[Federal Register Volume 66, Number 51 (Thursday, March 15, 2001)]
[Rules and Regulations]
[Pages 15041-15044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6386]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22 and 90

[WT Docket No. 96-18; PR Docket No. 93-253; FCC 01-66]


Paging Services; Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Clarification of final rule.

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SUMMARY: The Federal Communications Commission (``Commission'') answers 
petitions for reconsideration and/or clarification concerning various 
aspects of the Third Report and Order previously issued in this 
proceeding. The Commission grants one petition to the extent to clarify 
that a licensee who achieved exclusivity prior to the adoption of the 
Second Report and Order previously issued in this proceeding did not 
lose its exclusivity as a result of failing to maintain the previously-
required minimum number of transmitters after the adoption of the

[[Page 15042]]

Second Report and Order. The Commission also denies a petition 
requesting that an additional tier of small businesses eligible for an 
auctions bidding credit be established or, in the alternative, that the 
current gross revenues threshold to qualify for a 25 percent bidding 
credit be raised. Further, the Commission denies a petition requesting 
that it amend its rules either to eliminate the ability of paging 
licensees to partition along the ``boundaries of an FCC-recognized 
service area'' or to specify that the use of Major Trading Area or 
Basic Trading Area listings is not permitted for partitioning.

DATES: Effective March 15, 2001.

FOR FURTHER INFORMATION CONTACT: G. William Stafford, Wireless 
Telecommunications Bureau, Commercial Wireless Division at (202) 418-
0563.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Memorandum Opinion and Order on 
Reconsideration, FCC 01-66, in WT Docket No. 96-18 and PR Docket No. 
93-253, adopted on February 15, 2001, and released on February 27, 
2001. The full text of this Memorandum Opinion and Order on 
Reconsideration is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, S.W., Washington, DC 20554. The complete text may be purchased 
from the Commission's copy contractor, International Transcription 
Service, Inc., 1231 20th Street, N.W., Washington, DC 20037. The full 
text may also be downloaded at: www.fcc.gov. Alternative formats are 
available to persons with disabilities by contacting Martha Contee at 
(202) 418-0260 or TTY (202) 418-2555.

Synopsis of the Memorandum Opinion and Order on Reconsideration

    1. In this Memorandum Opinion and Order on Reconsideration, the 
Commission considers petitions for reconsideration and/or clarification 
of various parts of the Third Report and Order issued in this 
proceeding. See Revision of Part 22 and Part 90 of the Commission's 
Rules to Facilitate Future Development of Paging Systems, Memorandum 
Opinion and Order on Reconsideration and Third Report and Order, 14 FCC 
Rcd 10030 (1999) (``Third Report and Order''), 64 FR 33762, June 24, 
1999. The Commission clarifies one aspect of the Third Report and Order 
concerning interference protection given certain incumbent licensees, 
and denies the other petitions.
    2. Channel Exclusivity. In 1993, the Commission established a 
mechanism for exclusive licensing on thirty-five of the forty 929-930 
MHz channels. The 929 MHz Paging Exclusivity Order, Amendment of the 
Commission's Rules to Provide Channel Exclusivity to Qualified Private 
Paging Systems at 929-930 MHz, Report and Order, 8 FCC Rcd 8318 (1993) 
(``929 MHz Paging Exclusivity Order''), 58 FR 62289, November 26, 1993, 
allowed licensees whose systems operated on these channels to earn 
exclusivity on a local, regional or nationwide basis by constructing 
multi-transmitter systems that met certain minimum criteria. For 
example, an applicant for paging stations in the 929-930 MHz band was 
eligible for local channel exclusivity if, among other requirements, 
the applicant constructed and operated a local paging system that 
consisted of at least six contiguous transmitters. In the Second Report 
and Order, Revision of Part 22 and Part 90 of the Commission's Rules to 
Facilitate Future Development of Paging Systems, Second Report and 
Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 2732 (1997) 
(``Second Report and Order''), 62 FR 11616, March 12, 1997, the 
Commission provided that geographic area licensees must provide co-
channel protection to all incumbent licensees. In the Third Report and 
Order, the Commission clarified that non-exclusive incumbent licensees 
on the thirty-five exclusive 929 MHz channels will continue to operate 
under the same arrangements established with the exclusive incumbent 
licensees and other non-exclusive incumbent licensees prior to the 
adoption of the Second Report and Order. The Commission further 
clarified that nationwide and geographic area licensees have the right 
to share with non-exclusive incumbent licensees on a non-interfering 
basis. Section 22.503(i) of the Commission's rules, 47 CFR 22.503(i), 
was amended to reflect those clarifications.
    3. Blooston, Mordkofsky, Jackson and Dickens (``Blooston'') now 
asks the Commission to clarify that a non-geographic area licensee that 
achieved exclusivity prior to the adoption of the paging auction rules 
but, after the adoption of those rules, failed to maintain the minimum 
number of transmitters that had been required to achieve exclusivity 
does not thereby lose its exclusive status. Blooston further asks the 
Commission to clarify that such licensee accordingly would not be 
considered a non-exclusive incumbent licensee and would not be required 
to share with nationwide and geographic area licensees on a non-
interfering basis. In its Reply filed on September 9, 1999, to the 
Personal Communications Industry Association Opposition to Petition for 
Clarification and/or Reconsideration, Blooston clarified and narrowed 
the scope of its request. In this Memorandum Opinion and Order on 
Reconsideration, the Commission addresses Blooston's arguments only to 
the extent that they relate to Blooston's request as clarified and 
narrowed by its Reply.
    4. Section 22.503(i) of the Commission's rules, 47 CFR 22.503(i), 
provides that all facilities constructed and operated pursuant to a 
paging geographic area authorization must provide co-channel 
interference protection to all authorized co-channel facilities of 
exclusive licensees within the paging geographic area. The rule further 
provides that non-exclusive licensees on the thirty-five exclusive 929 
MHz channels are not entitled to exclusive status and that geographic 
area licensees have the right to share with these non-exclusive 
licensees on a non-interfering basis. In establishing these provisions, 
it was the Commission's intent to recognize the continued exclusivity 
of licensees who were exclusive incumbents prior to the adoption of the 
Second Report and Order. It is the Commission's view that the public 
interest would not be served by withdrawing exclusivity rights that had 
been earned by these licensees. Moreover, maintaining the exclusive 
status of incumbents that previously earned exclusivity is consistent 
with the clarification in the Third Report and Order that maintained 
the non-exclusive status of non-exclusive incumbents with respect to 
sharing with geographic area licensees. Therefore, the Commission 
clarifies in this Memorandum Opinion and Order on Reconsideration that 
a licensee who achieved exclusivity prior to the adoption of the Second 
Report and Order did not lose its exclusivity as a result of failing to 
maintain the previously required minimum number of transmitters after 
the adoption of the Second Report and Order. Such a licensee will not 
be subject to sharing with nationwide and geographic area licensees as 
a non-exclusive incumbent.
    5. The Commission notes, however, that the retained exclusivity 
rights, as clarified above, remain subject to the determination in the 
Third Report and Order that where an incumbent permanently discontinues 
operations at a given site, the area no longer served automatically 
reverts to the geographic area licensee.
    6. Bidding Credits. In the Second Report and Order, the Commission

[[Page 15043]]

adopted bidding credits for two tiers of small businesses in connection 
with paging auctions. In the Third Report and Order, the Commission 
retained its two-tiered small business definition and increased the 
bidding credits. As a result, an entity that, together with its 
affiliates and controlling interests, has average gross revenues for 
the preceding three years not exceeding $3 million qualifies for a 35 
percent bidding credit. An entity that, together with its affiliates 
and controlling interests, has average gross revenues for the preceding 
three years not exceeding $15 million qualifies for a 25 percent 
bidding credit. Morris Communications, Inc. (``Morris'') requests that 
the Commission establish a third tier of small businesses eligible for 
a bidding credit, to permit an entity with average gross revenues for 
the preceding three years not in excess of $40 million to be eligible 
for a 15 percent bidding credit. In the alternative, Morris requests 
that the current gross revenues threshold to qualify for a 25 percent 
bidding credit be raised from $15 million to $40 million.
    7. The Commission declines to change the small business definitions 
or bidding credits established for the paging services in its previous 
orders. In doing so, the Commission notes that it has previously found 
that the bidding credits adopted in this proceeding achieve a 
reasonable balance between the positions of those supporting bidding 
credits in larger amounts and those opposing the use of any bidding 
credits, and that it has considered the particular nature of the paging 
industry in establishing its definitions of small businesses eligible 
for bidding credits. Moreover, the Commission finds that there is no 
need to alter the small business definitions or bidding credits for 
paging, even if they differ from the bidding credits for other services 
such as broadband and narrowband Personal Communications Services, 
because it has conducted a paging auction within the past year in which 
it used the bidding credits adopted in the Third Report and Order and 
small businesses were very successful in that auction. Indeed, bidders 
claiming small business status won 440 of 985 licenses in the 929 and 
931 MHz paging auction that closed on March 2, 2000 (Auction No. 26). 
The successful performance of small businesses in Auction 26 supports 
the conclusion that the Commission's current small business definitions 
and bidding credits are appropriate for future paging auctions. 
Further, as Morris is the only party to raise this issue, there does 
not appear to be a widespread belief in the paging industry that the 
existing small business definitions need to be changed as Morris 
requests. In sum, the Commission is not persuaded that its small 
business definitions or bidding credits for paging should be adjusted, 
and it therefore denies Morris's petition for partial reconsideration.
    8. Partitioning Boundaries in Section 22.513(b) of the Commission's 
Rules. In the Third Report and Order, the Commission replaced the Rand 
McNally Major Trading Areas (MTAs) with Major Economic Areas (MEAs) for 
geographic licensing of the 929-931 MHz band, and affirmed its decision 
to award licenses for Economic Areas (EAs), as opposed to the Rand 
McNally Basic Trading Areas (BTAs), for paging systems operating in the 
lower paging bands. The Commission provided that geographic paging 
licenses may be partitioned based on any boundaries defined by the 
parties. Section 22.513(b) of the Commission's rules, 47 CFR 22.513(b), 
was amended to provide, in pertinent part, that:

[t]he partitioned service area shall be defined by 120 sets of 
geographic coordinates at points at every 3 degrees azimuth from a 
point within the partitioned service area along the partitioned service 
area boundary unless either an FCC-recognized service area is used 
(e.g., MEA or EA) or county lines are followed.

    9. In a petition for reconsideration, Rand McNally & Company 
(``Rand McNally'') requests that the Commission either amend 
Sec. 22.513(b) to eliminate the ability of paging licensees to 
partition along the ``boundaries of an FCC-recognized service area'' or 
to specify that the use of MTA or BTA listings is not permitted for 
partitioning in the absence of an express license agreement with Rand 
McNally permitting such use. Rand McNally asserts that even though the 
rule does not specify MTA or BTA listings, it continues to encourage 
Commission licensees to employ MTA or BTA listings. Rand McNally 
further claims that the Commission would be obligated under the rule to 
grant a license with an MTA-defined boundary, which would infringe upon 
Rand McNally's copyright interests.
    10. The Commission previously has recognized in this proceeding 
that Rand McNally is the copyright owner of the MTA/BTA Listings. In 
the Third Report and Order, the Commission acknowledged that economic 
benefits will accrue from licensing based on a designation that is in 
the public domain, and replaced Rand McNally's MTA listings with MEAs 
for geographic area licensing. Consistent with these determinations, 
Sec. 22.513(b) of the Commission's rules contains no reference to 
partitioning on the basis of MTAs or BTAs. The Commission disagrees 
with Rand McNally's contention that even in the absence of such a 
reference, the rule somehow encourages licensees to employ MTA or BTA 
listings. To the contrary, the Commission already has stated in this 
proceeding that a paging authorization grantee who does not obtain a 
copyright license (either through a blanket license agreement or some 
other arrangement) from Rand McNally for use of the copyrighted 
material may not rely on the grant of a Commission authorization as a 
defense to any claim of copyright infringement brought by Rand McNally 
against such a grantee. Furthermore, the Commission need not use the 
MTA or BTA designations in granting partitioned licenses in this 
service, regardless of whether the applicant uses them, but may instead 
reference county line boundaries, as allowed by the rules. In light of 
these considerations, the Commission sees no need to amend 
Sec. 22.513(b) of its rules, and therefore denies Rand McNally's 
petition for reconsideration.

Procedural Matters

A. Regulatory Flexibility Act

    11. As required by the Regulatory Flexibility Act (``RFA''),\1\ the 
Commission issued a Supplemental Final Regulatory Flexibility Analysis 
(``Supplemental FRFA'') and a Final Regulatory Flexibility Analysis 
(``FRFA'') in the Third Report and Order. The Commission received no 
petitions for reconsideration in direct response to those analyses. In 
this Memorandum Opinion and Order on Reconsideration, the Commission is 
not promulgating new rules or revising existing rules, and its action 
does not affect the previous analyses.
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    \1\ See 5 U.S.C. 604. The RFA, see 5 U.S.C. 601, et seq., has 
been amended by the Contract with America Advancement Act of 1996, 
Public Law No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of 
the CWAAA is the Small Business Regulatory Enforcement Fairness Act 
of 1996.
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    12. Although no RFA analysis or certification is required in this 
Memorandum Opinion and Order on Reconsideration, the Commission takes 
this opportunity to discuss its disposition of a reconsideration 
petition concerning small business size standards. In the Third Report 
and Order, the Commission determined that an entity that, together with 
its affiliates and controlling interests, has average

[[Page 15044]]

gross revenues for the preceding three years not exceeding $3 million 
would qualify for a 35 percent bidding credit in the Commission's 
paging auctions. In addition, an entity that, together with its 
affiliates and controlling interests, has average gross revenues for 
the preceding three years not exceeding $15 million will qualify for a 
25 percent bidding credit. In December 1998, the Small Business 
Administration approved the Commission's two-tiered small business size 
standards. In this Memorandum Opinion and Order on Reconsideration, the 
Commission denies a petition for reconsideration requesting that it 
establish a third tier of small businesses eligible for a bidding 
credit, to permit an entity with average gross revenues for the 
preceding three years not in excess of $40 million to be eligible for a 
15 percent credit. The Commission also denies the petitioner's 
alternative request that the threshold to qualify for a 25 percent 
bidding credit be raised from $15 million to $40 million. In denying 
both requests, the Commission explains that it has considered the 
particular nature of the paging industry in establishing its 
definitions of small businesses eligible for bidding credits. The 
Commission also finds that there is no need to alter the small business 
definitions or bidding credits for paging because it has conducted a 
paging auction within the past year in which the Commission used the 
bidding credits adopted in the Third Report and Order and small 
businesses were very successful in that auction. The Commission finds 
that the successful performance of small businesses in Auction 26 
supports the conclusion that the current small business definitions and 
bidding credits are appropriate for future paging auctions. Finally, 
the Commission notes that, as this petitioner is the only party to 
raise this issue, there does not appear to be a widespread belief in 
the paging industry that the existing small business definitions need 
to be changed in the manner requested.

B. Paperwork Reduction Act

    13. This Memorandum Opinion and Order on Reconsideration contains 
no new or modified information collections that are subject to the 
Paperwork Reduction Act of 1995, Public Law 104-13.

Ordering Clauses

    14. Accordingly, It Is Ordered, pursuant to sections 4(i) and 405 
of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 405, 
and Sec. 1.106 of the Commission's rules, 47 CFR 1.106, that the 
Petition for Clarification and/or Reconsideration filed July 26, 1999 
by Blooston, Mordkofsky, Jackson and Dickens, as clarified by its Reply 
filed September 9, 1999, Is Granted to the extent provided herein.
    15. It Is Further Ordered, pursuant to sections 4(i) and 405 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i) and 405, and 
Sec. 1.106 of the Commission's rules, 47 CFR 1.106, that the Morris 
Communications Petition for Partial Reconsideration filed July 26, 1999 
and the Petition for Reconsideration of Rand McNally & Company filed 
July 23, 1999 Are Denied.
    16. It Is Further Ordered, pursuant to section 4(i) of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), that this 
proceeding Is Terminated.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Appendix A

Petitions for Reconsideration

Morris Communications, Inc.
Rand McNally & Company
Blooston, Mordkofsky, Jackson and Dickens

Oppositions to Petitions

Personal Communications Industry Association

Replies to Oppositions

Blooston, Mordkofsky, Jackson and Dickens

Ex Parte Filings

The Rural Telecommunications Group
Organization for the Promotion and Advancement of Small 
Telecommunications Companies

[FR Doc. 01-6386 Filed 3-14-01; 8:45 am]
BILLING CODE 6712-01-P