[Federal Register Volume 64, Number 243 (Monday, December 20, 1999)]
[Rules and Regulations]
[Pages 71042-71056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32841]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 90
[PR Docket No. 93-144; GN Docket No. 93-252; PP Docket No. 93-253; FCC
99-270]
Future Development of SMR Systems in the 800 MHz Frequency Band,
Regulatory Treatment of Mobile Services, and Competitive Bidding
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this Memorandum Opinion and Order on Reconsideration
(MO&O), the Commission completes the implementation of a new licensing
framework for the 800 MHz Specialized Mobile Radio service (SMR).
Specifically, the Commission revises or clarifies its rules concerning:
the channel plan for General Category channels, the modification of
incumbent licensee systems, and the mandatory relocation of incumbent
licensee systems from the upper 200 channels to the lower 230 channels.
Additionally, the Commission retains its current construction and
coverage requirements and clarifies its rules concerning co-channel
interference protection, the definition of incumbent and the
applicability of its partitioning and disaggregation rules to Private
Mobile Radio Service (PMRS) licensees in the 800 MHz and 900 MHz SMR
services. The Commission also reaffirms its conclusion that competitive
bidding is an appropriate tool to resolve mutually exclusive license
applications for the General Category and lower 80 channels of the 800
MHz SMR service. These modifications and clarifications strike an
equitable balance between the competing interests of 800 MHz SMR
licensees seeking to provide local service and those desiring to
provide geographic area service. Further, the Commission's licensing
framework will enhance the competitive potential of SMR services in the
Commercial Mobile Radio Service (CMRS) marketplace.
DATES: Effective February 18, 2000.
FOR FURTHER INFORMATION CONTACT: Policy and Rules Branch, Commercial
Wireless Division, Wireless Telecommunications Bureau: Donald Johnson
or Scott Mackoul at (202) 418-7240; Auctions and Industry Analysis
Division, Wireless Telecommunications Bureau: Gary D. Michaels at (202)
418-0660; Media Contact: Meribeth McCarrick at (202) 418-0654.
SUPPLEMENTARY INFORMATION: This Memorandum Opinion and Order on
Reconsideration in PR Docket No. 93-144; RM-8117, RM-8030, RM-8029; GN
Docket No. 93-252; PP Docket No. 93-253 was adopted September 30, 1999
and released October 8, 1999. The document is available, in its
entirety, (including the list of petitioners) for inspection and
copying during normal business hours in the FCC Reference Center, (Room
CY-A257), 445 12th Street, SW, Washington, D.C. 20554. It may also be
purchased from the Commission's copy contractor, International
Transcription Services, Inc. (ITS, Inc.), 1231 20th Street, NW,
Washington, D.C. 20036, (202) 857-3800. In addition, it is available on
the Commission's website at http://www.fcc.gov/Bureaus/Wireless/Orders.
SYNOPSIS OF MEMORANDUM OPINION AND ORDER ON RECONSIDERATION
I. Introduction
1. The major actions adopted in the Memorandum Opinion and Order
are:
A. Service Rules for the Lower 230 Channels
Determine to license the 150 General Category channels in
six contiguous 25-channel blocks, thereby amending the Commission's
previous decision to license these channels in three contiguous 50-
channel blocks;
Retain the ``substantial service'' standard as an
alternative to meeting the applicable construction requirements for EA
licensees in the lower 230 channels;
B. Rights and Obligations of EA Licensees in the Lower 230 Channels
Clarify that the grandfathering provisions in Sec. 90.693
of the Commission's rules, setting forth the parameters within which
incumbent licensees can modify their systems, apply to both SMR and
non-SMR licensees that obtained their licenses or filed applications on
or before December 15, 1995;
Clarify that an incumbent licensee on the lower 230
channels seeking to modify its system using its 18 dB
interference contour may, in the absence of consent from affected
incumbents, provide a statement from a certified frequency advisory
committee that a modification will not cause interference to adjacent
licensees;
Specify the operating parameters that incumbent licensees
will use to calculate their service area contours and interference
contours;
Conclude that incumbents may not expand their geographic
licenses beyond the contours of their individual site licenses to
include areas where the EA licensee is not able to operate;
Clarify that an incumbent's geographic license area
includes, in addition to external base stations that are in operation,
any interior sites that are constructed within the applicable
construction period;
Clarify that even when an incumbent licensee has expanded
its operation throughout its 18 dB contour, its interference
protection continues to extend only to its 36 dBV/m signal
strength contour;
Affirm that the lower 80 SMR channels will not be
redesignated for non-SMR use;
[[Page 71043]]
Clarify that the construction requirements in Section
90.685(b) of the Commission's rules are applicable to all EA licensees
on the lower 230 channels without distinction between CMRS and PMRS
licensees;
Clarify that EA licensees on the lower 80 SMR channels and
General Category channels may switch between CMRS and PMRS services,
provided that channels designated exclusively for SMR use continue to
be used only for SMR service;
C. Relocation of Incumbents from the Upper 200 Channels
Clarify that, for the purpose of determining what facility
an EA licensee is responsible for relocating, an incumbent licensee's
``system'' includes mobile units and a redundant system when necessary
to effect a transparent relocation;
Affirm that the Commission's definition of ``system'' does
not include managed systems that are comprised of individual licenses;
Determine that an EA licensee that relocates an incumbent
to a system with a comparable channel capacity, but a different channel
configuration, is required to reimburse the incumbent for the increased
cost inherent in operating such a system;
Retain the five-year cost recovery period for increased
operating costs caused by incumbent licensee relocation;
Affirm that reimbursement of relocation costs will not be
due until the incumbent has been fully relocated and the frequencies
are free and clear;
Decline to revise the time period for relocation
negotiations between EA licensees and incumbent licensees;
Determine that EA licensees are not required to compensate
end users for service interruptions caused by realignment and returning
to new frequencies;
D. Partitioning and Disaggregation for 800 MHz and 900 MHz Licensees
Clarify that the Commission's geographic partitioning and
spectrum disaggregation rules apply to PMRS licensees in the 800 MHz
and 900 MHz SMR services;
E. Competitive Bidding Issues
Affirm the Commission's previous determination that the
General Category channels and lower 80 SMR channels of the 800 MHz SMR
band are auctionable under Section 309(j) of the Communications Act.
Clarify that the auction exemption for public safety radio
services in Section 309(j)(2) of the Communications Act does not apply
to spectrum that has been allocated for SMR use and which the
Commission has already determined to be auctionable;
Affirm that licensing in the lower 230 channels will be
open to all parties;
Amend the method by which licenses in the lower 230
channels will be grouped for auction, and direct the Wireless
Telecommunications Bureau, pursuant to delegated authority, to
determine what licensing groups, if any, should be established for
auctioning the lower 230 channels;
Affirm that a bidder's upfront payment will be based on
the number of licenses on which a bidder anticipates bidding in any
round;
Affirm that the Commission will not offer installment
payment financing for licenses in the lower 230 channels;
Affirm that the Commission will not adopt gender-or
minority-based provisions for auctioning licenses for the lower 230
channels at this time.
II. Background
2. The Commission initially established the 800 MHz SMR services to
license dispatch radio systems on a site-by-site basis in local
markets. In recent years, however, a number of SMR licensees have
expanded the geographic scope of their services, aggregated channels,
and developed digital networks to enable them to provide a type of
service comparable to that provided by cellular and Personal
Communications Service (PCS) operators. In response to these
developments, the Commission has re-evaluated its site-by-site
licensing procedures, which were cumbersome for systems comprised of
several hundred sites, because licensees were required to obtain
Commission approval for each site. This re-examination has stemmed from
a concern that site-by-site licensing procedures impair an SMR
licensee's ability to respond to changing market conditions and
consumer demand.
3. In the First Report and Order, Eighth Report and Order, and
Second Further Notice of Proposed Rule Making (800 MHz First Report and
Order), 61 FR 6212 (February 16, 1996) the Commission restructured the
licensing framework that governs the 800 MHz SMR service. For the upper
200 channels, the Commission replaced site-and frequency-specific
licensing with a geography-based system similar to those used in other
Commercial Mobile Radio Services (``CMRS''). The Commission designated
the upper 200 channels of 800 MHz SMR spectrum for geographic
licensing, and created 120-, 60-and 20-channel blocks within the U.S.
Department of Commerce Bureau of Economic Analysis Economic Areas
(``EAs''). The Commission concluded that mutually exclusive
applications for these licenses would be awarded through competitive
bidding. Additionally, the Commission granted EA licensees the right to
relocate incumbent licensees out of the upper 200 channels to
comparable facilities. Finally, the Commission reallocated the 150
contiguous 800 MHz General Category channels for exclusive SMR use.
4. In the 800 MHz Second Report and Order, 62 FR 41190 (July 31,
1997) the Commission established EAs as the licensing area for the
lower 230 800 MHz channels, which include the lower 80 SMR channels and
the 150 General Category channels. The Commission established
competitive bidding rules for resolving mutually exclusive applications
for EA licenses in the lower 230 channels, determined that incumbents
on the lower 230 channels would not be subject to mandatory relocation,
and defined the rights of incumbent licensees on those channels. The
Commission also provided further details concerning the mandatory
relocation rules for the upper 200 channel block and established
partitioning and disaggregation rules for 800 MHz and 900 MHz SMR
licensees.
5. In response to the 800 MHz Second Report and Order, the
Commission received a number of pleadings requesting reconsideration,
modification or clarification of its rules relating to mandatory
relocation, co-channel interference, spectrum block size, geographic
area licensing, and partitioning and disaggregation.
III. Discussion
A. Service Rules for the Lower 230 Channels
i. Channel Blocks
6. Background. In the 800 MHz Second Report and Order, the
Commission adopted channel blocks for licensing the lower 80 SMR
channels and the 150 General Category channels. Specifically, the
Commission determined to license the lower 80 SMR channels in sixteen
non-contiguous 5-channel blocks. The Commission reasoned that the non-
contiguous nature of these channels made it impractical to impose any
other channel plan. The Commission, further concluded that this
approach would provide opportunities for incumbents and applicants that
base their systems on trunking of non-contiguous channels to acquire
spectrum and was, therefore, consistent with the mandate of Section
309(j)(4)(C)
[[Page 71044]]
of the Communications Act of 1934 to promote an equitable distribution
of licenses and provide economic opportunities for a wide variety of
entities. Finally, the Commission determined that this channel plan was
the least disruptive geographic licensing method for smaller incumbent
licensees that had acquired their channels in 5-channel increments.
7. The Commission decided to license the 150 General Category
channels in three contiguous 50-channel blocks. Initially, in the
Second Further Notice, the Commission proposed three alternative block
sizes for licensing these channels: (a) a 120-channel block, a 20-
channel block, and a 10-channel block; (b) six 25-channel blocks; or
(c) fifteen 10-channel blocks. In response, commenters suggested
various other options for channel allotment such as 5-channel blocks
or licensing all 150 channels individually. While the Commission
considered all of the proposed plans, the Commission ultimately
adopted, in part, the Industry Proposal plan for licensing channels in
three contiguous 50-channel blocks. The Commission rejected that
portion of the Industry Proposal channel plan that would have permitted
incumbent licensees to enter into settlement agreements for the
distribution of unlicensed spectrum on a channel-by-channel basis prior
to auction. The Commission believed that licensing the General Category
channels in three contiguous 50-channel blocks, without permitting pre-
auction settlements, struck the appropriate balance between the needs
of some licensees for large contiguous blocks of spectrum and those of
other licensees for smaller spectrum blocks.
8. Discussion. On reconsideration, the Commission concludes that
auctioning the 150 General Category channels in six contiguous 25-
channel blocks, rather than three contiguous 50-channel blocks, will
best serve the interests of licensees with different spectrum
allocation needs. Currently, the General Category frequencies are
occupied by a wide variety of entities, including public safety, SMR,
business, and industrial/land transportation users. Each of these
entities has different spectrum allocation needs based on the services
they provide and their technological capabilities. While some licensees
use contiguous spectrum technologies and therefore need large blocks of
spectrum, other licensees (i.e., small businesses) trunk small numbers
of non-contiguous channels and thus seek smaller amounts of spectrum.
The Commission believes that licensing General Category channels in
blocks of 25 will achieve its goal of providing a wide variety of
entities a meaningful opportunity to pursue spectrum in this band.
9. A significant portion of incumbent licensees on the General
Category frequencies are small businesses and are licensed for only a
few channels in the band. Auctioning licenses for General Category
channels in smaller channel blocks will provide these small business
incumbents with greater opportunities to take advantage of geographic
area licensing. In addition, it will encourage new entrant
participation in the provision of 800 MHz services. As the Commission
explained in the 800 MHz Second Report and Order, auctioning the
General Category channels in large channel blocks could preclude small
businesses and new entrants with limited financial resources from
acquiring licenses because, generally, bigger blocks of spectrum
require larger bids. Smaller channel blocks, on the other hand, are
less likely to be cost prohibitive. Changing the block size from 50
channels to 25 channels will provide small entities with the
opportunity to acquire smaller amounts of spectrum consistent with
their financial means and technological needs. By facilitating small
business and new entrant participation in the provision of 800 MHz
services, this channel plan fulfills the Commission's statutory mandate
of promoting economic opportunity for a wide variety of applicants and
avoiding an excessive concentration of licenses.
10. The Commission declines to license General Category channels on
an individual basis. First, auctioning these channels on an individual
basis would be administratively burdensome given the large number of
channels involved. Second, this method of licensing is inconsistent
with the needs of applicants that receive blocks of contiguous
spectrum. Further, blocks of contiguous spectrum allow for more
flexibility in terms of technological applications and innovation.
ii. Construction and Coverage Requirements
11. Background. In the 800 MHz First Report and Order, the
Commission required EA licensees on the upper 200 channels to construct
their systems within five years of licensing. The Commission imposed
interim coverage requirements, requiring EA licensees to provide
coverage to one-third of the population within the EA within three
years of initial license grant and to two-thirds of the population by
the end of the five-year construction period. In addition, the
Commission required EA licensees to use at least 50 percent of the
channels in their spectrum blocks in at least one location within the
EA within three years of the initial license grant.
12. In the 800 MHz Second Report and Order, the Commission adopted
construction requirements for the lower 230 channels. Specifically, the
Commission required that EA licensees in these channel blocks provide
coverage to one-third of the population within three years of the
initial license grant and to two-thirds of the population within five
years of the license grant. Unlike their counterparts in the upper 200
channels, however, the Commission stated that EA licensees in the lower
230 channels could, in the alternative, provide ``substantial service''
to their geographic license area within five years of license grant.
The Commission defined ``substantial service'' as ``service that is
sound, favorable, and substantially above a level of mediocre service,
which would barely warrant renewal.'' The Commission stated that a
licensee could satisfy the substantial service requirement by
demonstrating that it is providing a technologically innovative service
or that it is providing service to unserved or underserved areas. The
Commission did not adopt a channel usage requirement for licensees in
the lower 230, channel block. The Commission made clear that failure to
meet these construction requirements would result in automatic
termination of the geographic area license.
13. Discussion. The substantial service option is necessary to
provide opportunities for new entrants to compete with incumbents in
the lower 230-channel block. In some EAs, an incumbent licensee may
already serve a large portion of the population. A new entrant,
therefore, may not be able to satisfy the population coverage
requirement because its service area cannot overlap with that of the
incumbent's. The option of providing a showing of substantial service
allows potential EA licensees that cannot meet the three-year and five-
year coverage requirements, because of the existence of incumbent co-
channel licensees, to satisfy a construction requirement. Allowing
licensees to make substantial service showings also encourages build-
out in rural areas since one of the ways in which a licensee may
satisfy the substantial service requirement is to demonstrate that it
is providing service to unserved or underserved areas, which are often
rural areas.
[[Page 71045]]
B. Rights and Obligations of EA Licensees in the Lower 230 Channels
1. Treatment of Incumbents
a. Definition of Incumbent
14. Background. In the Commission's 800 MHz SMR Second Report and
Order the Commission declined to adopt a mandatory, relocation plan for
incumbents on the lower 230 channels. The Commission concluded that
incumbent licensees, on these frequencies should be allowed to continue
to operate under their existing authorizations, and that geographic
area licensees would be required to provide protection to all co-
channel systems within their licensing areas. The Commission also
adopted operating parameters for incumbents that would give them a
reasonable opportunity to expand their systems.
15. Discussion. Section 90.693 sets forth, specific conditions
under which ``grandfathered'' licensees can modify their systems. The
Commission received a request to clarify Sec. 90.393(a) of its rules.
The term ``incumbent licensees,'' in Sec. 90.693(a) of its rules,
refers to both SMR and non-SMR licensees that obtained licenses or
filed applications on or before December 15, 1995.
b. Expansion and Flexibility Rights of Lower Channel Incumbents
16. Background. In the 800 MHz Second Report and Order, the
Commission concluded that while geographic licensing is appropriate for
the lower 230 channels, some additional flexibility is appropriate for
incumbents on these channels to facilitate modifications and limited
expansion of their systems. The Commission stated that it would allow
incumbents on the lower 230 channels to make system modifications
within their interference contours without prior Commission approval.
Thus, an incumbent licensee that desires to make modifications to its
existing system, such as adding new transmitters and altering its
coverage area, will be able to do so with the concurrence of all
affected incumbents, so long as such an incumbent does not expand the
18 dB interference contour of its system. Moreover, licensees
who do not receive the consent of all incumbent affected licensees,
will be able to make similar modifications within their 22 dB
signal strength interference contour and licensees who do not desire to
make modifications may continue to operate within their existing
systems. The Commission emphasized that the revised interference
standard protects incumbents only against EA licensees, not against
other incumbents. As such, the protection that one incumbent must
provide to another incumbent continues to be governed by Sec. 90.621(b)
of the Commission's rules. In the absence of consent of all affected
incumbent licensees, incumbent licensees must locate their stations at
least seventy miles from the facilities of any other incumbent or
comply with the co-channel separation standards established in the
Commission's short-spacing rules.
17. Discussion. The Commission concludes that incumbent licensees
seeking to utilize an 18 dB signal strength interference
contour shall first seek to obtain the consent of affected co-channel
incumbents. However, if that consent is withheld, the incumbent
licensee may provide, in lieu of consent, a statement from a certified
frequency coordinator that a modification will not cause interference
to adjacent licensees.
18. Consistent with Secs. 90.621(b)(4) and 90.621(b)(6) of the
Commission's rules, it believes that the ``originally-licensed''
contour should be calculated using the maximum ERP and the actual HAAT
along each radial. The short spacing table protects existing licensees
at maximum power, and actual HAAT in the direction of the co-channel
station. The Commission believes that these protection criteria will
provide more flexibility to incumbent licensees and are consistent with
Sec. 90.693 of its rules.
c. Converting Site-Specific Licenses to Geographic Licenses
19. Background. In the 800 MHz Second Report and Order, the
Commission allowed incumbents on the lower 230 channels to combine
their site-specific licenses into single geographic licenses to provide
them with the same flexibility and reduced administrative burden that
geographic licensing affords to EA licensees. Because the Commission
adopted the 18 dB contour rather than the 22 dB
contour, where the incumbent licensee has obtained the consent of all
affected parties, as the benchmark for defining an incumbent licensee's
protected service area, the Commission used the contiguous and
overlapping 18 dB contours of the incumbent's previously
authorized sites to define the scope of the incumbent's geographic
license. The Commission stated that once the geographic license has
been issued, incumbents will not be required to obtain prior Commission
approval or provide subsequent notification to add or modify facilities
that do not extend the licensee's 18 dB interference contour.
Additionally, licensees that do not receive the consent of all affected
parties may follow the same process utilizing their 22 dB
signal strength contour, rather than the 18 dB contour.
20. Discussion. Petitioners contend that incumbents' geographic
licenses should include areas where an incumbent's interference
contours do not overlap, but where no other licensee could place a
transmitter because of the Commission's interference protection rules.
The Commission declines to expand an incumbent's geographic license
beyond the contours of its individual site licenses. The Commission
finds that inclusion of areas that are outside of an incumbent's
interference contours within the incumbent's geographic license would
be contrary to its objective of prohibiting encroachment by incumbents
on the geographic area licensee's operations. Additionally, the
Commission clarifies that in defining the scope of an incumbent's
geographic license area, the Commission includes external base stations
that are already constructed and operational and interior sites that
are constructed within the particular construction period applicable to
the incumbent. Once the geographic license has been issued, facilities
that are added within an incumbent's existing footprint and that are
not subject to prior approval by the Commission will not be subject to
construction requirements.
2. Co-channel Interference Protection
21. Background. In the Commission's 800 MHz SMR Second Report and
Order, the Commission concluded that additional flexibility was needed
for lower 230 channel incumbent licensees to facilitate modifications
and limited expansion of their systems. The Commission determined that
additional flexibility for the lower 230 channel incumbent licensee was
appropriate because these channels were subject to an application
freeze and geographic licensing of these channels would not occur until
after the upper 200 channel auction was completed and upper 200 channel
incumbent licensees were relocated to the lower channels.
22. Because the Commission adopted an 18 dBV/m standard,
which gives incumbent licensees greater flexibility to expand, the
Commission adopted stricter interference protection criteria to ensure
that EA licensees do not interfere with incumbents' operations.
Specifically, the Commission further determined that incumbent
licensees who currently utilize the 40 dB signal strength
contour for their service area contour and 22 dB signal
strength contour for their interference contour will be permitted to
use their 18 dB
[[Page 71046]]
signal strength contour for their interference contour as long as they
obtain the consent of all affected parties. In particular, EA licensees
are required to either: locate their stations at least 173 km (107
miles) from the licensed coordinates of any incumbent licensee, or
comply with co-channel separation standards based on a 36/18
dBV/m standard, rather than the previously applicable 40/22
dBV/m standard. EA licensees must ensure that the 18
dBV/m signal strength contour of a proposed station does not
encroach upon the 36 dBV/m signal strength contour of an
incumbent licensee's existing stations.
23. Discussion. The Commission clarifies that incumbent licensees
on the lower 230 channels will be protected by EA licensees only on the
basis of the 36/18 dBV/m contour analysis of the incumbent's
existing station, even if an incumbent licensee has expanded its
operation throughout its 18 dBV/m contour. An incumbent
licensee's protection extends only to its 36 dBV/m signal
strength contour. The Commission further clarifies that where the co-
channel separation requirements in Sec. 90.621(b) of its rules have
afforded certain licensees greater interference protection, those
standards will continue to apply.
3. Regulatory Classification of EA Licensees on the Lower 230 Channels
24. Background. In the 800 MHz Second Report and Order, the
Commission concluded that the Commission would presumptively classify
SMR winners of EA licenses on the lower 230 channels as CMRS providers,
because the Commission anticipates that most applicants for these
licenses will be SMR applicants who seek to provide interconnected
service and thus meet the definition of CMRS. However, the Commission
stated that it would allow SMR applicants and licensees to overcome
this presumption by demonstrating that their service does not meet the
CMRS definition. In the 800 MHz Memorandum Opinion and Order, the
Commission determined that both SMRs and non-SMRs would be eligible to
obtain licenses for the 150 General Category channels. Thus, where an
EA license is obtained by a non-SMR operator, the CMRS presumption is
inapplicable. In the event that EA licenses are awarded to Public
Safety, Industrial/Land Transportation or Business licensees, for
example, such licensees will be classified as PMRS providers.
25. Discussion. The Commission declines to re-designate the lower
80 channels for non-SMR use, as well as for SMR use. The Commission
designated the lower 80 SMR channels for use in SMR systems based on a
significant increase in the number of applicants for 800 MHz trunked
systems and private users seeking service from SMR operators. The
Commission anticipates that SMR providers' demand for the lower 80
channels will be increased by geographic area licensing of the upper
200 channels and its mandatory relocation policy.
26. The Commission also clarifies that construction requirements in
Sec. 90.685(b) are applicable to all EA licensees in the lower 230
channels without distinction between those classified as CMRS and those
classified as PMRS. In addition, the Commission clarifies that EA
licensees in the lower 230 channels are permitted to switch between
CMRS and PMRS service in these channels.
C. Relocation of Incumbents from the Upper 200 Channels
1. Relocation Negotiations
27. Background. In the 800 MHz First Report and Order, the
Commission established procedures for the mandatory relocation of
incumbent licensees from the upper 200 to the lower 230 channels on the
800 MHz SMR band. The Commission established a three-phase process for
the relocation of incumbents. Phase I comprises a one-year voluntary
negotiation. If no agreement is reached in phase I, the EA licensee may
initiate Phase II, a one-year mandatory negotiation period during which
the parties are required to negotiate in ``good faith.'' If the parties
still fail to reach an agreement, the EA licensee may then initiate
Phase III, which is an involuntary relocation of the incumbent's
system. The Commission determined that incumbents on the upper 200
channels would not be subject to mandatory relocation unless the EA
licensee provided the incumbent with ``comparable facilities'' without
any significant disruption in the incumbent's operations.
28. In the 800 MHz Second Report and Order, the Commission defined
comparable facilities as facilities that will provide the same level of
service as the incumbent licensee's existing facilities, from the
perspective of the end user. The Commission identified four factors
relevant to this determination: system, capacity, quality of service
and operating costs.
29. Discussion. In the 800 MHz Memorandum Opinion and Order on
Reconsideration, the Commission reduced the original two-year mandatory
negotiation period to one year, concluding that a one-year voluntary
and one year mandatory negotiation period would provide parties with
the flexibility to negotiate voluntarily while ensuring that relocation
occurs expeditiously. Accordingly, the Commission declines to further
reduce the negotiation period. In addition, the Commission declines to
establish a time period after which an incumbent would have the ability
to terminate the relocation process if it does not reach agreement with
the EA licensee. Allowing incumbents to terminate the relocation
process after a certain period of time may encourage some incumbents to
refrain from negotiating in good faith.
2. Comparable Facilities
a. System
30. In the 800 MHz Second Report and Order, the Commission defined
``system'' functionally from the end user's point of view. A system is
comprised of base station facilities that operate on an integrated
basis to provide service to a common end user, and all mobile units
associated with those base stations. A system can include multiple-
licensed facilities that share a common switch or are otherwise
operated as a unitary system, provided that an end user has the ability
to access all such facilities. Although the Commission defined
``system'' broadly to provide incumbent licensees flexibility to
continue meeting their customers' needs, the Commission specifically
excluded from its definition facilities that are operationally separate
and managed systems that are comprised of individual licenses.
31. Discussion. The Commission agrees with petitioners that its
definition of ``system'' should include redundant mobile units and a
redundant backbone, but only to the extent that they are necessary to
effect a relocation that is transparent to the end user. The Commission
declines to engage in specific detailed analysis of the various
individual components that potentially could be included in a system.
To determine whether a specific component is part of a system, EA
licensees are required to look to the function of the component and
consider whether the equipment in question is part of a unitary system
providing service to the end user.
32. Furthermore, the Commission declines to expand its definition
of ``system'' to include commonly managed systems that are comprised of
individual licenses. To the extent that a manager operates separately
licensed facilities as a unitary system, that could meet the
Commission's definition of
[[Page 71047]]
``system,'' such operation would be likely to conflict with the
licensees' obligation under Section 310(d) of the Communications Act to
retain exclusive responsibility for the operation and control of
authorized facilities. To the extent that such facilities are kept
operationally separate, they are excluded from the Commission's
definition of ``system.''
b. Capacity
33. Background. To comply with the Commission's capacity
requirements, an EA licensee must provide an incumbent licensee with
equivalent channel capacity. The Commission defined channel capacity as
the same number of channels with the same bandwidth that is currently
available to the end user. If a different channel configuration is
used, it must have the same overall capacity as the original
configuration. Accordingly, comparable channel capacity requires
equivalent signaling capability, baud rate and access time.
34. Discussion. The Commission does not believe that retuning
requires the exact channel spacing that the incumbent licensee had on
the upper 200 channels. Because of the large number of incumbent
licensees presently licensed on the lower 230 channels, the Commission
believes that some relocated licensees will not receive the exact
channel spacing that the relocated licensees had on the upper 200
channels. In these situations the EA licensee must configure the system
in a way that does not compromise channel capacity and must reimburse
the incumbent for the increased cost of operating the reconfigured
system.
c. Operating Costs
i. Increased Operating Costs
35. Background. In the 800 MHz Second Report and Order, the
Commission defined operating costs as costs that affect the delivery of
services to the end user. The Commission stated that if the EA licensee
provides facilities that entail higher operating costs than the
operating cost of the incumbent's previous system, and the cost
increase is a direct result of the relocation of the system, the EA
licensee must compensate the incumbent licensee for the difference.
36. Discussion. The Commission disagrees with one petitioner that
contended that the Commission failed to provide for these increased
costs. In the 800 MHz Second Report and Order, the Commission explained
that operating costs associated with the relocation might consist of
either increased recurring costs associated with the replacement
facilities or increased maintenance costs. Accordingly, if a higher
power transmitter or larger antennas are necessitated by relocation,
the incumbent should be compensated for any additional rental payments,
increased utility fees, or increased maintenance costs associated with
the new transmitter or antennas.
ii. Cost Recovery Period
37. Background. While the Commission concluded in the 800 MHz
Second Report and Order that EA licensees should be responsible for
increased operating costs caused by relocation, it noted that
identifying whether increased costs are attributable to relocation
becomes more difficult over time. The Commission therefore determined
not to impose this obligation indefinitely, but stated that the EA
licensees' obligation to pay increased costs will end five years after
relocation has occurred. The Commission concluded that a five-year
payment period appropriately balances the interest of EA licensees and
relocated incumbents.
38. Discussion. The Commission declines to lengthen the cost
recovery period from a five to a ten-year period. A five-year period
will facilitate the speedy resolution of relocation issues. The
Commission believes the rationale the Commission provided in the
Microwave Relocation Cost Sharing First Report and Order, 61 FR 29679
(June 12, 1996) is equally applicable to the relocation of SMR
facilities. The five-year cost recovery period is not unfair to
incumbent licensees because after five years many incumbents would have
been forced to bear some of these costs themselves, even if they had
not been relocated by the EA licensee. The Commission also notes that a
five-year period provides incumbent licensees adequate time to budget,
plan and allocate resources to meet these expenses upon the expiration
of the cost recovery period.
39. In addition, the Commission declines to reduce the cost
recovery period to three years. The Commission does not believe that
costs incurred beyond a three-year period would be ``speculative and
beyond the realm of [the] cost reimbursement parameters.'' The five-
year period is not unfair to EA licensees and thus, the Commission
declines to reduce the period to three years.
3. Other Payment Issues
a. Timing of Payments to Incumbents
40. Background. In the 800 MHz Second Report and Order, the
Commission stated that reimbursement payments for relocation are due
(a) when the incumbent licensee has been fully relocated, and (b) the
frequencies are free and clear.
41. Discussion. The Commission reiterates that payment of
relocation costs will not be due until the incumbent has been fully
relocated and the frequencies are free and clear. The Commission
believes that this approach promotes a more expeditious relocation
process by establishing a definite time at which reimbursement is due.
However, the Commission notes that parties are free to negotiate when
reimbursement of relocation costs will occur, and may agree to
reimbursement as such expenses are incurred.
b. Compensable Costs
42. Background. In the 800 MHz Second Report and Order, the
Commission concluded that reimbursable relocation costs could include
incumbent transaction expenses such as legal and consulting fees,
configuration of antennas, increased rental space, and administrative
costs. However, because the Commission wanted to encourage a fast
relocation process free of disputes, it determined that the bulk of
compensable costs should be tied as closely as possible to actual
equipment costs. Therefore, the Commission required EA licensees to
reimburse incumbents only for those transaction expenses that are
directly attributable to the relocation, subject to a cap of two
percent of the hard costs involved.
43. The Commission declines to require compensation to end users of
incumbent licensee systems, because such compensation would be
inconsistent with the Commission's determination that the bulk of
compensable costs should be tied as closely as possible to the
licensee's actual equipment costs.
D. Partitioning and Disaggregation for 800 MHz and 900 MHz Licensees
44. Background. In the 800 MHz Second Report and Order, the
Commission adopted flexible partitioning and disaggregation rules for
all licensees in the 800 MHz and 900 MHz SMR service. Specifically, the
Commission extended partitioning to all incumbent and EA licensees on
both the upper 200 and lower 230 channels of the 800 MHz SMR service
and to all incumbent and Major Trading Area (MTA) licensees on the 200
channels of the 900 MHz service. Similarly, the Commission concluded
that all incumbent and EA licensees in the 800 MHz SMR service and all
incumbent
[[Page 71048]]
and MTA licensees in the 900 MHz SMR service should be allowed to
disaggregate portions of their spectrum.
45. Discussion. The Commission clarifies that in the 800 MHz Second
Report and Order, it determined that its partitioning and
disaggregation rules should apply to all licensees in all SMR channel
blocks with no distinction on the basis of licensee's regulatory
classification as PMRS or CMRS. Application of the partitioning and
disaggregation rules to PMRS licensees will result in more efficient
use of the spectrum by allowing licensees to transfer part of their
spectrum to a party that more highly values it.
E. Competitive Bidding Issues
1. Auctionability
46. Background. In the 800 MHz Second Report and Order, the
Commission concluded that competitive bidding is an appropriate
licensing mechanism for the General Category and lower 80 channels of
the 800 MHz SMR service. The Commission concluded that the 800 MHz SMR
service satisfies the criteria set forth by Congress for determining
when competitive bidding should be used. The Commission noted that
under its rules a diverse group of applicants, including incumbent
licensees and potential new providers of this service, will be able to
participate in the auction process because eligibility for EA licenses
will not be restricted. Finally, the Commission adopted special
provisions for small businesses seeking EA licenses.
47. Discussion. The Commission reaffirms its conclusion that
competitive bidding is the appropriate tool to resolve mutually
exclusive license applications for the General Category and lower 80
channels of the 800 MHz SMR service. The Commission continues to
believe that competitive bidding furthers the public interest by
promoting rapid deployment of service, fostering competition,
recovering a portion of the value of two spectrum for the public, and
encouraging efficient spectrum use. The Commission has previously
construed Sec. 309(j)(6)(E) to mean that it has an obligation to
attempt to avoid mutual exclusivity by the methods prescribed therein
only when it would further the public interest goals of Sec. 309(j)(3).
In the course of this proceeding, the Commission has evaluated the
appropriateness of various licensing mechanisms for the 800 MHz SMR
service. No new arguments are raised that would persuade the Commission
to reconsider the adoption of EA licensing for the 800 MHz SMR service.
The Commission emphasizes that geographic area licensing offers a
flexible, licensing scheme that eliminates the need for many of the
complicated and burdensome licensing procedures that hampered SMR
development in the past. By determining that it would not be in the
public interest to implement other licensing schemes or processes that
avoid mutual exclusivity, the Commission has fulfilled its obligation
under section 309(j)(6)(E).
48. Congress has exempted certain classes of licensees from the
competitive bidding process in Sec. 309(j)(2). The Commission
previously determined that the public safety radio services exemption
does not entitle individual users to remove licenses from auctions
licensing simply by claiming a public safety use. Thus, contrary to
petitioners' contentions, the exemption does not apply to spectrum that
is allocated for SMR use and which has already been determined to be
auctionable.
2. Eligibility
49. Background. In the 800 MHz Second Report and Order and the 800
MHz Memorandum Opinion and Order the Commission concluded that General
Category and lower 80 channels would be licensed on a geographic basis
and subject to competitive bidding to resolve mutually exclusive
applications. Earlier, in the 800 MHz SMR First Report and Order, the
Commission concluded based on comments in the proceeding and on its
licensing records that the primary demand for General Category channels
came from SMR operators. When the Commission froze General Category
licensing in 1995, the Commission noted that the number of SMR
applications for these channels had risen markedly and, as such, the
Commission believed that such activity is itself an indication that
demand for the spectrum exists. Moreover, as a result of geographic
area licensing on the upper 200 channels, there is a substantial demand
for General Category channels among legitimate small SMR operators,
including incumbents that relocate from the upper 200 channels.
50. Discussion. The Commission continues to believe that the lower
80 and General Category channels of the 800 MHz SMR service should be
licensed through competitive bidding and open to all parties, as
opposed to incumbents solely. The Commission has determined that it
will maintain open eligibility and the requirement that incumbents
participate in competitive bidding. The Commission believes that open
eligibility will foster competition and result in a diverse group of
800 MHz SMR providers, and that the competitive bidding process will
adequately deter speculation. These rules are consistent with the rules
for other CMRS services, and encourage the participation of diverse
provider that are serious enough to meet the requirements of the
competitive bidding process.
51. The Commission does not believe that its approach will harm the
interests of non-commercial licensees by requiring them to compete for
spectrum with commercial systems. In the 800 MHz Second Report and
Order, the Commission noted there are several ways in which non-SMRs
can benefit from its geographic licensing rules. For example, non-
commercial operators may not only apply individually for geographic
area licenses they may also participate in joint ventures (with other
non-commercial operators or with commercial service providers) or
obtain spectrum through partitioning and disaggregation to meet their
spectrum needs. The Commission also expects that geographic area
licensing of SMR and General Category spectrum will free up non-SMR
spectrum in the 800 MHz band, providing more options for non-commercial
operators where availability of General Category spectrum is limited.
Finally, the Commission is continuing with its initiatives to provide
sufficient spectrum for non-commercial operations through its Refarming
proceeding.
52. The Commission emphasizes that non-SMR operators are eligible
to hold licenses in the lower 80 SMR channels, however these channels
continue to be designated for SMR use only. While the Commission
concludes that non-SMR are eligible for licensing, it emphasizes that
this in no way affects its decision to license General Category and
lower 80 channels geographically, with mutually exclusive applications
reserved through competitive bidding with open eligibility.
3. Competitive Bidding Design
a. License Grouping
53. Background. In the 800 MHz Second Report and Order, the
Commission stated that ``to expedite the process of auctioning the
lower 80 and General Category EA licenses, it would auction these
licenses using the five regional groups that were used for the regional
narrowband Personal Communications Services (PCS) auction: Northeast,
South, Midwest, Central, and West.''
54. Discussion. The Commission amends the method by which it will
group licenses for auction. While the Commission continues to believe
that licenses should be grouped for
[[Page 71049]]
competitive bidding purposes in a manner that will reduce the
administrative burden on auction participants, particularly small
businesses, the Commission will not use the five regional groups based
on Basic Trading Areas that were used in the regional narrowband PCS
auction. Instead, the Commission will direct the Bureau to determine,
pursuant to its delegated authority, what groups, if any should be
established for auctioning the lower 80 and General Category EA
licenses. The Balanced Budget Act of 1997 provides that ``before the
issuance of bidding rules,'' the Commission must provide adequate time
for parties to comment on proposed auction procedures. It has been the
Bureau's practice to issue a Public Notice seeking comment on auction-
specific operational issues well in advance of the application deadline
for each auction. The Commission therefore concludes that the Bureau,
under its existing delegated authority and in accordance with the
Balanced Budget Act of 1997, should seek further comment on license
grouping and auction sequence, prior to the start of the 800 MHz
auction.
b. Upfront Payments
55. Background. Currently, applicants have the option to check
``all markets'' on their short-form applications but submit an upfront
payment to cover only those licenses on which they actually intend to
bid in any one round. Permitting the selection of ``all markets'' gives
bidders the flexibility to pursue back-up strategies in the event they
are unable to obtain their first choice of licenses.
56. Discussion. The Commission has expressly rejected arguments
made by those that oppose the use of an ``all markets'' box. A bidder
must submit an upfront payment sufficient to meet the eligibility
requirements for any combination of licenses on which it might wish to
bid in a round. This rule forces bidders to make a payment that
reflects their level of interest and protects against speculation.
Moreover, the Commission continues to believe that bidders should have
the flexibility to pursue back-up strategies if they are unable to
obtain their first choice of licenses. As demonstrated by all recent
auctions, providing bidders flexibility is crucial to an efficient
auction and optimum license assignment. Therefore, the Commission will
retain the current rules, which permit use of the ``all markets'' box
and require an upfront-payment that corresponds to the number of
licenses on which a bidder anticipates bidding in any one round.
c. Delegated Authority
57. Background. In the 800 MHz Second Report and Order, the
Commission delegated to the Bureau the authority to implement many of
the Commission's rules pertaining to auctions procedures. This included
the authority to conduct auctions; administer applications, payment,
licenses, grant, and denial procedures; and determine upfront and down
payment amounts.
58. Discussion. The Commission notes that Sec. 0.131 of its rules
gives delegated authority to the Bureau to implement all of the rules
pertaining to auction procedures. The Commission concludes that the
delegation of authority to the Bureau is valid as it concerns
inherently procedural rather than substantive issues and is, therefore,
in compliance with its rules. Furthermore, the Commission's delegation
of authority is in compliance with the APA. Pursuant to 5 U.S.C.
Section 553(b), an agency may modify procedural rules without notice
and comment. Because the actions delegated to the Bureau are procedural
in nature and do not affect the substantive rights of interested
parties, the Commission's delegation of authority falls within that
exception.
4. Treatment of Designated Entities
a. Installment Payments
59. Background. In the 800 MHz Second Report and Order, the
Commission deferred to its Part 1 proceeding the decision on whether to
adopt installment payments in the lower 80 and General Category
channels. The Commission determined in its Part 1 Third Report and
Order, 63 FR 2315 (January 15, 1998), released in December of 1997,
that installment payments should not be used in the immediate future as
a means of financing small-business participation in its auction
program.
60. Discussion. In the Part 1 Third Report and Order, the
Commission considered its use of installment payment plans for future
auctions. On the basis of the record in that proceeding and the record
developed on installment payment financing for the broadband PCS C
block service and on recent decisions eliminating installment payment
financing for LMDS and 800 MHz SMR (upper 200 channels), the Commission
concluded that, until further notice, the Commission should no longer
offer such plans as a means of financing small businesses and other
designated entities seeking spectrum licenses. The Commission notes
that this conclusion was subject to its request for comment in the
Second Further Notice of Proposed Rulemaking portion of the Part 1
Third Report and Order on installment payment issues and means other
than bidding credits and installment payments by which the Commission
might facilitate the participation of small businesses in its spectrum
auction program.
61. The Commission believes that the public interest is best served
by going forward with the auction of the lower 80 and General Category
channels without extending installment payments to licensees. In place
of installment payments, the Commission established larger bidding
credits to provide for the interests of small business bidders. The
Commission believes that its adoption of the larger bidding credit both
fulfills the mandate of Section 309(j) to provide small businesses with
the opportunity to participate in auctions and ensure that new services
are offered to the public without delay.
b. Designated Entity Provisions
62. Background. In the 800 MHz Second Report and Order, the
Commission sought comment on the type of designated entity provisions
that should be incorporated into its competitive bidding procedures for
the lower 80 and General Category channels. The Commission requested
comment on the possibility that, in addition to small business
provisions, separate provisions for women- and minority-owned entities
should be adopted for the lower 80 and General Category channels. In
the 800 MHz Second Report and Order, the Commission determined that it
had not developed a record sufficient to sustain gender- and minority-
based measures in the lower 80 and General Category licenses based on
the standard established by the Adarand decision. Additionally, the
Commission noted the record was insufficient to support any gender-
based provisions under the intermediate scrutiny standard established
in the VMI decision. Based upon the record in that proceeding, the
Commission adopted bidding credits solely for applicants qualifying as
small businesses. The Commission believed these provisions would
provide small businesses with a meaningful opportunity to obtain
licenses for the lower 80 and General Category channels. Moreover, many
women- and minority-owned entities are small businesses and will
therefore qualify for these provisions. As such, these provisions met
Congress' goal of promoting wide dissemination of licenses in this
spectrum.
63. Discussion. In light of the Supreme Court's recent decisions,
the
[[Page 71050]]
Commission considered its statutory obligations to (1) award spectrum
licenses expeditiously and to promote the rapid deployment of new
services to the public without judicial delays, and (2) disseminate
licenses among a wide variety of applicants, including designated
entities. The designated entity bidding credits adopted for the 800 MHz
service are gender- and minority-neutral but specifically target small
businesses. Auction results indicate that many of the small businesses
participating in auctions are also women- and minority-owned, therefore
effectively furthering Congress' objective of disseminating licenses
among a wide variety of applicants.
V. Conclusion
64. The Commission believes that the revisions and clarifications
of its rules adopted in this Memorandum Opinion and Order on
Reconsideration are necessary to finalize its implementation of a new
licensing framework for SMR systems that strikes a fair and equitable
balance between the competing interests of 800 MHz SMR licensees who
seek to provide local service and those desiring to provide geographic
area service. The Commission further believes that the revisions and
clarifications of its rules will facilitate the rapid implementation of
wide-area licensing in the SMR service and advance the public interest
by fostering the economic growth of competitive new services.
VI. Procedural Matters
A. Regulatory Flexibility Act
65. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared a Supplemental Final Regulatory Flexibility
Analysis (Supplemental FRFA) of the possible impact on small entities
of the changes in its rules adopted in this Memorandum Opinion and
Order on Reconsideration. The Office of Public Affairs, Reference
Operations Division, will send a copy of the Memorandum Opinion and
Order on Reconsideration, including the Supplemental FRFA, to the Chief
Counsel for Advocacy of the Small Business Administration, in
accordance with the RFA.
B. Paperwork Reduction Act of 1995 Analysis
66. This Memorandum Opinion and Order on Reconsideration contains a
modified information collection that the Commission is submitting to
the Office of Management and Budget requesting clearance under the
Paperwork Reduction Act of 1995.
VII. Supplemental Final Regulatory Flexibility Analysis
67. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.
603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated
in the Second Further Notice of Proposed Rulemaking (Second Further
Notice) in this proceeding. The Commission sought written public
comment on the proposals in the Second Further Notice, including the
IRFA. A Final Regulatory Flexibility Analysis (FRFA) was incorporated
in Appendix D of the subsequent Second Report and Order in this
proceeding. The Commission received eight petitions for reconsideration
in response to the 800 MHz Second Report and Order. The Memorandum
Opinion and Order on Reconsideration addresses those reconsideration
petitions. This associated Supplemental Final Regulatory Flexibility
Analysis (Supplemental FRFA) reflects revised or additional information
to that contained in the FRFA. This Supplemental FRFA is thus limited
to matters raised in response to the 800 MHz Second Report and Order
and addressed in this Memorandum Opinion and Order on Reconsideration.
This Supplemental FRFA conforms to the RFA, as amended by the Contract
with America Advancement Act of 1996.
A. Need for and Purpose of this Action
68. In the 800 MHz Second Report and Order, the Commission
established a flexible regulatory scheme for the 800 MHz Specialized
Mobile Radio (SMR) service to promote efficient licensing and enhance
the service's competitive potential in the commercial mobile radio
marketplace. The rules adopted, in the 800 MHz Second Report and Order,
also implement Congress' goal of regulatory symmetry in the regulation
of competing commercial mobile radio services (CMRS) as described in
Sections 3(n) and 332 of the Communications Act of 1934, as amended, 47
U.S.C. 153(n), 332 (Communications Act), as amended by Title VI of the
Omnibus Budget Reconciliation Act of 1993. In the Second Report and
Order, the Commission also adopted rules regarding competitive bidding
for the remaining 800 MHz SMR spectrum based on Section 309(j) of the
Communications Act, 47 U.S.C. 309(j), which authorizes the Commission
to use auctions to select among mutually exclusive initial applications
in certain services, including the 800 MHz SMR service. The actions
taken in this Memorandum Opinion and Order on Reconsideration are in
response to petitions for reconsideration or clarification of the 800
MHz Second Report and Order. Throughout this proceeding, the Commission
has sought to promote Congress' goal of regulatory parity for all
commercial mobile radio services, and to encourage the participation of
a wide variety of applicants, including small businesses, in the SMR
industry. In addition, the Commission has sought to establish rules for
the SMR services that will streamline the licensing process and provide
a flexible operating environment for licensees, foster competition, and
promote the delivery of service to all areas of the country, including
rural areas.
B. Summary of Significant Issues Raised in Response to the Final
Regulatory Flexibility Analysis
69. No reconsideration petitions were submitted in response to the
FRFA. However, small business-related issues were raised indirectly by
some parties filing petitions for reconsideration of the 800 MHz Second
Report and Order. Several petitions concerned the potential impact of
some of the Commission's proposals on small entities, especially on
certain incumbent 800 MHz SMR licensees. In Section E, infra, the
Commission describes its actions taken in response to petitions that
raised small entity-related issues, as well as significant alternatives
considered.
70. In the 800 MHz Second Report and Order, the Commission adopted
geographic area licensing for the lower 230 800 MHz SMR channels in
order to facilitate the evolution of larger 800 MHz SMR systems
covering wider areas and offering commercial services to rival other
wireless telephony services. Some petitioners that were not SMR
licensees opposed this plan arguing that it was unsuitable to the needs
of smaller, private systems, which do not seek to cover large
geographic areas in the manner of commercial service providers.
71. In the 800 MHz Second Report and Order, the Commission adopted
a portion of a proposal set forth by a number of incumbent 800 MHz SMR
licensees (``Industry Proposal'') and allotted three contiguous 50-
channel blocks from the former General Category block of channels. Some
petitioners argued that auctioning such large contiguous blocks would
not suit the needs of smaller SMR and non-SMR systems, which typically
trunk smaller numbers of non-contiguous channels. These petitioners
argued that large blocks of contiguous channels could be
[[Page 71051]]
prohibitively expensive to bid for at auction, thereby limiting the
opportunities for smaller operators to take advantage of geographic
area licensing. One petitioner argued that the 150 General Category
Channels should be auctioned on a single-channel basis.
72. In the 800 MHz Second Report and Order, the Commission adopted
construction requirements for the lower 230 channels requiring EA
licensees to provide coverage to one-third of the population within
three years of initial license grant and to two-thirds of the
population within five years of license grant. However, as an
alternative to meeting applicable construction requirements, the
Commission allowed EA licensees in the lower 230 channels to provide
``substantial service'' to their geographic license area within five
years of license grant. The Commission found that more flexible
construction requirements enhance rapid deployment of new technologies
and services and will expedite service to rural areas. The Commission
stated that a licensee could satisfy the substantial service
requirement by demonstrating that it is providing a technologically
innovative service or that it is providing service to unserved or
underserved areas. Two petitioners argued that the Commission should
eliminate the substantial service test and impose specific channel
usage requirements.
73. In the 800 MHz Second Report and Order, the Commission
concluded that competitive bidding is an appropriate licensing
mechanism for the Lower 80 channels and the General Category channels.
Several petitioners request that the Commission use procedures other
than competitive bidding to license the 800 MHz SMR service. In
essence, petitioners contend that this band does not fit within the
Congressional criteria for auctions because the General Category and
lower 80 channels of the 800 MHz SMR band do not meet the original
statutory criteria governing auctionability contained in Section 309(j)
of the Communications Act, or the criteria as amended by the enactment
of the Balanced Budget Act of 1997. Several petitioners contend that
Section 309(j)(6)(E) of the Communications Act prohibits the Commission
from conducting an auction unless it first attempts alternative
licensing mechanisms to avoid mutual exclusivity.
74. Several petitioners contend that the Commission should limit
participation in the 800 MHz SMR auction to SMR and/or non-SMR
incumbents. PCIA, for example, believes that the Commission should
limit eligibility for geographic area licenses to those incumbent
licensees who provide coverage to 70 percent of their market areas. It
further argues that the rules adopted in the 800 MHz Second Report and
Order will encourage the filing of applications for anti-competitive or
speculative purposes, which may result in high license costs and
degradation of service to the public.
75. Two petitioners contended that the Commission should retain
installment payments for the lower 80 and General Category 800 MHz SMR
licenses on the grounds that installment payments are the most
significant option for the provision of meaningful small business
participation in the spectrum auctions as they allow SMR operators to
pay for the license out of the profits generated through the provision
of SMR service. In the Part 1 Third Report and Order, released in
December of 1997, the Commission subsequently determined that
installment payments should not be used in the immediate future as a
means of financing small-business participation in the auction program.
76. Finally, one petitioner argued that, in addition to small
business provisions, separate bidding credit provisions for women- and
minority-owned entities should be adopted for the lower 80 and General
Category channels.
C. Description and Number of Small Entities to Which the Rules Will
Apply
77. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the Commission's rules. The RFA generally defines the term
``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA). A small organization is generally ``any not-for-
profit enterprise which is independently owned and operated and is not
dominant in its field.'' Nationwide, as of 1992, there were
approximately 275,801 small organizations. ``Small governmental
jurisdiction'' generally means ``governments of cities, counties,
towns, townships, villages, school districts, or special districts,
with a population of less than 50,000.'' As of 1992, there were
approximately 85,006 such jurisdictions in the United States. This
number includes 38,978 counties, cities, and towns; of these, 37,566,
or 96 percent, have populations of fewer than 50,000. The Census Bureau
estimates that this ratio is approximately accurate for all
governmental entities. Thus, of the 85,006 governmental entities, the
Commission estimate that 81,600 (91 percent) are small entities.
78. The rules adopted in the Memorandum Opinion and Order on
Reconsideration will affect all small entities that hold or seek to
acquire 800 MHz SMR licenses. Under these rules, Economic Area (EA)
licenses will be granted on a market area basis, instead of site-by-
site and mutually exclusive applications will be resolved through
competitive bidding procedures. As noted, a FRFA was incorporated into
the 800 MHz Second Report and Order. In that analysis, the Commission
described the small entities that might be significantly affected at
that time by the rules adopted in the 800 MHz Second Report and Order.
Those entities include existing, 800 MHz SMR operators and new entrants
into the 800 MHz SMR market. To ensure the more meaningful
participation of small business entities in the auction for geographic
area 800 MHz SMR licenses, the Commission, adopted a two-tiered
definition of small businesses in the 800 MHz Second Report and Order.
A very small business will be defined as an entity that, together with
its affiliates and controlling principals, has average gross revenues
for the three preceding years of not more than $3 million. A small
business will be defined as an entity that, together with affiliates
and controlling principals, has average gross revenues for the three
preceding years of not more than $15 million. The Small Business
Administration (SBA) has approved these definitions for the lower 80
SMR channels and General Category channels.
79. Based on the revised channelization plan adopted in the
Memorandum Opinion and Order on Reconsideration, the Commission
anticipates that a total of 3,850 EA licenses will be auctioned in the
lower 230 channels of the 800 MHz SMR service. This figured is derived
by multiplying the total number of EAs (175) by the number of channel
blocks (22) in the lower 230 channels. No party submitting or
commenting on the petitions for reconsideration giving rise to this
Memorandum Opinion and Order on Reconsideration commented on the
potential number of small entities that might participate in the
auction of the lower 230 channels and no reasonable estimate can be
made.
[[Page 71052]]
80. The Commission does not know how many 800 MHz SMR service
providers have annual revenues of no more than $15 million. One firm
has over $15 million in revenues. In the auction of the upper 200
channels of the 800 MHz SMR service, there were 524 licenses won by
winning bidders, of which 38 licenses were won by small or very small
businesses. There is no basis to determine, of the 3,850 geographic
area licenses to be auctioned in the lower 230 channels, the number of
licenses that will be awarded to small or very small businesses.
D. Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements
81. With one exception, this Memorandum Opinion and Order on
Reconsideration does not impose any additional recordkeeping or other
compliance requirements beyond the requirements contained in the 800
MHz Second Report and Order. Incumbent licensees seeking to utilize an
18 dB signal strength interference contour and that are
unsuccessful in obtaining the consent of affected co-channel
incumbents, may submit to any certified frequency coordinator an
engineering study showing that interference will not occur, together
with proof that the incumbent licensee has sought consent.
E. Steps Taken to Minimize Any Significant Economic Burdens on Small
Entities, and Significant Alternatives Considered
82. In awarding geographic area 800 MHz licenses in the lower 230
channels, the Commission is committed to meeting the statutory
objectives of promoting economic opportunity and competition, of
avoiding excessive concentration of licenses, and of ensuring access to
new and innovative technologies 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. In order to ensure the more meaningful participation of small
business entities in the 800 MHz auctions, the Commission has adopted a
two-tier definition of small businesses. This approach will give
qualifying small businesses bidding flexibility. Small businesses will
receive a 25 percent bidding credit and very small businesses will
receive a 35 percent bidding credit.
83. A number of petitioners requested that the Commission
reconsider its decision to license the 150 General Category channels in
three contiguous 50-channel blocks. These petitioners generally
supported the licensing of smaller channel blocks as a means of
enabling small businesses and new entrants to acquire spectrum in the
800 MHz SMR service. Recognizing these concerns, the Commission has
determined that the General Category channels will be licensed in six
contiguous 25-channel blocks, rather than three contiguous 50-channel
blocks. A significant portion of incumbent licensees on the General
Category frequencies are small businesses and are licensed for only a
few channels in the band. Auctioning licenses for General Category
Channels in smaller channel blocks will provide these small business
incumbents with greater opportunities to take advantage of geographic
area licensing. In addition, it will encourage new entrant
participation in the provision of 800 MHz services. Changing the block
size from 50 channels to 25 channels will provide small entities with
the opportunity to acquire smaller amounts of spectrum consistent with
their financial means and technological needs. By further facilitating
small business and new entrant participation in the provision of 800
MHz services, this channel plan fulfills the Commission's statutory
mandate of promoting economic opportunity for a wide variety of
applicants and avoiding an excessive concentration of licenses. At the
same time, licensing in 25-channel blocks will allow entities desiring
large contiguous blocks of spectrum to pursue such spectrum in the
General Category.
84. In concluding that licensing the General Category channels in
blocks of 25 strikes a better balance between the competing needs of
different licensees, the Commission also rejected one petitioner's
proposal to license channels on an individual basis. The Commission
does not believe the public interest would be served by licensing on a
channel-by-channel basis, because this method of licensing would be
administratively burdensome given the large number of channels
involved. Single channel licensing would also be inconsistent with the
needs of applicants that require blocks of contiguous spectrum and
would not foster the kind of technological advancements that would
allow SMR licensees, which typically operate multichannel systems, to
compete with other CMRS licensees.
85. In the 800 MHZ Second Report and Order, the Commission adopted
construction requirements for the lower 230 channels that required EA
licensees to provide coverage to one-third of the population within
three years of initial license grant and to two-thirds of the
population within five years of license grant. However, as an
alternative to those construction requirements, the Commission stated
that EA licensees in the lower 230 channels could provide ``substantial
service'' to their geographic license area within five years of license
grant. One petitioner asked the Commission to eliminate the substantial
service test and require that construction standards be met on a ``per
channel'' basis. The Commission has rejected the petitioner's request
because the Commission believes that maintaining the substantial
service option as an alternative to meeting applicable construction
requirements will facilitate build-out in rural areas, encourage
licensees to provide new service, and enable new entrants to satisfy
the Commission's coverage requirements in geographic areas where
incumbents are already substantially built out. The Commission believes
that rural service providers as well as new entrants are likely to
include small businesses, and thus retaining the ``substantial
service'' option should benefit small businesses. Giving licensees
flexibility to satisfy the ``substantial service'' option in different
ways should benefit small businesses.
86. In the Second Report and Order, the Commission concluded that
incumbent licensees may add or modify sites within their existing 22
dB interference contours without prior Commission approval,
and may use their 18 dB interference contour as the basis for
modifying or expanding their systems provided that they obtain the
consent of all co-channel incumbents potentially affected by the use of
this standard. Three petitioners suggested that the Commission clarify
that an incumbent licensee on the lower 230 channels seeking to modify
its system using its 18 dB interference contour may, in the
absence of consent from affected incumbents, provide a statement from a
certified frequency advisory committee that a modification will not
cause interference to adjacent licensees. In response to this request
the Commission clarified that incumbent licensees seeking to utilize an
18 dB signal strength interference contour and that are
unsuccessful in obtaining the consent of affected co-channel
incumbents, may submit to any certified frequency coordinator an
engineering study showing that interference will not occur together
with proof that the incumbent licensee has sought consent. Adopting
this alternative will provide a balance between incumbent licensee
flexibility and incumbent licensee
[[Page 71053]]
protection, including small business incumbent licensees. This
alternative reduces unnecessary regulatory burdens on licensees and
administrative costs on the industry, and thereby benefits consumers.
87. Two petitioners contended that incumbents' geographic licenses
should include areas where an incumbent's interference contours do not
overlap, but where no other licensee could place a transmitter because
of the Commission's interference rules. The Commission considered and
rejected this proposal, finding that inclusion of areas outside of an
incumbent's interference contours would be contrary to its objective of
prohibiting encroachment on the geographic area licensee's operations.
Incumbents seeking to expand their contours, including small businesses
may participate in the auction of geographic area licenses or seek
partitioning agreements with geographic area licensees.
88. A number of petitioners have requested that the Commission
reconsider its decision to grant mutually exclusive applications for
geographic area licenses in the lower 230 channels through competitive
bidding. Balancing various interests, the Commission has affirmed the
use of competitive bidding to grant mutually exclusive 800 MHz SMR
licenses. The Commission also reaffirms its conclusion in the 800 MHz
Second Report and Order that mutually exclusive applications for the
lower 230 channels are auctionable under the Commission's auction
authority, as amended by the Balanced Budget Act of 1997. Under the
Commission's rules, incumbent licensees and potential new providers of
this service, including small businesses, will be able to participate
in the auction process because the Commission has decided not to
restrict eligibility for EA licenses.
89. Some petitioners contend that the administrative procedures
associated with assigning geographic area licenses through auctions are
not as efficient as site-specific licensing. The Commission disagrees
with those petitioners and reiterates the advantages to both the
Commission and licensees of geographic area licensing. The Commission
again emphasizes that geographic area licensing offers a flexible,
licensing scheme that eliminates the need for many of the complicated
and burdensome licensing procedures that hampered SMR development in
the past. Small businesses will be among those licensees that will
benefit from the advantages of a flexible and less burdensome licensing
scheme.
90. Several petitioners asked the Commission to limit participation
in the 800 MHz SMR auction to SMR and/or non-SMR incumbents. The
Commission specifically considered and rejected a proposal to limit
eligibility for geographic area licenses to incumbents providing
coverage to 70 percent or more of their market areas. In rejecting
these proposals, the Commission concluded that market forces, not
regulation, should determine participation in competitive bidding for
geographic area licenses. The Commission concluded that the competitive
bidding process will adequately deter speculation and that open
eligibility will foster competition and result in a diverse group of
800 MHz SMR providers, including small businesses.
91. In the 800 MHz Second Report and Order, the Commission stated
that to expedite the auctioning of EA licenses for the lower 230
channels, the Commission would auction these licenses using the five
regional groups that were used for the regional narrowband Personal
Communications Services (PCS) auction. On reconsideration, the
Commission clarifies the method by which the Commission will group
licenses for auction. While the Commission continues to believe that
licenses should be grouped for competitive bidding purposes in a manner
that will reduce the administrative burden on auction participants,
particularly small businesses, the Commission will not use the five
regional groups based on Basic Trading Areas that were used in the
regional narrowband PCS auction. Instead, the Commission direct the
Bureau to seek comment on license groupings and determine, pursuant to
its delegated authority, what groups, if any, should be established for
auctioning the lower 80 and General Category EA licenses.
92. The Commission declined to reconsider its decision in the Part
1 Third Report and Order to suspend the availability of installment
payment financing for small businesses participating in the auction of
the lower 230 channels of the 800 MHz SMR service. To balance the
impact of this decision on small businesses, in the 800 MHz Second
Report and Order, the Commission established larger bidding credits for
qualifying entities. The Commission believes that the larger bidding
credit will provide small businesses with adequate opportunities to
participate in the 800 MHz SMR auction.
93. The Commission has also rejected one petitioner's contention
that the Commission is required to incorporate gender- and minority-
based provisions into its competitive bidding procedures. Recent U.S.
Supreme Court decisions has created legal uncertainty on whether
special auction provisions for minorities and women could withstand a
constitutional challenge. The designated entity bidding credits adopted
for the 800 MHz service are gender- and minority-neutral but
specifically target small businesses. Auction results indicate that
many of the small businesses participating in auctions are also women-
and minority-owned, therefore effectively furthering Congress'
objective of disseminating licenses among a wide variety of applicants.
F. Report to Congress
94. The Commission will send a copy of this Memorandum Opinion and
Order on Reconsideration, including this Supplemental FRFA, in a report
to Congress pursuant to the Small Business Regulatory Enforcement
Fairness Act of 1996. In addition, the Commission will send a copy of
the Memorandum Opinion and Order on Reconsideration, including this
Supplemental FRFA, to the Chief Counsel for Advocacy of the Small
Business Administration.
VIII. Ordering Clauses
95. Authority for issuance of this Memorandum Opinion and Order on
Reconsideration 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),
309(j).
96. Accordingly, it is ordered that the petitions for
reconsideration or clarification filed by the parties listed in the
attachment are granted in part to the extent provided herein, and
otherwise are denied.
97. It is furthered ordered that the Commission's rules, are
amended. It is further ordered that the provisions of this Memorandum
Opinion and Order on Reconsideration and the Commission's rules, as
amended in the rule changes, shall become effective February 18, 2000.
98. It is furthered ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
Memorandum Opinion and Order on Reconsideration, including the
Supplemental Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Part 90
Administrative practice and procedure, Business and industry,
[[Page 71054]]
Common carriers, Communications equipment, Radio.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
Part 90 of Chapter 1 of Title 47 of the Code of Federal Regulations
is amended as follows:
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
1. The authority citation for part 90 continues to read as follows:
Authority: Secs. 4, 251-2, 303, 309, and 332, 48 Stat. 1066,
1082, as amended; 47 U.S.C. 154, 251-2, 303, 309 and 332, unless
otherwise noted.
2. Section 90.615 is revised to read as follows:
Sec. 90.615 Spectrum blocks available in the General Category for 800
MHz SMR General Category.
Table 1.--806-821/851-866 MHz Band Channels (150 Channels)
------------------------------------------------------------------------
Spectrum block Channel Nos.
------------------------------------------------------------------------
D......................................... 1 through 25
D1........................................ 26 through 50
E......................................... 51 through 75
E1........................................ 76 through 100
F......................................... 101 through 125
F1........................................ 126 through 150
------------------------------------------------------------------------
3. Section 90.619 is amended by revising the ``General Category (12
Channels)'' entries in Table 4A in paragraph (a)(5), Table 12 in
paragraph (b)(8), the ``General Category (5 Channels)'' entries in
Table 16 in paragraph (b)(9), Table 20 in paragraph (b)(10), and the
``General Category (18 Channels)'' entries in Table 24 in paragraph
(b)(11) to read as follows:
Sec. 90.619 Frequencies available for use in the U.S./Mexico and U.S/
Canada border areas.
(a) * * *
(5) * * *
Table 4A.--United States-Mexico Border Area, SMR and General Categories
806-821/851-866 MHz Band (95 Channels)
[EA-Based SMR Category (83 Channels)]
* * * * *
------------------------------------------------------------------------
Spectrum Block Channel Nos.
------------------------------------------------------------------------
General Category (12 Channels)
------------------------------------------------------------------------
D......................................... 275-315
D1........................................ 355-395
E......................................... 276-316
E1........................................ 356-396
F......................................... 277-317
F1........................................ 357-397
------------------------------------------------------------------------
(b) * * *
(8) * * *
Table 12.--SMR and General Categories--95 Channels
[Regions 1, 4, 5, 6]
------------------------------------------------------------------------
Spectrum block Channel Nos.
------------------------------------------------------------------------
EA-Based SMR Category (90 Channels)
------------------------------------------------------------------------
A......................................... None
B......................................... 463 through 480
C......................................... 493 through 510, 523 through
540, 553 through 570, 583
through 600
G through V............................... None
------------------------------------------------------------------------
General Category (5 Channels)
------------------------------------------------------------------------
D......................................... None
D1........................................ 30
E......................................... 60
E1........................................ 90
F......................................... 120
F1........................................ 150
------------------------------------------------------------------------
(9) * * *
Table 16.--SMR and General Categories--60 Channels
[Region 2]
* * * * *
------------------------------------------------------------------------
Spectrum Block Channel Nos.
------------------------------------------------------------------------
General Category (5 Channels)
------------------------------------------------------------------------
D......................................... 18
D1........................................ 36
E......................................... 54-72
E1........................................ 90
F......................................... None
F1........................................ None
------------------------------------------------------------------------
(10) * * *
Table 20.--SMR and General Categories (135 Channels)
[Region 3]
------------------------------------------------------------------------
Spectrum Block Channel Nos.
------------------------------------------------------------------------
SMR Category (120 Channels)
------------------------------------------------------------------------
A......................................... 417 through 420
B......................................... 421 through 440, 457 through
480
C......................................... 497 through 520, 537 through
560, 577 through 600
G through V............................... None
------------------------------------------------------------------------
General Category (15 Channels)
------------------------------------------------------------------------
D......................................... 38-39-40
D1........................................ 158-159
E......................................... 78-79-80
E1........................................ 160-198
F......................................... 118-119-120
F1........................................ 199-200
------------------------------------------------------------------------
(11) * * *
Table 24.--(Regions 7,8) SMR and General Categories--190 Channels
* * * * *
------------------------------------------------------------------------
Spectrum Block Channel Nos.
------------------------------------------------------------------------
General Category (18 Channels)
------------------------------------------------------------------------
D......................................... 35 through 37
D1........................................ 38 through 40
E......................................... 75 through 77
E1........................................ 78 through 80
F......................................... 115 through 117
F1........................................ 118 through 120
------------------------------------------------------------------------
* * * * * *
4. Section 90.621 is amended by revising paragraphs (b)
introductory text, (b)(1) and (b)(3) introductory text to read as
follows:
Sec. 90.621 Selection and assignment of frequencies.
* * * * *
(b) Stations authorized on frequencies listed in this Subpart,
except for those stations authorized pursuant to paragraph (g) of this
section and EA-based and MTA-based SMR systems, will be afforded
protection solely on the basis of fixed distance separation criteria.
For Channel Blocks A, through V, as set forth in Sec. 90.917(d), the
separation between co-channel systems will be a minimum of 113 km (70
mi) with one exception. For incumbent licensees in Channel Blocks D
through V, that have received the consent of all affected parties or a
certified frequency coordinator to utilize an 18 dBV/m signal
strength interference contour (see Sec. 90.693), the separation between
co-channel systems will be a minimum of 173 km (107 mi). The following
exceptions to these separations shall apply:
(1) Except as indicated in paragraph (b)(4) of this section, no
station in Channel Blocks A through V shall be less than 169 km (105
mi) distant from a co-channel station that has been
[[Page 71055]]
granted channel exclusivity and authorized 1 kW ERP on any of the
following mountaintop sites: Santiago Peak, Sierra Peak, Mount Lukens,
Mount Wilson (California). Except as indicated in paragraph (b)(4) of
this section, no incumbent licensee in Channel Blocks D through V that
has received the consent of all affected parties or a certified
frequency coordinator to utilize an 18 dBV/m signal strength
interference contour shall be less than 229 km (142 mi) distant from a
co-channel station that has been granted channel exclusivity and
authorized 1 kW ERP on any of the following mountaintop sites: Santiago
Peak, Sierra Peak, Mount Lukens, Mount Wilson (California).
* * * * *
(3) Except as indicated in paragraph (b)(4) of this section,
stations in Channel Blocks A through V that have been granted channel
exclusivity and are located in the State of Washington at the locations
listed below shall be separated from co-channel stations by a minimum
of 169 km (105 mi). Except as indicated in paragraph (b)(4) of this
section, incumbent licensees in Channel Blocks D through V that have
received the consent of all affected parties or a certified frequency
coordinator to utilize an 18 dBV/m signal strength
interference contour, have been granted channel exclusivity and are
located in the State of Washington at the locations listed below shall
be separated from co-channel stations by a minimum of 229 km (142 mi).
Locations within one mile of the geographical coordinates listed in the
table below will be considered to be at that site.
* * * * *
5. Section 90.693 is revised to read as follows:
Sec. 90.693 Grandfathering provisions for incumbent licensees.
(a) General provisions. These provisions apply to ``incumbent
licensees'', all 800 MHz licensees authorized in the 806-821/851-866
MHz band who obtained licenses or filed applications on or before
December 15, 1995.
(b) Spectrum blocks A through V. An incumbent licensee's service
area shall be defined by its originally licensed 40 dBV/m
field strength contour and its interference contour shall be defined as
its originally-licensed 22 dBV/m field strength contour. The
``originally-licensed'' contour shall be calculated using the maximum
ERP and the actual height of the antenna above average terrain (HAAT)
along each radial. Incumbent licensees are permitted to add, remove or
modify transmitter sites within their original 22 dBV/m field
strength contour without prior notification to the Commission so long
as their original 22 dBV/m field strength contour is not
expanded and the station complies with the Commission's short-spacing
criteria in Secs. 90.621(b)(4) through 90.621(b)(6). Incumbent licensee
protection extends only to its 40 dBV/m signal strength
contour. Pursuant to the minor modification notification procedure set
forth in 1.947(b), the incumbent licensee must notify the Commission
within 30 days of any changes in technical parameters or additional
stations constructed that fall within the short-spacing criteria. See
47 CFR 90.621(b).
(c) Special provisions for spectrum blocks D through V. Incumbent
licensees that have received the consent of all affected parties or a
certified frequency coordinator to utilize an 18 dBV/m signal
strength interference contour shall have their service area defined by
their originally-licensed 36 dBV/m field strength contour and
their interference contour shall be defined as their originally-
licensed 18 dBV/m field strength contour. The ``originally-
licensed'' contour shall be calculated using the maximum ERP and the
actual HAAT along each radial. Incumbent licensees seeking to utilize
an 18 dBV/m signal strength interference contour shall first
seek to obtain the consent of affected co-channel incumbents. When the
consent of a co-channel licensee is withheld, an incumbent licensee may
submit to any certified frequency coordinator an engineering study
showing that interference will not occur, together with proof that the
incumbent licensee has sought consent. Incumbent licensees are
permitted to add, remove or modify transmitter sites within their
original 18 dBV/m field strength contour without prior
notification to the Commission so long as their original 18
dBV/m field strength contour is not expanded and the station
complies with the Commission's short-spacing criteria in
Secs. 90.621(b)(4) through 90.621(b)(6). Incumbent licensee protection
extends only to its 36 dBV/m signal strength contour. Pursuant
to the minor modification notification procedure set forth in 1.947(b),
the incumbent licensee must notify the Commission within 30 days of any
changes in technical parameters or additional stations constructed that
fall within the short-spacing criteria. See 47 CFR 90.621(b).
(d) Consolidated license--(1) Spectrum blocks A through V.
Incumbent licensees operating at multiple sites may, after grant of EA
licenses has been completed, exchange multiple site licenses for a
single license, authorizing operations throughout the contiguous and
overlapping 40 dBV/m field strength contours of the multiple
sites. Incumbents exercising this license exchange option must submit
specific information on Form 601 for each of their external base sites
after the close of the 800 MHz SMR auction. The incumbent's geographic
license area is defined by the contiguous and overlapping 22
dBV/m contours of its constructed and operational external
base stations and interior sites that are constructed within the
construction period applicable to the incumbent. Once the geographic
license is issued, facilities that are added within an incumbent's
existing footprint and that are not subject to prior approval by the
Commission will not be subject to construction requirements.
(2) Special Provisions for Spectrum Blocks D through V. Incumbent
licensees that have received the consent of all affected parties or a
certified frequency coordinator to utilize an 18 dBV/m signal
strength interference contour operating at multiple sites may, after
grant of EA licenses has been completed, exchange multiple site
licenses for a single license. This single site license will authorize
operations throughout the contiguous and overlapping 36 dBV/m
field strength contours of the multiple sites. Incumbents exercising
this license exchange option must submit specific information on Form
601 for each of their external base sites after the close of the 800
SMR auction. The incumbent's geographic license area is defined by the
contiguous and overlapping 18 dBV/m contours of its
constructed and operational external base stations and interior sites
that are constructed within the construction period applicable to the
incumbent. Once the geographic license is issued, facilities that are
added within an incumbent's existing footprint and that are not subject
to prior approval by the Commission will not be subject to construction
requirements.
6. Section 90.903 is amended by revising paragraph (b)(1) to read
as follows:
Sec. 90.903 Competitive bidding mechanisms.
* * * * *
(b) Grouping. (1) All EA licenses for Spectrum Blocks A through V
will be auctioned simultaneously, unless the Wireless
Telecommunications Bureau announces, by Public Notice prior to the
[[Page 71056]]
auction, an alternative method of grouping these licenses for auction.
* * * * *
[FR Doc. 99-32841 Filed 12-17-99; 8:45 am]
BILLING CODE 6712-01-P