309(i)(5) (1997). The Balanced Budget Act also expanded the Commission's authority--and statutory mandate--to use competitive bidding to select among mutually exclusive applications for any initial license, with no exceptions for pending mutually exclusive applications. 47 U.S.C. 309(j)(1) (1997). (Accordingly, in September, 1998, the Public Safety and Private Wireless Division of the Commission's Wireless Telecommunications Bureau dismissed the pending applications for the 932/941 MHz bands, without prejudice. Order (63 FR 53350, Oct. 5, 1998)). Further, the Balanced Budget Act changed the criteria for determining the auctionability of spectrum, removing the requirement that the principal use of the subject spectrum be for subscriber-based services. 47 U.S.C. 309(j)(1) (1997). The Balanced Budget Act also altered the criteria for determining exemptions to competitive bidding. 47 U.S.C. 309(j)(2) (1997). The exemption pertinent to MAS is for ``public safety radio services'' (public safety exemption). The public safety exemption applies to services that ``(i) are used to protect the safety of life, health, or property; and (ii) are not made commercially available to the public.'' 47 U.S.C. 309(j)(2)(A) (1997). 4. Due to the changes brought about by the Balanced Budget Act, which was enacted subsequent to the release of the Notice, parties have not had an opportunity to assess the impact of the Balanced Budget Act on the Commission's outstanding proposals for MAS spectrum. Accordingly, the Commission concludes that the public interest would be served by giving interested parties a further opportunity to comment in this proceeding. 5. The Commission tentatively concludes that, as a general matter, the use of competitive bidding to select between mutually exclusive applications for initial MAS licenses is consistent with Section 309(j), as amended by the Balanced Budget Act. The Commission seeks comment on this tentative conclusion. The Commission additionally seeks comment on whether Congress' highlighting in the Balanced Budget Act, the Commission's obligation under 47 U.S.C. 309(j)(6)(E) to use various means to avoid mutual exclusivity in application and licensing proceedings, has any effect on its tentative conclusion that competitive bidding should be used to resolve mutually exclusive applications for initial MAS licenses. 6. The Commission also tentatively concludes that the proposed use of the 932/941 MHz bands, and the current MAS use of the 928/959 MHz bands, do not fall within the public safety exemption, and therefore licenses for [[Page 38619]] these bands should be subject to competitive bidding. The Commission seeks comment on this tentative conclusion. Regarding the 928/952/956 MHz bands, the Commission seeks comment on the level of representation of public safety radio services in the current use of these bands. If it appears that these bands are predominantly used for public safety purposes, the Commission seeks comment on allocating all, or part, of the 928/952/956 MHz bands for public safety radio services, and whether the Commission should grandfather all existing services currently being provided in these bands. Additionally, if the Commission reserves the 928/952/956 MHz bands for public safety radio services, it tentatively concludes that site-by-site licensing should be retained, but if the current and foreseeable use of these bands do not comport with the statutory definition of public safety radio services, the Commission tentatively concludes that the bands should be subject to competitive bidding and that a system of geographic licensing should be adopted. The Commission seeks comment on these tentative conclusions. 7. In the interest of implementing the Congressional intent of increasing the public safety community's access to frequencies without having to participate in an auction, the Commission tentatively concludes that its proposal in the Notice to set aside five of the 40 channel pairs in the 932/941 MHz bands for public safety/Federal Government use should be retained. The Commission seeks comment on this tentative conclusion. The Commission also seeks comment as to how it should determine eligibility for such a set-aside. For example, should it use the traditional public safety service categories outlined in the Commission's rules (see 47 CFR part 90, Subpart B), or should eligibility be expanded to encompass services that fall under the public safety exemption in the Balanced Budget Act? The Commission further seeks comment on the need for this set-aside if all or part of the 928/952/956 MHz bands is reserved for public safety radio services. 8. If the Commission does not set aside five channels in the 932/ 941 MHz bands for public safety/Federal Government use, it seeks comment on how to treat applications for the 932/941 MHz bands that propose to provide public safety radio services. The Commission tentatively concludes that such applicants should be required to participate in the competitive bidding process, because the subject spectrum would not be specifically allocated for public safety radio services. The Commission seeks comment on this tentative conclusion. 9. The Commission tentatively concludes that if it reserves channels in either the 932/941 MHz bands or the 928/952/956 MHz bands, or both, for public safety radio services, thereby exempting them from competitive bidding, licensing should be on a first-come, first-serve basis. Because these site-based applications would be frequency coordinated prior to filing, and would be subject to a filing window, mutual exclusivity would be rare. Because mutual exclusivity is still possible, however, the Commission seeks comment on a proposal offered by Microwave Data Systems that if mutually exclusive applications are filed, the Commission should grant all applications that reach the frequency coordinator on the day that the mutual exclusivity is created, provided that they are in order, and that the licensees be required to share the channels under whatever private arrangements they negotiate. The Commission also seeks comment on other possible alternatives. 10. In the Notice, the Commission sought comment generally on establishment of a ``small business'' definition for MAS. In the Further Notice, the Commission seeks comment on the specific size standards that should be applied to any small business definition the Commission decides to adopt for MAS. The Commission proposes to define a ``small business'' as an entity with average annual gross revenues for the preceding three years not exceeding $15 million, and it proposes to define a ``very small business'' as an entity with average gross revenues for the preceding three years not exceeding $3 million. The Commission seeks comment on those proposals. 11. The Commission also seeks comment on its proposal to offer ``tiered bidding credits'' for different sizes of small businesses. The Commission proposes to establish two levels of bidding credits: small businesses will receive a 25 percent bidding credit, and very small businesses will receive a 35 percent bidding credit. Bidding credits will not be cumulative. The Commission believes that tiered bidding credits will help achieve its statutory objective to provide varying sizes of small businesses with a meaningful opportunity to participate in the MAS auction. See 47 U.S.C. 309(j)(3)(B) (1997). 12. The Commission maintains the current suspension of the acceptance of MAS applications for new licenses, amendments, or modifications for the 932/941 MHz and 928/959 MHz bands. Additionally, effective as of the date of the release of the Further Notice, the Commission suspends acceptance of all MAS applications for new licenses, amendments, or modifications for the 928/952/956 MHz bands, regardless of the type of service proposed by the applicant. The application suspension is extended because of the uncertainty regarding whether to employ geographic area licensing and auctioning for these bands. This suspension will remain in effect until further notice. The Commission will continue to accept and process applications for minor modifications, or for license assignment or transfer of control under existing procedures. This exception will also apply to amendments to applications for minor amendments. 13. Regarding MAS applications for new licenses, amendments, or non-minor modifications which were filed prior to the applicable deadlines and remain pending, the Commission will process such applications provided that they are not mutually exclusive with other applications as of the applicable deadline, and the relevant period for filing competing applications has expired as of the applicable deadline. Previously-filed applications not meeting this criteria will be held in abeyance until the conclusion of this proceeding. The Commission will determine later, in accordance with such new rules as they are adopted, whether to process or return any such pending applications. Ex Parte Rules 14. This is a permit-but-disclose 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 Rules. See generally, 47 CFR 1.1202, 1.203, and 1.1206. Comment Filing Procedures 15. Pursuant to sections 1.415 and 1.419 of the Commission's rules, interested parties may file comments on or before September 17, 1999 and reply comments on or before October 19, 1999. Comments may be filed using the Commission's Electronic Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998. 16. Comments filed through the ECFS can be sent as an electronic file via the Internet to <http://www.fcc.gov/e-mail/ecfs.html>. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking [[Page 38620]] numbers appear in the caption of this proceeding, however, commenters must transmit an electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e- mail. To get filing instructions for e-mail comments, commenters should send an e-mail to [email protected], and should include the following words in the body of the message, ``get form.'' A sample form and directions will be sent in reply. 17. Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number. All filings must be sent to the Commission's Secretary, Magalie Roman Salas, Office of the Secretary, Federal Communications Commission, 445 Twelfth Street, SW, Room TW-A325, Washington, DC 20554. In addition, a courtesy copy should be delivered to Ronald E. Quirk, Jr., Public Safety and Private Wireless Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 Twelfth Street, SW, Room 4 C-405, Washington, DC 20554. 18. All relevant and timely comments will be considered by the Commission before final action is taken in this proceeding. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Information Center, 445 Twelfth Street, SW, Room CY-A257, Washington, DC 20554. Initial Regulatory Flexibility Analysis Regulatory Flexibility Act 19. Pursuant to the Regulatory Flexibility Act (RFA), see 5 U.S.C. 603, the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the policies and rules proposed in this Further Notice. Written public comments are requested on the IRFA. Comments must be identified as responses to the IRFA and are to be filed by the deadlines for comments on this Further Notice, as described supra in section VI. The Commission's Office of Public Affairs (OPA) shall cause a copy of this Further Notice to be sent to Chief Counsel for Advocacy of the Small Business Administration (SBA), in accordance with 5 U.S.C. 603(a). 20. This Further Notice requests further public comment on our proposals to maximize the use of spectrum allocated to MAS in the Microwave Services. The Notice in this proceeding offered proposals that included: (1) Converting licensing of MAS spectrum for ``subscriber-based'' services from site-based licensing to geographic area licensing; (2) simplifying and streamlining the MAS licensing process and rules; (3) increasing licensee flexibility to provide communications services that are responsive to dynamic market demands; and (4) employing competitive bidding procedures, or auctions, to resolve mutually exclusive applications for initial licenses or permits for MAS spectrum for which the principal use would involve, or reasonably likely involve, subscriber-based services. In this Further Notice, we seek comment on whether, and to what extent, the Balanced Budget Act's amendment of Section 309(j) of the Communications Act affects these proposals. Specifically, the Commission is now directed to use competitive bidding to resolve mutually exclusive applications, with an exemption for ``public safety radio services.'' This Further Notice also extends the temporary suspension of the acceptance and processing of MAS applications to include all applications for new licenses, major amendments, or modifications. 21. In attempting to maximize the use of MAS spectrum, we continue our efforts to establish a flexible regulatory framework for spectrum allocations that will, among other things, provide opportunities for the continued development of competitive new service offerings by allowing flexible use of spectrum, expedite market entry through modified licensing procedures, and promote technological innovation by eliminating unnecessary regulatory burdens. 22. The authority for this action is contained in Sections 4(i), 303(r), and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), and 309(j). See also Administrative Procedures Act, 5 U.S.C. 553. 23. Pursuant to the Contract with America Advancement Act of 1996, Pub. L. No. 101-121, 110 Stat. 847 (1996) (CWAAA), 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. The Regulatory Flexibility Act states that a ``small business'' is the equivalent of a ``small business concern'' under the Small Business Act unless the Commission has developed one or more definitions that are appropriate to its activities. Under the Small Business Act, a ``small business concern'' is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business Administration (SBA). To assist the Commission in this analysis, commenters are requested to provide information regarding how many MAS entities, total, would be affected by the various proposals on which the Commission seeks comment in this Further Notice. In particular, we seek estimates of the number of affected entities that will be considered ``small businesses.'' We ask commenters to note that we requested comment in the Notice regarding the establishment of a small business definition for MAS for the purpose of competitive bidding. 24. The proposals first announced in the Notice would affect MAS licensees and applicants for licenses. Such entities, in general, fall into two broad categories: (1) Those using MAS spectrum for the offering of commercial services and (2) those using MAS spectrum to meet their internal communications needs, including for public safety radio services. It is possible that an entity could be categorized as both. 25. With respect to the first category, neither the Commission nor the SBA has developed a specific definition of small entities applicable to MAS commercial licensees. The applicable definition of small entity in this instance appears to be the definition under the SBA rules applicable to establishments engaged in radiotelephone communications. This definition provides that a small entity is any entity employing fewer than 1,500 persons. See 13 CFR 121.201, Standard Industrial Classification (SIC) Code 4812. The 1992 Census of Transportation, Communications and Utilities, conducted by the Bureau of the Census, which is the most recent information available, shows that only 12 radiotelephone firms out of a total of 1,178 such firms operating during 1992 had 1,000 or more employees. Therefore, whether or not any or all of these 12 firms are MAS commercial service providers, nearly all MAS commercial service providers are small businesses under the SBA's definition. The Commission's licensing database indicates that, as of January 20, 1999, there were a total of 8,670 MAS station authorizations. Of these, 260 [[Page 38621]] authorizations were associated with common carrier service. 26. Alternatively, under the SBA rules, the applicable definition of small entity for MAS licensees that provide commercial services may also be applicable to establishments primarily engaged in furnishing telegraph and other message communications. This definition provides that a small entity is an entity with annual receipts of $5 million or less. 13 CFR 121.201, Standard Industrial Classification (SIC) code 4822. 1992 Census data, which is the most recent information available, indicates that, of the 286 firms under this category, 247 had annual receipts of $4.999 million or less. We seek comment on whether the appropriate definition for such MAS licensees is SIC Code 4812, SIC code 4822, or both. 27. The Commission seeks comment on the number of small entities that currently provide commercial MAS subscription service, and the number of small entities that would anticipate filing applications to provide such service under the various proposals described in this Further Notice and the Notice. We seek comment on whether we should conclude, for purposes of the Final Regulatory Flexibility Analysis in this matter, that all MAS commercial communications service providers are small entities. 28. With respect to second category, which consists of entities that use, or seek to use, MAS spectrum for the meeting of their own internal communications needs, we note that MAS serves an essential role in a range of industrial, safety, business, and land transportation activities. MAS radios are used by companies of all sizes, operating in virtually all U.S. business categories, and by all types of public safety entities. Because of the array of users, the Commission has not developed (nor would it be possible to develop) a definition of small entities specifically applicable to such MAS users. Nor is there a precise SBA definition. In this context we again seek comment on whether the appropriate definition of small entity under the SBA rules is that applicable to radiotelephone companies: any entity employing fewer than 1,500 persons. See 13 CFR 121.201, Standard Industrial Code (SIC) Code 4812. Again, alternatively, we seek comment on the appropriateness of defining such MAS licensees under SIC Code 4822, concerning establishments primarily engaged in furnishing telegraph or other message communications, or perhaps under both Codes 4812 and 4822. For the purpose of determining whether a licensee is a small business as defined by the SBA, each licensee would need to be evaluated within its own business area. The Commission's licensing database indicates that, as of January 20, 1999, of the 8,670 total MAS station authorizations, 8,410 authorizations were for private radio service, and of these, 1,433 were for private mobile service. 29. We seek comment on the number of small entities that use MAS spectrum for their internal communications needs. Further, we seek comment on the number of small entities that are likely to apply for licenses, under the various proposals described in this Further Notice and the Notice, to obtain spectrum for their own internal communications needs. Because any entity engaged in a business or commercial activity is eligible to hold an MAS license, the proposals could prospectively affect any small business in the United States interested in using MAS for its own communications needs. In other words, the universe of prospective or possible MAS licensees includes all U.S. small businesses. 30. The RFA also includes small governmental entities as part of the regulatory flexibility analysis. The definition of a small governmental entity is one with populations of fewer than 50,000. There are 85,006 governmental entities in the nation. This number includes such entities as states, counties, cities, utility districts and school districts. There are no figures available on what portion of this number has populations of fewer than 50,000. However, this number includes 38,978 counties, cities and towns, and of those, 37,556, or 96 percent, have populations of fewer than 50,000. The Census Bureau estimates that this ratio is approximately accurate for all government entities. Thus, of the 85,006 governmental entities, we estimate that 96 percent, or about 81,600, are small entities that may be affected by our rules. 31. Again, we have requested comment, in the initial Notice, regarding the establishment of a refined small business definition for MAS for the specific purpose of competitive bidding. Neither the Notice nor this Further Notice propose any specific definition, rather the Notice merely sought comment on this issue. Paperwork Reduction Act 32. This Further Notice contains a proposed information collection. As part of the Commission's continuing effort to reduce paperwork burdens, we invite the general public, the Office of Management and Budget (OMB), and other agencies to take this opportunity to comment on the information collections contained in the Further Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and agency comments are due at the same time as other comments on the Further Notice; OMB comments are due 60 days after the publication of the Further Notice summary in the Federal Register. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to both of the following: Leslie Smith, Federal Communications Commission, Room 1-A804, 445 12th St., SW., Washington, DC 20554, or via the Internet to [email protected], and Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., Washington DC 20503, or via the Internet to [email protected]. Federal Communications Commission. Magalie Roman Salas, Secretary. [FR Doc. 99-18248 Filed 7-16-99; 8:45 am] BILLING CODE 6712-01-P