[Federal Register Volume 65, Number 32 (Wednesday, February 16, 2000)]
[Rules and Regulations]
[Pages 7749-7753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3784]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 90

[PR Docket No. 93-144; FCC 99-399]


Rules to Facilitate Future Development of SMR Systems in the 800 
MHz Frequency Band

AGENCY: Federal Communications Commission.

ACTION: Final rule: deadline requirement.

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SUMMARY: In this document, the Commission addresses the construction 
requirements imposed on incumbent licensees in the 800 MHz Specialized 
Mobile Radio (SMR) service that have received authorizations to 
construct wide-area systems. This action is taken pursuant to the order 
issued by the United States Court of Appeals for the District of 
Columbia Circuit in Fresno Mobile Radio, Inc., et al. v. Federal 
Communications Commission (Fresno), 165 F.3d 965 (D.C. Cir. 1999). The 
court remanded for further consideration the Commission's prior 
decision maintaining the requirement that incumbent wide-area 
Specialized Mobile Radio (SMR) licensees, licensees who had received 
``extended implementation'' authorizations, must construct and operate 
all sites and all frequencies by the construction deadline. Upon 
further reconsideration, the Commission will allow incumbent wide-area 
800 MHz SMR licensees who were within their construction periods at the 
time Fresno was decided to satisfy construction requirements similar to 
those given to Economic Area licensees in the 800 MHz band.

DATES: Effective February 16, 2000. Written comments by the public on 
the modified information collections are due March 17, 2000. Written 
comments must be submitted by OMB on the information collections on or 
before April 17, 2000.

FOR FURTHER INFORMATION CONTACT: William Kunze, Wireless 
Telecommunications Bureau, at (202) 418-0620; for additional 
information concerning the information collections contained in this 
document contact Judy Boley at (202) 418-0214, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This Memorandum Opinion & Order on Remand 
(MO&O on Remand) in PR Docket No. 93-144, adopted December 17, 1999, 
and released December 23, 1999, is available for inspection and copying 
during normal business hours in the FCC Reference Center, 445 Twelfth 
Street, SW, Washington DC. The complete text may be purchased from the 
Commission's copy contractor, International Transcription Service, 
Inc., 1231 20th Street, NW, Washington DC 20036 (202) 857-3800. The 
document is also available via the internet at http://www.fcc.gov/Bureaus/Wireless/Orders/1999/index2.html.

Synopsis of Memorandum Opinion and Order on Remand

I. Introduction

    This action is taken pursuant to the order issued by the United 
States Court of Appeals for the District of Columbia Circuit in Fresno 
Mobile Radio, Inc., et al. v. Federal Communications Commission 
(Fresno), 165 F.3d 965 (D.C. Cir. 1999). Upon further reconsideration, 
the Commission will allow incumbent wide-area licensees who were within 
their construction periods at the time Fresno was decided to satisfy 
construction requirements similar to those given to Economic Area 
licensees in the 800 MHz band. Incumbent wide-area licensees must file 
certifications of construction within fifteen (15) days after the 
licensee's applicable construction deadline or April 17, 2000, 
whichever is later.

II. Summary of the Remand Order

A. Background

    Prior to December 1995, when the Commission amended its 800 MHz SMR 
rules to provide for geographic area licensing, 800 MHz SMR licenses 
were awarded on a site-by-site, channel-by-channel basis. If an SMR 
licensee failed to construct and begin operation on all

[[Page 7750]]

authorized frequencies at a particular site, the unconstructed 
frequencies would automatically cancel. In 1991, the Commission began 
granting some SMR licensees extended implementation (EI) authority to 
construct their systems, whereby the licensee would have up to five 
years to construct all of the facilities within the wide-area 
``footprint'' established by its licenses. At the end of the EI period, 
any frequency licensed at a specific site within the footprint that was 
not fully constructed and in operation would cancel automatically.
    In December 1995, in the 800 MHz Order, 61 FR 6212 (Feb. 16, 1996) 
the Commission adopted a new wide-area licensing scheme by creating 
geographic-based licenses (Economic Area, or EA, licenses) for the 
upper 200 channels of the 800 MHz SMR band. As part of the new 
licensing scheme, the Commission adopted construction and coverage 
requirements for EA licensees similar to those required of broadband 
PCS and 900 MHz SMR licensees. In addition to creating rules for the 
new EA licensees, the Commission also concluded that continuation of 
the prior site-based extended implementation licensing process would be 
contrary to the new wide-area licensing plan.
    The Commission decided to stop accepting new applications for 
extended implementation authority and dismissed all pending 
applications. The Commission also required licensees who had previously 
obtained EI authorizations to rejustify their authorizations by 
demonstrating that continuing to maintain their extended time to 
construct their facilities was warranted and in the public interest. If 
a wide-area licensee's rejustification of EI authority was found 
sufficient, the Commission would give the licensee two years from the 
decision to construct and begin operation, or maintain its original 
construction deadline, whichever was earlier. If the rejustification 
was not approved, the licensee's EI authorization would be terminated, 
and the licensee would be given six months from the termination date to 
complete construction of its site-based facilities. In May and November 
1997, the Wireless Telecommunications Bureau (Bureau) acted on the 
rejustification submissions filed by thirty-seven wide-area licensees. 
Of the thirty-seven submissions, the Bureau approved thirty-one, 
including the rejustification submission of Southern Company, one of 
the petitioners in Fresno. The Bureau rejected the remaining six 
rejustification submissions because these licensees had not constructed 
any facilities during the period of extended implementation.
    In the 800 MHz Reconsideration Order, 62 FR 41190 (July 31, 1997), 
the Commission also affirmed its decision that rejustified EI licensees 
would receive a maximum of two years to complete construction of their 
facilities. Any site-specific license within a licensee's wide-area 
``footprint'' that was not constructed by the two-year deadline would 
be automatically cancelled, with the unconstructed frequencies 
reverting to the EA licensee. The Commission rejected the claim made by 
Southern that the two-year construction requirement for site-based EI 
licensees, which required full construction of all facilities, was 
unfairly discriminatory in comparison to the five-year build-out period 
for EA licensees, which required only partial coverage of the EA 
licensing area.
    On September 26, 1997, Southern petitioned the United States Court 
of Appeals for the District of Columbia for review of the Commission's 
decision in the 800 MHz Reconsideration Order not to give incumbent 
wide-area SMR licensees the same construction requirements given to EA 
licensees. On February 5, 1999, the United States Court of Appeals for 
the District of Columbia held that the Commission had not adequately 
explained why incumbent wide-area SMR licensees were not allowed to 
apply the same coverage requirements as EA licensees, cellular 
licensees, or PCS licensees, given that they are substantially similar 
CMRS providers. The court rejected the Commission's argument that EA 
licensees who must pay for their licenses at auction have a greater 
incentive to construct than incumbent licensees who acquired their 
licenses for free, like the EI licensees. The court found the 
Commission had not fully considered whether incumbent wide-area 
licensees are sufficiently different from 800 MHz EA licensees, 
cellular licensees and PCS licensees to justify the different 
requirements, and therefore, remanded the matter to the Commission to 
reconsider the issue. In the interim, the court ordered that Southern 
Company should not be denied the benefit of the more liberal 
construction requirements applicable to EA licensees.
    In light of the Fresno decision, the Bureau temporarily suspended 
the construction timetable for incumbent 800 MHz licensees whose EI 
rejustifications were approved by the Bureau in 1997. The Bureau then 
sought comment on whether the Commission should retain existing EI 
construction requirements, adopt new construction requirements for EI 
licensees that would be comparable to EA licensees' requirements, or 
consider some other alternative.
    None of the comments received in response to the Bureau's Public 
Notice support the Commission's decision in the 800 MHz Reconsideration 
Order to maintain the existing construction requirements for incumbent 
wide-area SMR licensees (i.e., requiring build-out of all authorized 
sites on all frequencies).

B. Discussion

    The Commission concludes that SMR licensees granted extended 
implementation authority are sufficiently similar to EA licensees that 
they should have similar flexibility with respect to construction 
requirements. The record on remand demonstrates that incumbent wide-
area SMR licensees such as Southern do provide service that is similar, 
if not identical, to that provided by EA licensees and other CMRS 
providers. Recognizing that these licensees may have constructed their 
systems in accordance with the requirements in place at the time (i.e., 
site-by-site, frequency-by-frequency), we will give eligible wide-area 
SMR licensees the option of complying with the terms of their EI 
authorizations or applying the EA construction requirements to their 
wide-area systems. We believe that giving incumbent wide-area SMR 
licensees the choice between applying the site- and frequency-specific 
requirements and the EA coverage requirements establishes reasonable 
parity between incumbent wide-area SMR licensees and EA licensees.
    Construction Period. When an eligible wide-area licensee elects to 
apply the EA construction requirements to its system, the five-year 
construction period shall begin from the grant date of its extended 
implementation authority (``EI grant'') because that date is most 
analogous to the initial grant date of an EA license. Because the 
current EI incumbents have already had several years to build out their 
systems, we believe that adding five more years to their build-out 
periods on a cumulative basis would give incumbent wide-area SMR 
licensees an inequitable advantage over EA licensees. Moreover, 
eligible EI licensees will not be harmed by having the five years run 
from the date of EI grant because this alternative is still more 
flexible than the rules they have been operating under, which required 
them to construct all sites on all frequencies. Under the more flexible 
EA requirements, an eligible EI licensee will now be able to leave 
certain sites

[[Page 7751]]

and frequencies unconstructed for potential future use. Finally, 
starting the EA construction period from the grant of EI authority 
provides a degree of certainty for EA licensees in the upper 200 
channels that will soon be coming on their own three-year benchmark 
(which must be met regardless of the level of incumbency) and for 
bidders in the future auction of EA licenses in the lower 230 channels. 
Therefore, we will start the construction period for those eligible 
licensees who choose the EA construction requirements from the date of 
EI grant.
    We will not require EI licensees to meet the interim three-year 
coverage requirement. Therefore, an eligible wide-area SMR licensee in 
the upper 200 channels, which elects to apply the EA construction 
requirements must have constructed and placed into operation a 
sufficient number of base stations to provide coverage to at least two-
thirds of the population of its wide-area system within five years of 
EI grant plus the tolling period described below. A wide-area licensee 
exercising this option must demonstrate that it has constructed fifty 
percent of its total authorized upper 200 channels within its wide-area 
system. An incumbent wide-area licensee that is authorized for 
frequencies in the lower 230 channels and chooses the EA requirements 
may elect to demonstrate that it is providing substantial service 
within five years of EI grant, in lieu of the specific population 
coverage requirements, for those frequencies.
    Effect of Tolling on Construction Deadline. By this MO&O on Remand, 
we hereby terminate the temporary suspension of the construction 
timetable for incumbent wide-area 800 MHz SMR licensees that was 
instituted by the Bureau's Public Notice. For all licensees entitled to 
relief under this decision, we will add 321 days to their construction 
periods, representing the amount of time between the Fresno decision 
and the release of this order. Therefore, the applicable construction 
deadline for any eligible incumbent wide-area SMR licensee that elects 
to apply the EA coverage requirements shall be five years from the date 
of EI grant plus 321 days. Likewise, the applicable construction 
deadline for incumbent wide-area SMR licensees that do not elect the EA 
requirements shall be 321 days after the EI deadline established in the 
800 MHz Rejustification Order (rel. May 20, 1997).
    Certification Filing. An incumbent wide-area 800 MHz SMR licensee 
that was within its construction period at the time of the Fresno 
decision must certify in a filing with the Bureau that it either met 
the EA construction requirements, as set out herein, or complied with 
the terms of its EI authorization. In addition to the certification, if 
a licensee chooses to meet the EA requirements for frequencies in the 
lower 230 channels using the substantial service option, it must 
demonstrate in the same filing with the Bureau how it is providing 
substantial service. All filings must be made within fifteen (15) days 
after the licensee's applicable construction deadline or April 17, 
2000, whichever is later.
    Class of Licensees Affected. The Fresno court ordered that the 
petitioner in the case, Southern Company, not be denied the benefit of 
EA-type construction requirements while the matter is pending before 
the Commission. The court did not, however, indicate what, if any, 
class of similar licensees should be accorded interim coverage 
requirements if the Commission reversed its decision. We extend the 
relief contained in this order to all 800 MHz licensees, such as 
Southern, who were granted extended implementation authority and were 
within their construction period at the time of the Fresno decision.
    Two of the commenters, Chadmoore and Mobile Relays urge the 
Commission to apply EA-type construction requirements to either an 
expanded or a narrower class of licensees. Chadmoore argues that the 
Commission should extend the new construction requirements 
retroactively to any 800 MHz SMR incumbent licensee that has ever 
sought EI authority, whether or not it was granted. Chadmoore urges the 
Commission to reinstate these licenses and allow the licensees to 
demonstrate that they have met the interim coverage requirements. 
Mobile Relays urges the Commission to limit EA-type construction 
requirements to 800 MHz SMR frequencies held by wide-area licensees 
that have requested wide-area authorizations as part of a plan to 
convert and upgrade existing, analog SMR systems.
    We conclude that all 800 MHz SMR licensees that have been granted 
extended implementation and were within their construction periods at 
the time of the Fresno decision should be given the opportunity to 
apply EA-type requirements. We decline to apply the EA-type 
construction requirements retroactively, as Chadmoore suggests. This 
would require reinstating licenses that have previously reached the 
expiration of their construction periods and been cancelled for failure 
to construct, in most cases over two years ago. We do not believe that 
reinstating these licenses would be in the public
    We agree with Mobile Relays's suggestion that the relief in Fresno 
apply only to SMR frequencies. The Fresno court's decision specifically 
involves SMR frequencies, and the construction status of non-SMR 
frequencies, including Business and Industrial/Land Transportation 
frequencies converted under inter-category sharing for SMR use, is 
beyond the scope of this proceeding. However, we disagree with Mobile 
Relays's argument that relief should be limited only to EI licensees 
who are converting from analog to digital systems.
    Area of Coverage. When determining if an eligible wide-area SMR 
licensee has met a specific coverage requirement (i.e., covering one-
third or two-thirds of the population), the population should be 
measured using the licensee's wide-area ``footprint'' as established in 
the licensee's rejustification submission. A wide-area licensee may 
compute population covered within its footprint on a county basis using 
1990 U.S. Census information. In cases where the footprint does not 
align with county boundaries, a wide-area licensee should include the 
entire population of the county if the licensee covers any portion of 
it.
    Minimum Number of Frequencies. An EA licensee in the upper 200 
channels of the 800 MHz band must construct and operate fifty percent 
of the total channels included in its spectrum block in at least one 
location in its respective EA-based service area within three years of 
initial license grant and retain such channel usage for the remainder 
of the five-year construction period (``channel use requirement''). We 
will require that wide-area licensees that elect to apply the EA 
construction requirements also meet such a requirement for those 
frequencies within their extended implementation authority that are in 
the upper 200 channels. We note that commenters generally disfavor 
imposing the channel use requirement for incumbent wide-area licensees. 
However, we interpret the channel use requirement for EA licensees in 
the upper 200 channels differently than the comments suggest. Instead 
of requiring fifty percent of the licensee's authorized channels to be 
constructed and in operation at one site, we interpret the requirement 
to mean that a licensee must construct and operate fifty percent of the 
channels throughout its licensed area, so that the aggregate number of 
channels in use is fifty percent of those authorized. The licensee may 
choose to meet the channel use requirement at one site, but may also 
choose to use any number of sites (but at least one site). Based on 
this interpretation, we believe

[[Page 7752]]

that incumbent wide-area licensees are capable of meeting this 
requirement. Therefore, those incumbent wide-area licensees that do 
elect to apply EA construction requirements must also meet the same 
channel use requirement for their upper 200 channel frequencies that EA 
licensees in the upper 200 channels must meet.
    In addition to the channel use requirement imposed on upper 200 
channel EA licensees, Mobile Relays recommends that the Commission 
require that incumbent wide-area licensees demonstrate service by a 
minimum of two frequencies at each site. There is no justification for 
the two-frequency minimum, and that it would not provide regulatory 
parity between wide-area and EA licensees. Incumbent wide-area 
licensees, therefore, need only demonstrate coverage by constructing 
and operating one frequency at each site, with the exception, of the 
channel use requirement for frequencies in the upper 200 channels.
    Any incumbent wide-area 800 MHz licensee that was still in its 
construction period as of the date of that decision may choose to apply 
either the existing site-by-site, frequency-by-frequency construction 
requirements or the EA construction requirements. Those licensees who 
choose the latter must certify in a filing with the Commission their 
compliance with the requirements within the later of fifteen days from 
their applicable construction benchmarks or April 17, 2000, whichever 
is later. Such a certification should include compliance with the 
channel use requirement, if applicable, and a demonstration of 
substantial service, if elected.

IV. Procedural Matters

A. Paperwork Reduction Act of 1995 Analysis

    Supplementary Information: This MO&O on Remand contains a modified 
information collection, which has been submitted to the Office of 
Management and Budget for approval. As part of our continuing effort to 
reduce paperwork burdens, we invite the general public to take this 
opportunity to comment on the information collection contained in this 
MO&O on Remand, as required by the Paperwork Reduction Act of 1995, 
Pub. L. 104-13. Public comments should be submitted to OMB and the 
Commission, and are due thirty days from date of publication of this 
MO&O on Remand in the Federal Register. Comments should address: (a) 
whether the proposed collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information shall have practical utility; (b) the accuracy 
of the Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    OMB Approval Number: 3060-0307.
    Title: Rules to Facilitate Future Development of SMR Systems in the 
800 MHz Frequency Band.
    Form No.: N/A.
    Type of Review: Revision of a currently approved collection.
    Respondents: Business or other for-profit.
    Number of Respondents: 35.
    Estimated Time Per Response: 2 hours.
    Total Annual Burden: 70 hours.
    Frequency of Response: Single response.
    Total Annual Estimated Costs: $14,000. This cost includes an 
estimate that 100% of the respondents will hire an outside consultant 
at $200 per hour to prepare the information.
    Needs and Uses: The Commission will use this information to 
determine whether wide-area SMR licensees have complied with the 
Commission's 800 MHz construction requirements for their respective 
systems.
    Address: In addition to filing comments with the Secretary, a copy 
of any comments on the information collections contained herein should 
be submitted to Judy Boley, Federal Communications Commission, Room 1-
C804, 445 12th Street, SW, Washington, DC 20554, or via the Internet to 
[email protected]; and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725-
17th Street, NW, Washington, DC 20503 or via the Internet to fain--
[email protected].

B. Regulatory Flexibility Act

    To assist the public in determining the possible impact on small 
entities of the requirements adopted in this MO&O on Remand, the 
Commission has prepared a Supplemental Final Regulatory Flexibility 
Analysis (Supplemental FRFA). The Office of Media Relations, Reference 
Operations Division, will send a copy of the MO&O on Remand, including 
this Supplemental FRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration, in accordance with the Regulatory Flexibility 
Act.
1. Need for, and Objectives of, the MO&O on Remand
    This MO&O on Remand was initiated by order of the United States 
Court of Appeals for the District of Columbia in the case of Fresno 
Mobile Relays, Inc. v. Federal Communications Commission (Fresno). This 
MO&O on Remand allows incumbent wide-area 800 MHz SMR licensees who 
were within their construction periods at the time of the Fresno 
decision to choose between complying with the terms of their EI 
authorizations or applying construction requirements similar to those 
given to EA licensees. Therefore, this MO&O on Remand (1) gives the 
incumbent licensees greater flexibility to leave certain sites and 
frequencies unconstructed (for potential future use), (2) establishes 
reasonable regulatory parity between incumbent wide-area licensees and 
EA licensees in the 800 MHz SMR service, without prejudicing the 
interests of either, and (3) provides the 800 MHz SMR service with a 
degree of certainty for both current and future EA licensees.
(2) Summary of Significant Issues Raised by Public Comment in Response 
to the Initial Regulatory Flexibility Analysis
    This MO&O on Remand was initiated by order of the United States 
Court of Appeals for the District of Columbia. Therefore, there was no 
Initial Regulatory Flexibility Analysis.
(3) Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply
    The Regulatory Flexibility Act (RFA) directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by our 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.'' The provisions adopted in this MO&O on Remand 
will apply to approximately 30--35 current incumbent 800 MHz SMR 
operators, most of which may be considered small entities.

[[Page 7753]]

(4) Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    This MO&O on Remand gives eligible wide-area 800 MHz SMR licensees 
the option of complying with the terms of their EI authorizations or 
applying EA-type construction requirements to their wide area 
footprints. If a licensee chooses the former, it need only comply with 
the requirements already imposed by the Commission's rules.
(5) Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    The action taken by this MO&O on Remand not only gives eligible 
incumbent wide-area 800 MHz SMR licensees greater flexibility to leave 
certain sites and frequencies unconstructed (for potential future use), 
but also establishes reasonable parity between incumbent wide-area 
licensees and EA licensees in the 800 MHz SMR service. Eligible 
incumbent licensees need only report their compliance with the 
construction requirements in the same fashion that EA 800 MHz licensees 
do (i.e., in a certification and, if the substantial service option is 
elected, a demonstration).
(6) Report to Congress
    The Commission shall send a copy of this Supplemental Final 
Regulatory Flexibility Analysis, along with this MO&O on Remand, in a 
report to Congress pursuant to the Small Business Enforcement Fairness 
Act of 1996, 5 U.S.C. 801(a)(1)(A).

V. Ordering Clauses

    Accordingly, it is ordered that incumbent wide-area 800 MHz SMR 
licensees eligible for relief as described herein must comply with the 
terms of their extended implementation authorizations or apply the 
alternative construction requirements described herein. This action is 
taken pursuant to the authority of section 4(i) of the Communications 
Act of 1934, as amended, 47 U.S.C. 154(i).
    It is further ordered that incumbent wide-area 800 MHz SMR 
licensees eligible for relief as described herein must certify in a 
filing with the Wireless Telecommunications Bureau their compliance 
with the construction requirements as described herein within the later 
of fifteen days after the licensee's applicable construction deadline 
or April 17, 2000.
    It is further ordered that the temporary suspension of the 
construction timetable for incumbent wide-area SMR licensees as set 
forth in Public Notice DA 99-698 released April 15, 1999, is 
terminated.
    It is further ordered that the Commission's Consumer Information 
Bureau, the Reference Information Center, shall send a copy of this 
MO&O on Remand, including the Supplemental Final Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

    Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-3784 Filed 2-14-00; 11:53 am]
BILLING CODE 6712-01-U