[Federal Register Volume 65, Number 145 (Thursday, July 27, 2000)]
[Rules and Regulations]
[Pages 46109-46113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18955]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 24

[WT Docket No. 95-157, RM-8643; FCC 00-123]


Amendment of the Commission's Rules Regarding a Plan for Sharing 
the Costs of Microwave Relocation; Petitions for Reconsideration

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this document, the Commission clarifies certain aspects of 
its rules governing the relocation of microwave facilities from the 
1850-1990 Megahertz (MHz) band. These rule clarifications are 
consistent with the Commission's goal of ensuring the efficient 
relocation of fixed microwave incumbents from the 1850-1990 MHz band to 
higher bands and the efficient rollout of broadband PCS service in the 
1850-1990 MHz band.

DATES: Effective August 28, 2000.

FOR FURTHER INFORMATION CONTACT: Joel Taubenblatt, Wireless 
Telecommunications Bureau, Commercial Wireless Division, at (202) 418-
1513.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order on Reconsideration (MO&O) in WT Docket No. 
95-157, adopted April 5, 2000, and released July 19, 2000. In this 
document, the Commission addresses petitions for reconsideration and/or 
clarification of, and a petition for declaratory ruling concerning, the 
Commission's rules governing the relocation of microwave facilities 
from the 1850-1990 Megahertz (MHz) band. The Commission clarifies 
certain aspects of these rules, as discussed below, and denied the 
remaining requests in the petitions.
    2. In 1992, the Commission reserved 220 megahertz of spectrum, 
including the 1850-1990 MHz band, for reallocation from private and 
common carrier fixed microwave services (microwave incumbents) to 
services using emerging technologies. The Commission also established 
procedures for microwave incumbents to be

[[Page 46110]]

relocated to available frequencies in higher bands or to other media, 
including procedures governing the compensation of microwave incumbents 
by providers of emerging technology services. In 1994, the Commission 
allocated the 1850-1990 MHz band to broadband Personal Communications 
Services (PCS), one of the emerging technology services.
    3. In the First Report and Order in this proceeding, 61 FR 29679 
(June 12, 1996), the Commission changed and clarified certain aspects 
of its microwave relocation procedures and adopted a plan for sharing 
the costs of relocating microwave facilities operating in the broadband 
PCS band (the ``cost-sharing plan''). Under the Commission's cost-
sharing plan, PCS licensees and manufacturers of unlicensed PCS devices 
that incur costs for relocating an interfering microwave link 
(together, ``PCS relocators'') are eligible to receive reimbursement 
from later-entrant PCS licensees and later-entrant manufacturers of 
unlicensed PCS devices that benefit from the clearing of their spectrum 
(together, ``later-entrant PCS entities''). The cost-sharing plan is 
administered by two private clearinghouses designated by the Wireless 
Telecommunications Bureau (WTB)--the Personal Communications Industry 
Association (PCIA) and the Industrial Telecommunications Associations, 
Inc. (ITA)--using the cost-sharing formula adopted by the Commission.
    4. In the Second Report and Order in this proceeding, 62 FR 12752 
(March 18, 1997), the Commission, among other things, modified its 
cost-sharing rules to permit microwave incumbents who relocate their 
own microwave links and pay their own relocation expenses (``self-
relocating microwave incumbents'') to collect reimbursement in 
accordance with the cost-sharing plan adopted in the First Report and 
Order, subject to certain conditions.
    5. Ten parties filed petitions for reconsideration or clarification 
of the First Report and Order, one party filed a petition for 
declaratory ruling concerning the First Report and Order, and three 
parties filed petitions for reconsideration and clarification of the 
Second Report and Order.
    6. This document denies the petitions for reconsideration and/or 
clarification of the First Report and Order because it finds that: (1) 
with respect to the MSS Coalition petition, the concerns raised by the 
petitioner regarding the applicability of the microwave relocation and 
cost-sharing rules to the 2 GHz non-PCS bands were raised and 
considered in another Commission rulemaking; (2) with respect to the 
other petitions, any potential benefit of the suggested changes to the 
Commission's cost-sharing rules is outweighed by the risk of 
undermining the integrity of the relocation process by altering rules 
relied upon by the parties involved in the process.
    7. This document also declines to make a declaratory ruling that a 
later-entrant PCS licensee is not obligated to reimburse a PCS 
relocator for the cost of relocating a link that is entirely within the 
PCS relocator's MTA or BTA, as requested by Powertel, because it finds 
that Sec. 24.247 of the Commission's rules dictates a different result.
    8. In addition, with respect to the petitions for reconsideration 
and/or clarification of the Second Report and Order, this document 
clarifies that: (1) microwave incumbents that self-relocated links 
between April 5, 1995 and May 19, 1997 are not entitled to 
reimbursement; (2) microwave incumbents are permitted to relocate to 
leased facilities, as well as purchased facilities; (3) the date that 
the depreciation factor begins to apply to the amount reimbursable to a 
microwave incumbent for its self-relocated links is the date that the 
incumbent notifies the Commission that it intends to discontinue, or 
has discontinued, the use of these links, pursuant to Sec. 101.305 of 
the Commission's rules; (4) the deadline for self-relocating microwave 
incumbents to file documentation of the relocation with the 
clearinghouse shall be within ten business days of the date referred to 
in the preceding clause; and (5) under the cost-sharing formula as 
applied to self-relocating microwave incumbents, the variable N equals 
1 for the first PCS entity that would have interfered with the 
relocated link. This document denies the remaining requests in the 
petitions for reconsideration and/or clarification of the First Report 
and Order and Second Report and Order in this proceeding.
    9. The complete text of this MO&O is available for inspection and 
copying during normal business hours in the Commission's Reference 
Center, Room CY-A257, 445 12th Street SW, Washington, DC. The complete 
text is also available through the Internet at http://www.fcc.gov/Bureaus/Wireless/Orders/2000/fcc00123.doc. In addition, the complete 
text may be purchased from the Commission's duplicating contractor, 
International Transcription Service, Inc. (ITS, Inc.) at 1231 20th 
Street NW, Washington, DC 10036, (202) 857-3800.

Supplemental Final Regulatory Flexibility Analysis

    10. As required by the Regulatory Flexibility Act (RFA), see 5 
U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Notice of Proposed Rulemaking (NPRM) in WT Docket 
No. 95-157, 60 FR 55529 (November 1, 1995). The Commission sought 
written public comment on the proposals in the NPRM, including the 
IRFA. A Final Regulatory Flexibility Analysis (FRFA) was incorporated 
in the First Report and Order in WT Docket No. 95-157, 61 FR 29679 
(June 12, 1996). The First Report and Order also included a Further 
Notice of Proposed Rulemaking (Further Notice), and thus incorporated 
an IRFA on the additional proposals in the Further Notice, 61 FR 29679 
(June 12, 1996). The Commission sought written public comment on the 
additional proposals in the Further Notice, including the IRFA. A FRFA 
on the additional proposals in the Further Notice was incorporated in 
the Second Report and Order in WT Docket No. 95-157, 62 FR 12752 (March 
18, 1997). The present Supplemental Final Regulatory Flexibility 
Analysis in this document supplements the FRFAs in the First Report and 
Order and Second Report and Order, and conforms to the RFA, as amended.

A. Need for, and Objectives of, the Rules

    10. This document addresses petitions for reconsideration and/or 
clarification of, and a petition for declaratory ruling, concerning the 
Commission's plan for PCS market entrants to share the costs of 
relocating microwave facilities from the 1850-1990 MHz band. Under the 
Commission's cost-sharing plan, PCS licensees and manufacturers of 
unlicensed PCS devices that incur costs for relocating an interfering 
microwave link (together, ``PCS relocators'') are eligible to receive 
reimbursement from later-entrant PCS licensees or later-entrant 
manufacturers of unlicensed PCS devices that benefit from the clearing 
of their spectrum (together, ``later-entrant PCS entities''). In 
addition, the cost-sharing plan permits microwave incumbents who 
relocate their own microwave links and pay their own relocation 
expenses (``self-relocating microwave incumbents'') to collect 
reimbursement from later-entrant PCS entities that benefit from the 
clearing of the spectrum, subject to certain conditions. This document 
clarifies certain aspects of this cost-sharing plan, as discussed 
below, and denies the remaining requests in the petitions, including a 
request to eliminate the installment payment plan

[[Page 46111]]

for designated entity reimbursement obligations. These clarifications 
will facilitate the efficient relocation of fixed microwave incumbents 
from the 1850-1990 MHz band in order to clear the band for the 
provision of PCS service.
    11. In particular, the document clarifies that: (1) the Proximity 
Threshold test set forth in Sec. 24.247 of the Commission's rules, 47 
CFR 24.247, controls when a reimbursement obligation exists for a 
later-entrant PCS licensee; (2) microwave incumbents that self-
relocated links between April 5, 1995 and May 19, 1997 are not entitled 
to reimbursement; (3) microwave incumbents are permitted to relocate to 
leased facilities, as well as purchased facilities; (4) the date that 
the depreciation factor begins to apply to the amount reimbursable to a 
microwave incumbent for its self-relocated links is the date that the 
incumbent notifies the Commission that it intends to discontinue, or 
has discontinued, the use of these links, pursuant to Sec. 101.305 of 
the Commission's rules, 47 CFR 101.305; (5) the deadline for self-
relocating microwave incumbents to file documentation of the relocation 
with the clearinghouse shall be within ten business days of the date 
referred to in the preceding clause; and (6) under the cost-sharing 
formula as applied to self-relocating microwave incumbents, the 
variable N equals 1 for the first PCS entity that would have interfered 
with the relocated link.

B. Summary of Issues Raised in Response to the FRFAs

    12. None of the petitions filed on the First Report and Order and 
Second Report and Order, or comments filed on these petitions, were 
specifically in response to the FRFAs in those orders. Several of the 
petitions and comments regarding the First Report and Order, though, 
raised issues that may impact small entities, and were considered by 
the Commission, as discussed in Section E below. In particular, Tenneco 
Energy argues that the Commission should eliminate the payment plan 
that permits PCS providers that are designated entities (a small 
business classification used for Commission spectrum auctions) to make 
reimbursement payments in installments over time, as set forth in 
Sec. 24.249(b) of the Commission's rules, 24 CFR 24.249(b). Omnipoint 
and PCIA oppose Tenneco's argument. Moreover, Omnipoint contends that, 
although it does not qualify as a designated entity under the 
Commission's rules, it should be permitted to make reimbursement 
payments according to the installment plan schedule set forth in 
Sec. 24.249(b).
    13. Small Business in Telecommunications (SBT) argues that the 
Commission should refine its definitions of communications throughput 
and network reliability in evaluating whether a microwave incumbent's 
new system is comparable to the old one, and that the Commission should 
require PCS providers to compensate microwave incumbent's for internal 
resources devoted to the relocation process. Other fixed microwave 
incumbents, such as the Association of American Railroads, support a 
refinement of the definitions of throughput and reliability, whereas 
PCS providers such as AT&T, Omnipoint, and Pacific Bell, oppose such a 
refinement. In addition, AT&T opposes SBT's suggested modification to 
include internal resources in compensation.

C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    14. 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 proposed rules, if adopted. 5 U.S.C. 603(b)(3). 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. 15 U.S.C. 632. 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). Id. A small 
organization is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 5 
U.S.C. 601(4). 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.'' 5 U.S.C. 601(5). 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, we estimate that 81,600 (96 percent) 
are small entities. Below, we further describe and estimate the number 
of small entity licensees and regulatees that will be affected by the 
rule clarifications adopted in this document.
    15. The rule clarifications adopted in this document will affect 
small entities that participate in the microwave relocation process in 
the 1850 MHz to 1990 MHz band: providers of broadband personal 
communications service (PCS); providers of fixed microwave services; 
and manufacturers of unlicensed PCS devices.
    16. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years. For Block F, an additional classification for ``very 
small business'' was added and is defined as an entity that, together 
with their affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These regulations 
defining ``small entity'' in the context of broadband PCS auctions have 
been approved by the SBA. No small businesses within the SBA-approved 
definition bid successfully for licenses in Blocks A and B. There were 
90 winning bidders that qualified as small entities in the Block C 
auctions. A total of 93 small and very small business bidders won 
approximately 40% of the 1,479 licenses for Blocks D, E, and F. 
However, licenses for Blocks C through F have not been awarded fully; 
therefore, there are few, if any, small businesses currently providing 
PCS services. Based on this information, we estimate that the number of 
small broadband PCS licensees will include the 90 winning C Block 
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a 
total of 183 small entity PCS providers as defined by the SBA and the 
Commission's auction rules.
    17. Fixed Microwave Services. The Commission has not yet defined a 
small business with respect to microwave services. For purposes of this 
IRFA, we will utilize the SBA's definition applicable to radiotelephone 
companies--i.e., an entity with no more than 1,500 persons. 13 CFR 
121.201, Standard Industrial Classification (SIC) 4812. The 
Commission's Office of Engineering and Technology developed a study in 
1992 that provides statistical data for all microwave incumbents in 
1850 to 1990 MHz band. Specifically,

[[Page 46112]]

the study finds that in the 1850 MHz to 1990 MHz band, local 
governments, including public safety entities, have 168 licenses; 
petroleum companies have 67 licenses; power companies have 164 
licenses; railroad companies have 18 licenses; and all other microwave 
incumbents in this band have 143 licenses. However, the Commission does 
not have specific statistics that determine how many of these companies 
are small businesses. We therefore are unable to estimate the number of 
fixed microwave service providers that qualify under the SBA's 
definition.
    18. Manufacturers of Unlicensed PCS Devices. The Commission has not 
yet developed a definition of small entities applicable to 
manufacturers of unlicensed PCS devices. Therefore, the applicable 
definition of small entity is the definition under the SBA applicable 
to the ``Communications Services, Not Elsewhere'' category--an entity 
with less than $11.0 million in annual receipts. 13 CFR 121.201, SIC 
Code 4899. The Census Bureau estimate indicate that of the 848 firms in 
the ``Communications Services, Not Elsewhere'' category, 775 are small 
businesses. The Commission does not have specific statistics, though, 
on how many of these 775 small businesses are manufacturers of 
unlicensed PCS devices.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    19. This document does not contain any additional reporting or 
recordkeeping requirements. The document does clarify several aspects 
of the Commission's cost-sharing plan for microwave relocation, as 
discussed in Section A above, but these clarifications do not create 
new compliance obligations.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    20. This document clarifies certain aspects of the Commission's 
plan for PCS market entrants to share the costs of relocating microwave 
facilities from the 1850-1990 MHz band, as discussed in Section A 
above. Under the Commission's cost-sharing plan, PCS relocators and 
self-relocating fixed microwave incumbents that pay for the relocation 
of microwave links are entitled to reimbursement from later-entrant PCS 
entities that benefit from the clearing of the spectrum. A number of 
the clarifications set forth in this document will affect the amount of 
reimbursement that a PCS relocator or self-relocating microwave 
incumbent is entitled to receive under the plan and, conversely, the 
amount of reimbursement that a later-entrant PCS entity is obligated to 
pay. In some cases, the clarifications will result in an increase in 
reimbursement, to the benefit of the PCS relocator or self-relocating 
microwave incumbent; in other cases, the clarifications will result in 
a decrease in reimbursement, to the benefit of the later-entrant PCS 
entity. Because some entities on both sides of the reimbursement 
equation are small businesses, we do not believe that, on the whole, 
these clarifications to the cost-sharing plan will have a significant 
economic impact on small businesses. We do believe that these 
clarifications will make it easier for the affected regulated entities 
to comply with our cost-sharing rules and, to some extent, reduce the 
staff resources needed to handle compliance, a result that is 
especially beneficial for small businesses.
    21. This document also denies the remaining requests in the 
petitions (retaining the status quo), including the requests by 
Tenneco, Omnipoint, and SBT set forth in Section B above. We believe 
that the remaining requests would require changes in the cost-sharing 
rules that might undermine the integrity of the rules that PCS 
relocators, later-entrant PCS entities, and microwave incumbents have 
relied on since 1996 to effect the relocation from these bands. Thus, 
as discussed in paragraph 8 of the document, we conclude that granting 
these remaining requests would not significantly advance our goal of 
promoting an efficient and equitable relocation process as to outweigh 
the risks associated with such rule changes.

F. Report to Congress

    22. The Commission will send a copy of this document, including 
this Supplemental FRFA, in a report to be sent to Congress pursuant to 
the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 
U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of 
this document, including this Supplemental FRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration. A copy of this 
document and this Supplemental FRFA (or summaries thereof) will also be 
published in the Federal Register. See 5 U.S.C. 604(b).

G. Ordering Clauses

    23. Accordingly, pursuant to the authority of Sec. 1.106 of the 
Commission's rules, 47 CFR 1.106, the petitions for reconsideration 
and/or clarification of the First Report and Order filed by the 
American Petroleum Institute, the Association of American Railroads, 
the Association of Public-Safety Communications Officials-
International, Inc, AT&T Wireless Services, Inc. (jointly with GTE 
Mobilnet, PCS PrimeCo, L.P., Pocket Communications, Inc., Western PCS 
Corporation and the Cellular Telecommunications Industry Association), 
the MSS Coalition, Omnipoint Communications, Inc., the Personal 
Communications Industry Association, Small Business in 
Telecommunications, Tenneco Energy, and UTC/The Telecommunications 
Association are denied, as discussed in paragraph 6 supra.
    24. Pursuant to the authority of Sec. 1.2 of the Commission's 
rules, 47 CFR Sec. 1.2, the petition for declaratory ruling concerning 
the First Report and Order filed by Powertel PCS, Inc. is denied, as 
discussed in paragraph 7 supra.
    25. Pursuant to the authority of Sec. 1.106 of the Commission's 
rules, 47 CFR 1.106, the petitions for reconsideration and/or 
clarification of the Second Report and Order filed by American 
Petroleum Institute, UTC/The Telecommunications Association, and the 
South Carolina Public Service Authority are granted in part and denied 
in part, as discussed in paragraph 8 supra.
    26. Pursuant to the authority of Secs. 24.243 and 24.245 of the 
Commission's rules, 47 CFR 24.243, 24.245, are amended as set forth in 
the rule changes which are to become August 28, 2000.
    27. It is further ordered that the Commission's Consumer 
Information Bureau, Reference Information Center, 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 24

    Personal communications services, Radio.

    Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 24 as follows:

[[Page 46113]]

PART 24--PERSONAL COMMUNICATIONS SERVICES

    1. The authority citation for part 24 continues to read as follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 309, and 332.


    2. Section 24.243 is amended by revising paragraphs (c) and (d) to 
read as follows:


Sec. 24.243  The cost-sharing formula.

* * * * *
    (c) N equals the number of PCS entities that would have interfered 
with the link. For the PCS relocator, N=1. For the next PCS entity that 
would have interfered with the link, N=2, and so on. In the case of a 
voluntarily relocating microwave incumbent, N=1 for the first PCS 
entity that would have interfered with the link. For the next PCS 
entity that would have interfered with the link, N=2, and so on.
    (d) Tm equals the number of months that have elapsed between the 
month the PCS relocator or voluntarily relocating microwave incumbent 
obtains reimbursement rights for the link and the month that the 
clearinghouse notifies a later-entrant of its reimbursement obligation 
for the link. A PCS relocator obtains reimbursement rights for the link 
on the date that it signs a relocation agreement with a microwave 
incumbent. A voluntarily relocating microwave incumbent obtains 
reimbursement rights for the link on the date that the incumbent 
notifies the Commission that it intends to discontinue, or has 
discontinued, the use of the link, pursuant to Sec. 101.305 of the 
Commission's rules.

    3. Section 24.245 is amended by revising paragraph (a)(2) to read 
as follows:


Sec. 24.245  Reimbursement under the cost-sharing plan.

    (a) * * *
    (2) To obtain reimbursement, a voluntarily relocating microwave 
incumbent must submit documentation of the relocation of the link to 
the clearinghouse within ten business days of the date that the 
incumbent notifies the Commission that it intends to discontinue, or 
has discontinued, the use of the link, pursuant to Sec. 101.305 of the 
Commission's rules.
* * * * *

[FR Doc. 00-18955 Filed 9-26-00; 8:45 am]
BILLING CODE 6712-01-P