[Federal Register Volume 64, Number 243 (Monday, December 20, 1999)]
[Proposed Rules]
[Pages 71088-71097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32829]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 2, and 101

[WT Docket No. 99-327; FCC 99-333]


Commission's Rules To License Fixed Services at 24 GHz

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Notice of Proposed Rulemaking (NPRM), the Commission 
proposes licensing and service rules to govern the 24 GHz band 
generally. Specifically, the Commission proposes that future licensees 
in the 24 GHz band, as well as licensees relocated to the 24 GHz band 
from the 18 GHz band, will be generally subject to part 101, as 
modified to reflect the particular characteristics and circumstances of 
this band. The Commission also proposes to apply competitive bidding 
procedures under the Commission's part 1 competitive bidding rules for 
future licensing in the band.

DATES: Comments are due on or before January 19, 2000. Reply comments 
are due on or before February 7, 2000.

ADDRESSES: Federal Communications Commission, Secretary, 445 12th 
Street, SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Howard Davenport, Wireless 
Telecommunications Bureau, Auctions and Industry Analysis Division, 
Legal Branch, at (202) 418-0585. Media Contact: Meribeth McCarrick at 
(202) 419-0654.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in the matter of Amendments to parts 1, 2, and 
101 of the Commission's Rules To License Fixed Services at 24 GHz, WT 
Docket No. 99-327, adopted November 4, 1999 and released November 10, 
1999. The complete text of this NPRM is available for inspection and 
copying during normal business hours in the Commission's Reference 
Center (Room CY-A257), 445 12th Street, SW, Washington, DC and also may 
be purchased from the Commission's copy contractor, International 
Transcription Services, Inc. (ITS, Inc.), 1231 20th Street, NW, 
Washington, DC 20036, (202) 857-3800. It is also available through the 
Internet at http://www.fcc.gov.

Synopsis of Notice of Proposed Rulemaking

    1. In 1983, the Commission adopted rules for Digital Electronic 
Message Service (``DEMS''), which was envisioned as a high-speed, two-
way, point-to-multipoint terrestrial microwave transmission system. 
See, Amendment of the Commission's Rules to Relocate the Digital 
Electronic Message Service From the 18 GHz Band to the 24 GHz Band and 
to Allocate the 24 GHz Band for Fixed Service, Memorandum Opinion and 
Order, 63 FR 50538, (September 22, 1998), (``DEMS MO&O''). The service 
was allocated spectrum in the 18.36-18.46 GHz band paired with the 
18.94-19.04 GHz band. Subsequently, the Commission modified the initial 
DEMS allocation, instead designating spectrum in the 18.82-18.92 GHz 
and 19.16-19.26 GHz bands. The Commission began to grant DEMS licenses 
in the early 1980's, but the service was not initially commercially 
successful. Frequently, licensees had to return their licenses because 
they had not met construction requirements. The high cost of equipment 
appears to have been one of the many issues involved in the service's 
lack of early success. In the early 1990s, a small number of companies 
began acquiring licenses in approximately 30 of the country's largest 
markets.
    2. In January 1997, and again in March 1997, the National 
Telecommunications and Information Administration (``NTIA''), on behalf 
of the United States Department of Defense (``DoD''), formally 
requested that the Commission take action to protect military satellite 
system operations in the 18 GHz band. NTIA stated that DEMS use of 
frequencies in the 17.8-20.2 GHz bands within 40 kilometers of existing 
Government Fixed-Satellite Service (``FSS'') earth stations ``will not 
be possible.'' As a result, NTIA asked the Commission to protect those 
government satellite earth stations operating in the 18 GHz band in 
Washington, DC and Denver, and ``[e]xpeditiously undertake any other 
necessary actions, such as amending the Commission's rules and 
modifying Commission issued licenses.'' Specifically, in its January 
1997 letter, NTIA stated:

    We are asking that these actions be undertaken on an expedited 
basis. As we have previously indicated, this matter involves 
military functions, as well as specific sensitive national security 
interests of the United States. These actions are essential to 
fulfill requirements for Government space systems to perform 
satisfactorily.

    The Commission is permitted to amend its Rules without complying 
with the notice provisions of the Administrative Procedure Act (APA) in 
cases involving any ``military, naval of [sic] foreign affairs function 
of the United States'' or where the agency for good cause finds 
``notice and public procedure * * * are impracticable, unnecessary, or 
contrary to the public interest.'' To protect the two government earth 
stations from interference, NTIA proposed to make 400 MHz of spectrum 
available in the 24 GHz band so that the Commission could relocate DEMS 
licensees. Recognizing the Commission's objective of maintaining DEMS 
on a uniform, nationwide frequency band, NTIA stated that ``[t]aking 
into account our common interests, [NTIA] could make available spectrum 
in the region of 24.25-24.65 GHz'' and suggested that ``the Commission 
take such steps as may be necessary to license DEMS stations in this 
spectrum * * *''
    3. For its part, the Commission had before it sharing issues 
between 18 GHz non-Government satellite services and DEMS. See 
Amendment of the Commission's Rules to Relocate the Digital Electronic 
Message Service from the 18 GHz Band to the 24 GHz Band and To Allocate 
the 24 GHz Band For Fixed Service, Order, 62 FR 24576 (May 6, 1997) 
(``Reallocation Order''). In July 1996, the Commission designated 500 
MHz of spectrum in the 18.8-19.3 GHz band for non-geostationary 
satellite orbit, fixed satellite service (NGSO/FSS) downlinks to help 
meet increasing demand for spectrum for this service. See, Rulemaking 
to Amend parts 1, 2, 21, and 25 of the Commission's Rules to 
Redesignate the 27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-
30.0 GHz Frequency Band, to establish Rules and Policies for Local 
Multipoint Distribution Service and for Fixed Satellite Services, 61 FR 
39425 (July 29, 1996). Initially, it appeared that sharing between 
NGSO/FSS and DEMS would be possible. However, subsequent to that 
allocation, the only applicant for an NGSO/FSS system in the 18 GHz 
band

[[Page 71089]]

indicated that coordination between the two services might present 
difficulties.
    4. Finally, on March 5, 1997, NTIA reiterated its request for 
protection of government systems, using the 18 GHz band and further 
discussed the issues regarding use of that spectrum. NTIA stated again 
that it had ``determined that both existing and anticipated FCC 
licensees could cause interference problems to the Federal Government 
use of the 18 GHz band.'' Consequently, NTIA offered to withdraw 
government co-primary allocations for radionavigation service in the 
24.25-24.45 and 25.05-25.25 GHz bands to clear the way for DEMS 
relocation. Accordingly, in the Reallocation Order, adopted on March 
14, 1997, the Commission amended the Table of Frequency Allocations and 
part 101 of the Commission's Rules regarding Fixed Microwave Services 
to permit fixed service use of the 24.25-24.45 GHz and 25.05-25.25 GHz 
bands (24 GHz band). See 47 CFR 101. This also had the practical effect 
of resolving potential interference concerns between non-Government 
NGSO/FSS and DEMS operations at 18 GHz.

A. Licensing Plan for 24 GHz Services

1. Table of Allocations
    5. In the Reallocation Order, the Commission amended the Table of 
Allocations in part 2 of the Commission's Rules to add the fixed 
service on a primary basis in the 24 GHz band, and the Commission 
recognized the deletion of radionavigation by the government from its 
portion of the 24 GHz band. See 47 CFR 2. One issue the Commission 
intends to examine in this rulemaking is whether the Table of 
Allocations should be amended further to facilitate other possible uses 
of spectrum in the 24 GHz band. The Commission has focused its initial 
review on the issue of whether mobile service should be added to the 
Table of Allocations for the 24 GHz band. Based on the information 
currently available, it appears that, in the near term, equipment may 
not be available for mobile use in the 24 GHz band. Licensees at 18 GHz 
are limited to fixed service, and no one has requested the opportunity 
to provide mobile service at 24 GHz. If, contrary to the Commission's 
assumption, equipment is available for mobile use in this band, and 
interference problems can be resolved, the Commission knows of no 
reason why it would not allow mobile operations. The Commission 
believes this would be consistent with its goal of providing 24 GHz 
licensees with flexibility in designing their systems. The Commission 
seeks comment on whether it should include an allocation in the 24 GHz 
band for mobile service.
    6. The Commission proposes to amend the Commission's Table of 
Allocations and rules to provide, among other things, for the use of 
the 24.75-25.25 GHz band for Broadcasting Satellite Service (BSS) 
earth-to-space ``feeder links'' in the FSS. See, Redesignation of the 
17.7-19.7 GHz Frequency Band, Blanket Licensing of Satellite Earth 
Stations in the 17.7-20.2 GHz and 27.5-30.0 GHz Frequency Bands, and 
the Allocation of Additional Spectrum in the 17.3-17.8 GHz and 24.75-
25.25 GHz Frequency Bands for Broadcast Satellite-Service Use, Notice 
of Proposed Rulemaking, 63 FR 54100 (October 8, 1998) (``18 GHz Band 
Plan''). Current 24 GHz licensees contend that the Commission would 
have to prohibit 24 GHz BSS feeder link sites within 300 miles of the 
boundaries of each 24 GHz service area, a requirement that would be too 
impractical and inefficient to be consistent with the public interest. 
On the other hand, one licensee takes the position that it is possible 
for BSS feeder links and 24 GHz nodal stations, which are the central 
or controlling station in a radio system operating on point-to-
multipoint frequencies, in the 25.05-25.25 GHz band to share spectrum 
on a co-frequency basis at distances in the range of 0.2 miles. Because 
BSS feeder link stations need not be ubiquitously employed and can be 
located outside population centers, the Commission believes sharing 
between these services may be feasible. In the 18 GHz Band Plan 
proceeding, the Commission noted that the corresponding downlink BSS 
allocation in the 17.3-17.8 GHz band cannot become effective until 
after April 1, 2007; and thus there is no immediate need to implement 
the FSS allocation in the 25.05-25.25 GHz band. Delaying the FSS 
allocation would allow sufficient time for a detailed sharing 
methodology to be formulated between terrestrial fixed service 
interests and satellite interests. In light of the foregoing, the 
Commission tentatively concludes, based on preliminary review of the 
petition and comments filed regarding such FSS use of this band, that 
the criteria need not be as severe and restrictive as that put forth by 
the current 24 GHz licensees, and that a more workable solution can be 
developed. The Commission solicits comment on the interaction between 
these two services.
    7. The Commission proposes to revise the Table of Frequency 
Allocations in part 2 of its rules to delete the non-Government 
radionavigation service allocations in the 24.25-24.45 GHz and 25.05-
25.25 GHz bands, which is consistent with previous Government action 
taken with respect to these bands. The Commission has not issued any 
licenses for the use of these bands by the radionavigation service, and 
does not anticipate any demand for this service in these bands. 
Further, the Commission also proposes to delete footnote US341 from the 
Table of Frequency Allocations because the Federal Aviation 
Administration has decommissioned its remaining radar facility at the 
Newark, New Jersey International Airport and thus, concluded its 
operations in the 24.25-24.45 GHz band. In light of the foregoing, the 
Commission proposes to amend the frequency table in the aviation 
service rules, specifically section 87.173(b), by changing the entry 
for 24.25-25.45 GHz to 24.45-25.05 GHz, which would remain available 
for use by the aeronautical radionavigation service. See 47 CFR 
87.173(b).
2. Geographic Area-Wide Licensing
    8. The Commission proposes to license the 24 GHz band spectrum on 
the basis of Economic Areas (EAs), which were developed by the 
Department of Commerce's Bureau of Economic Analysis (BEA), because it 
believes this licensing scheme would best serve the public interest in 
facilitating efficient use of this spectrum. See Final Redefinition of 
the BEA Economic Areas, 60 FR 13114 (March 10, 1995). The Commission 
seeks comment on this proposal. The Commission tentatively concludes 
that using EAs for 24 GHz licenses in connection with its proposed 
partitioning and disaggregation rules discussed will create reasonable 
opportunities for the dissemination of 24 GHz licenses among a large 
number of entities. See In the Matter of Amendment of the Commission's 
Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Band, (``39 GHz''), 
Memorandum Opinion and Order, ET Docket No. 95-183, 64 FR 45891, 
(August 23, 1999). The Commission also tentatively concludes that using 
EAs for 24 GHz licenses will facilitate service to rural areas. See 47 
USC 309(j)(3)(A). Specifically, because EAs typically contain both 
urban and rural areas, licensees will have both the legal authority to 
provide service in both areas and the financial incentive to do so in 
order to earn a return on their investment in their licenses. In 
contrast, the Standard Metropolitan Statistical Areas (``SMSA'') which 
were originally used to license DEMS service did not include rural 
areas, and thus, rural areas

[[Page 71090]]

were not provided the service. Further, the relatively small size of 
EAs will allow for a more rapid build-out than might be the case in a 
larger geographic area. In addition, to give licensees maximum 
flexibility, the Commission tentatively concludes that licensees will 
be permitted to aggregate licenses in order to operate in larger 
geographic areas. The Commission seeks comment on these tentative 
conclusions. Because the Commission used SMSAs to license those that 
were originally relocated from 18 GHz to 24 GHz, it proposes to exclude 
from the applicable EAs, the areas currently licensed in the 24 GHz 
band, and to add as three additional areas for licensing the United 
States territories and possessions over which the Commission has 
jurisdiction: Guam and the Commonwealth of Northern Marianas (EA 173), 
Puerto Rico and the U.S. Virgin Islands (EA 174), and American Samoa 
(EA 175). See e.g., Amendment of Part 90 of the Commission's Rules to 
Provide for the Use of the 220-222 MHz Band by the Private Land Mobile 
Radio Service, Third Report and Order, 62 FR 16004 (April 3, 1997). The 
Commission seeks comment on these proposals.
    9. The Commission also requests comment on alternative geographic 
areas, including nationwide licenses, and licenses based upon 
Metropolitan and Rural Service Areas (MSAs and RSAs), See 
Implementation of Section 309(j) of the Communications Act--Competitive 
Bidding, Fourth Report and Order, 59 FR 24947 (May 13, 1994), Regional 
Economic Area Groupings (REAGs), Major Economic Areas (MEAs) or other 
relevant geographic areas. Commenters supporting alternative geographic 
areas should specify which areas they support and explain in detail why 
those alternatives would be superior to the use of EAs for 24 GHz 
licensing areas.
3. Treatment of Incumbents
    10. As the Commission discussed in the Reallocation Order, 
incumbent licensees would begin to transfer their operations to 
frequencies in the 24 GHz band over a period of time commencing with 
the effective date, June 24, 1997, of the Order which modified the 
licenses. After the transfer of operations by an incumbent licensee to 
the 24 GHz band, such licensee generally shall be governed by part 101 
of the Commission's rules. See 47 CFR 101. Under those rules, 
transferred licensees are generally subject to the same rules as 
applied to operations in the 18 GHz band.
    11. By this NPRM, the Commission proposes to make licensees subject 
to any changes it makes in this proceeding to the part 101 rules that 
are generally applicable to the 24 GHz band, including interference 
criteria. Therefore, it is the Commission's tentative view that no 
special rules for protection of incumbents alone are necessary, any 
more than special protections would be required if additional providers 
were licensed in the 18 GHz band. The Commission believes that the 
protection requirements of part 101.509 will accommodate the new 
stations and allow licensees to effectively coordinate their systems. 
To the extent that any incumbent licensee wishes to use additional 
frequencies at 24 GHz or to extend its currently authorized service 
area, then such licensee may apply for such a license or licenses 
subject to the Commission's competitive bidding and other assignment 
procedures available. Any incumbent licensee may also acquire 
additional frequencies in the 24 GHz band through the partitioning and 
disaggregation procedures proposed. The Commission seeks comment on 
these proposals.
4. Authorized 24 GHz Services
    12. In the Reallocation Order, the Commission adopted fixed service 
in this band as the only authorized use under its Table of Frequency 
Allocations. In keeping with this allocation, the Commission proposes 
to permit any 24 GHz licensee to use spectrum in the band for any fixed 
service. In addition, as discussed in section II.B.1, supra, the 
Commission seeks comment on whether it should permit the use of this 
band for mobile services, should it become technically feasible to do 
so. While the Commission proposes general ``fixed'' use for this 
spectrum, it does not know precisely the types of services new 
licensees will seek to provide. The Commission therefore proposes rules 
that will enable licensees to offer a wide variety of services and that 
will minimize regulatory barriers and costs of operation. It is the 
Commission's tentative view that the proposals it is making regarding 
licensed services areas, spectrum blocks, and partitioning and 
disaggregation will provide both incumbent and new licensees with a 
wide variety of options for using 24 GHz spectrum to meet market 
demands.
    13. The Commission notes that section 303(y) of the Communications 
Act grants it the ``authority to allocate electromagnetic spectrum so 
as to provide flexibility of use,'' if ``such use is consistent with 
international agreements to which the United States is a party'' and if 
the Commission makes certain findings. The Commission has not proposed 
to allocate this spectrum to multiple categories of service listed in 
the Table of Allocations, but rather have allocated spectrum only to 
the Fixed Service. However, in this service rule proceeding, the 
Commission is seeking comment on whether to expand or revise its 
earlier approach. The Commission seeks comment on the findings required 
by section 303(y) of the Act and whether section 303(y) applies here.
    14. The Commission proposes to modify part 101 of its rules to 
include the entire range of digital services to be provided at 24 GHz, 
so that the use of the 24 GHz band by new and relocated licensees in 
the 24 GHz band shall be subject to those rules. (Because relocated and 
new licensees in the 24 GHz band will be treated the same, the 
Commission refers to both as ``24 GHz licensees.'') The Commission 
refers to them separately as ``relocated licensees'' and ``new 
licensees.'' Consequently, all applications for licenses will be filed 
pursuant to Section 101 of 47 CFR. The Commission also proposes to 
modify part 101 of its rules to the extent necessary to reflect the 
particular characteristics and circumstances of the services to be 
offered. The Commission seeks comment on this general approach. The 
Commission discusses several specific issues in this NPRM, but also 
requests comment on any other changes in the existing part 101 rules 
that might be useful or necessary for the 24 GHz band. The Commission 
believes that making this spectrum available for use under these rules 
is in the public interest because it will contribute to technological 
and service innovation and, more robust competition in the 
telecommunications service markets.
5. Spectrum Blocks
    15. In the Reallocation Order, the Commission decided to license 
relocated operations in 40 megahertz channel pairs. 47 CFR 101.109(c). 
The Commission proposes that the same amount of spectrum be provided to 
each new 24 GHz licensee as is provided under the rules for the 
relocated licensees adopted in the Reallocation Order. In the 
Reallocation Order, the Commission discussed the basis for its 
conclusion that DEMS licensees need 40 megahertz channel pairs at 24 
GHz for their capacity to be equivalent to the capacity they have at 18 
GHz. The Commission found that differences in propagation, rain 
attenuation, and available equipment between the two bands would 
require DEMS systems at 24 GHz to use approximately four times as much 
bandwidth as DEMs systems at

[[Page 71091]]

18 GHz to maintain comparable reliability and coverage. While this 
analysis would not necessarily apply to non-DEMS use at 24 GHz, the 
Commission believes that 40 megahertz paired blocks would be efficient 
for such use. Thus, the Commission proposes that it license five 
spectrum blocks, except in the SMSAs where there are incumbent 
licensees. Each spectrum block shall consist of a pair of 40 megahertz 
channels. The Commission also proposes to modify the emission mask in 
section 101.111 to accommodate the changes in spectrum and bandwidth. 
See 47 CFR 101.111. The Commission seeks comment on these proposals.
    16. The Commission tentatively concludes that the use of EAs, 
described in section A.2, supra, as well as the partitioning and 
spectrum disaggregation, described in section B.4, infra, will result 
in economic opportunity for a wide variety of applicants, including 
small business, rural telephone, and minority-owned and women-owned 
applicants, as required by section 309(j)(4)(C). These proposals, the 
Commission tentatively concludes, will lower entry barriers through the 
creation of licenses for smaller geographic areas, thus requiring less 
capital and facilitating greater participation by such entities.

B. Application, Licensing, and Processing Rules

1. Regulatory Status
    17. In this NPRM, the Commission is proposing a broad licensing 
framework for implementing services in the 24 GHz spectrum band. Under 
its proposal, a 24 GHz licensee would be allowed to provide a variety 
or combination of fixed services. In order to fulfill its enforcement 
obligations and ensure compliance with the statutory requirements of 
Titles II and III of the Communications Act, the Commission has 
required applicants to identify whether they seek to provide common 
carrier services.
    18. In the LMDS Second Report and Order, the Commission required 
applicants for fixed services to indicate if they planned to offer 
services as a common carrier, a non-common carrier, or both, and to 
notify the Commission of any changes in status without prior 
authorization. The Commission seeks comment on a similar proposal to 
permit an applicant for a 24 GHz license to request common carrier 
status as well as non-common carrier status for authorization in a 
single license, rather than require the applicant to choose between 
common carrier and non-common carrier services, and to change 
regulatory status upon notification without prior approval. The 
licensee would be able to provide all allowable services anywhere 
within its licensed area at any time, consistent with its regulatory 
status. This approach, the Commission tentatively concludes, would 
achieve efficiencies in the licensing and administrative process. This 
is consistent with its approach with respect to Multipoint Distribution 
Service (``MDS''), and the Local Multipoint Distribution Service 
(``LMDS''). See Revisions to part 21 of the Commission's Rules 
Regarding the Multipoint Distribution Service, ``MDS Report and 
Order'', 52 FR 27553 (July 22, 1987). Apart from the designation of 
regulatory status, the Commission proposes not to require 24 GHz 
license applicants to describe the services they seek to provide. The 
Commission believes it is sufficient that an applicant indicate its 
choice for regulatory status in a streamlined application process. In 
providing guidance on this issue to MDS and LMDS applicants, the 
Commission points out that an election to provide service on a common 
carrier basis requires that the elements of common carriage be present; 
otherwise, the applicant must choose non-common carrier status. 
Accordingly, a determination of regulatory status will be based on the 
service actually provided, rather than the service proposed. The 
Commission also proposes that if licensees change the service they 
offer such that it would change their regulatory status, they must 
notify the Commission, although such change would not require prior 
Commission authorization. The Commission proposes that licensees notify 
them within 30 days of this change, unless the change results in the 
discontinuance, reduction, or impairment of the existing service, in 
which case the licensee is also governed by section 101.305 and submits 
the application under section 1.947 in conformance with the time frames 
and requirements of Sec. 101.305. See 47 CFR 101.305.
2. Eligibility
    19. The Commission's primary goal in the present proceeding is to 
encourage efficient competition, particularly in the local exchange 
telephone market. In assessing whether to restrict the opportunity of 
any class of service providers to obtain and use spectrum to provide 
communications services in the 24 GHz band, the Commission seeks to 
determine whether open eligibility poses a significant likelihood of 
substantial competitive harm in specific markets, and, if so, whether 
eligibility restrictions are an effective way to address that harm. See 
Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 
38.6-40.0 GHz Bands and Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding, 37.0-38.6 GHz and 38.6-40.0 
GHz, Report and Order and Second Notice of Proposed Rulemaking, (``39 
GHz Report and Order''), 63 FR 3075 (January 21, 1998). This approach 
relies on competitive market forces to guide license assignment absent 
a showing that regulatory intervention to exclude potential 
participants is necessary. Such an approach is appropriate because it 
best comports with the Commission's statutory guidance. When granting 
the Commission authority in section 309(j)(3) of the Communications Act 
to auction spectrum for the licensing of wireless services, Congress 
acknowledged the Commission's authority ``to [specify] eligibility and 
other characteristics of such licenses.'' However, Congress 
specifically directed the Commission to exercise that authority so as 
to ``promot[e] * * * economic opportunity and competition.'' Congress 
also emphasized this pro-competitive policy in section 257, where it 
articulated a ``national policy'' in favor of ``vigorous economic 
competition'' and the elimination of barriers to market entry by a new 
generation of telecommunications providers.
    20. Current providers in the 24 GHz band offer a range of services 
such as local and long distance telephony and internet access. The 
Commission tentatively concludes that open eligibility for 24 GHz 
licenses will not pose a significant likelihood of substantial 
competitive harm in local exchange telephone markets, and that it is 
therefore unnecessary to impose eligibility restrictions on incumbent 
local exchange carriers (``ILECs''). This tentative conclusion is based 
on several factors. First, other wireless providers such as LMDS and 39 
GHz licensees may provide competition in the local telephony markets. 
See 47 CFR 101.1003(a) and Amendment of the Commission's Rules 
Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-
183, Report and Order and Second Notice of Proposed Rulemaking. Second, 
other facilities-based, wireline entrants such as interexchange 
carriers and competitive LECs, and non-facilities-based wireline 
entrants utilizing the local competition provisions of the 
Communications Act, may provide competition in these

[[Page 71092]]

markets as well. Third, in LMDS, a fixed broadband point-to-multipoint 
microwave service in the 28 GHz band, ILECs and cable companies have 
been prohibited from holding an attributable interest in any license 
whose geographic service area significantly overlaps such incumbent's 
authorized or franchised service area. This prohibition guaranteed that 
initially each one of those licenses will be acquired by a firm new to 
the provision of local exchange in the service area. These new 
providers have now had a significant opportunity to enter these markets 
without the participation of ILECs and cable interests. Finally, under 
its proposal, the Commission will make available five licenses for each 
geographic area. This number of licenses permits numerous 24 GHz 
licensees in any one market and, thus, numerous competitors for the 
licenses. This scenario makes it more difficult for an incumbent LEC to 
acquire all the licenses in a single geographic area. Taken together, 
these factors demonstrate that an incumbent strategy of trying to 
forestall competition in local telephony by buying 24 GHz licenses 
cannot succeed because there are several other sources of actual and 
potential competition.
    21. Given all these competitive possibilities, the Commission 
tentatively concludes that it would be exceedingly difficult for an 
incumbent LEC to pursue a strategy of buying 24 GHz licenses in the 
hope of foreclosing or delaying competition, and implausible that it 
would succeed at that strategy. As noted, the Commission seeks comment 
on these tentative conclusions. The Commission also tentatively 
concludes that the spectrum made available for 24 GHz may be inadequate 
to enable the provision of competitive multi-channel video programming 
distribution (MVPD) service, and that incumbent cable company 
acquisition of these licenses does not raise anti-competitive concerns. 
The Commission bases this conclusion in part on Teligent's current 
service offerings, which are generally limited to voice and data, as 
well as its own assessment. The Commission also relies on the number of 
licenses (five) available in each geographic area to check anti-
competitive conduct by cable operators. Nevertheless, the Commission 
does note, however, that cable companies are increasingly offering high 
speed internet access, a service offering that Teligent is currently 
providing. The Commission's concerns about anti-competitive behavior by 
cable companies is substantially attenuated by the existence of 
alternative sources of such internet access, including digital 
subscriber lines, fixed wireless applications, and satellite. 
Furthermore, the cable companies are also subject to the restrictions 
in the LMDS service, which the Commission has noted herein. The 
Commission, therefore, tentatively concludes that it is unnecessary to 
impose eligibility restrictions on incumbent cable operators
3. Foreign Ownership Restrictions
    22. Certain foreign ownership and citizenship requirements are 
imposed in sections 310(a) and 310(b) of the Communications Act, as 
modified by the 1996 Act, that restrict the issuance of licenses to 
certain applicants. The statutory provisions are implemented in 
Sec. 101.7 of the Commission's Rules and reflect the restrictions as 
they must be imposed on 24 GHz license applicants. Specifically, 
Sec. 101.7(a) prohibits the granting of any license to be held by a 
foreign government or its representative. Sec. 101.7(b) prohibits the 
granting of any common carrier license to be held by individuals who 
fail any of the four citizenship requirements listed in the rule. See 
47 CFR 101.7(b).
    23. Based on the prohibitions set forth in Sec. 101.7(a), the 
Commission concludes that neither a foreign government, nor its 
representative can hold a license, including either a common carrier or 
non-common carrier license, to operate in the 24 GHz band. In addition, 
the Commission concludes that Sec. 101.7(b) prohibits any individual 
who fails to meet the four citizenship requirements set forth therein 
from holding a license to operate as a common carrier in the 24 GHz 
band. Further, any individual who elects both common carrier and non-
common carrier status must comply with Sec. 101.7(b)'s four citizenship 
requirements. But, since the prohibitions set forth in Sec. 101.7(b) do 
not apply to non-common carriers, an individual may elect to hold a 
license, as a non-common carrier in the 24 GHz band, without complying 
with the four citizenship requirements, as long as the individual is 
still in compliance with the requirements set forth in Sec. 101.7(a). 
See 47 CFR 101.7(b)(4); See also Rules and Policies on Foreign 
Participation in the U.S. Telecommunications Market and Market Entry 
and Regulation of Foreign-Affiliated Entities, Report and Order and 
Order on Reconsideration, (``Foreign Participation Report and Order''), 
62 FR 64741 (December 9, 1997).
    24. To assist its analysis of alien ownership restrictions, the 
Commission tentatively concludes that applicants in the 24 GHz band 
shall file FCC Form 430. This requirement is identical to the 
information which the Commission requires MDS, satellite, and LMDS 
applicants to submit in order to assess the alien ownership 
restrictions under Sec. 101.7(b). Furthermore, both common carriers and 
non-common carriers would be required to file the information whenever 
there are changes to the foreign ownership information, as well as the 
other legal and financial qualifications. The Commission would not 
disqualify an applicant requesting authorization exclusively to provide 
non-common carrier services solely because its citizenship information 
reflects that it would be disqualified from a common carrier license. 
However, consistent with what the Commission stated in the Satellite 
Rules Report and Order and in the LMDS Second Report and Order, the 
Commission tentatively concludes that requiring non-common carriers to 
address all the alien ownership prohibitions better enables the 
Commission to monitor all of the licensed providers in light of their 
ability to provide both common and non-common carrier services. The 
Commission requests comment on this proposal.
4. Aggregation, Disaggregation and Partitioning
    25. The Commission proposes to permit 24 GHz licensees to partition 
their service areas and to aggregate and disaggregate their spectrum. 
The Commission believes that such an approach would serve to promote 
the efficient use of the spectrum. The Commission thus tentatively 
concludes that partitioning and spectrum disaggregation will provide a 
means to overcome entry barriers through the creation of licenses for 
smaller geographic areas that require less capital, thereby 
facilitating greater participation by, and economic opportunity for, 
smaller entities such as small businesses, rural telephone companies, 
and businesses owned by minorities and women, as required by section 
309(j)(4)(C) of the Communications Act. See Geographic Partitioning and 
Spectrum Disaggregation by Commercial Mobile Radio Services Licensees 
and Implementation of section 257 of the Communications Act--
Elimination of Market Barriers, Report and Order and Further Notice of 
Proposed Rulemaking, (``Partitioning and Disaggregation Report and 
Order''), 62 FR 653 (January 6, 1997), 62 FR 696 (January 6, 1997). The 
Commission requests comment on this conclusion.

[[Page 71093]]

    26. The Commission also requests comment regarding what limits, if 
any, should be placed on the ability of a 24 GHz licensee to partition 
its service area and disaggregate its spectrum. The Commission notes 
that in the Partitioning and Disaggregation Report and Order the 
Commission permitted both geographic partitioning and spectrum 
disaggregation by broadband PCS licensees. In the case of broadband PCS 
service, the Commission decided to permit geographic partitioning along 
any service area defined by the partitioner and partitionee, and 
spectrum disaggregation without restriction on the amount of spectrum 
to be disaggregated, and to permit combined partitioning and 
disaggregation. The Commission concluded that allowing parties to 
decide without restriction the exact amount of spectrum to be 
disaggregated will encourage more efficient use of the spectrum and 
permit the deployment of a broader mix of service offerings, both of 
which will lead to a more competitive wireless marketplace.
    27. The Commission requests comment regarding whether such an 
approach should apply to 24 GHz licenses. If commenters take the 
position that such an approach should apply, they should also address 
what information should be filed with the Commission to allow us to 
maintain our licensing records.
5. License Term and Renewal Expectancy
    28. The Commission proposes that the 24 GHz license term for both 
incumbent and new licensees be 10 years, with a renewal expectancy 
similar to that afforded PCS and cellular licensees. In the case of 
either a cellular or PCS licensee, a renewal applicant shall receive a 
preference or renewal expectancy if the applicant has provided 
substantial service during its past license term and has complied with 
the Act and applicable Commission rules and policies. See 47 CFR 
22.940(a)(1)(i). While preferring a substantial service requirement, 
the Commission also invites comment on whether a build-out requirement 
is more appropriate for this service. The Commission believes that this 
10-year license term, combined with a renewal expectancy, will help to 
provide a stable regulatory environment that will be attractive to 
investors and, thereby, encourage development of this frequency band. 
The Commission also seeks comment on whether a license term longer than 
10 years is appropriate to achieve these goals and better serve the 
public interest. Commenters who favor a license term in excess of ten 
years should specify the appropriate license term and include a basis 
for the period proposed.
    29. The Commission proposes that the renewal application of a 24 
GHz licensee must include at a minimum the following showings in order 
to claim a renewal expectancy:
     A description of current service in terms of geographic 
coverage and population served or links installed and a description of 
how the service complies with the substantial service requirement.
     Copies of any Commission Orders finding the licensee to 
have violated the Communications Act or any Commission rule or policy, 
and a list of any pending proceedings that relate to any matter 
described by the requirements for the renewal expectancy.
     If applicable, a description of how the licensee has 
complied with the build-out requirement. These proposed requirements 
are based on those the Commission ordered for LMDS. See 47 CFR 
22.940(a)(1)(i).
    30. Under the Commission's proposal, in the event that a 24 GHz 
license is partitioned or disaggregated, any partitionee or 
disaggregatee would be authorized to hold its license for the remainder 
of the partitioner's or disaggregator's original license term, and the 
partitionee or disaggregatee will be required to demonstrate that it 
has met the substantial service, or build-out standard, requirements in 
any renewal application. The Commission believes that this approach, 
which is similar to the partitioning provisions it adopted for MDS and 
for current broadband PCS licensees, is appropriate because a licensee, 
through partitioning or disaggregation, should not be able to confer 
greater rights than it was awarded under the terms of its license 
grant. See Amendment of parts 21 and 74 of the Commission's Rules With 
Regard to Filing Procedures in the Multipoint Distribution Service and 
in the Instructional Television Fixed Service, Report and Order, 60 FR 
36524 (July 17, 1995); See Partitioning and Disaggregation Report and 
Order.

C. Operating Rules

1. Performance Requirements
    31. The Commission seeks comment on whether licensees in the 24 GHz 
band should be subject to a substantial service requirement or a 
minimum coverage requirements as a condition of license renewal. The 
Commission imposed such requirements on licensees in other services to 
ensure that spectrum is used effectively and service is implemented 
promptly.
    32. The Commission seeks comment on whether 24 GHz licensees should 
be required to provide ``substantial service'' to the geographic 
license area within ten years or any other license term which the 
Commission adopts for this service. The Commission defined substantial 
service as ``service which is sound, favorable, and substantially above 
a level of mediocre service which just might minimally warrant renewal. 
See e.g. 47 CFR 22.940(a)(1)(i). Further, as an alternative, safe 
harbor standard, the Commission seeks comment on whether there should 
be a construction requirement that the licensee transmit to reach a 
minimum of one-third of the population in their licensed area, no later 
than the mid-point of the license term and two-thirds of the population 
by the end of the license term. The Commission also seeks comment on 
whether, in the event that a 24 GHz license is partitioned or 
disaggregated, a partitionee or disaggregatee should be bound by the 
standard, either substantial service or a construction requirement, 
which the Commission may adopt in this proceeding.
    33. If a licensee does not comply with whichever standard the 
Commission adopts, either substantial service or minimum coverage, the 
Commission must consider what action to take. The Commission could 
adopt a standard whereby a licensee who does not comply with the 
appropriate standard, either substantial service or minimum coverage, 
is subject to license termination upon action by the Commission or 
alternatively, the license would automatically cancel. The Commission 
seeks comment on whether to adopt an automatic cancellation standard or 
cancellation only upon action by the Commission. If the geographic 
licensee loses its license for failure to comply with coverage 
requirements, should the licensee be prohibited from bidding on the 
geographic license for the same territory in the future? Is there a 
sanction more appropriate than automatic cancellation?
2. Application of Title II Requirements to Common Carriers
    34. The Commission also seeks comment on whether it should forbear 
from applying certain obligations on common carrier licensees in the 24 
GHz band pursuant to section 10 of the Act. In the case of commercial 
mobile radio service (``CMRS'') providers, the Commission concluded 
that it was appropriate to forbear from sections 203, 204, 205, 211, 
212, and most

[[Page 71094]]

applications of section 214. See also In the Matter of Personal 
Communications Industry Association's Broadband Personal Communications 
Services Alliance's Petition for Forbearance For Broadband Personal 
Communications Services, Forbearance from Applying Provisions of the 
Communications Act to Wireless Telecommunications Carriers, Memorandum 
Opinion and Order and Notice of Proposed Rulemaking, (``Forbearance 
Order'') 63 FR 43033 (August 11, 1998), 63 FR 43026 (August 11, 1998). 
The Commission, however, declined to forbear from enforcing other 
provisions, including sections 201 and 202. The Commission has also 
exercised its forbearance authority in permitting competitive access 
providers (``CAPS'') and competitive local exchange carriers 
(``CLECs'') to file permissive tariffs. The Commission seeks comment on 
whether it is appropriate to forbear from enforcing any provisions of 
the Act or the Commission's rules in the 24 GHz band.

D. Technical Rules

    35. As discussed, the Commission's general proposal is to apply the 
rules in part 101 to govern the use of the 24 GHz band, except as they 
may be modified as a result of this proceeding. This would include 
technical parameters such as channelization, frequency tolerance and 
stability, power and emission limitations, antennas, and equipment 
authorization. Also, general provisions of part 101, such as 
environmental and radio frequency (RF) safety requirements, and the 
protection of quiet zones, would be applicable.
    36. The technical parameters for operations at 24 GHz were adopted 
in the Reallocation Order. As discussed there, such parameters were 
derived, for purposes of expedience, from those applied to operations 
at 18 GHz , and may not have been exactly suited to operations at the 
higher 24 GHz band. The use of the higher frequency band is, for 
example, one reason for the change in channelization. The Commission 
has little information in the record at this time, however, on which to 
propose other specific changes to the part 101 rules. New developments 
in fixed technology, besides those generated by the transition to a new 
band, may warrant other changes in the technical parameters. Moreover, 
changes and advancements in technology may, in the future, warrant use 
of this band for not only digital modulation, but also other 
modulations. In that connection, it is not the Commission's intent to 
impose technological requirements which may in the future restrain more 
efficient and innovative use of this spectrum. Therefore, the 
Commission solicits comment regarding whether this service should be 
limited to digital modulation and whether further development of 
service at 24 GHz will be facilitated by technical parameters different 
from those that are currently in part 101. Regardless of the final set 
of technical rules adopted in this proceeding, the Commission proposes 
that they all apply to all licensees in the 24 GHz band, including 
licensees that acquire their licenses through partitioning and 
disaggregation. But, none of the proposed rule changes are directed at, 
nor intended to apply to DEMS licensees that operate in the 10 GHz 
band. While it is the Commission's tentative view that most technical 
issues are addressed by the current rules, there is one specific 
technical issue that warrants some attention and is therefore 
discussed. The Commission solicits comments, however, on all technical 
parameters that should apply to operations at 24 GHz.
1. Licensing and Coordination of 24 GHz Stations
    37. With one exception, incumbent licenses have been granted, by 
waiver, on an area wide basis. However, nodal stations, which serve as 
the central or controlling station in a radio system operating on 
point-to-multipoint frequencies, must be specifically applied for by 
licensees and authorized by the Commission. See 47 CFR 101.3 and 47 CFR 
101.503. This could be viewed as a dual licensing situation and may not 
be necessary or administratively efficient. Sec. 101.103(d) of the 
Commission's Rules contains guidelines for the current frequency 
coordination process for Fixed Microwave Services, while Sec. 101.509 
of the Commission's Rules sets forth interference protection criteria 
for 24 GHz licensees. These two rule sections have similar goals: to 
facilitate interference-free operations, to ensure cooperation among 
licensees to minimize and resolve potential interference problems, and 
to obtain the most efficient and effective use of the spectrum and 
authorized facilities. The Commission intends to auction the remaining 
spectrum in geographic areas and believes that licensees must be 
assured a reasonable and effective use of their own areas, while 
equally protecting the interests of other licensees.
    38. The Commission tentatively concludes that a requirement to 
coordinate those 24 GHz nodal stations located within the boundaries of 
a licensed SMSA or other geographic licensing area prior to putting 
them into operation would be sufficient to achieve these goals, and 
therefore proposes to replace the individual licensing of nodal 
stations with a coordination requirement. Such coordination would be 
required with co-channel 24 GHz licensees in adjacent geographic areas 
and with adjacent channel 24 GHz licensees in adjacent geographic 
areas, as well as the same or overlapping area. Based on propagational 
characteristics at 24 GHz, the Commission's information on planned 
system configurations, the current technical parameters and similar 
distances adopted in Commission proceedings regarding other microwave 
bands, the Commission tentatively concludes that the 80 km coordination 
distance currently specified in our rules appears to be too large. See 
Sec. 101.103(g) and 101.103(I) of the Commission's Rules, 47 CFR 
101.103(g), 101(i). However, the Commission proposes to have each 
licensee coordinate with licensees in other relevant areas and develop 
agreements between systems. Instead of specifying a fixed distance, the 
Commission proposes that licensees coordinate their facilities whenever 
their facilities have line-of-sight into other licensees' facilities or 
are within the same geographic area. Under the Commission's proposal, 
both types of coordination must be successfully completed before 
operation is permitted. In the event that there is no 24 GHz licensee 
immediately available in an adjacent, same or overlapping area, the 
licensee must be prepared to coordinate its stations in the future in 
order to accommodate other licensees to ensure cooperative and 
effective use of the spectrum in each area. The Commission solicits 
comment on these coordination procedures and criteria.
    39. International coordination is also an issue that needs to be 
addressed. While no specific proposals are made at this time, 
operations at 24 GHz in the United States will be subject to any 
agreements reached with Canada and Mexico. The Commission is in the 
process of holding discussions with these countries to determine the 
types of coordination that would be necessary.
2. RF Safety
    40. The Commission proposes that licensees and manufacturers be 
subject to the RF radiation exposure requirements specified in 
Secs. 1.1307(b), 2.1091, and 2.1093 of the Commission's Rules, which 
lists the services and devices for which an environmental evaluation 
must be performed. See 47 CFR 1.1307(b), 2.1091, 2.1093. See also 
Guidelines for Evaluating the

[[Page 71095]]

Environmental Effects of Radiofrequency Radiation, Report and Order, 
(``RF Guidelines Report and Order''), 61 FR 41006 (August 7, 1996); 
First Memorandum Opinion and Order, 62 FR 3232 (January 22, 1997); and 
Second Memorandum Opinion and Order, 62 FR 47960 (September 12, 1997). 
The Commission tentatively concludes that routine environmental 
evaluations for RF exposure should be required in the case of fixed 
operations, including base stations, when the effective radiated power 
(ERP) is greater than 1,000 watts.
    41. The Commission proposes to treat services and devices in the 24 
GHz band in accordance with the Commission's exposure limits in OET 
Bulletin 65, which has replaced OST Bulletin No. 65.

E. Competitive Bidding Procedures

1. Statutory Requirements
    42. The Balanced Budget Act of 1997 amended section 309(j) of the 
Act to require the Commission to award mutually exclusive applications 
for initial licenses or permits using competitive bidding procedures, 
with very limited exceptions. Section 309(j)(2) exempts from auctions 
licenses and construction permits for public safety radio services, 
digital television service licenses and permits given to existing 
terrestrial broadcast licensees to replace their analog television 
service licenses, and licenses and construction permits for 
noncommercial educational broadcast stations and public broadcast 
stations. Thus, if not exempted by the statute, a service will be 
auctionable if the Commission implements a licensing process that 
permits the filing and acceptance of mutually exclusive applications. 
In establishing particular licensing schemes or methodologies, the 
Commission is required to consider the public interest objectives 
described in section 309(j)(3).
    43. Pursuant to section 309(j)(6)(E) of the Act, the Commission has 
an ``obligation in the public interest to continue to use engineering 
solutions, negotiation, threshold qualifications, service regulations, 
and other means in order to avoid mutual exclusivity in application and 
licensing proceedings.'' In the Balanced Budget Act, Congress 
highlighted the Commission's obligation under section 309(j)(6)(E) by 
referencing that obligation in the general auction authority provision. 
The Commission recently sought comment on whether that reference 
changes the scope or content of the Commission's obligation under 
section 309(j)(6)(E). See Implementation of Sections 309(j) and 337 of 
the Communications Act of 1934 as Amended, Notice of Proposed Rule 
Making, (``BBA NPRM''), 64 FR 23571 May 3, 1999. In determining whether 
to resolve mutually exclusive applications for licenses in the 24 GHz 
band through competitive bidding, the Commission intends to adhere to 
any conclusions it reaches in the Balanced Budget Act proceeding 
regarding the scope of our auction authority.
    44. In paragraphs 8 and 9, supra, the Commission proposed to 
continue the use of a geographic area licensing scheme for the 24 GHz 
band, using EAs instead of SMSAs. Because the Commission has 
tentatively concluded that it would serve the public interest to 
implement a licensing scheme under which mutual exclusivity is 
possible, it also tentatively concludes that mutually exclusive initial 
applications for the 24 GHz band must be resolved through competitive 
bidding. The Commission seeks comment on this tentative conclusion.
2. Incorporation of Part 1 Standardized Auction Rules
    45. In the Part 1 Third Report and Order, the Commission 
streamlined its auction procedures by adopting general competitive 
bidding rules applicable to all auctionable services, and, in the same 
proceeding, issued a Second Further Notice of Proposed Rule Making 
concerning designated entities and attribution rules, among other 
issues. The Commission proposes to conduct the auction for initial 
licenses in the 24 GHz band in conformity with the general competitive 
bidding rules set forth in part 1, subpart Q of the Commission's rules, 
and substantially consistent with the bidding procedures that have been 
employed in previous Commission auctions. Specifically, the Commission 
proposes to employ the part 1 rules governing designated entities, 
application issues, payment issues, competitive bidding design, 
procedure and timing issues, and anti-collusion. These rules would be 
subject to any modifications that the Commission adopts in relation to 
the Second Further Notice of Proposed Rule Making. The Commission seeks 
comment on this proposal and on whether any of our part 1 rules would 
be inappropriate in an auction for this service.
3. Provisions for Designated Entities
    46. The Communications Act provides that, in developing competitive 
bidding procedures, the Commission shall consider various statutory 
objectives and consider several alternative methods for achieving them. 
Specifically, the statute provides that, in establishing eligibility 
criteria and bidding methodologies, the Commission shall:

promot[e] economic opportunity and competition and ensur[e] that new 
and innovative technologies are readily accessible to the American 
people by avoiding excessive concentration of licenses and by 
disseminating licenses among a wide variety of applicants, including 
small businesses, rural telephone companies, and businesses owned by 
members of minority groups and women.

    47. In the Competitive Bidding Second Memorandum Opinion and Order, 
the Commission stated that it would define eligibility requirements for 
small businesses on a service-specific basis, taking into account the 
capital requirements and other characteristics of each particular 
service in establishing the appropriate threshold. See Implementation 
of Section 309(j) of the Communications Act--Competitive Bidding, 
Second Memorandum Opinion and Order, (``Competitive Bidding Second 
Memorandum Opinion and Order''), 59 FR 44272 (August 26, 1994). The 
Part 1 Third Report and Order, while it standardizes many auction 
rules, provides that the Commission will continue a service-by-service 
approach to defining small businesses. For the 24 GHz band, the 
Commission proposes to adopt the definitions the Commission adopted for 
broadband PCS for ``small'' and ``very small'' businesses, which the 
Commission also adopted for 2.3 GHz and 39 GHz applicants. See 
Implementation of Section 309(j) of the Communications Act--Competitive 
Bidding, Fifth Memorandum Opinion and Order, 59 FR 63210 (December 7, 
1994). See 47 CFR 27.210(b)(1)(2), 101.1209(b)(1)(i). The Commission 
tentatively concludes that the capital requirements are likely to be 
similar to the capital requirements in those services. Specifically, 
the Commission proposes to define a small business as any firm with 
average annual gross revenues for the three preceding years not in 
excess of $40 million. For entities who qualify as a small business, 
the Commission proposes to provide them with a bidding credit of 15%. 
See 47 CFR 1.2110(e)(2)(iii).
    48. The Commission observes that the capital costs of operational 
facilities in the 24 GHz band are likely to vary widely. Accordingly, 
the Commission seeks to adopt small business size standards that afford 
licensees substantial flexibility. Thus, in addition to its proposal to 
adopt the general small business standard the Commission used in the 
case of

[[Page 71096]]

broadband PCS, 2.3 GHz, and 39 GHz licenses, the Commission proposes to 
adopt the definition for very small businesses used for 39 GHz licenses 
and for the PCS C and F block licenses: businesses with average annual 
gross revenues for the three preceding years not in excess of $15 
million. For entities who qualify as a very small business, the 
Commission proposes to provide them with a bidding credit of 25%. See 
47 CFR 1.2110(e)(2)(ii).
    49. The Commission seeks comment on the use of these standards and 
associated bidding credits for applicants to be licensed in the 24 GHz 
band, with particular focus on the appropriate definitions of small and 
very small businesses as they relate to the size of the geographic area 
to be covered and the spectrum allocated to each license. In discussing 
these issues, commenters are requested to address the expected capital 
requirements for services in the 24 GHz band. Commenters are invited to 
use comparisons with other services for which the Commission has 
already established auction procedures as a basis for their comments 
regarding the appropriate definitions for small and very small 
businesses.
    50. The Commission seeks comment here on whether there are any 
actions specific to the 24 GHz service that should be taken to insure 
that this service will be provided in rural areas. Relatedly, the 
Commission notes that section 309(j) requires the Commission to 
``promote * * * economic opportunity for a wide variety of applicants, 
including * * * rural telephone companies.'' Consistent with this 
mandate, the Commission seeks comment on whether there are specific 
measures that should be taken with respect to these entities.

Procedural Matters

A. Initial Regulatory Flexibility Analysis

    51. As required by Sec. 603 of the Regulatory Flexibility Act (RFA) 
of 1980, the Commission has prepared an Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities of the policies and rules proposed in this NPRM. The IRFA is 
set forth in Appendix A. The Commission requests written public comment 
on the IRFA. In order to fulfill the mandate of the Contract with 
America Advancement Act of 1996 regarding the Final Regulatory 
Flexibility Analysis, the Commission asks a number of questions in our 
IRFA regarding the prevalence of small businesses in the affected 
industries.
    52. Comments must be filed in accordance with the same filing 
deadlines as comments filed in this rulemaking proceeding, but they 
must have a separate and distinct heading designating them as responses 
to the Initial Regulatory Flexibility Analysis. The Consumer 
Information Bureau, Reference Operations Division, shall send a copy of 
this NPRM, including the Initial Regulatory Flexibility Analysis, to 
the Chief Counsel for Advocacy of the Small Business Administration in 
accordance with Sec. 603(a) of the Regulatory Flexibility Act.

B. Comment Dates

    53-55. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments on or before 
January 19, 2000, and reply comments on or before February 7, 2000. 
Comments may be filed using the Commission's Electronic Comment Filing 
System (ECFS) or by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, Report and Order, 63 FR 24121 (May 
1, 1998); Electronic Filing of Documents in Rulemaking Proceedings, 
Memorandum Opinion and Order, 63 FR 56090 (October 21, 1998). All 
relevant and timely comments will be considered by the Commission 
before final action is taken in this proceeding. To file formally, 
interested parties must file an original and four copies of all 
comments, reply comments, and supporting comments. If interested 
parties want each Commissioner to receive a personal copy of their 
comments, they must file an original plus nine copies. Interested 
parties should send comments and reply comments to the Office of the 
Secretary, Federal Communications Commission, 445 12th Street, SW, 
Washington, DC 20554, with a copy to Howard Davenport, Wireless 
Telecommunications Bureau, 445 12th Street, SW, Washington, DC 20554. 
Parties are also encouraged to file a copy of all pleadings on a 3.5-
inch diskette in Word 97 format.
    56. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/ecfs.html>. 
Generally, only one copy of an electronic submission must be filed. 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