[Federal Register Volume 65, Number 194 (Thursday, October 5, 2000)]
[Rules and Regulations]
[Pages 59350-59362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24065]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 2, 87 and 101

[FCC 00-272; WT Docket No. 99-327]


24 GHz Service; Licensing and Operation

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document adds and amends regulations governing the 
licensing and operation of the 24.25-24.45 GHz and 25.05-25.25 GHz 
bands. In addition, the Commission adopts competitive bidding rules to 
select among mutually exclusive applicants for licenses in these bands. 
We expect such amendments to promote the effective use of the 24 GHz 
band and to accommodate deployment of point-to-point, point-to-
multipoint, and multipoint-to-multipoint fixed wireless technology at 
24 GHz.

DATES: Effective December 4, 2000, except for Secs. 101.527 and 
101.529, which contain information collection requirements that have 
not been approved by the Office of Management and Budget. The 
Commission will publish a document in the Federal Register announcing 
the effective date of those sections. Public comments on the 
information collections contained in the Report and Order are due 
November 6, 2000.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Room 4-C207, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Michael Pollak, Shellie Blakeney or 
Paul Moon of the Policy and Rules Branch, Public Safety and Private 
Wireless Division, Wireless Telecommunications Bureau, (202) 418-0680, 
or Nese Guendelsberger of the Auctions and Industry Analysis Division, 
Wireless Telecommunications Bureau, (202) 418-0660.

[[Page 59351]]


SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (R&O) in WT Docket No. 99-327, FCC 00-272, adopted July 25, 
2000, and released August 1, 2000. The full text of the R&O is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The full text of the R&O may also be purchased 
from the Commission's copy contractor, International Transcription 
Services, 1231 20th Street, NW., Washington, DC 20036, telephone (202) 
857-3800, facsimile (202) 857-3805. The full text of the R&O may also 
be downloaded at: http://www.fcc.gov/Bureaus/Wireless/Orders/2000/fcc00272>. Alternative formats (computer diskette, large print, audio 
cassette, and Braille) are available to persons with disabilities by 
contacting Martha Contee at (202) 418-0260, TTY (202) 418-2555, or at 
[email protected].

Synopsis of the Report and Order

    The R&O gives maximum regulatory flexibility to 24 GHz Service 
providers. Both incumbent 24 GHz band licensees and new licensees will 
be governed by part 101 of the Commissions Rules, 47 CFR part 101. The 
Commission will assign the 24 GHz band for licensing throughout the 
United States by 172 Economic Areas. The Commission also authorized 
additional economic areas for licensing covering the following United 
States territories and possessions: Guam, Northern Mariana Islands, 
Puerto Rico, the United States Virgin Islands, America Samoa and the 
Gulf of Mexico. The Commission will license the 24 GHz band in 40 MHz 
flexible channel pairs, five per economic area. The R&O also permitted 
24 GHz licensee more flexibility in system design, by designating that 
either the upper or lower side of the 40 MHz channel pairs can be used 
for the nodal station or the subscriber station.
    The R&O allowed 24 GHz band licensees to offer a variety of fixed 
services. 24 GHz providers may elect their regulatory status as either 
common carrier or private, under the conditions set forth in Title II 
and III of the Communications Act of 1934, as amended. Regarding 
service and construction requirements, the R&O adopted a ten-year 
license term and required a ``substantial service'' showing at the ten 
year license renewal date. Substantial service is defined as a 
``service'' that is sound, favorable, and substantially above a level 
of mediocre service which might minimally warrant renewal. In addition, 
the following ``safe harbor'' examples achieve compliance: (a) A 
demonstration of four links per million population within a service 
area; (b) a demonstration of service to an area that has limited 
wireless or wireline telecommunication services.
    Partitioning and disaggregation are permitted, and any partitionee/
disaggregatee is authorized to hold its license for the remainder of 
the original licensee's term. The R&O also clarified that licensees may 
aggregate 24 GHz band spectrum.
    The R&O adopted flexible technical standards as well that are both 
consistent with the Commission's part 101 Rules, 47 CFR part 101. These 
rules include, but are not limited to the revision of the emission mask 
for the 24 GHz band; allowing the use of non-directional antennas and 
one foot parabolic antennas; eliminating individual licensing for nodal 
stations; and allowing a maximum contiguous bandwidth of up to 200 MHz 
through aggregation.
    The R&O provides that the competitive bidding rules set forth in 
part 1, subpart Q, of the Commission's rules will apply to the auction 
of licenses in the 24 GHz band unless otherwise provided therein. The 
application of the part 1 rules to the 24 GHz band will include any 
amendments that may be adopted in the ongoing part 1 proceeding. 
Consistent with current practice, the Wireless Telecommunications 
Bureau (Bureau) will seek comment on matters such as auction design in 
a public notice prior to the auction. The R&O adopts a ten-day period 
for filing petitions to deny against long-form applications and 
delegates to the Bureau the discretion to implement a five-day period 
in exigent circumstances.
    The R&O also adopts a three-tiered approach to bidding credits. 
Entrepreneurs, which are defined as entities having average annual 
gross revenues not exceeding $40 million for the preceding three years, 
are eligible to receive a 15 percent bidding credit. Small businesses, 
which are defined as entities having average annual gross revenues not 
exceeding $15 million for the preceding three years, are eligible to 
receive a 25 percent bidding credit. Very small businesses, which are 
defined as entities having average annual gross revenues not exceeding 
$3 million for the preceding three years, are eligible to receive a 35 
percent bidding credit.
    Finally, the R&O adopts attribution rules for the 24 GHz band. 
Under these rules, the Commission will attribute to the applicant the 
gross revenues of its controlling interests and their affiliates in 
assessing whether the applicant is qualified to take advantage of the 
Commission's small business provisions.

Regulatory Flexibility Act Final Analysis

    As required by the Regulatory Flexibility Act (``RFA''), an Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the 
Amendment to parts 1, 2, and 101 of the Commission's Rules To License 
Fixed Services at 24 GHz, WT Docket 99-327, Notice of Proposed 
Rulemaking (NPRM), 64 FR 71088 (rel. Dec. 20, 1999), issued in this 
proceeding. The Commission sought written public comment on the 
proposals in the NPRM, including comment on the IRFA. No comments were 
filed in direct response to the IRFA. This Final Regulatory Flexibility 
Analysis (``FRFA'') conforms to the Regulatory Flexibility Act.

I. Need for, and Objectives of, the Report and Order in the Report and 
Order

    We adopt rules for licensing and operation of the 24.25-24.45 GHz 
and 25.05-25.25 GHz bands. In addition, the Commission adopts 
competitive bidding rules to select among new licensees for this band. 
We amend parts 1, 2, 87 and 101 of the Commission's Rules and expect 
such amendments to promote the effective use of the 24 GHz band and to 
accommodate deployment of point-to-point, point-to-multipoint, and 
multipoint-to-multipoint fixed wireless technology at 24 GHz. The rule 
changes we adopt today establish a flexible regulatory and licensing 
framework, which will enhance opportunities to provide a broadband 
wireless service, foster effective competition, and further our efforts 
for consistent rule application regarding broadband wireless services.

II. Summary of Significant Issues Raised by the Public Comments in 
Response to the Initial Regulatory Flexibility Analysis

    No comments were filed in direct response to the IRFA. However, as 
described in Section V, we have taken into account all comments 
submitted generally by small entities.

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

    The Regulatory Flexibility Act 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. The 
Regulatory Flexibility Act defines the term ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,''

[[Page 59352]]

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 ninety-six 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 
(ninety-one percent) are small entities. The rules we are adopting 
today will affect incumbent licensees who were relocated to the 24 GHz 
band from the 18 GHz band, and applicants who wish to provide services 
in the 24 GHz band. The Commission has not developed a definition of 
small entities applicable to licensees in the 24 GHz band. Therefore, 
the applicable definition of small entity is the definition under the 
SBA rules for the radiotelephone industry that provides that a small 
entity is a radiotelephone company employing fewer than 1,500 persons. 
The 1992 Census of Transportation, Communications, and Utilities, 
conducted by the Bureau of the Census, which is the most recent 
information available, shows that only 12 radiotelephone firms out of a 
total of 1,178 such firms that operated during 1992 had 1,000 or more 
employees. This information notwithstanding, we believe that there are 
only two licensees in the 24 GHz band that were relocated from the 18 
GHz band, Teligent and TRW, Inc. It is our understanding that Teligent 
and its related companies have less than 1,500 employees, though this 
may change in the future. However, TRW is not a small entity. 
Therefore, only one incumbent licensee in the 24 GHz band is a small 
business entity. The proposals also affect potential new licensees on 
the 24 GHz band. Pursuant to 47 CFR 24.720(b), the Commission has 
defined ``small business'' for Blocks C and F broadband PCS licensees 
as firms that had average gross revenues of less than $40 million in 
the three previous calendar years. This regulation defining ``small 
business'' in the context of broadband PCS auctions has been approved 
by the SBA. With respect to new applicants in the 24 GHz band, we shall 
use this definition of ``small business'' and apply it to the 24 GHz 
band under the name ``entrepreneur.'' With regard to ``small 
business,'' we shall adopt the definition of ``very small business'' 
used for 39 GHz licenses and PCS C and F block licenses: Businesses 
with average annual gross revenues for the three preceding years not in 
excess of $15 million. Finally, ``very small business'' in the 24 GHz 
band shall be defined as an entity with average gross revenues not to 
exceed $3 million for the preceding three years. The Commission will 
not know how many licensees will be small or very small businesses 
until the auction, if required, is held. Even after that, the 
Commission will not know how many licensees will partition their 
license areas or disaggregate their spectrum blocks, if partitioning 
and disaggregation are allowed.

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

    This R&O adopts rules that will entail reporting, recordkeeping, 
and/or third-party consultation. However, the Commission believes that 
these requirements are the minimum needed. By this R&O, we require 
licensees to notify the Commission within 30 days of a change in 
regulatory status between common carrier and/or non-common carrier. We 
also require licensees to substantiate their renewal expectancies with 
information demonstrating substantial service. In addition, because we 
consider partitioning and disaggregation to be a form of license 
assignment, we require such action to receive Commission approval via 
application for assignment on FCC Form 603. With regard to alien 
ownership, we require licensees to amend their FCC Form 602 to reflect 
any changes in foreign ownership information, together with the initial 
information required by FCC Form 601.

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

    The Regulatory Flexibility Act requires an agency to describe any 
significant alternatives that it has considered in reaching its 
proposed approach, which may include the following four alternatives: 
(1) The establishment of differing compliance or reporting requirements 
or timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    In the NPRM, we noted that the Commission originally used Standard 
Metropolitan Statistical Areas (SMSA) to license the DEMS service, 
which failed to include rural communities because SMSAs are too large. 
We then proposed to reduce the licensing service area in order to: (1) 
Include rural communities; (2) maximize the opportunities for the 
dissemination of 24 GHz licenses among a wide array of entities; and 
(3) facilitate efficient use of this spectrum. While adopting Economic 
Areas (EAs) in this R&O, we cite to our experience with the 39 GHz 
auction in which the majority of small, very small and rural qualified 
bidders won licenses. We also note that our decision to offer flexible 
partitioning and disaggregation/aggregation will speed service to rural 
areas and encourage the participation of smaller entities at auction. 
In addition, we adopt flexible bidding credits for smaller entities, 
while noting that small entities may further form bidding consortiums 
to prevail at auction. In sum, we believe that adopting EAs for 
licensing this service will serve the public interest best, in light of 
the overall changes we are making here to specifically benefit small 
entities.
    In this R&O, we authorize 24 GHz licensees to provide common 
carrier service, non-common carrier service, or both under a single 
license. We also adopt our proposal in the NPRM to require licensees to 
notify us within 30 days of such a change in regulatory status. 
However, we minimize the reporting burden by declining to require 
licensees to obtain Commission authorization prior to a change in 
regulatory status. In addition, we decline to require that the 
licensees detail the specific services they seek to provide. This is 
consistent with our streamlined application process, and it serves to 
simplify the reporting requirements for small entities.
    In this R&O, we adopt a ten-year license term in conjunction with a 
renewal expectancy based on substantial service. In order to 
demonstrate substantial service,

[[Page 59353]]

licensees must provide the Commission with a description of geographic 
coverage and population served or links installed, and a description of 
how the service complies with the substantial service requirement. In 
addition, licensees must submit copies of any violations or proceedings 
that relate to their renewal expectancy. While taking into account this 
burden on small entities, we note that such recordkeeping ensures that 
the 24 GHz band is not ``warehoused'' or abused to the preclusion of 
small business opportunities. In this context, we also note that we 
declined here to adopt a license term in excess of ten years, in order 
to afford more opportunities for entities, including small businesses, 
to capture licenses that fail to meet substantial service.
    In order to overcome entry barriers for smaller entities, we adopt 
here flexible partitioning and disaggregation rules. Parties to 
partitioning and disaggregation agreements may negotiate whether one 
party or both will be responsible for demonstrating fulfillment of 
pertaining construction requirements. Parties may also combine 
partitioning and disaggregation agreements. Any such agreements are 
treated, however, as a form of license assignment and therefore require 
Commission approval via filing FCC Form 603. Licensees who received 
bidding credits at auction and who subsequently partition or 
disaggregate are also subject to the unjust enrichment provision 
contained in our Rules. We believe that these recordkeeping and unjust 
enrichment restrictions are the minimum needed, when weighed against 
the significant benefits to small entities that result from the 
flexible approach we are adopting here.
    In order to supervise effectively the compliance of 24 GHz 
licensees with regard to our alien ownership restrictions, we require 
both common carrier and non-common carrier licensees in the 24 GHz band 
to provide the alien ownership information requested in FCC Form 601, 
as well as amendments in FCC Form 602 to reflect any changes in foreign 
ownership information. This enforcement is a mutual benefit to all 
licensees and a minimal reporting burden.
    In the R&O, we adopt a ten-day period for filing petitions to deny 
long-form applications. We decline to adopt a five-day period in order 
to give small businesses more flexibility in challenging license 
awards. We also adopt a third level of small business bidding credits 
in addition to those proposed in the NPRM, in respect of the fact that 
the capital costs of operating facilities in the 24 GHz band will vary 
widely. Finally, we adopt attribution rules based on a ``controlling 
interest'' standard to determine eligibility for our small business 
provisions. We believe these rules, along with our affiliation rules, 
will prevent larger firms from illegitimately seeking status as a small 
business. All of these decisions regarding competitive bidding 
procedures will work to the benefit of small entities.

Report to Congress

    The Commission will send a copy of this R&O, including this 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 the R&O, including this 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the R&O and this FRFA (or summaries thereof) 
will also be published in the Federal Register. See 5 U.S.C. 604(b).

Paperwork Reduction Analysis

    This R&O contains either a new or modified information collection. 
As part of its continuing effort to reduce paperwork burdens, the 
Commission invites the general public and the Office of Management and 
Budget (OMB) to take this opportunity to comment on revision to the 
information collections contained in the R&O. As required by the 
Paperwork Reduction Act of 1995, Public Law 104-13, public comments on 
the information collections contained in the R&O are due November 6, 
2000.
    Comments on the modified and proposed information collections 
contained in the R&O should address: (a) Whether the 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. These 
comments 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]>. Furthermore, a copy of any such 
comments should be submitted to Edward C. Springer, OMB Desk Officer, 
10236 NEOB, 725 17th Street, NW., Washington, DC 20503 or via the 
Internet to [email protected]>.
    OMB Approval Number: 3060-XXXX.
    Title: Section 101.527 Construction requirements of 24 GHz 
operations & 101.529 Renewal Expendancy criteria for 24 GHz licenses.
    Form No: N/A.
    Type of Review: New collection.
    Respondents: Business or other for-profit.
    Number of Respondents: 952.
    Estimated Time Per Response: 20 hours.
    Total Annual Burden: 14,399 hours.
    Total Annual Cost: $952,000.
    Needs and Uses: The information required in Sections 101.527 and 
101.529 is used to determine whether a renewal applicant of a 24 GHz 
Service system has complied with the requirements to provide 
substantial service by the end of the ten-year initial license term. 
The FCC uses the information to determine whether an applicant's 
license will be renewed at the end of the license period.

Ordering Clauses

    The actions of the Commission herein are taken pursuant to Sections 
4(i), 257, 303, 309(j) of the Communications Act of 1934, as amended, 
47 U.S.C. 154(i), 257, 303, 309(j).
    The rules in this Report and Order are effective December 4, 2000, 
except for Secs. 101.527 and 101.529, which contain information 
collection requirements that have not been approved by the Office of 
Management and Budget. The Commission will publish a document in the 
Federal Register announcing the effective date of those sections. 
Public comments on the information collections contained in the Report 
and Order are due November 6, 2000.
    Pursuant to Section 4(i) of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), that the Commission's Consumer Information 
Bureau, Reference Information Center, shall send a copy of this Report 
and Order, including the Final Regulatory Flexibility Analysis, to the 
Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects

47 CFR Part 1

    Administrative practice and procedure, Radio.

47 CFR Parts 2, 87, and 101

    Communications equipment, Radio, Reporting and recordkeeping 
requirements.


[[Page 59354]]


Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 1, 2, 87 and 101 as 
follows:

PART 1--PRACTICE AND PROCEDURE

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

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 
and 325(e).

    2. In Table 1 in Sec. 1.1307(b)(1), the entry for Local Multipoint 
Distribution Service is removed and a new entry is added in its place, 
to read as follows:


Sec. 1.1307  Actions which may have a significant environmental effect, 
for which Environmental Assessments (EAs) must be prepared.

* * * * *
    (b) * * *
    (1) * * *

  Table 1.--Transmitters, Facilities and Operations Subject to Routine
                        Environmental Evaluation
------------------------------------------------------------------------
    Service (title 47 CFR rule part)          Evaluation required if
------------------------------------------------------------------------
 
*                  *                  *                  *
                  *                  *                  *
Local Multipoint Distribution Service    Non-building-mounted antennas:
 (subpart L of part 101) and 24 GHz       height above ground level to
 (subpart G of part 101).                 lowest point of antenna 10 m
                                          and power>1640 W EIRP
                                         Building-mounted antennas:
                                          power >1640 W EIRP LMDS and 24
                                          GHz Service licensees are
                                          required to attach a label to
                                          subscriber transceiver
                                          antennas that:
                                         (1) provides adequate notice
                                          regarding potential
                                          radiofrequency safety hazards,
                                          e.g., information regarding
                                          the safe minimum separation
                                          distance required between
                                          users and transceiver
                                          antennas; and
                                         (2) references the applicable
                                          FCC-adopted limits for radio-
                                          frequency exposure specified
                                          in Sec.  1.1310.
------------------------------------------------------------------------

* * * * *

PART 2--FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL 
RULES AND REGULATIONS

    3. The authority citation for part 2 continues to read as follows:

    Authority: 47 U.S.C. 154, 302a, 303 and 336 unless otherwise 
noted.


Sec. 2.106  [Amended]

    4. Section 2.106 is amended by revising pages 71 and 72 of the 
Table to read as follows:
BILLING CODE 6712-02-P

[[Page 59355]]

[GRAPHIC] [TIFF OMITTED] TR05OC00.008


[[Page 59356]]


[GRAPHIC] [TIFF OMITTED] TR05OC00.009

BILLING CODE 6712-02-C

[[Page 59357]]

* * * * *

PART 87--AVIATION SERVICES

    5. The authority citation for part 87 is revised to read as 
follows:

    Authority: 47 U.S.C. 154, 303 and 307(e), unless otherwise 
noted.


Sec. 87.173  [Amended]


    6. Section 87.173(b), the Frequency Table, is amended in the first 
column by revising ``24250-25250 MHz'' to read ``24750-25050 MHz''.

PART 101--FIXED MICROWAVE SERVICES

    7. The authority citation for part 101 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303.


    8. Section 101.1 is amended by revising paragraph (b) to read as 
follows:


Sec. 101.1  Scope and authority.

* * * * *
    (b) The purpose of the rules in this part is to prescribe the 
manner in which portions of the radio spectrum may be made available 
for private operational, common carrier, 24 GHz Service and Local 
Multipoint Distribution Service fixed, microwave operations that 
require transmitting facilities on land or in specified offshore 
coastal areas within the continental shelf.
* * * * *

    9. Section 101.3 is amended by adding a definition for ``24 GHz 
Service'' immediately preceding the alphabetical definitions and adding 
a definition for ``User or Subscriber Station,'' in alphabetical order, 
and by revising the definitions of ``Digital Electronic Message 
Service'' and ``Nodal Station,'' to read as follows:


Sec. 101.3  Definitions.

* * * * *
    24 GHz Service. A fixed point-to-point, point-to-multipoint, and 
multipoint-to-multipoint radio system in the 24.25-24.45 GHz band and 
in the 25.05-25.25 GHz band consisting of a fixed main (nodal) station 
and a number of fixed user terminals. This service may encompass any 
digital fixed service.
* * * * *
    Digital Electronic Message Service. A two-way end-to-end fixed 
radio service utilizing digital termination systems for the exchange of 
digital information in the frequency bands 10,550-10,680 MHz, 18,820-
18,920 MHz, and 19,160-19,260 MHz. This service may also make use of 
point-to-point microwave facilities, satellite facilities or other 
communications media to interconnect digital termination systems to 
comprise a network.
* * * * *
    Nodal station. The central or controlling stations in a microwave 
radio system operating on point-to-multipoint or multipoint-to-
multipoint frequencies with one or more user stations or internodal 
links.
* * * * *
    User or subscriber station. The station(s) in a microwave radio 
system operating at the users' premises on point-to-multipoint or 
multipoint-to-multipoint frequencies and communicating with one or more 
nodal stations.
* * * * *

    10. Section 101.21 is amended by revising paragraph (g) to read as 
follows:


Sec. 101.21  Technical content of applications.

* * * * *
    (g) Each application in the Local Multipoint Distribution Service 
and 24 GHz Service must contain all technical information required by 
FCC Form 601 and any other applicable form or associated Public Notices 
and by any applicable rules in this part.

    11. Section 101.45 is amended by revising paragraph (b) 
introductory text to read as follows:


Sec. 101.45  Mutually exclusive applications.

* * * * *
    (b) A common carrier application, except in the Local Multipoint 
Distribution Service and in the 24 GHz Service, will be entitled to 
comparative consideration with one or more conflicting applications 
only if:
* * * * *

    12. Section 101.61 is revised to read as follows:


Sec. 101.61  Certain modifications not requiring prior authorization in 
the Local Multipoint Distribution Service and 24 GHz Service

    In the Local Multipoint Distribution Service (LMDS) licensees may 
add, remove, or relocate facilities within the area authorized by the 
license without prior authorization. Upon request by an incumbent 
licensee or the Commission, an LMDS licensee shall furnish the 
technical parameters, location and coordinates of the completion of the 
addition, removal, relocation or modification of any of its facilities 
within the BTA. The LMDS licensee must provide such information within 
ten (10) days of receiving a written request. This section also applies 
to 24 GHz licensees that are licensed according to Economic Areas.


    13. Section 101.63 is amended by revising paragraph (a) to read as 
follows:


Sec. 101.63  Period of construction; certification of completion of 
construction.

    (a) Each Station, except in Local Multipoint Distribution Services, 
24 GHz Service and the 38.6-40.0 GHz band, authorized under this part 
must be in operation within 18 months from the initial date of grant.
* * * * *

    14. Section 101.101 is amended by revising the entry for 24,250-
25,250 MHz in the table to read as follows:


Sec. 101.101  Frequency availability.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Radio service
                                    --------------------------------------------------------------------------------------------------------------------
        Frequency band (MHz)                                                                                 Other (Parts 15, 21,
                                      Common carrier (Part     Private radio (Part    Broadcast auxiliary    22, 24, 25, 74, 78 &          Notes
                                              101)                    101)                 (Part 74)                 100)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
             *                    *                    *                    *                    *                    *                    *
24,250-25,250......................  CC....................  OFS...................
 
             *                    *                    *                    *                    *                    *                    *
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *

[[Page 59358]]


    15. Section 101.105 is amended by revising the text of paragraph 
(c)(6) preceding the table to read as follows:


Sec. 101.105  Interference protection criteria.

* * * * *
    (c) * * *
    (6) Each application for new or modified nodal station on channels 
numbered 4A, 4B, 7, 9, and 19/20 in the 10.6 GHz band must demonstrate 
that all existing co-channel stations are at least 56 kilometers from 
the proposed nodal station site. Applicants for these channels must 
certify that all licensees and applicants for stations on the adjacent 
channels within 56 kilometers of the proposed nodal station have been 
notified of the proposed station and do not object. Alternatively, or 
if one of the affected adjacent channel interests does object, the 
applicant may show that all affected adjacent channel parties are 
provided a C/I protection ratio of 0 dB. An applicant proposing to 
operate at an AAT greater than 91 meters must reduce its EIRP in 
accordance with the following table; however, in no case may EIRP 
exceed 70 dBm on the 10.6 GHz channels:
* * * * *
    16. Section 101.109(c) is amended in the table by revising the 
entry for 24, 250 to 25,250 MHz and by revising footnote 7 and the note 
to footnote 7 to read as follows:


Sec. 101.109  Bandwidth.

* * * * *
    (c) * * *

------------------------------------------------------------------------
           Frequency band (MHz)             Maximum authorized bandwidth
------------------------------------------------------------------------
 
                  *        *        *        *        *
24,250 to 25,250..........................  40 MHz \7\
 
                  *        *        *        *        *
------------------------------------------------------------------------
\7\ For channel block assignments in the 24,250-25,250 MHz and 38,600-
  40,000 MHz bands, the authorized bandwidth is equivalent to an
  unpaired channel block assignment or to either half of a symmetrical
  paired channel block assignment. When adjacent channels are
  aggregated, equipment is permitted to operate over the full channel
  block aggregation without restriction.
Note to Footnote 7: Unwanted emissions shall be suppressed at the
  aggregate channel block edges based on the same roll-off rate as is
  specified for a single channel block in Sec.  101.111(a)(1) or in Sec.
   101.111(a)(2)(ii) and (iii) as appropriate.


    17. Section 101.111 is amended by adding paragraph (a)(2)(iv) and 
by revising paragraph (a)(4) introductory text to read as follows:


Sec. 101.111  Emission limitations.

    (a) * * *
    (2) * * *
    (iv) The emission mask for 24 GHz Service used the equation in 
paragraph (a)(2)(ii) of this section applies only to the edge of each 
channel, but not to subchannels established by licensees. The value of 
P in the equation is for the percentage removed from the carrier 
frequency and assumes that the carrier frequency is the center of the 
actual bandwidth used. The emission mask can be satisfied by locating a 
carrier of the subchannel sufficiently far from the channel edges so 
that the emission levels of the mask are satisfied. The 24 GHz emission 
mask shall use a value B (bandwidth) of 40 MHz, for all cases even in 
the case where a narrower subchannel is used (for instance the actual 
bandwidth is 10 MHz) and the mean output power used in the calculation 
is the sum of the output power of a fully populated channel.
* * * * *
    (4) For DEMS channels in the 17,700-19,700 MHz band:
* * * * *

    18. In Sec. 101.115(c), the table is amended by revising the entry 
for ``24,250 to 25,250'' and footnote 10 to read as follows:


Sec. 101.115  Directional antennas.

* * * * *
    (c) * * *

                                                                    Antenna Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Maximum               Minimum radiation suppression to angle in degrees from centerline of main
                                                       beamwidth                                           beam in decibels
                                                        to 3 dB    Minimum  ----------------------------------------------------------------------------
              Frequency (MHz)                Category    points    antenna
                                                          \1\        gain    5 deg. to   10 deg.    15 deg.    20 deg.    30 deg.    100 deg.   140 deg.
                                                       (included    (dbi)      10 deg.    to  15     to  20     to  30    to  100    to  140    to  180
                                                        angle in                           deg.       deg.       deg.       deg.       deg.       deg.
--------------------------------------------------------degrees)----------------------------------------------------------------------------------------
 
             *                    *                    *                    *                    *                    *                    *
24,250 to 25,250 \10\.....................          A        2.8         38         25         29         33         36         42         55         60
                                                    B        2.8         38         20         24         28         32         35         36         45
 
             *                    *                    *                    *                    *                    *                    *
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ If a licensee chooses to show compliance using maximum beamwidth to 3 dB points, the beamwidth limit shall apply in both the azimuth and the
  elevation planes.
    *        *        *        *        *        *        *
\10\ DEMS User Station antennas in this band must meet performance Standard B and have a minimum antenna gain of 34 dBi. The maximum beamwidth
  requirement does not apply to DEMS User Stations. DEMS Nodal Stations need not comply with these standards. Stations authorized to operate in the
  24,250-25,250 MHz band do not have to meet these standards, however, the Commission may require the use of higher performance antennas where
  interference problems can be resolved by the use of such antennas.

* * * * *

    19. Section 101.139 is amended by adding paragraph (g) to read as 
follows:


Sec. 101.139  Authorization of transmitters.

* * * * *
    (g) After January 1, 2001, a transmitter operating on the 24,250-
24,450 MHz and 25,050-25,250 MHz bands must meet the emission 
limitation set forth in Sec. 101.111(a)(2)(ii).

    20. Section 101.141 is amended by revising paragraph (a) 
introductory text to read as follows:


Sec. 101.141  Microwave modulation.

    (a) Microwave transmitters employing digital modulation techniques 
and operating below 19.7 GHz band must, with appropriate multiplex 
equipment, comply with the following additional requirements:
* * * * *

    21. Section 101.147 is amended by:
    A. Revising the fifth sentence of paragraph (r) introductory text.
    B. Revising the introductory text of paragraph (r)(9) preceding the 
table and paragraphs (r)(9)(i) and (r)(9)(ii).

[[Page 59359]]

    C. Adding paragraph (r)(9)(iii).
    The additions and revisions read as follows:


Sec. 101.147  Frequency assignments.

* * * * *
    (r) 17,700 to 19,700 and 24,250 to 25,250 MHz. * * * Licensees, 
except 24 GHz band licensees, may use either a two-way link or one 
frequency of a frequency pair for a one-way link and must coordinate 
proposed operations pursuant to the procedures required in 
Sec. 101.103. * * *
* * * * *
    (9) The following frequencies are available for point-to-multipoint 
DEMS Systems, except that channels 35-39 were available only to 
existing 18 GHz DEMS licensee as of March 14, 1997 and are now 
available by geographic area licensing in the 24 GHz Service to be used 
as the licensee desires. The 24 GHz spectrum can be aggregated or 
disaggregated and does not have to be used in the transmit/receive 
manner shown except to comply with international agreements along the 
US borders. Systems operating on Channels 25-34 must cease operations 
as of January 1, 2001, except that those stations on these channels 
within 150 km of the coordinates 38 deg.48' N/76 deg.52' W (Washington, 
DC, area) and 39 deg.43' N/ 101 deg.46' W (Denver, Colorado area) must 
cease operations of June 5, 1997:
* * * * *
    (i) Each station on channels 25 through 34 will be limited to one 
frequency pair per SMSA. Additional channel pairs may be assigned upon 
a showing that the service to be provided will fully utilize the 
spectrum requested. A channel pair may be subdivided as desired by the 
licensee.
    (ii) A frequency pair on channels 25 through 34 may be assigned to 
more than one licensee in the same SMSA or service area so long as the 
interference protection criteria of Sec. 101.105 are met.
    (iii) Channels 35 through 39 are licensed in the 24 GHz Service by 
Economic Areas for any digital fixed service. Channels may be used at 
either nodal or subscriber station locations for transmit or receive 
but must be coordinated with adjacent channel and adjacent area users 
in accordance with the provisions of Sec. 101.509. Stations must also 
comply with international coordination agreements.
* * * * *

    22. Section 101.305 is amended by revising paragraphs (a), (b) and 
(c) to read as follows:


Sec. 101.305  Discontinuance, reduction or impairment of service.

    (a) If the public communication service provided by a station in 
the Common Carrier Radio Services, the Local Multipoint Distribution 
Service or 24 GHz Service is involuntarily discontinued, reduced or 
impaired for a period exceeding 48 hours, the station licensee must 
promptly notify the Commission. In every such case, the licensee must 
furnish full particulars as to the reasons for such discontinuance, 
reduction or impairment of service, including a statement as to when 
normal service is expected to be resumed. When normal service is 
resumed, prompt notification thereof must be given Commission.
    (b) No station licensee subject to title II of the Communications 
Act of 1934, as amended, may voluntarily discontinue, reduce or impair 
public communication service to a community or part of a community 
without obtaining prior authorization from the Commission pursuant to 
the procedures set forth in part 63 of this chapter. In the event that 
permanent discontinuance of service is authorized by the Commission, 
the station license is terminated; except that station licenses in the 
Local Multipoint Distribution Service and 24 GHz Service are not 
terminated if the discontinuance is a result of a change of status by 
the licensee from common carrier to non-common carrier pursuant to 
Sec. 1.929 of this chapter.
    (c) Any licensee not subject to title II of the Communications Act 
of 1934, as amended, who voluntarily discontinues, reduces or impairs 
public communication service to a community or a part of a community 
must notify the Commission within 7 days thereof. In the event of 
permanent discontinuance of service, the station license is 
automatically terminated; except that station licenses in the Local 
Multipoint Distribution Service and 24 GHz Service are not terminated 
if the discontinuance is a result of a change of status by the licensee 
from non-common carrier to common carrier pursuant to Sec. 1.929 of 
this chapter.
* * * * *

    23. Section 101.311 is revised to read as follows:


Sec. 101.311  Equal employment opportunities.

    Equal opportunities in employment must be afforded by all common 
carrier licensees and all Local Multipoint Distribution Service and 24 
GHz Service licensees in accordance with the provisions of Sec. 21.307 
of this chapter.

    24. Subpart G is amended by:
    A. Revising the table of contents for subpart G.
    B. Revising the heading of subpart G.
    C. Revising Secs. 101.501, 101.503, 101.505, 101.509, and 101.511.
    The revisions read as follows:

Subpart G--24 GHz Service and Digital Electronic Message Service
Sec.
101.501   Eligibility.
101.503   Digital Electronic Message Service Nodal Stations.
101.505   Frequencies.
101.509   Interference protection criteria.
101.511   Permissible services.
101.513   Transmitter power.
101.515   Emissions and bandwidth.
101.519   Interconnection.
101.521   Spectrum utilization.
101.523   Service areas.
101.525   24 GHz system operations.
101.526   License term.
101.527   Construction requirements for 24 GHz operations.
101.529   Renewal expectancy criteria for 24 GHz licenses.
101.531   Application form and contents.
101.533   Regulatory status.
101.535   Geographic partitioning and spectrum aggregation/
disaggregation.
101.537   24 GHz band subject to competitive bidding.
101.538   Designated entities.

Subpart G--24 GHz Service and Digital Electronic Message Service


Sec. 101.501  Eligibility.

    See Sec. 101.147(n) for licensing of DEMS facilities in the 10.6 
GHz band. Applications for new facilities using the 18 GHz band are no 
longer being accepted. Any entity, other than one precluded by 
Sec. 101.7, is eligible for authorization to provide 24 GHz Service 
under this subpart.


Sec. 101.503  Digital Electronic Message Service Nodal Stations.

    10.6 GHz DEMS Nodal Stations may be authorized only as a part of an 
integrated communication system wherein 10.6 GHz DEMS User Stations 
associated therewith also are licensed to the 10.6 GHz DEMS Nodal 
Station licensee. Applications for 10.6 GHz DEMS Nodal Station licenses 
should specify the maximum number of 10.6 GHz DEMS User Stations to be 
served by that nodal station. Any increase in that number must be 
applied for pursuant to Sec. 1.913 of this chapter.


Sec. 101.505  Frequencies.

    Frequencies, and the conditions on which they are available, for 
DEMS operations are contained in this subpart as well as in 
Sec. 101.147(m), (n), and (r)(9).

[[Page 59360]]

Sec. 101.509  Interference protection criteria.

    (a) As a condition for use of frequencies in this service each 
licensee is required to:
    (1) Engineer the system to be reasonably compatible with adjacent 
and co-channel operations in the same or adjacent areas on all 
frequencies; and
    (2) Cooperate fully and in good faith to resolve whatever potential 
interference and transmission security problems may be present in 
adjacent and co-channel operations.
    (b) All harmful interference to other users of co-channel and 
adjacent channel use in the same or adjacent geographical area are 
prohibited. In areas where Economic Areas are in close proximity, 
careful consideration should be given to minimum power requirements and 
to the location, height, and radiation pattern of the transmitting and 
receiving antennas. Licensees are expected to cooperate fully in 
attempting to resolve problems of potential interference before 
bringing the matter to the attention of the Commission.
    (c) Licensee shall coordinate their facilities whenever the 
facilities have optical line-of-sight into other licensees' areas or 
are within the same geographic area. Licensees are encouraged to 
develop operational agreements with relevant licensees in the same or 
adjacent areas. Incumbent SMSA licensee(s) shall retain exclusive 
rights to its channel(s) within its SMSA and must be protected.
    (d) Licensees shall comply with the appropriate coordination 
agreements between the United States and Canada and the United States 
and Mexico concerning cross-border sharing and use of the 24 GHz bands 
which may require using channels pairs in accordance with the table in 
Sec. 101.147(r)(9).
    (e) The Commission recommends that coordination is not necessary if 
the power flux density (pfd) at the boundary of the relevant adjacent 
area is lower than -14 dBW/m\2\ in any 1 MHz. This value can be changed 
and agreed upon by both coordinating parties. Licensees should be able 
to deploy with a pfd up to -94 dBW/m\2\ in any 1 MHz at the boundary of 
the relevant adjacent area without negatively affecting the successful 
operations of the adjacent area licensee.


Sec. 101.511  Permissible services.

    (a) Authorizations for stations in the 24 GHz Service will be 
granted to provide services on a common carrier basis or a non-common 
carrier basis or on both a common carrier and non-common carrier basis 
in a single authorization.
    (b) Stations may render any kind of digital communications service 
consistent with the Commission's rules and the regulatory status of the 
station to provide services on a common carrier or non-common carrier 
basis.
    (c) An applicant or licensee may submit a petition at any time 
requesting clarification of the regulatory status required to provide a 
specific communications service.

    25. Section 101.521 is revised to read as follows:


Sec. 101.521  Spectrum utilization.

    All applicants for DEMS frequencies in the 10.6 GHz band must 
submit as part of the original application a detailed plan indicating 
how the bandwidth requested will be utilized. In particular the 
application must contain detailed descriptions of the modulation 
method, the channel time sharing method, any error detecting and/or 
correcting codes, any spatial frequency reuse system and the total data 
throughput capacity in each of the links in the system. Further, the 
application must include a separate analysis of the spectral efficiency 
including both information bits per unit bandwidth and the total bits 
per unit bandwidth.

    26. Sections 101.523, 101.525, 101.526, 101.527, 101.529, 101.531, 
101.533, 101.535, 101.537 and 101.538 are added to subpart G to read as 
follows:


Sec. 101.523  Service areas.

    (a) The service areas for 24 GHz are Economic Areas (EAs) as 
defined in this paragraph (a). EAs are delineated by the Regional 
Economic Analysis Division, Bureau of Economic Analysis, U.S. 
Department of Commerce. The Commerce department organizes the 50 States 
and the District of Columbia into 172 EAs. Additionally, there are 
three EA-like areas: Guam and Northern Mariana Islands; Puerto Rico and 
the U.S. Virgin Islands; and American Samoa and the Gulf of Mexico. A 
total of 176 authorizations will be issued for the 24 GHz Service by 
the FCC.
    (b) Where an incumbent SMSA license area in the 24 GHz band 
occupies only a portion of an EA available for application under the 
competitive bidding rules, the SMSA portion will be excluded from 
auction and the incumbent licensee will retain the exclusive right to 
those channels within the SMSA.


Sec. 101.525  24 GHz system operations.

    (a) A licensee using the 24 GHz band may construct and operate any 
number of fixed stations anywhere within the area authorized to serve 
without prior authorization, except as follows:
    (1) A station would be required to be individually licensed if:
    (i) International agreements require coordination;
    (ii) Submission of an Environmental Assessment is required under 
Sec. 1.1307 of this chapter;
    (iii) The station would affect the radio quiet zones under 
Sec. 1.924 of this chapter.
    (2) Any antenna structure that requires notification to the Federal 
Aviation Administration (FAA) must be registered with the Commission 
prior to construction under Sec. 17.4 of this chapter.
    (b) Whenever a licensee constructs or makes system changes as 
described in paragraph (a)(1) of this section, the licensee is required 
to notify the Commission within 30 days of the change under Sec. 1.947 
of this chapter and include a statement of the technical parameters of 
the changed station.


Sec. 101.526  License term.

    The license term for stations licensed under this subpart is ten 
years from the date of license grant or license renewal for incumbent 
licensees.


Sec. 1A101.527  Construction requirements for 24 GHz operations.

    (a) Each licensee must make a showing of ``substantial service'' 
within ten years of its license grant. A ``substantial service'' 
assessment will be made at renewal pursuant to the provisions and 
procedures set forth in Sec. 1.949 of this chapter. ``Substantial 
service'' is a service which is sound, favorable, and substantially 
above a level of mediocre service which just might minimally warrant 
renewal during its past license term.
    (b) Each licensee must, at a minimum file:
    (1) A report, maps and other supporting documents describing its 
current service in terms of geographic coverage and population served 
to the Commission. The report must also contain a description of the 
licensees' investments in its operations. The report must be labeled as 
an attachment to the renewal application; and
    (2) Copies of all FCC orders finding the licensee to have violated 
the Communications Act or any FCC rule or policy; and a list of any 
pending proceedings that relate to any matter described in this 
paragraph (b)(2).
    (c) Failure to demonstrate that substantial service is being 
provided in the service area will result in forfeiture of the license, 
and the licensee will be unable to regain it.

[[Page 59361]]

    (d) The frequencies associated with incumbent authorizations, 
licensed on a SMSA basis, that have cancelled automatically or 
otherwise been recovered by the Commission will automatically revert to 
the applicable EA licensee.


Sec. 101.529  Renewal expectancy criteria for 24 GHz licenses.

    (a) A renewal applicant involved in a renewal proceeding shall 
receive a preference, commonly referred to as a renewal expectancy, 
that is the most important factor to be considered in the proceeding as 
long as the applicant's past record for the relevant license period 
demonstrates that:
    (1) The renewal applicant has provided ``substantial service'' 
pursuant to Sec. 101.527; and
    (2) The renewal applicant has substantially complied with 
applicable FCC rules, policies, and the Communications Act of 1934, as 
amended.
    (b) In order to establish its right to a renewal expectancy, a 
licensee in the 24 GHz service involved in a renewal proceeding must 
submit a showing explaining why it should receive a renewal expectancy. 
At a minimum, this showing must include:
    (1) A description of how the licensee has complied with the 
``substantial service'' requirement; and
    (2) Copies of all FCC orders finding the licensee to have violated 
the Communications Act or any FCC rule or policy; and a list of any 
pending proceedings that relate to any matter described in this 
paragraph (b)(2).
    (c) In making its showing of entitlement to a renewal expectancy, a 
renewal applicant may claim credit for any system modification 
applications that were pending on the date it filed its renewal 
application. Such credit will not be allowed if the modification 
application is dismissed or denied.


Sec. 101.531  Application form and contents.

    (a) Applications for initial authorization of 24 GHz facilities are 
filed on FCC Form 175 in accordance with subpart M and subpart Q of 
part 1 of this chapter. FCC Form 601 is submitted subsequently either 
by the winning bidder, if an auction is held to decide among two or 
more mutually exclusive applications, or, in cases of no mutual 
exclusivity, by the sole applicant. Applications to amend pending 
applications and to modify licenses are filed on FCC Form 601.
    (b) Foreign ownership information. All applicants for 24 GHz 
licenses must provide the information requested on FCC Form 601 to 
address all of the eligibility requirements in Sec. 101.7 of this part. 
All licensees will keep the information updated.


Sec. 101.533  Regulatory status.

    (a) Initial applications. An applicant for a 24 GHz license must 
specify on FCC Form 601 if it is requesting authorization to provide 
services on a common carrier basis, a non-common carrier basis, or on 
both a common carrier and non-common carrier basis.
    (b) Amendment of pending applications. Any pending application may 
be amended to:
    (1) Change the carrier status requested; or
    (2) Add to the pending request in order to obtain both common 
carrier and non-common carrier status in a single license.
    (c) Modification of license. A licensee may modify a license to:
    (1) Change the carrier status authorized; or
    (2) Add to the status authorized in order to obtain both common 
carrier and non-common carrier status in a single license.


Sec. 101.535  Geographic partitioning and spectrum aggregation/
disaggregation.

    (a) Eligibility. (1) Parties seeking approval for partitioning and 
disaggregation shall request from the Commission an authorization for 
partial assignment of a license pursuant to Sec. 1.948 of this chapter.
    (2) 24 GHz licensees may apply to the Commission to partition their 
licensed geographic service areas to eligible entities and are free to 
determine the portion of their service areas to be partitioned. 24 GHz 
licensees may aggregate or disaggregate their licensed spectrum at any 
time following the grant of a license.
    (3) Any existing frequency coordination agreements shall convey 
with the assignment of the geographic area or spectrum, and shall 
remain in effect unless new agreements are reached.
    (b) Technical standards.--(1) Aggregation. There is no limitation 
on the amount of spectrum that a 24 GHz licensee may aggregate.
    (2) Partitioning. In the case of partitioning, applicants and 
licensees must file FCC Form 603 pursuant to Sec. 1.948 of this chapter 
and list the partitioned service area on a schedule to the application. 
The geographic coordinates must be specified in degrees, minutes, and 
seconds to the nearest second of latitude and longitude and must be 
based upon the 1983 North American Datum (NAD83).
    (3) Disaggregation. Spectrum may be disaggregated in any amount. A 
licensee need not retain a minimum amount of spectrum.
    (4) Combined partitioning and disaggregation. The Commission will 
consider requests for partial assignment of licenses that propose 
combinations of partitioning and disaggregation.
    (c) Unjust enrichment. 24 GHz licensees that received a bidding 
credit and partition their licenses or disaggregate their spectrum to 
entities not meeting the eligibility standards for such a bidding 
credit, will be subject to the provisions concerning unjust enrichment 
as set forth in Sec. 1.2111 of this chapter.
    (d) License term. The license term for a partitioned license area 
and for disaggregated spectrum shall be the remainder of the original 
licensee's license term as provided for in Sec. 101.526.
    (e) Construction requirements. Applications requesting approval for 
partitioning or disaggregation must include a certification by each 
party stating that one or both parties will satisfy the construction 
requirement set forth in Sec. 101.529. Failure by a party to meet its 
respective construction requirement will result in the automatic 
cancellation of its license without further Commission action.


Sec. 101.537  24 GHz band subject to competitive bidding.

    Mutually exclusive initial applications for licenses in the 24 GHz 
band are subject to competitive bidding procedures. The procedures set 
forth in part 1, subpart Q, of this chapter will apply unless otherwise 
provided in this part.


Sec. 101.538  Designated entities.

    (a) Eligibility for small business provisions. (1) A very small 
business is an entity that, together with its controlling interests and 
affiliates, has average gross revenues not exceeding $3 million for the 
preceding three years.
    (2) A small business is an entity that, together with its 
controlling interests and affiliates, has average gross revenues not 
exceeding $15 million for the preceding three years.
    (3) An entrepreneur is an entity that, together with its 
controlling interests and affiliates, has average gross revenues not 
exceeding $40 million for the preceding three years.
    (4) For purposes of determining whether an entity meets one of the 
definitions set forth in paragraphs (a)(1), (a)(2), and (a)(3) of this 
section, the gross revenues of the entity, its controlling interests 
and affiliates shall be considered on a cumulative basis and 
aggregated. An applicant seeking status

[[Page 59362]]

as a very small business, small business, or entrepreneur under this 
section must disclose on its short- and long-form applications, 
separately and in the aggregate, the gross revenues of the applicant 
(or licensee), its controlling interests and affiliates for each of the 
previous three years.
    (5) Persons or entities that hold interests in an applicant (or 
licensee) that are affiliates of each other or have an identity of 
interests identified in Sec. 1.2110(b)(4)(iii) of this chapter will be 
treated as though they were one person or entity and their ownership 
interests aggregated for purposes of determining an applicant's (or 
licensee's) compliance with the requirements of this section.
    (6) Where an applicant (or licensee) cannot identify controlling 
interests under the standards set forth in this section, the gross 
revenues of all interest holders in the applicant, and their 
affiliates, will be attributable.
    (7) A consortium of very small businesses, a consortium of small 
businesses, or a consortium of entrepreneurs is a conglomerate 
organization formed as a joint venture between or among mutually 
independent business firms, each of which individually satisfies the 
applicable definition in paragraphs (a)(1), (a)(2) and (a)(3) of this 
section. Where an applicant or licensee is a consortium of very small 
businesses, a consortium of small businesses, or a consortium of 
entrepreneurs, the gross revenues of each very small business, small 
business, or entrepreneur shall not be aggregated.
    (8) Designated entities must describe on their long-form 
applications how they satisfy the requirements for eligibility for 
designated entity status, and must list and summarize on their long-
form applications all agreements that affect designated entity status 
such as partnership agreements, shareholder agreements, management 
agreements and other agreements, including oral agreements, 
establishing, as applicable, de facto or de jure control of the entity. 
Such information must be maintained at the licensee's facilities or by 
its designated agent for the term of the license in order to enable the 
Commission to audit designated entity eligibility on an ongoing basis.
    (b) Controlling interest. (1) For purposes of this section, a 
controlling interest includes individuals or entities with either de 
jure or de facto control of the applicant. De jure control is evidenced 
by holdings of greater than 50 percent of the voting stock of a 
corporation, or in the case of a partnership, general partnership 
interests. De facto control is determined on a case-by-case basis. An 
entity must disclose its equity interest and demonstrate at least the 
following indicia of control to establish that it retains de facto 
control of the applicant:
    (i) The entity constitutes or appoints more than 50 percent of the 
board of directors or management committee;
    (ii) The entity has authority to appoint, promote, demote, and fire 
senior executives that control the day-to-day activities of the 
licensee; and
    (iii) The entity plays an integral role in management decisions.
    (2) The following rules apply for the calculation of certain 
interests.
    (i) Ownership interests shall be calculated on a fully diluted 
basis; all agreements such as warrants, stock options, and convertible 
debentures will generally be treated as if the rights thereunder 
already have been fully exercised.
    (ii) Partnership and other ownership interests and any stock 
interest equity, or outstanding stock, or outstanding voting stock 
shall be attributed as specified.
    (iii) Stock interests held in trust shall be attributed to any 
person who holds or shares the power to vote such stock, to any person 
who has the sole power to sell such stock, and to any person who has 
the right to revoke the trust at will or to replace the trustee at 
will. If the trustee has a familial, personal, or extra-trust business 
relationship to the grantor or the beneficiary, the stock interests 
held in trust will be attributed to the grantor or beneficiary, as 
appropriate.
    (iv) Non-voting stock shall be attributed as an interest in the 
issuing entity.
    (v) Limited partnership interests shall be attributed to limited 
partners and shall be calculated according to both the percentage of 
equity paid in and the percentage of distribution of profits and 
losses.
    (vi) Officers and directors of an entity shall be considered to 
have a controlling interest in the entity. The officers and directors 
of an entity that controls a licensee or applicant shall be considered 
to have a controlling interest in the licensee or applicant.
    (vii) Ownership interests that are held indirectly by any party 
through one or more intervening corporations will be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain exceeds 
50 percent or represents actual control, it shall be treated as if it 
were a 100 percent interest.
    (viii) Any person who manages the operations of an applicant or 
licensee pursuant to a management agreement shall be considered to have 
a controlling interest in such applicant or licensee if such person, or 
its affiliate, has authority to make decisions or otherwise engage in 
practices or activities that determine, or significantly influence:
    (A) The nature or types of services offered by such an applicant or 
licensee;
    (B) The terms upon which such services are offered; or
    (C) The prices charged for such services.
    (ix) Any licensee or its affiliate who enters into a joint 
marketing arrangement with an applicant or licensee, or its affiliate, 
shall be considered to have a controlling interest, if such applicant 
or licensee, or its affiliate, has authority to make decisions or 
otherwise engage in practices or activities that determine, or 
significantly influence:
    (A) The nature or types of services offered by such an applicant or 
licensee;
    (B) The terms upon which such services are offered; or
    (C) The prices charged for such services.
    (c) Bidding credits. A winning bidder that qualifies as a very 
small business or a consortium of very small businesses as defined in 
this section may use the bidding credit specified in 
Sec. 1.2110(e)(2)(i) of this chapter. A winning bidder that qualifies 
as a small business or a consortium of small businesses as defined in 
this section may use the bidding credit specified in 
Sec. 1.2110(e)(2)(ii) of this chapter. A winning bidder that qualifies 
as an entrepreneur or a consortium of entrepreneurs as defined in this 
section may use the bidding credit specified in Sec. 1.2110(e)(2)(iii) 
of this chapter.


[FR Doc. 00-24065 Filed 10-4-00; 8:45 am]
BILLING CODE 6712-01-P