[Federal Register Volume 65, Number 156 (Friday, August 11, 2000)]
[Rules and Regulations]
[Pages 49199-49202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20458]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 22

[WT Docket No. 96-6; FCC 00-246]


Permit Flexible Service Offerings in the Commercial Mobile Radio 
Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Federal Communications Commission (the Commission) has 
previously permitted commercial mobile radio service (CMRS) providers 
to offer fixed wireless services on a co-primary basis with commercial 
mobile services. In this document, the Commission determines that due 
to the evolving nature of fixed wireless services, it will decide the 
regulatory treatment of such services on a case-by-case basis. The 
Commission also amends its rules to clarify that fixed wireless 
services provided are not subject to the requirements for incidental 
communications services. Further, this document eliminates the 
notification requirement of submitting FCC Form 601 prior to the 
provision of incidental services.

DATES: Effective September 11, 2000.

FOR FURTHER INFORMATION CONTACT: Jeffrey Steinberg, Wireless 
Telecommunications Bureau, Commercial Wireless Division, at (202) 418-
0896.

SUPPLEMENTARY INFORMATION: 1. The Second Report and Order and Order on 
Reconsideration was released on July 20, 2000, and is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 445 Twelfth Street, S.W., Washington, D.C. The 
complete text may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., 1231 20th Street, N.W., 
Washington, D.C. 20036. The document is also available via the internet 
at http://www.fcc.gov/Bureaus/Wireless/Orders/2000/index2.html.

Synopsis of the Second Report and Order and Order on 
Reconsideration

    2. In the First Report and Order in this proceeding, 61 FR 45336, 
the Commission permitted CMRS providers to offer fixed wireless 
services on a co-primary basis with commercial mobile services. This 
decision raised the related issue of how such fixed service offerings 
should be classified for regulatory purposes. In a Further Notice of 
Proposed Rulemaking released together with the First Report and Order, 
61 FR 43721, the Commission proposed a rebuttable presumption that 
fixed services offered over frequency bands licensed to CMRS providers 
would be treated for regulatory purposes as CMRS. The Commission sought 
comment on this proposal and related issues.
    3. Based on the record established in this proceeding, the 
Commission

[[Page 49200]]

concludes that it is inappropriate at this time to establish a bright-
line test for determining the regulatory treatment of co-primary fixed 
services offered over CMRS spectrum. At this point, the development of 
fixed and fixed/mobile services on CMRS spectrum is at too early a 
stage for the Commission to anticipate how the future evolution of 
these services will occur. Thus, any test that the Commission might 
adopt at this time would be based on assumptions and criteria that 
could soon be made obsolete by developments in technology and the 
marketplace, and could cause more regulatory uncertainty than it 
resolves. For similar reasons, the Commission declines to adopt a 
rebuttable presumption that fixed services offered over CMRS spectrum 
should be treated as CMRS.
    4. Section 22.323 of the Commission's rules, permits Part 22 
(Public Mobile Services) licensees to provide incidental communications 
services provided that (1) The costs of the incidental service are not 
borne by subscribers who do not use the service, (2) the quality of the 
primary service does not materially deteriorate, (3) the provision of 
the incidental service is not inconsistent with the Communications Act 
or Commission rules, and (4) the licensee notifies the Commission 
before providing the incidental service. Section 22.901(d) of the 
Commission's rules, 47 CFR 22.901(d), was amended in the First Report 
and Order to specifically allow cellular carriers to provide fixed 
services on a co-primary basis. In a petition for reconsideration of 
the First Report and Order, BellSouth argued that Sec. 22.323 is 
inconsistent with the First Report and Order. BellSouth requested that 
the Commission either eliminate Sec. 22.323 or issue a declaratory 
ruling that Sec. 22.323 is inapplicable to CMRS licensees providing co-
primary fixed services pursuant to the First Report and Order and 
Sec. 22.901 of the Commission's rules.
    5. The Commission concludes that there is a need to clarify the 
relationship between incidental services provided under Sec. 22.323 and 
co-primary fixed services offered pursuant to Sec. 22.901(d). 
Therefore, the Commission amends its rules to clarify that CMRS 
providers who provide fixed services on a co-primary basis pursuant to 
Sec. 22.901(d) are not subject to the requirements of Sec. 22.323. In 
light of this clarification, the Commission does not eliminate 
Sec. 22.323 as it applies to incidental services at this time. However, 
the Commission eliminates the notification requirement in Sec. 22.323 
because it currently serves no useful purpose and it is inconsistent 
with the premises of flexibility underlying this proceeding. In 
addition, the Commission will develop a more complete record and 
consider whether to delete, further amend, or replace Sec. 22.323 as 
part of its current biennial review of all regulations that apply to 
providers of telecommunications service.

Supplemental Final Regulatory Flexibility Analysis

    6. As required by Section 604 of the Regulatory Flexibility Act 
(RFA), a Final Regulatory Flexibility Analysis (FRFA) for the First 
Report and Order was incorporated in the First Report and Order and 
Further Notice of Proposed Rule Making in WT Docket No. 96-6.\1\ The 
Commission's Supplemental Final Regulatory Flexibility Analysis (SFRFA) 
for this Order on Reconsideration \2\ contains information additional 
to that contained in the FRFA and is limited to matters raised on 
reconsideration with regard to the First Report and Order and addressed 
in this Order on Reconsideration. This SFRFA conforms to the RFA, as 
amended by the Contract With America Advancement Act of 1996.\3\
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    \1\ Amendment of the Commission's Rules to Permit Flexibile 
Service Offerings in the Commercial Mobile Radio Services, First 
Report and Order and Notice of Proposed Rule Making, WT Docket No. 
96-6, 11 FCC Rcd 8965, 9021 (1996).
    \2\ We note that this SFRFA addresses only the matters 
considered in the Order on Reconsideration portion of the Second 
Report and Order and Order on Reconsideration. No FRFA is necessary 
for the Second Report and Order because we have decided not to make 
any change to the Commission's rules.
    \3\ The FRA, see 5 U.S.C. 601 et seq., has been amended by the 
Contract With America Advancement Act of 1996, Public Law 104-121, 
110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small 
Busines Regulatory Enforcement Fairness Act of 1996 (SBREFA).
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A. Need for, and Objectives of, the Order on Reconsideration

    7. The Order on Reconsideration modifies and clarifies aspects of 
the regulatory regime governing the provision of co-primary fixed 
services and ancillary, auxiliary, and incidental services under part 
22, as established in the First Report and Order. Specifically, the 
Commission clarifies that commercial mobile radio services (CMRS) 
providers who provide fixed services on a co-primary basis pursuant to 
Sec. 22.901(d) of the rules are not subject to the requirements that 
govern provision of ancillary, auxiliary, and incidental services under 
Sec. 22.323. The Commission also modifies Sec. 22.323 by eliminating 
the requirement that carriers notify the Commission when providing 
ancillary, auxiliary, and incidental services. These actions are 
intended to clarify the Commission's rules and to eliminate an 
unnecessary notification requirement.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the FRFA

    8. No petitions for reconsideration were filed in direct response 
to the FRFA. In the petition for partial reconsideration or 
clarification and in responsive pleadings, however, some issues were 
raised that might affect small entities. Specifically, some commenters 
argued that limiting the applicability of Sec. 22.323, and in 
particular the notification requirement, would eliminate regulatory 
burdens that could deter CMRS providers, including small entities, from 
providing fixed wireless services. Other commenters, however, argued 
that Sec. 22.323 protects CMRS providers, including small entities, 
that provide ancillary, auxiliary, and incidental services from 
unlawful attempts to impose State regulation.\4\
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    \4\ See Order on Reconsideration, paragraph 10.
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C. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    9. 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 a rule. The RFA defines the term ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small business concern'' under section 3 of the 
Small Business Act.\5\ 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).\6\
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    \5\ 5 U.S.C. 601(3).
    \6\ 5 U.S.C. 632.
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    10. The rule changes effectuated by this Order on Reconsideration 
apply to telecommunications service providers that are regulated under 
part 22 of the Commission's rules. These include providers of Cellular 
Radiotelephone, Paging and Radiotelephone (Common Carrier Paging), Air-
Ground Radiotelephone, Offshore Radiotelephone, and Rural 
Radiotelephone services. In addition, pursuant to Sec. 90.493(b) of the 
Commission's rules, paging licensees on exclusive channels in the 929-
930 MHz bands are subject to the licensing, construction, and operation 
rules set forth in part 22.\7\ Since this rulemaking proceeding applies 
to multiple services,

[[Page 49201]]

we will analyze the number of small entities affected on a service-by-
service basis.
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    \7\ See 47 CFR 90.493(b).
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i. Cellular
    11. Since the Commission does not define a small business with 
respect to cellular services, we utilize the SBA's definition 
applicable to radiotelephone companies--i.e. an entity employing fewer 
than 1,500 persons.\8\ The size data provided by the SBA does not 
enable us to make a meaningful estimate of the number of cellular 
providers which are small entities because it combines all 
radiotelephone companies with 500 or more employees.\9\ We therefore 
use the 1992 Census of Transportation, Communications, and Utilities, 
conducted by the Bureau of the Census, which is the most recent 
information available. Data from the Bureau of the Census' 1992 study 
indicates that only 12 out of a total of 1,178 radiotelephone firms 
that operated during 1992 had 1,000 or more employees.\10\ Therefore, 
even if all twelve of these firms were cellular telephone companies, 
nearly all cellular carriers were small businesses under the SBA 
definition. In addition, we note that there are 1,758 cellular 
licenses; however, a cellular licensee may own several licenses. In 
addition, according to the most recent Telecommunications Industry 
Revenue data, 804 carriers reported that they were engaged in the 
provision of either cellular service or Personal Communications Service 
(PCS) services, which are placed together in the data.\11\ We do not 
have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of cellular service carriers that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 804 small cellular service carriers that may 
be affected by the new rules.
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    \8\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4812.
    \9\ U.S. Small Business Administration 1992 Economic Census 
Employment Report, Bureau of the Census, U.S. Department of 
Commerce, SIC Code 4812 (radiotelephone communications industry data 
adopted by the SBA Office of Advocacy).
    \10\ U.S. Bureau of the Census, U.S. Department of Commerce, 
1992 Census of Transportation, Communications, and Utilities, UC92-
S-1, Subject Series, Establishment and Firm Size, Table 5, 
Employment Size of Firms; 1992, SIC Code 4812 (issued May 1995).
    \11\ Telecommunications Industry Revenue, Figure 2.
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ii. Paging
    12. The Commission has adopted, and the SBA has approved, a two-
tier definition of small businesses in the context of auctioning 
licenses in the paging services. Under this definition, a small 
business is defined as either (1) 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, or (2) an entity 
that, together with affiliates and controlling principals, has average 
gross revenues for the three preceding calendar years of not more than 
$15 million. The Commission has estimated that as of January 1998, 
there were more than 600 paging companies in the United States.\12\ We 
do not have data specifying the number of these carriers that are not 
independently owned and operated or meet the small business thresholds 
set forth, or the number of these carriers that are regulated under 
part 22 of the Commission's rules, and thus are unable at this time to 
estimate with precision the number of affected paging carriers that 
would qualify as small business concerns under our definition. However, 
we estimate that the majority of existing paging providers qualify as 
small entities under our definition. Consequently, we estimate that 
there are up to approximately 600 currently licensed small paging 
carriers that will be affected by the rules adopted in this Order on 
Reconsideration. In addition, high bids were recently placed at auction 
for 985 new geographic area paging licenses, and an additional 15,645 
geographic area paging licenses are expected to be awarded following 
future auctions. In the recent auction, high bids were placed on paging 
licenses by 55 entities that qualify as small businesses under the 
Commission's definition. Licenses have been granted to 51 of these 
entities, and the applications of the other four remain pending. Thus, 
in addition to existing licensees, between 51 and 55 license winners in 
the recent auction will be affected small entities, and up to 15,645 
winners of paging licenses in future auctions will be affected small 
entities.
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    \12\ Implementation of Section 6002(b) of the Omnibus Budget 
Reconciliation Act of 1993, Third Report, 13 FCC Rcd 19746, 19792 
(1998).
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iii. Air-Ground Radiotelephone Service
    13. The Commission has not adopted a definition of small business 
specific to the Air-Ground radiotelephone service.\13\ Accordingly, we 
use the SBA definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons. There are approximately 
100 licensees in the Air-Ground radiotelephone service, and the 
Commission estimates that almost all of them qualify as small entities 
under the SBA definition.
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    \13\ Air-ground radiotelephone service is defined in Sec. 22.99 
of the Commission's rules, 47 CFR 22.99.
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iv. Offshore Radiotelephone Service
    14. This service operates on several ultra high frequency (UHF) TV 
broadcast channels that are not used for TV broadcasting in the coastal 
area of the states bordering the Gulf of Mexico. At present, there are 
approximately 55 licensees in this service. The Commission has not 
adopted a definition of small business specific to the Offshore 
radiotelephone service. Accordingly, we use the SBA definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons. The Commission is unable at this time to 
estimate the number of licensees that would qualify as small entities 
under the SBA definition for radiotelephone communications. The 
Commission assumes, for purposes of this SFRFA, that all of the 55 
licensees are small entities, as that term is defined by the SBA.
v. Rural Radiotelephone Service
    15. The Commission has not adopted a definition of small entity 
specific to the Rural Radiotelephone Service.\14\ A significant subset 
of the Rural Radiotelephone Service is the Basic Exchange Telephone 
Radio Systems (BETRS).\15\ We therefore use the SBA definition 
applicable to radiotelephone companies; i.e., an entity employing no 
more than 1,500 persons. There are approximately 1000 licensees in the 
Rural Radiotelephone Service, and the Commission estimates that almost 
all of them qualify as small entities under the SBA definition.
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    \14\ Rural Radiotelephone Service is defined in section 22.99 of 
the Commission's rules, 47 CFR 22.99.
    \15\ BETRS is defined in sections 22.757 and 22.729 of the 
Commission's rules, 47 CFR 22.757, 22.729.
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D. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements

    16. The Order on Reconsideration does not impose any additional 
reporting, recordkeeping, or other compliance requirements. The Order 
on Reconsideration eliminates a requirement that part 22 licensees 
notify the Commission before providing incidental services. As a 
result, no reporting or recordkeeping requirements remain under 
Sec. 22.323 of the Commission's rules.

[[Page 49202]]

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

    17. The Order on Reconsideration modifies Sec. 22.901(d) to clarify 
that fixed wireless services provided on a co-primary basis are not 
subject to the requirements of Sec. 22.323 for incidental 
communications services. Clarifying that carriers providing fixed 
wireless services on a co-primary basis pursuant to Sec. 22.901(d) need 
not comply with the requirements of Sec. 22.323 will provide further 
flexibility to CMRS carriers, including small entities, and is 
consistent with the Commission's intent in the First Report and Order. 
In addition, we amend Sec. 22.323 to delete the requirement that 
carriers notify the Commission when providing incidental services. This 
change will reduce burdens on small entities and other providers 
subject to part 22 by eliminating an unnecessary notification 
requirement.
    18. The Commission considered and rejected eliminating Sec. 22.323 
because it concluded that retaining Sec. 22.323 is consistent with its 
decision in the First Report and Order not to alter the regulatory 
treatment of ancillary, auxiliary, and incidental fixed services that 
had been provided by CMRS providers under the rules. However, the 
Commission will consider the continued need for Sec. 22.323 as part of 
its upcoming biennial review of all regulations that apply to providers 
of telecommunications service. The Commission also considered and 
rejected refining the notification requirement in Sec. 22.323, finding 
that the notification requirement currently serves no useful purpose 
and therefore should be eliminated.

F. Report to Congress

    19. The Commission shall send a copy of the Order on 
Reconsideration, including this Supplemental Final Regulatory 
Flexibility Analysis, 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 
the Order on Reconsideration, including the Supplemental Final 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration. A copy of this Order on 
Reconsideration and Supplemental Final Regulatory Flexibility Analysis 
(or summaries thereof) will also be published in the Federal Register. 
See 5 U.S.C. 604(b).

List of Subjects in 47 CFR Part 22

    Communications common carriers, Communications equipment, 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 22 as follows:

PART 22--PUBLIC MOBILE SERVICES

    1. The authority citation for part 22 continues to read as follows: 
47 U.S.C. 154, 222, 303, 309, and 332.

    2. Section 22.323 is amended by removing paragraph (d) and revising 
paragraphs (b) and (c) to read as follows:


Sec. 22.323  Incidental communication services.

* * * * *
    (b) The quality of the primary public mobile service does not 
materially deteriorate as a result of provision of incidental services, 
and neither growth nor availability of the primary public mobile 
service is significantly diminished as a result of provision of 
incidental services; and
    (c) The provision of the incidental services is not inconsistent 
with the Communications Act of 1934, as amended, or with FCC rules and 
policies.

    3. Section 22.901 is amended by revising the introductory text and 
paragraph (d) to read as follows:


Sec. 22.901  Cellular service requirements and limitations.

    Cellular system licensees must provide cellular mobile 
radiotelephone service upon request to subscribers in good standing, 
including roamers, as provided in Sec. 20.12 of this chapter. A 
cellular system licensee may refuse or terminate service, however, 
subject to any applicable state or local requirements for timely 
notification, to any subscriber who operates a cellular telephone in an 
airborne aircraft in violation of Sec. 22.925 or otherwise fails to 
cooperate with the licensee in exercising operational control over 
mobile stations pursuant to Sec. 22.927.
* * * * *
    (d) Alternative technologies and co-primary services. Licensees of 
cellular systems may use alternative cellular technologies and/or 
provide fixed services on a co-primary basis with their mobile 
offerings, including personal communications services (as defined in 
part 24 of this chapter) on the spectrum within their assigned channel 
block. Cellular carriers that provide mobile services must make such 
service available to subscribers whose mobile equipment conforms to the 
cellular system compatibility specification (see Sec. 22.933).
    (1) Licensees must perform or obtain an engineering analysis to 
ensure that interference to the service of other cellular systems will 
not result from the implementation of co-primary fixed services or 
alternative cellular technologies.
    (2) Alternative technology and co-primary fixed services are exempt 
from requirements for incidental communications services of 
Sec. 22.323, the channeling requirements of Sec. 22.905, the modulation 
requirements of Sec. 22.915, the wave polarization requirements of 
Sec. 22.367, the compatibility specification in Sec. 22.933 and the 
emission limitations of Secs. 22.357 and 22.917, except for emission 
limitations that apply to emissions outside the assigned channel block.
[FR Doc. 00-20458 Filed 8-10-00; 8:45 am]
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