[Federal Register Volume 67, Number 25 (Wednesday, February 6, 2002)]
[Rules and Regulations]
[Pages 5491-5513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2866]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2, 27 and 73

[GN Docket No. 01-74; FCC 01-364]


Reallocation and Service Rules for the 698-746 MHz Spectrum Band 
(Television Channels 52-59)

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts allocation and service 
rules for the 698-746 MHz spectrum band (Lower 700 MHz Band), which is 
being reallocated pursuant to statutory requirements. The Commission 
takes these actions to support the development of new services in the 
Lower 700 MHz Band, and to protect existing television operations that 
will occupy the band throughout the transition to digital television.

DATES: Effective April 8, 2002 except for Sec. 27.50(c)(5) which 
contains information collection that has not been approved by the 
Office of Management Budget (OMB). The Commission will publish a 
document in the Federal Register announcing the effective date of that 
section.

FOR FURTHER INFORMATION CONTACT: Jamison Prime, Office of Engineering 
and Technology, at (202) 418-2472 or Michael Rowan, Wireless 
Telecommunications Bureau, at (202) 418-7240.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Report and Order (R&O), FCC 01-364, in GN 
Docket No. 01-74, adopted on December 12, 2001 and released on January 
18, 2002. The full text of this R&O is available for inspection and 
copying during normal business hours in the FCC Reference Information 
Center, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The 
complete text may be purchased from the Commission's duplicating 
contractor, Qualex International, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, (202) 863-2893. The complete text may also be 
downloaded at: www.fcc.gov.

Synopsis of R&O

    In the R&O, the Commission: (1) Reallocates the entire 48 megahertz 
of spectrum in the Lower 700 MHz Band to the fixed and mobile services 
while retaining the existing broadcast allocation; (2) establishes 
technical criteria designed to protect television (TV) operations 
during the digital television (DTV) transition period; (3) allows low 
power television (LPTV) and TV translator stations to retain secondary 
status and operate in the band after the transition; (4) sets forth a 
mechanism by which pending broadcast applications may be amended to 
provide analog or digital service in the core television spectrum or to 
provide digital service on TV Channels 52-58; (5) divides the 48 
megahertz of reallocated spectrum into three 12-megahertz blocks, with 
each block consisting of a pair of 6-megahertz segments, and two 6-
megahertz blocks of contiguous, unpaired spectrum; (6) licenses the two 
six-megahertz blocks of contiguous unpaired spectrum and two of the 
three 12-megahertz blocks of paired spectrum over six Economic Area 
Groupings (EAGs) and the remaining 12-megahertz block of paired 
spectrum over 734 Metropolitan Statistical Areas (MSAs) and Rural 
Service Areas (RSAs); (7) provides for a 50 kW effective radiated power 
(ERP) power limit for the Lower 700 MHz Band to permit both wireless 
services and certain new broadcast operations; and (8) establishes 
competitive bidding procedures and voluntary band-clearing mechanisms 
for the Lower 700 MHz Band.

I. Background

    1. In the Notice of Proposed Rulemaking (NPRM) (66 FR 19106, April 
13, 2001) in this proceeding, the Commission proposed to reallocate and 
adopt service rules for the Lower 700 MHz Band as part of the ongoing 
conversion to DTV broadcasting. Because DTV technology is more

[[Page 5492]]

spectrally efficient than the current analog standard, the same amount 
of television service can operate in a reduced allocation. 47 U.S.C. 
309(j)(14) requires the Commission to assign spectrum recovered from 
broadcast television using competitive bidding, and envisions that the 
Commission will conduct an auction of this spectrum by September 30, 
2002. The statute further requires analog broadcasters to cease 
operation in the recovered spectrum by the end of 2006 unless the 
Commission extends the end of the transition. As provided in the 
statute, the Commission is required to extend the end of the transition 
at the request of individual broadcast licensees on a market-by-market 
basis if one or more of the four largest network stations or affiliates 
are not broadcasting in digital, digital-to-analog converter technology 
is not generally available, or 15 percent or more television households 
are not receiving a digital signal. While the end of the DTV transition 
is targeted for the end of 2006, the statute anticipates that the 
Commission will reclaim excess television spectrum by September 30, 
2002. Therefore, the auction for this spectrum will occur a number of 
years in advance of the end of the digital transition.
    2. The Commission previously determined that television operations 
can be relocated to a core spectrum (TV Channels 2-51), which will make 
existing broadcast spectrum on TV Channels 52-69 available for 
reallocation. The Commission previously reallocated TV Channels 60-69 
(Upper 700 MHz Band). In this R&O, the Commission adopts a flexible 
allocation for the Lower 700 MHz Band that will allow service providers 
to select the technology they wish to use to provide new services that 
the market may demand. At the same time, it takes steps to protect 
incumbent broadcasters during the technically complex transition to 
digital broadcasting during which there will be significant 
interference protection issues for new licensees seeking to initiate 
service in the Lower 700 MHz Band.

II. Discussion

A. Spectrum Allocation Issues

1. Reallocation of the 698-746 MHz Band
    3. Domestically, the Lower 700 MHz Band is currently allocated on a 
primary basis to non-government broadcasting. TV Channels 52-59 (each 
channel represents 6 megahertz of spectrum) occupy the band. TV 
broadcast services may also use TV subcarrier frequencies, and, more 
generally, their TV channels, on a secondary basis for other purposes, 
including datacasting. The band is further allocated to the fixed 
service for subscription television operations in accordance with part 
73 of the Commission's rules. Internationally, the band is allocated 
worldwide on a primary basis to broadcasting services. The band is also 
allocated to fixed and mobile services in Region 2 (which includes the 
United States) on a secondary basis and in Region 3 on a 
co-primary basis. A footnote to the International Table of Frequency 
Allocations elevates the allocation to fixed and mobile services to 
primary status in the United States, Mexico, and several other Region 2 
countries, but this primary allocation has yet to be implemented 
domestically.
    4. In recent years, there has been tremendous growth in new 
wireless services and demand for spectrum. In previous proceedings, the 
Commission has noted that the propagation characteristics of the Lower 
700 MHz Band are ideal for two-way mobile communications. Further, a 
resolution adopted at World Radiocommunication Conference-2000 (WRC-
2000) recognized that some administrations may use the Lower 700 MHz 
Band for 3G services. At WRC-2000, the United States proposed that the 
Lower 700 MHz Band be identified as one of several candidate bands for 
the terrestrial component of new advanced communication applications. 
However, significant investment and planning is required by 
broadcasters to build new digital facilities and relocate operations. 
The Commission has anticipated that the band will remain principally a 
television band until the end of the digital transition and early 
recovery of additional spectrum beyond the Upper 700 MHz Band was not 
contemplated in the DTV transition plan. Because of the statutory 
requirement to auction this spectrum several years in advance of the 
end of the transition, the Commission balances the opportunities for 
new services with the challenges faced by incumbent broadcasters.
a. Fixed, Mobile, and Broadcast Allocation
    5. The Commission reallocates the entire 48 megahertz of spectrum 
in the Lower 700 MHz Band to fixed and mobile services, and retains the 
existing broadcast allocation. This decision is consistent with the 
Commission's allocation plans as set forth in the Spectrum Reallocation 
Policy Statement (14 FCC Rcd 19868 (1999)). It is also consistent with 
the principles of the policy statement `` that flexible allocations can 
promote efficient spectrum markets, which, in turn, encourages 
efficient use of the spectrum. Furthermore, it conforms with positions 
the United States has taken at the World Radio Conference (WRC). The 
broadcast allocation supports broadcasting that will take place during 
the DTV transition period (and LPTV and TV translator operations on a 
secondary basis for the indefinite future). It also draws on the Upper 
700 MHz Band proceeding, where the Commission permitted both broadcast 
and advanced fixed and mobile service use of the band (with service 
rules that limited the power of any new broadcasting services in order 
to insure the protection of new wireless entrants in the band). The 
Commission notes that no commenter suggested an alternative basis for 
its allocation decision, but, instead, those who do not fully support 
the Commission's proposal expressed narrow technical concerns about a 
shared allocation as opposed to broader concerns about the overall 
spectrum management approach.
    6. The Commission describes how the R&O meets several additional 
statutory responsibilities. 47 U.S.C. 309(j)(14) requires the 
Commission to reclaim and assign the Lower 700 MHz Band by competitive 
bidding. Furthermore, 47 U.S.C. 309(j)(3) sets forth objectives that 
the Commission must promote in developing our competitive bidding 
methodology including, inter alia, the development, and rapid 
deployment of new technologies. As in the Upper 700 MHz Band 
proceeding, the Commission expects many of the new technologies to be 
developed and deployed will support advanced wireless applications, and 
wants to provide licensees with the maximum opportunity to make use of 
these opportunities.
    7. The Commission finds that the flexible use approach it is 
adopting is consistent with 47 U.S.C. 303(y), and meets all four of the 
criteria outlined in that section. 47 U.S.C. 303(y) requires the 
Commission to make affirmative findings that a proposed flexible use 
allocation (1) is consistent with international agreements; (2) would 
be in the public interest; (3) would not deter investment in 
communications services and systems, or technology development; and (4) 
would not result in harmful interference among users. Because the band 
is allocated worldwide on a primary basis to the broadcasting service, 
and is also allocated to the fixed and mobile services in Region 2 
(which includes the United States) on a primary basis, via footnote to 
the International Table of Frequency Allocations, the Commission may 
add a fixed and mobile service

[[Page 5493]]

allocation to the existing broadcast allocation and be consistent with 
international band management plans. The Commission envisions that the 
existing broadcast allocation (in conjunction with the new technical 
rules designed to support both broadcast and fixed and mobile services) 
will support investment in and development of a variety of broadcast-
type applications in the band, including two-way interactive services 
and services using coded orthogonal frequency division multiplex 
(COFDM) technology. These applications could include video 
transmissions to mobile receivers, similar to services being developed 
in Europe and Asia. Development of these applications, it concludes, 
would be in the public interest.
    8. The Commission recognizes that these public interest benefits 
might be frustrated if broadcast and fixed and mobile services cannot 
successfully co-exist, and it therefore adopts technical rules that 
account for the differences between the services. The rules it adopts 
will allow the two services can co-exist without harmful interference 
among users and, in doing so, will not deter investment in and 
development of technology for the two services. The flexible use 
characteristic of the allocation--by which both broadcast and fixed and 
mobile services is allowed in the band--is identical to the approach 
the Commission took in the Upper 700 MHz Band proceeding.
    9. The Commission prohibits licensees who acquire the reallocated 
spectrum from providing full-power broadcast services of the type that 
has traditionally been made available in this band because such high-
powered broadcasting is likely to cause harmful interference and deter 
development of the band. Otherwise, the Commission would have to adopt 
interference protection criteria that would make a large portion of 
this band effectively unusable for those licensees who seek to offer 
new wireless applications. However, the approach the Commission takes 
also recognizes that a highly restrictive approach to broadcasting 
power limits would sharply limit broadcasting options for this band and 
would frustrate the public interest afforded by a broadcast allocation.
b. Special Considerations for Broadcast Allocation
    10. At the end of the DTV transition, television broadcasting will 
remain adjacent to the Lower 700 MHz Band, with full power and Class A 
low power television stations operating on TV Channel 51. The 
Commission declines to adopt a guard band or other specialized 
mechanism to protect DTV operations on Channel 51, but instead relies 
on interference protection criteria to ensure that new licensees 
adequately protect core TV channel operations. The Commission takes 
this approach because the protection for Channels 52-59 is no different 
from the protection for the core TV channels (Channels 2-51)--only the 
duration of that protection differs. Accordingly, the Commission 
concludes that there is no basis for adopting additional protective 
measures at the lower end of the Lower 700 MHz Band and instead finds 
that the protective measures suggested by commenters are unnecessarily 
restrictive. Instead of making special considerations for new 
licensees--such as adjusting our allocation to minimize the presence of 
systems with low immunity to high-power signals--the Commission chooses 
a flexible approach and expects licensees to consider potential 
interference situations when designing and developing their systems. 
The Commission believes that bidders for this spectrum will take into 
account criteria established to protect the core TV channels and will 
develop their business plans, services, and facilities accordingly.
c. Low Power Television Service and Television Translators
    11. The Commission will permit LPTV operations (which, for purposes 
of this proceeding, includes television translators) in the Lower 700 
MHz Band after the end of the transition on a secondary basis. These 
stations may operate until they cause actual interference to a DTV 
station or new licensee and LPTV stations may negotiate interference 
agreements with new service providers. The Commission prohibits LPTV 
stations, licensed under 47 CFR 74 subpart G from causing harmful 
interference to stations of primary services--including new licensees 
in the band. (However, if a licensee who acquires Lower 700 MHz Band 
spectrum through the competitive bidding process opts to use the 
spectrum for low power digital broadcasting, such a station would have 
primary regulatory status.)
    12. The Commission concludes that its approach appropriately 
balances two largely conflicting interests. 47 U.S.C. 337(e)(2) states 
that after allocating the Upper 700 MHz Band, the Commission ``shall 
seek to assure * * * that each qualifying low-power television station 
is assigned a frequency below 746 MHz to permit the continued operation 
of such station.'' However, LPTV operators in the Lower 700 MHz Band 
must be prepared to cease service once television Channels 52-59 are 
reclaimed, pursuant to 47 U.S.C. 309(j)(14), when new licensees (who 
will have primary status) begin using the band. Congress has 
recognized--and the Commission has repeatedly noted--that not all LPTV 
stations can be guaranteed a certain future due to the emerging DTV 
service, and the Commission concludes that it is inadvisable to defer 
the ultimate displacement of LPTV operations to the detriment of new 
primary service licensees in the band. To grant LPTV operations special 
considerations vis-a-vis new licensees would turn the concept of 
secondary status upside down and would retard the potential development 
of new and innovative services.
    13. Because the overall framework for the Commission's treatment of 
LPTV stations was previously decided outside of this proceeding, the 
Commission concludes that there is no reason to modify those decisions 
and notes that those commenters who outline circumstances in which they 
believe LPTV should have greater protection do not explain how 
circumstances have changed since the Commission last examined the 
issue. LPTV licensees have been aware of their secondary status 
throughout the transition and LPTV entities with operations on Channels 
52-59 must recognize the possibility that a primary licensee can 
initiate service in the band. The DTV Sixth Report and Order (62 FR 
26684, May 14, 1997) identified the core DTV spectrum to consist of 
those TV channels below Channel 52 and stated that secondary operations 
(such as LPTV) will be able to continue to operate until a displacing 
DTV station or a new primary service provider is operational. The 
requirement to auction reclaimed spectrum has also been in place since 
1997. Because of the steps it has taken to allow continued LPTV 
operation, including allowing LPTV licensees to remain in the band 
until they actually cause interference and permitting LPTV operators to 
negotiate with new licensees for interference protection agreements, 
the Commission nevertheless expects that many LPTV licensees will be 
able to continue to operate in the band for some time to come.
    14. The Commission also rejects specific comments that suggest that 
some LPTV stations should receive the same protection from displacement 
and interference as full power television stations because of the 
Commission's obligations with respect to Class A status, and decides 
that a proposal that

[[Page 5494]]

out-of-core LPTV stations that are eligible for Class A status be 
allowed to continue operating until such a time as an in-core channel 
becomes available is overly broad and inconsistent with the 
Commission's ultimate goals for the band. Furthermore, it rejects a 
request to afford continued secondary status to part 74 low power 
broadcast auxiliary devices (such as wireless microphones) operating in 
the Lower 700 MHz Band, and to establish a new service in part 95 of 
our Rules to accommodate their use.
d. Satellite Services
    15. The Commission does not include a satellite allocation in the 
Lower 700 MHz Band and concludes allowing satellite operations would be 
inconsistent with the principles of effective spectrum management in 
the Lower 700 MHz Band. The Commission concludes that the inherent 
difficulties in coordinating satellite and terrestrial services could 
delay or stifle the introduction of new services in this band; 
questions whether a flexible satellite allocation in this band could 
meet the statutory requirements 47 U.S.C. 303(y); and notes that 
current international allocations do not include satellite operations 
in this band.
2. Transition Issues
a. Incumbent Broadcasters
    16. The Commission's treatment of issues related to incumbent 
broadcasters who will continue to use the band throughout the DTV 
transition recognizes differences between the Upper and Lower 700 MHz 
Bands. Early recovery of additional spectrum beyond the Upper 700 MHz 
Band was not contemplated in the DTV transition plan. Even with the 
mechanisms it adopts to encourage voluntary band clearing in both the 
Upper and Lower 700 MHz Bands, the Commission has never anticipated 
that it will be able to clear the Lower 700 MHz Band before the Upper 
700 MHz Band. Because of this history, and because encumbrances in the 
Lower 700 MHz Band are likely to make band clearing a more complex 
operation, the Commission realizes that some broadcasters may have 
accepted an allotment in the Lower 700 MHz Band with the expectation 
that the band would continue to be extensively used for broadcasting 
throughout the transition.
    17. New licensees will need to take into account the large number 
of digital broadcasters who will operate in the Lower 700 MHz Band 
during the transition. On average, there are slightly more than ten 
times the number of digital stations per channel on Channels 52-59 as 
compared to Channels 60-69. While the planning for the DTV Table of 
Allotments sought to minimize use of out-of-core channels, the 
Commission was unable to accommodate a second digital channel for all 
broadcasters within the ``core'' broadcast spectrum. The degree of 
incumbency in the Lower 700 MHz Band--consisting of both digital and 
analog broadcasters--is likely to make it far more difficult for new 
services to operate in this band, particularly in major metropolitan 
markets, prior to the end of the transition. The Commission notes that 
the degree of incumbency in the Lower 700 MHz Band underscores its 
obligation to fully protect incumbent full-power analog and digital 
broadcasters during the transition period, and the rules it adopts are 
designed to support this core value.
(i) Analog Stations
    18. Currently, there are 94 licensed full service NTSC analog 
stations and seven approved analog construction permits in the Lower 
700 MHz Band. Although this figure represents approximately the same 
number of analog incumbents as in the Upper 700 MHz Band, the Lower 700 
MHz Band consists of less spectrum and, therefore, incumbent licensees 
are more densely situated across the band. The Commission addresses 
requests for new NTSC stations in the 698-746 MHz band in two parts: 
(1) Petitions for new allotments and (2) applications for construction 
permits. Some of these applications may also include requests for 
modifications of the allotment such as changes in frequencies to cure 
interference to new DTV operations or as a replacement channel for 
channels in the Upper 700 MHz Band (i.e. channels 60-69). The 
Commission dismisses the pending petitions for new NTSC channel 
allotments in the 698-746 MHz band. In this regard, it notes that its 
staff previously dismissed a number of petitions for rulemaking for new 
station allotments on channels 
52-58 as defective, and petitions for reconsideration have been filed. 
Given its decision to dismiss all petitions on these channels, the 
Commission concludes that the pending petitions for reconsideration are 
now rendered moot and determines that they will be dismissed. The 
Commission concludes that beginning the process of adding new analog 
television allotments or stations at this stage of the transition to 
digital television would be inconsistent with the DTV transition 
process because the allotment proceedings, station authorization, and 
construction would likely not be completed until much later in the DTV 
transition. The new licensee might then have only a limited period of 
time to operate in analog before being required to transition to 
digital service. The Commission also notes that the Balanced Budget Act 
of 1997 requires that analog television spectrum be reclaimed for new 
services and concludes that adding analog allotments or stations in the 
698-746 MHz band would be inconsistent with the purpose of that Act and 
would not foster the timely and efficient transition to digital 
television. The Commission notes that petitioners may, however, refile 
a new DTV channel allotment petition on a core channel (2-51), subject 
to meeting the DTV spacing requirements.
    19. With regard to applications for construction permits, the 
Commission recognizes that parties have made investments in these 
applications and that they are generally further along in the 
regulatory process and thus could potentially provide service to the 
public on a more near-term basis. While it believes that these 
applications can be processed in a manner consistent with our DTV 
transition policies, the Commission does not believe that deploying 
service in analog format is consistent with the statutory mandate to 
reclaim this spectrum for new services or with its DTV transition 
policies. It concludes that authorizing additional analog television 
operations at this stage in the DTV transition so close the May 1, 
2002, date when commercial broadcast stations are required to be 
operating on their digital allotments would be inconsistent with the 
goal of achieving a rapid conclusion of the transition.
    20. Although the Commission does not wish to encourage the 
expansion of analog television service, it also notes that digital 
deployment on the allotments for which there are pending analog 
applications will introduce new digital services and will promote the 
acquisition of digital receiving equipment by consumers. In addition, 
the Commission concludes that such an approach will avoid the 
complications that could arise in requiring licensees to convert their 
analog operation to digital operation relatively soon after they 
commence analog operation. It also believes that new service providers 
may be able to co-exist more easily with digital television stations 
given that such stations operate with lower power and their signals may 
generally be less susceptible to interference than analog television 
signals. Accordingly, the Commission provides a 45-day opportunity for 
applicants to request a change in their pending applications for a 
construction permit or petition for rule

[[Page 5495]]

making. Requests to provide analog or digital service in the core 
spectrum will require the filing of a petition for rulemaking to amend 
either the TV Table of Allotments (47 CFR 73.606) or the DTV Table of 
Allotments (47 CFR 73.622) or an amendment to such a petition if the 
applicants have already filed one. The Mass Media Bureau will set forth 
these procedures in a soon-to-be released Public Notice. The Commission 
made the 45-day window effective upon release of the Commission's R&O. 
Applications can be modified in one of two ways: (1) To provide analog 
or digital service in the core television spectrum, i.e., channels 2-51 
or (2) to provide digital service in the 698-740 MHz band, i.e., 
channels 52-58 (In this limited circumstance, the Commission will not 
treat these application amendments to provide digital service in 
channels 52-58 as new DTV allotments under 47 CFR 73.622(a)(1)). At the 
end of the 45-day period, the Commission will dismiss any pending 
application that does not meet either of the above conditions. Finally, 
because of the adjacent channel interference that new stations on 
channel 59 could cause to new licensees in the adjacent Upper 700 MHz 
Band, the Commission will no longer accept or grant any application for 
channel 59, and parties with outstanding applications that specify 
channel 59 and who have not yet filed a channel allotment rulemaking 
petition to specify another channel must do so within the 45-day 
period. The Commission also amends its rules to specify that petitions 
requesting a change in the channel of an initial DTV allotment may only 
be amended to specify channels 2-58.
(ii) Low Power Stations
    21. At the time the NPRM was adopted, there were 835 licenses and 
244 construction permits for LPTV operations on Channels 
52-59, and an additional 607 pending applications for LPTV stations on 
those channels. Although the Commission recognizes that it must clear 
all LPTV operations from the Upper 700 MHz Band at the end of the 
transition, it also finds that it has additional flexibility with 
respect to operations in the Lower 700 MHz Band. Thus, to ensure the 
continuation of television service, the Commission will continue to 
permit LPTV and TV translator stations to request the use of channels 
52-69 in order to eliminate or avoid conflicts with NTSC and DTV 
stations or allotments. This decision recognizes that these 
``displacement relief'' stations may be in very rural areas of the 
country where the 700 MHz Band could be used by these stations with 
little chance that they would again be displaced in the near future. 
The Commission takes a measured approach with regard to the filing and 
processing of applications seeking new LPTV and TV translator stations 
to operate on channels 52-69. With respect to all such applications on 
file, namely those tendered in the August 2000 LPTV and TV translator 
filing window, the Commission will process these applications and, if 
found acceptable, grant them. The proposed channel 52-69 operations 
will also be authorized on a secondary basis.
    22. The Commission sought an approach that will not unduly encumber 
the 700 MHz Band further during the DTV conversion, but will also 
further its desire to treat fairly all of the nearly 4,700 LPTV and TV 
translator applicants that filed during the August 2000 window. 
Accordingly, it revises its LPTV displacement relief policies and rules 
as follows: Future LPTV and TV translator permittees and licensees that 
tendered new station applications during or subsequent to the August 
2000 filing window and have been authorized to operate in the 700 MHz 
Band (TV channels 52-69) will be entitled to displacement relief only 
in order to eliminate or avoid interference conflicts. Priority over 
pending Class A TV, LPTV or TV translator station applications will not 
be afforded to the displacement applications of these future LPTV or TV 
translator permittees or licensees solely by virtue of their 
authorization to operate in the 700 MHz Band. With respect to future 
filing windows, the Commission retains the discretion to geographically 
restrict or preclude altogether the filing of applications for new LPTV 
and TV translator stations seeking to operate on channels 52-69. The 
Commission will permit secondary operation of LPTV stations below 
channel 60 after the end of the transition.
    23. Throughout the DTV and related proceedings, the Commission has 
recognized that the transition and reallocation of spectrum will 
significantly affect LPTV. It concludes that the rule changes 
previously adopted in the DTV proceeding, in conjunction with its 
decision to allow continued LPTV operations in the Lower 700 MHz Band 
strike the appropriate balance between facilitating the DTV transition 
and reallocating the spectrum as required by law, and permitting 
continued LPTV operations outside the core channels.
b. Interference Protection for TV Services
    24. The Commission adopts the same protection criteria for analog 
TV stations in the Lower 700 MHz Band at it previously adopted in the 
Upper 700 MHz Band. Because these limits are based on the results of a 
thorough experimental study of land mobile interference to analog 
television conducted many years before the advent of digital 
television, the Commission concludes that they properly apply only to 
analog television and finds that it is not necessary or appropriate to 
apply the same interference protection for DTV stations in the Lower 
700 MHz Band. It concludes that the D/U ratio of 17 dB for co-channel 
interference to digital stations should be 23 dB for protection of DTV 
from wideband land mobile transmissions. At the edge of the DTV (noise-
limited) service area, where the DTV S/N ratio is small, the value of 
D/U is 23 dB for co-channel interference protection from another DTV 
station (i.e., the desired signal must be at least 23 dB greater than 
the undesired signal). A wideband land mobile or digital broadcast 
signal will increase the noise floor for the DTV reception just as 
though it were a DTV transmission. Because DTV receivers treat 
interference from wideband co-channel signals as an increase in the 
noise floor of the desired signal, the Commission finds that new land 
mobile systems operating in the Lower 700 MHz Band employing wide band 
noise-like signals need to provide co-channel DTV stations with an 
additional 6 dB of protection. 6 dB is the difference between the D/U 
ratio of 17 dB that applies to the Upper 700 MHz Band and the value 23 
dB that the Commission finds is necessary to fully protect DTV from 
wideband transmissions. The corresponding maximum field strengths are 
18 dB and 64 dB respectively for co- and adjacent-
channel land mobile transmissions. The Commission permits fields no 
stronger than these at the DTV service contour where the DTV signal 
strength is 41 dB. This criterion, the Commission concludes, 
will best protect existing broadcast operations.
    25. The Commission concludes that its approach is warranted because 
the number and density of incumbent TV stations in the Lower 700 MHz 
Band is greater than those in the Upper 700 MHz Band and a major factor 
that led to the specific protection standards adopted in the Upper 700 
MHz Band--the goal of maximizing the utility of the new public safety 
allocation--is not present in this case. The Commission also rejects a 
proposal to revise the

[[Page 5496]]

Grade B contour predictions/broadcast television protections based on 
new field strength measurements. The Commission concludes that any such 
ad hoc re-evaluation of broadcast protections could inadvertently lead 
to loss of service by viewers.
c. Coordination With Canada and Mexico
    26. Because the United States is obligated under existing 
agreements to protect the signals of Canadian and Mexican TV broadcast 
stations located in the border areas, new licensees' use of the band 
will be subject to any future agreements that the United States 
establishes with Canada and Mexico. Until that time, new licensees in 
the band will be subject to existing agreements and the condition that 
harmful interference not be caused to, and must be accepted from, 
television broadcast operations in those countries.

B. Service Rules

    27. The R&O provides the service rule decisions required by the 
Commission's reallocation of the Lower 700 MHz Band to fixed, mobile, 
and broadcast services. In the R&O, the Commission generally applies 
the part 27 licensing and operational rules that it applied previously 
to the spectrum band 747-762 MHz and 777-792 MHz (Upper 700 MHz 
Commercial Band). The Commission believes that the general application 
of the same part 27 licensing and operating rules to the 700 MHz Band 
as a whole will help promote flexible and efficient use of the 
spectrum. In the Spectrum Reallocation Policy Statement, the Commission 
explained that flexibility can be promoted by harmonizing the rules for 
like services. The Commission continues to believe that regulatory 
neutrality and operational uniformity across the 700 MHz Band will 
permit the marketplace to achieve the highest valued end use of the 
spectrum. These part 27 rules will enable the broadest possible use of 
this spectrum consistent with the spectrum management obligations and 
objectives identified in the Commission's Spectrum Reallocation Policy 
Statement.
    28. While the Commission generally adopts the same part 27 
framework established for licenses in the Upper 700 MHz Commercial 
Band, the Commission's service rules for the Lower 700 MHz Band also 
contain some distinctive elements based on its assessment of 
similarities and differences between these spectrum resources. These 
include the specific record pertaining to the band, the potential 
demand for these licenses, the nature of the spectrum resource (e.g., 
propagation characteristics), statutory considerations, various 
external constraints (e.g., degree of incumbency, scarcity of spectrum 
suitable for mobile applications), and several longer-term policy 
objectives (e.g., the pace of the DTV transition, the feasibility of 
clearing the band). As a result, the Commission has added definitional 
and technical rules to part 27 to reflect what it believes to be the 
optimal initial scope of licenses for the Lower 700 MHz Band.
    29. These service rules, along with the competitive bidding 
provisions that the Commission adopts in the R&O, derive from the 
Commission's statutory obligations under 47 U.S.C. 309(j). 47 U.S.C. 
309(j)(3) outlines a number of public interest objectives that the 
Commission must consider when establishing the characteristics of 
licenses that are to be assigned by competitive bidding and designing 
auction systems. These statutory objectives include the development and 
rapid deployment of new technologies, products, and services for the 
benefit of the public, the promotion of economic opportunity and 
competition, the recovery of a portion of the value of the spectrum 
made available for commercial use, and the efficient and intensive use 
of the spectrum. Further, 47 U.S.C. 309(j)(14)(c) directs the 
Commission to reclaim, reorganize, and auction this spectrum well 
before broadcasters are required to vacate the band at the end of the 
DTV transition period. The Commission believes that adopting flexible, 
market-based service rules is the most appropriate approach for 
implementing its 47 U.S.C. 309(j) statutory directives.
1. Scope of Licenses
    30. The NPRM sought comment on the three sets of issues that define 
the scope of licenses for the Lower 700 MHz Band: the permissible 
licensed services, the size of spectrum blocks, and the size of 
licensed service areas. By these decisions, the Commission seeks to 
define an initial scope of licenses that can be obtained and used by a 
wide range of entities and services. It is the Commission's intent that 
market forces assign this spectrum to its highest valued use and 
thereby determine the ultimate use of the band.
a. Permissible Licensed Services
    31. The Commission will apply Sec. 27.2 of its rules to define the 
permissible communications for the Lower 700 MHz Band and allow a 
multitude of fixed, mobile, and broadcast uses that the market may 
demand. Because the Commission has declined to reallocate the Lower 700 
MHz Band for satellite use, the R&O does not consider service rules for 
the deployment of satellite operations on this band. Consistent with 
the Commission's Spectrum Reallocation Policy Statement, this flexible 
use approach will allow the provision of services to the public that 
could include mobile and other digital new broadcast operations, fixed 
and mobile wireless commercial services (including Frequency Division 
Duplex (FDD) and Time Division Duplex (TDD) based services), as well as 
fixed and mobile wireless uses for private, internal radio needs. The 
record in this proceeding demonstrates demand for expanded wireless 
services in the Lower 700 MHz Band, particularly in non-urban areas, 
for uses ranging from the implementation of next generation 
applications and extensions of existing mobile and fixed networks to 
the implementation of various innovative stand-alone technologies. It 
also demonstrates demand for certain broadcast and other broadband 
applications that could include two-way interactive, cellular, and 
mobile television broadcasting services. The Commission therefore 
declines to exclude all broadcast services and will instead allow any 
broadcast services that meet its part 27 technical rules. These 
technical rules will provide opportunities for existing broadcasters 
and others who wish to operate certain new digital television services 
in the Lower 700 MHz Band. The Commission does not wish to exclude 
competitors by adopting use restrictions on spectrum with 
characteristics suitable for new broadcast, wireless, and broadband 
services.
    32. This decision will permit market forces to effectively assign 
spectrum to its highest valued use as well as meet the Commission's 
statutory mandate under 47 U.S.C. 303(y) to ensure harmful interference 
will not result from the permitted flexibility. As part of the 
Commission's commitment to establish maximum practicable flexibility 
for services, the Commission has determined and lessened the potential 
for interference by the Commission's power limit and other technical 
decisions set forth in the R&O. The Commission believes this approach 
affords maximum flexibility while promoting efficient use of scarce 
spectrum and preventing harmful interference between mobile wireless 
and broadcast applications using a variety of different technologies.
b. Band Plan
    33. The Commission adopts a band plan that divides the 48 megahertz 
of

[[Page 5497]]

reallocated spectrum into three 
12-megahertz blocks, with each block consisting of a pair of 6-
megahertz segments, and two 6-megahertz blocks of contiguous, unpaired 
spectrum. The Commission's decision to institute multiple paired and 
unpaired blocks in a combination of sizes and pairings accommodates the 
proposals of nearly all of the parties participating in this 
proceeding. Although two commenters advocated a larger initial 
allocation per spectrum block, their recommended sizes were not 
significantly larger than 12 megahertz. The block sizes that the 
Commission adopt, therefore, should not burden their attempts to 
acquire more than 12 megahertz of spectrum in any given area. Moreover, 
the Commission's decision not to apply any spectrum aggregation limits 
to the Lower 700 MHz Band will permit parties seeking larger blocks to 
aggregate spectrum both at auction and in the secondary market.
    34. The size and placement of the five blocks reflect several 
important spectrum management considerations. Each of these blocks 
corresponds with either one or two 6 megahertz television channels. The 
Commission agrees that this will facilitate use of the Lower 700 MHz 
Band by analog and digital broadcasters as well as a variety of fixed 
and mobile wireless services. In addition, this alignment will minimize 
the number of incumbent television licensees to which a new Lower 700 
MHz Band licensee's operations would potentially cause interference.
    35. Placing the two unpaired 
6-megahertz blocks at the center of the band plan has several 
advantages. It provides an opportunity for licensees to aggregate both 
licenses and thereby offer services with very wide emission types that 
may require more than 6 megahertz of contiguous spectrum. Centering 
these two blocks also results in 30-megahertz separation between the 
upper and lower segments of the 12-megahertz paired licenses. Such 
separation is consistent with licenses in the Upper 700 MHz Commercial 
Band and meets the requirements of many two-way technologies and 
equipment.
    36. Finally, the size and nature of each paired segment should make 
those portions of the spectrum equally suitable to firms employing 
technologies that rely on unpaired spectrum, as well as firms seeking 
to launch certain new broadcast operations. Each segment consists of 6 
megahertz of contiguous spectrum, an amount cited by both broadcast 
interests and TDD advocates as instrumental to their operations. In 
addition, all six segments are symmetric in size and will be subject to 
power limits based on usage rather than frequency, an approach that was 
adopted for the Upper 700 MHz Commercial Band in the Upper 700 MHz MO&O 
and FNPRM. By not imposing different restrictions on operations in 
upper versus lower segments, the Commission increases the potential use 
of these segments by new technologies and new service providers that do 
not rely on paired spectrum.
    37. This flexible band plan offers five licenses in any given area 
that are of sufficient bandwidth to permit a variety of services. The 
Commission has considered commenters' desires for multiple blocks by 
adopting smaller blocks of spectrum. The Commission has balanced this 
demand, however, against its goal of enabling new broadband services 
and advanced wireless services on spectrum with propagation 
characteristics well suited for such applications. Although it 
acknowledges that encumbrances by broadcasters may preclude such 
services in the near term, the Commission is committed to reorganizing 
the spectrum in such a way that its bandwidth assignments, at a 
minimum, can eventually support the deployment of the new technologies 
and services that it is bound to promote by statute
    38. As compared to smaller block sizes, the Commission believes 
that 12 megahertz paired blocks are required to afford sufficient 
capacity for the provision of many new services. Accordingly, the 
Commission has adopted three 12-megahertz paired blocks to provide 
opportunities for augmentation of existing systems, especially CMRS 
systems, as well as for new systems. The Commission also believes that 
12-megahertz licenses could in some cases facilitate band clearing and 
new licensees' use of the Lower 700 MHz Band during the DTV transition.
    39. In addition to the three 
12-megahertz paired blocks, the Commission has adopted two 
6-megahertz unpaired blocks because it believes they add flexibility to 
the band plan while offering the minimum capacity for the provision of 
additional new services, including certain broadband services. The 
Commission finds that a combination approach is appropriate given the 
interest in small spectrum block sizes, the support by broadcasters for 
6-megahertz blocks, and the R&O's technical rule decisions that permit 
certain new broadcast operations in the Lower 700 MHz Band. In 
addition, a 6-megahertz contiguous block of spectrum is sufficient to 
allow for development and deployment of certain services including new 
broadcast services and fixed and mobile wireless services that do not 
depend on paired frequencies.
    40. In providing a flexible band plan with multiple spectrum blocks 
and small sizes, the Commission presents ample opportunities for 
participation by rural telephone companies and small businesses. The 
Commission therefore declines to set aside 10 to 12 megahertz in each 
geographic licensing area for designated entities. As opposed to 
restricting certain firms' access to spectrum, the Commission has 
created five smaller spectrum licenses in each geographic area of the 
United States.
c. Size of Service Areas for Geographic Area Licensing
    41. The Commission adopts a geographic area licensing approach to 
assign licenses in the Lower 700 MHz Band. This is consistent with the 
Commission's past experience that geographic area licensing, as 
compared to site-specific licensing, offers licensees superior 
flexibility to respond to market demands.
    42. Regarding the size of each service area for geographic 
licensing, the Commission has determined that the most appropriate 
configuration for the Lower 700 MHz Band is based on a combination of 
large regional areas and small geographic areas. The Commission 
therefore will license the five blocks in the Lower 700 MHz Band plan 
as follows: the two 6-megahertz blocks of contiguous unpaired spectrum, 
as well as two of the three 
12-megahertz blocks of paired spectrum, will be assigned over 6 EAGs as 
defined in the Upper 700 MHz Band proceeding; the remaining 12 
megahertz block of paired spectrum (designated as Block C) will be 
licensed over 734 MSAs and RSAs originally adopted for the cellular 
radiotelephone service with modifications for cellular market 306, 
which covers the Gulf of Mexico, and for all MSAs and RSAs that border 
the Gulf. See 47 CFR 27.6(c).
    43. The Commission's assignment of 36 megahertz of spectrum in this 
band over EAGs complements the approach used for the Upper 700 MHz 
Commercial Band. As the Commission observed in the Upper 700 MHz Band 
proceeding, EAGs can provide licensees significant flexibility to 
address issues associated with protection of incumbent TV stations. The 
Commission believes that certain interference risks are offset by 
avoiding the need for complicated agreements that could arise if 
spectrum were licensed in smaller areas where several geographic 
service areas could overlap a TV protection zone.

[[Page 5498]]

    44. The use of EAGs establishes an initial license scope that 
provides flexibility and opportunities for a wide variety of fixed, 
mobile, and new broadcast services. In the Upper 700 MHz Band 
proceeding, the Commission noted that the ability to build nationwide 
service was an important advantage of EAGs, along with the opportunity 
EAGs offer providers to achieve economies of scale in their operations. 
Such efficiencies have allowed providers to offer or expand innovative 
pricing plans such as one-rate type plans, which in turn reduce prices 
to consumers. Licensees may, therefore, use EAGs to build larger, even 
nationwide footprints.
    45. Despite the efficiencies associated with nationwide service, 
however, the Commission believes the use of EAGs is preferable to the 
assignment of nationwide service areas. The vast majority of commenters 
recommend using much smaller geographic areas, and only two commenters 
recommend assigning any portion of this spectrum across a nationwide 
service area. Using EAGs instead of nationwide license areas 
facilitates the acquisition of spectrum by different providers with 
spectrum needs that are confined to their particular region or market. 
As the Commission observed in the Upper 700 MHz Band proceeding, EAGs 
are easier to partition than nationwide licenses, which also may help 
serve the needs of regional providers. Furthermore, the Commission 
believes aggregating EAGs into nationwide areas is an administratively 
straightforward process, and the Commission notes that this may be 
simplified through the auction process. While any type of aggregation 
is not without cost, the Commission believes that such costs are 
outweighed by the significant benefits associated with use of large 
regional areas, such as EAGs.
    46. The Commission's assignment of a 12-megahertz block of paired 
spectrum, 25 percent of the Lower 700 MHz Band spectrum, over MSAs/RSAs 
reflects its desire to promote opportunities for a wide variety of 
applicants, including small and rural wireless providers, to obtain 
spectrum. This is consistent with the Commission's congressional 
mandate to promote ``economic opportunity and competition'' and to 
disseminate licenses ``among a wide variety of applicants, including 
small businesses, rural telephone companies, and businesses owned by 
members of minority groups and women.'' 47 U.S.C. 309(j)(3)(B). In 
contrast to the Commission's experience in the Upper 700 MHz Band 
proceeding, many commenters in this proceeding favor geographic areas 
that are smaller than the 6 EAGs used for the Upper 700 MHz Commercial 
Band. Licensing a portion of the Lower 700 MHz Band over these small 
geographic areas balances the playing field such that small and rural 
providers will have an opportunity to participate in the auction and 
the provision of spectrum-based services. The Commission believes that 
a combination of large and small geographic service areas best 
accomplishes these various statutory objectives.
    47. The Commission, therefore, recognizes the importance to small 
and regional providers of licensing a significant portion of this 
spectrum band across MSAs and RSAs. The propagation characteristics of 
the spectrum in this band make it conducive to business models that are 
built on serving consumers over a large area. The Commission concludes 
that MSAs and RSA are the appropriate size for small geographic 
licenses based on the record in this proceeding, which indicates a 
strong preference for these areas over, for example, EAs or MEAs. MSAs 
and RSAs represent known area sizes to many business entities, 
especially small regional and rural providers. These smaller areas also 
may correspond to the needs of many customers, including customers of 
small regional and rural providers. Specifically, MSAs and RSAs 
represent areas over which many customers may desire to receive the 
majority of their wireless or broadcast-type services and thus can be 
the focus of smaller carriers that do not wish to bid on or provide 
service to larger regions. Assigning a portion of the Lower 700 MHz 
Band across MSAs and RSAs may allow licensees to focus on consumers 
that seldom travel outside of these geographic areas and that do not 
place a high value on roaming or long distance services. While some 
commenters recommend that all of the spectrum in this band be allocated 
to such small areas, the Commission declines to take such an approach. 
As the Commission noted in the Spectrum Reallocation Policy Statement, 
it seeks to make this spectrum available for use by a variety of new 
technologies and providers. The Commission believes that a combination 
of large and small geographic service areas, rather than an assignment 
comprised only of small service areas, best accomplishes these goals.
2. Technical Rules
    48. In the interest of maximizing spectrum use, all new broadcast 
and fixed and mobile wireless operations in the Lower 700 MHz Band will 
be governed generally by the flexible technical standards contained in 
part 27 of the Commission's rules. Licensees are subject, therefore, to 
part 27's provisions relating to equipment authorization, frequency 
stability, antenna structures and air navigation safety, international 
coordination, disturbance of AM broadcast station antenna patterns, and 
protection from interference. See 47 CFR 27.51, 27.54, 27.56, 27.57, 
27.63, 27.64. Although part 27 provides an appropriate technical 
framework for the development of both wireless and new broadcast 
services, the Commission has revised certain provisions as they apply 
to the Lower 700 MHz Band so as to promote greater flexibility in the 
choice of licensed services.
a. Power Limits and Related Requirements
(i) Power Limits
    49. For all services operating in the Lower 700 MHz Band, the 
Commission adopts a maximum power limit of 50 kW ERP subject to 
specific requirements regarding non-interference. Specifically, for 
those services operating base or fixed stations at power levels greater 
than 1 kW ERP, the Commission adopts a power flux density (PFD) 
standard as a way to address the interference potential, as well as a 
general notification requirement. Following the approach adopted for 
the Upper 700 MHz Commercial Band, the Commission adopts a maximum 
power limit of 30 watts ERP for mobile and control stations, and 3 
watts ERP for portable (hand-held) devices. In addition, all operations 
1 kW ERP or below will be subject to previously established 
requirements governing antenna height above average terrain (HAAT).
    50. The Commission's choice of a 50 kW maximum ERP limit will 
promote efficiency and maximize flexibility to the extent practicable 
by allowing the greatest number of different services to co-exist--and 
to serve more consumers--subject only to reasonable standards for non-
interference. The Commission believes such a power limit will produce 
the most efficient use of this spectrum resource. The Commission 
disagrees with comments suggesting that use of this spectrum should be 
limited to wireless applications, or that the 1 kW limit applied to the 
Upper 700 MHz Commercial Band should be applied to the Lower 700 MHz 
Band. In the Lower 700 MHz Band, unlike the Upper 700 MHz Band, there 
is no issue regarding the need to protect public safety

[[Page 5499]]

spectrum from interference. In addition, the Commission has been able 
to adopt 6 and 12 megahertz blocks for the Lower 700 MHz Band, a band 
plan that more readily accommodates new broadcast services. The 
Commission notes that providers of non-broadcast services may also 
operate at power levels up to 50 kW ERP, provided they comply with the 
same technical requirements associated with such operation. The 
Commission believes that to promote flexibility and efficiency, it is 
important to create a consistent set of technical rules for all 
services operating in this band.
    51. The Commission recognizes that establishing a power limit in 
excess of 1 kW ERP creates the potential for stations operating at such 
power levels to cause interference to systems on adjacent channels, 
especially those that operate at lower power levels. However, the 
Commission believes that any risk that such interference will be 
harmful can be mitigated so as not to outweigh the added flexibility 
that is afforded by the higher power limit. Accordingly, in order to 
limit such interference and to make the various services compatible, 
the Commission imposes the following requirement on licensees operating 
at higher power levels: Licensees operating base stations at power 
levels in excess of 1 kW ERP must design their systems such that 
transmissions from their base station antenna produce PFD levels that 
are no greater than the PFD levels that would ordinarily occur from 
stations operating at power levels of 1 kW ERP or less. Specifically, 
the Commission will require licensees operating base stations at power 
levels greater than 1 kW ERP to limit the calculated PFD of the signal 
from their base station to 3000 microwatts per square meter at any 
location at ground level within 1 km of their base station transmitter.
    52. This PFD standard will minimize the likelihood of adjacent 
channel interference to ground-based devices by effectively limiting 
the energy received by such devices to levels no greater than what they 
would receive from adjacent channel base stations operating at 1 kW ERP 
or less. For UHF operations, antenna height tends to be a more 
important variable than output power in causing/mitigating 
interference, so the effect of a 50 kW ERP signal on adjacent channel 
devices operating on the ground will be minimized given the tower 
heights likely to be used. The Commission has provided calculations 
that demonstrate, for example, how 50 kW ERP, high antenna broadcast 
operations can co-exist with lower-power/low antenna height land mobile 
operations.
    53. The Commission believes that current technologies reasonably 
and practically allow certain measures to limit interference among 
various services that may be provided in this band. The Commission 
provides a table that describes the potential for interference that may 
be caused by a base station operating at 50 kW ERP to a nearby, 
adjacent channel base station receiver. Based on these sample 
computations, the Commission concludes that a licensee operating a base 
station receiver could mitigate potential harmful interference through 
use of a selective vertical antenna pattern or by downtilting of its 
receive antenna. In addition to these antenna selections or 
adjustments, a licensee could mitigate interference through use of 
improved filtering, by avoiding the use of spectrum at the edge of its 
authorized block, or through other measures. In any bid for a license 
within this band, the Commission expects that prospective licensees 
will take into account any costs that may be necessary to incorporate 
technical features to alleviate interference issues if adjacent channel 
licensees operate systems at power levels greater than 1 kW ERP.
    54. The Commission will not, however, permit broadcasting at power 
levels higher than 50 kW (e.g., conventional full-power broadcasting 
under part 73). As the Commission found for the Upper 700 MHz 
Commercial Band, the contrasting technical characteristics of 
broadcasting at these higher power levels and wireless services 
effectively preclude the development of interference rules that would 
enable the practical provision of both sets of services on this 
spectrum. Spectrum for full-power terrestrial broadcast television 
service has been provided on Channels 2-51. Since the adoption of the 
Upper 700 MHz First Report and Order, the Commission has received no 
convincing evidence that contradicts its finding that part 73 full-
power broadcasting is too different technically from fixed and mobile 
commercial wireless services to permit a spectrum-efficient co-
existence of these services in the Lower 700 MHz Band. Those commenters 
who believe that these two services may coexist do not provide any 
specific engineering proposals and only offer generalized assertions 
that maximum flexibility should be ensured. Maximizing flexibility 
without due consideration of harmful interference is not in the public 
interest. Accordingly, the Commission concludes that a 50 kW ERP limit 
is practicable for maximizing both flexibility and freedom from harmful 
interference for the widest number of potential users.
    55. The Commission declines to adopt a proposal to let licensees 
increase their power above 50 kW ERP within their service areas 
provided they do not cause co- or adjacent-channel interference to 
other users. The Commission is concerned that this additional 
flexibility will result in uncertainty as to how all potentially 
affected licensees (both co- and adjacent-channel) are made aware of a 
licensee's proposed higher-power and whether these licensees have 
consented to such operation.
(ii) Notification Requirement
    56. In the NPRM, the Commission requested comment on how innovative 
service rules can maximize use of this spectrum by different services. 
To facilitate licensees' use of spectrum and prevent harmful 
interference, the Commission will require licensees intending to 
operate base or fixed stations in excess of 1 kW ERP to file 
notifications with the Commission and provide notifications to all part 
27 licensees authorized on adjacent blocks in their area of operation. 
When applicable, this requirement includes notification to part 27 
commercial and guard band manager licensees operating on Channel 60 
(746-752 MHz) in the Upper 700 MHz Band. The Commission shall require a 
licensee intending to operate a higher-power base or fixed station to 
provide notifications to all adjacent channel part 27 licensees 
authorized to construct and operate base or fixed stations within 75 km 
of the higher-power base or fixed station. Licensees filing 
notifications with the Commission and adjacent channel licensees must 
provide the location and operating parameters of all base and fixed 
stations operating in excess of 1 kW ERP. See 47 CFR 27.50(c)(5). Such 
notification must be filed with the Commission and adjacent channel 
licensees at least 90 days prior to the commencement of station 
operation. Licensees operating at or below the 1 kW ERP will not be 
subject to this requirement.
    57. This action will ensure that licensees will be notified that 
their base, fixed, mobile, or portable receivers could be situated in 
the vicinity of an adjacent channel, high-powered base or fixed 
station. As discussed in the R&O, the Commission has concluded that, 
under appropriate regulations, a 50 kW ERP limit can be permitted 
without causing harmful interference among adjacent channel 
broadcasting and wireless operations. This notification requirement 
provides an opportunity for licensees to take steps to mitigate

[[Page 5500]]

potential interference to their stations--e.g., by employing filters or 
modifying base station vertical attenuation patterns. In addition to 
notification, the Commission believes that licensees could employ 
voluntary coordination to prevent harmful interference.
(iii) RF Safety
    58. The Commission will require transmitting facilities and devices 
in the Lower 700 MHz Band to comply with the existing RF safety 
criteria identified in Sec. 27.52 of the Commission's rules. See 47 CFR 
27.52. The Commission has provided guidance on complying with its RF 
safety exposure limits in OET Bulletin No. 65. The Commission is 
adopting these RF safety thresholds for this band because the 
Commission regards them to be essential for the protection of human 
beings from exposure to radiated RF energy.
b. Co-Channel Interference Control
    59. Consistent with the Commission's intent to maximize spectrum 
use through application of flexible technical standards, the Commission 
is adopting a field strength limit to address co-channel interference 
in the Lower 700 MHz Band. The Commission agrees that a field strength 
limit provides established, objective criteria for licensees to 
understand the co-channel interference environment in which to 
construct and operate facilities in the geographic edges of their 
service areas. The Commission is not adopting a general coordination 
approach because, as it determined in the Upper 700 MHz Band 
proceeding, such an approach could impose unnecessary coordination 
costs for facilities and could lead to possible anti-competitive 
activities.
    60. The Commission adopts for the Lower 700 MHz Band a field 
strength limit of 40 dBuV/m, the same field strength limit the 
Commission adopted for the Upper 700 MHz Band and the 800 MHz EA-based 
and 900 MHz MTA-based SMR services. See 47 CFR 27.55(a). The Commission 
believes that using the same field strength limit that it adopted for 
these other bands will enable licensees in the Lower 700 MHz Band, 
including new broadcast providers, to provide effective service within 
their authorized geographic area, while minimizing co-channel 
interference to co-channel licensees in adjacent areas. The Commission 
also notes that Sec. 27.55(a) of the Commission's rules permits 
licensees, pursuant to mutual agreement, to use a different field 
strength limit. This will provide licensees with increased flexibility 
in implementing their systems without increasing the risk of harmful 
interference.
c. Out-of-Band Emission Limits
    61. The Commission has determined that licensees operating in the 
Lower 700 MHz Band should be required to attenuate the power below the 
transmitter power (P) by at least 43 + 10 log (P) dB for any emission 
on all frequencies outside the licensee's authorized spectrum. The 
Commission adopts this standard consistent with the requirements for 
many of the Commission's radio services, including services in the 
Upper 700 MHz Commercial Band, which limits out-of-band emissions 
(OOBE) to no more than 50 microwatts (50 W) of transmitter 
output power over a typical instrument measurement bandwidth. The 
Commission notes one commenter's preference for a stricter limit, but 
determines that in the absence of data and other support from the many 
parties to this proceeding, it should not increase OOBE limits given 
the potential adverse effects that may result on the commercial 
usefulness of the spectrum.
    62. Although the Commission adopted an additional 76 + 10 log P dB 
limit to apply to OOBE of Upper 700 MHz commercial licensees that might 
fall within the Upper 700 MHz public safety bands, the Commission sees 
no need to apply this requirement to licensees in the Lower 700 MHz 
Band. Given the 18 megahertz of separation between the Lower 700 MHz 
Band and the Upper 700 MHz spectrum set aside for public safety, the 
Commission believes that public safety will be adequately protected by 
the attenuation limits the Commission has imposed on use of the Lower 
700 MHz Band.
3. Licensing Rules
    63. By its decisions in the R&O, the Commission will generally 
apply part 27's existing rules on applications and licenses to all 
fixed, mobile, and new broadcast services offered in the Lower 700 MHz 
Band. The part 27 rules that address applications and licenses provide 
a licensing framework for the common elements of regulation that are 
applicable to wireless and new broadcast services alike. Section 27.3 
provides for the potential application of specific licensing provisions 
contained in other parts of the Commission's rules to the extent that 
they do not conflict with the supervening application of part 27. See 
47 CFR 27.3. Therefore, a Lower 700 MHz Band licensee could be subject, 
for example, to licensing aspects of part 22 if providing public mobile 
services, to part 73 if providing radio broadcast services, to part 90 
if providing private land mobile radio services, and to part 101 if 
providing fixed microwave services.
    64. The Commission finds that the application of part 27 licensing 
rules permits the flexible use necessary for the variety of services 
that are permitted by the band's reallocation. The Lower 700 MHz Band, 
like the Upper 700 MHz Band, is being reclaimed as part of the DTV 
transition and reallocation for uses that include both broadcast and 
non-broadcast operations. Part 27 allows licensees to make 
determinations respecting the services provided and technologies to be 
used, including provision of the full range of FDD- and TDD-based 
wireless services, as well as possible new broadcast services. Applying 
the licensing rules of part 27 will promote innovative services and 
encourage the efficient use of the 700 MHz Band as a whole.
a. Regulatory Status
    65. The Commission agrees with the commenters and finds that a part 
27 approach is likely to achieve efficiencies in the licensing and 
administrative process. Consistent with Sec. 27.10 of the Commission's 
rules, Lower 700 MHz Band licensees will be permitted to provide any 
combination of services anywhere within their licensed areas at any 
time, consistent with the regulatory status specified by the licensee 
on its FCC Form 601 (i.e., common carrier, non-common carrier, private 
internal communications, and/or broadcast services) and with applicable 
interference protection requirements. Licensees operating in the Lower 
700 MHz Band are subject to other FCC rule parts depending on the 
regulatory status of the services provided. See generally 47 CFR 27.3. 
For example, providers of CMRS must comply with applicable sections of 
Title II of the Communications Act, which governs common carrier 
service, as well as part 20 of the Commission's rules. To fulfill the 
Commission's enforcement obligations and ensure compliance with the 
statutory requirements of Titles II and III of the Communications Act, 
the Commission will require all Lower 700 MHz Band licensees to 
identify the service(s) they seek to provide. Consistent with 
Sec. 27.10 of the Commission's rules, licensees in the Lower 700 MHz 
Band will not be required to describe the specific services they seek 
to provide, but only to designate the regulatory status of the 
service(s). Licensees will also be required to notify the Commission 
within 30 days of service changes that alter their regulatory status. 
Pursuant to

[[Page 5501]]

Sec. 27.66 of the Commission's rules, when the change results in the 
discontinuance, reduction, or impairment of the existing service, a 
different approach may apply, depending on the nature of the service 
affected.
    66. With respect to the provision of broadcast services, the 
Commission is adopting the same regulatory approach for the Lower 700 
MHz Band as it employed for the Upper 700 MHz Commercial Band. In the 
Upper 700 MHz First Report and Order, the Commission determined that 
the provision of new broadcast-type services under a part 27 license 
does not alter the underlying broadcast nature of such services. 
However, in the Upper 700 MHz MO&O and FNPRM, the Commission declined 
to apply the part 73 regulatory regime to part 27 new broadcast-type 
licensees in the Upper 700 MHz Commercial Band, stating that it would 
determine the applicable regulatory framework in the context of the 
offering of specific, actual new broadcast-type services. The 
Commission adopts this approach for the Lower 700 MHz Band and will 
allow any new broadcast services that meet the Commission's part 27 
power limits and other technical standards. New broadcast services 
offered under part 27 will remain subject to the statutory provisions 
of the Communications Act governing broadcasting and the Commission 
will determine the applicability of additional provisions from part 73 
on a case-by-case basis.
    67. Consistent with the approach taken for the Upper 700 MHz 
Commercial Band, the Commission is permitting private radio uses in the 
Lower 700 MHz Band. In auctioning recaptured broadcast spectrum subject 
to 47 U.S.C. 309(j)(14), Congress did not preclude use of the spectrum 
for private, internal communications. The Commission's reallocation of 
the Lower 700 MHz Band, therefore, includes the ability to provide 
private fixed and mobile radio services.
b. Eligibility; Foreign Ownership Restrictions
    68. Consistent with the Commission's tentative conclusion in the 
NPRM, the Commission will apply Sec. 27.12's eligibility provisions to 
the Lower 700 MHz Band. See 47 CFR 27.12; see also id. Sec. 27.302. As 
the Commission determined for the Upper 700 MHz Commercial Band, the 
Commission believes that the benefits of open eligibility also apply to 
the Lower 700 MHz Band. The Commission agrees that open eligibility 
will enhance the opportunities for licensees to provide service in any 
market or combinations of markets. A policy of open eligibility for the 
Lower 700 MHz Band will best serve the public interest by encouraging 
entrepreneurial efforts to develop new services and ensuring the most 
efficient use of the spectrum.
    69. Because the Commission is adopting a flexible approach to 
regulatory status, all licensees will be subject to the same 
requirements to file changes in foreign ownership information to the 
extent required by the part 27 rules. In light of a part 27 licensee's 
ability to provide common carrier, non-common carrier, private internal 
communications and/or broadcast services, the part 27 rules require all 
licensees to report alien ownership to enable the Commission to monitor 
compliance. By establishing parity in reporting obligations, however, 
the Commission does not establish a single substantive standard for 
compliance. A non-broadcast applicant requesting authorization only for 
non-common carrier or private radio services will be subject to 47 
U.S.C. 310(a) but not to the additional prohibitions of 47 U.S.C. 
310(b). An applicant requesting authorization for new broadcast or 
common carrier services will be subject to both 47 U.S.C. 310(a) and 47 
U.S.C. 310(b). Regarding foreign ownership of common carrier licenses 
under 47 U.S.C. 310(b)(4), the Commission will continue to apply the 
foreign ownership precedent set forth in prior Commission decisions.
c. Spectrum Aggregation Limits
    70. The Commission will impose no specific limitations on the 
aggregation of spectrum in the Lower 700 MHz Band. Consistent with the 
Commission's Spectrum Cap Report and Order (67 FR 1626, January 14, 
2002) the Commission believes entities should have the flexibility to 
aggregate Lower 700 MHz spectrum subject only to its 47 U.S.C. 310(d) 
public interest review.
    71. Accordingly, the Commission will not adopt any Lower 700 MHz 
in-band or 700 MHz cross-band aggregation limits. The Commission agrees 
that parties should be afforded flexibility at auction or in the 
secondary market to aggregate sufficient unencumbered spectrum and to 
commence new services. The Commission recognizes that a single entity 
could acquire all 48 megahertz of the Lower 700 MHz Band spectrum in 
any given geographic area. The Commission believes, however, that given 
the high level of incumbency in the band and the need for flexibility 
to engineer around incumbent broadcasters, certain aggregations of 
spectrum may be in the public interest.
    72. The Commission has also determined that the Lower 700 MHz Band 
should not be subject to any out-of-band aggregation limits, including 
the CMRS spectrum cap. The Commission disagrees with claims that 
exempting this band from the spectrum cap would lead to excessive 
concentration of spectrum in the hands of mega-carriers. Given the 
additional flexibility the Commission is permitting for the provision 
of new broadcast services, it is not clear that this spectrum will be 
used for CMRS. In addition, the Lower 700 MHz Band spectrum is 
significantly encumbered and is likely to remain so during the DTV 
transition, especially by the operations of DTV incumbents who await 
relocation to the core DTV spectrum. Thus, compared to the Upper 700 
MHz Commercial Band, there is even less reason to extend the spectrum 
cap to the Lower 700 MHz Band. Moreover, to count this spectrum against 
the spectrum cap would be inconsistent with the Commission's decision 
to sunset the cap three months after the statutory deadline for 
auctioning Lower 700 MHz Band licenses.
d. License Term; Renewal Expectancy
    73. Consistent with Sec. 27.13(b) of the Commission's rules, the 
Commission is establishing a license expiration date of January 1, 2015 
for Lower 700 MHz Band licenses. Because licensees need additional time 
to develop and use this spectrum in light of its continued use by 
incumbent broadcasters, the Commission has set an expiration date that 
is eight years after the earliest date that incumbent broadcasters may 
be required to vacate the Lower 700 MHz Band. The Commission is setting 
a definite license term that terminates January 1, 2015. The Commission 
believes that eight additional years will provide new licensees a 
reasonable period in which to comply with the performance requirements 
set forth in the R&O. If the continued presence of a substantial number 
of incumbents remains beyond this date, the Commission will consider 
whether extensions are warranted at that time. For licensees that elect 
to commence new broadcast operations prior to January 1, 2007, their 
renewal deadline will be set at the end of an eight-year term following 
commencement of such broadcast operations.
    74. The Commission also is adopting the right to a renewal 
expectancy established in Sec. 27.14(b), 47 CFR 27.14(b), for non-
broadcast services. To claim a renewal expectancy, a Lower 700 MHz Band 
renewal applicant involved in a comparative renewal

[[Page 5502]]

proceeding must demonstrate, at a minimum, the showing required in 
Sec. 27.14(b) of the Commission's rules. In the event that a license is 
partitioned or disaggregated, the Commission will permit any 
partitionee or disaggregatee to hold its license for the remainder of 
the original licensee's license term and obtain a renewal expectancy on 
the same basis as other licensees in the Lower 700 MHz Band. All 
licensees meeting the Lower 700 MHz Band's performance requirements 
will be deemed to have met this element of the renewal expectancy 
requirement regardless of which of the construction options the 
licensee has chosen.
e. Performance Requirements
    75. Consistent with the Commission's approach towards the Upper 700 
MHz Commercial Band, the Commission will apply the construction 
requirement in Sec. 27.14(a) of the Commission's rules to the Lower 700 
MHz Band. See 47 CFR 27.14(a). Accordingly, a licensee must provide 
``substantial service'' to its license service area no later than the 
end of its license term.
    76. Section 27.14(a)'s construction requirement provides the 
flexibility required to accommodate the new and innovative services 
that are permitted by the Lower 700 MHz Band's reallocation. The 
substantial service standard is particularly appropriate for the Lower 
700 MHz Band given the highly-encumbered nature of this particular 
spectrum. The Commission disagrees with those commenters that advocate 
stricter standards such as an unserved area approach. Because new 
licensees in different geographic areas will not be similarly situated 
due to the varying levels of incumbency, specific benchmarks for all 
new licensees would be inequitable. In contrast, the substantial 
service standard provides the Commission with flexibility to consider 
the particular circumstances of each licensee and how the level of 
incumbency has had an impact on the licensee's ability to build-out and 
commence service in its licensed area.
    77. The Commission adopts the following safe harbors for licensees 
in the Lower 700 MHz Band to demonstrate substantial service: (1) The 
construction of four permanent links per one million people in the 
licensed service area of a licensee that chooses to offer fixed, point-
to-point services; (2) the demonstration of coverage for 20 percent of 
the population of the licensed service area of a licensee that chooses 
to offer fixed, point-to-multipoint services; and (3) the demonstration 
of coverage for 20 percent of the population of the licensed service 
area of a licensee that chooses to offer mobile services.
f. Partitioning and Disaggregation
    78. The Commission will permit licensees in the Lower 700 MHz Band 
to partition their service areas and to disaggregate their spectrum in 
accordance with Sec. 27.15 of the Commission's rules. See 47 CFR 27.15. 
Compared to an approach that restricts such transfers in the secondary 
market, the Commission believes that permitting partitioning and 
disaggregation in the Lower 700 MHz Band improves smaller entities' 
ability to overcome barriers to entry. The Commission does not agree 
with certain commenters that allowing licensees to partition and/or 
disaggregate their licensed spectrum fails to provide opportunities for 
small entities to enter and compete. As a part of the Commission's 
broader policy to facilitate efficient use of spectrum by its highest 
valued use, these allowances provide a mechanism by which all parties, 
including small businesses and rural telephone companies, can negotiate 
agreements to modify the geographic or spectral scope of any given 
license in the Lower 700 MHz Band. The Commission's decisions to adopt 
multiple blocks of spectrum and MSA/RSA-based service areas for 25 
percent of the spectrum are specifically designed to identify an 
efficient starting point for small entities in this band.
    79. A number of commenters recommend that the Commission permit 
spectrum leasing in the Lower 700 MHz Band. The Commission finds that a 
Lower 700 MHz Band licensee's right to lease its spectrum usage rights 
will be subject to decisions the Commission make in the Secondary 
Markets proceeding.
4. Operating Rules
    80. The Commission has considered operating rules for a full range 
of possible licensees in the Lower 700 MHz Band and believe part 27 
provides an appropriate licensing framework for this spectrum. The part 
27 rules provide for the potential application of specific operating 
provisions contained in other parts of the Commission's rules. See 47 
CFR 27.3.
a. Forbearance
    81. The Commission declines to adopt additional forbearance 
initiatives in this proceeding. Although the Commission solicited 
comment on the proper application of the Commission's forbearance 
authority with respect to the Lower 700 MHz Band, the Commission 
received no comments on the appropriate interpretation of the 
forbearance criteria in this context and only general proposals 
concerning additional forbearance from regulatory provisions applicable 
to service providers operating on this spectrum. The Commission 
continues to invite suggestions on ways in which it can alleviate or 
streamline regulations that would otherwise be applicable to Lower 700 
MHz Band services.
b. Equal Employment Opportunity
    82. Consistent with the approach adopted in the Upper 700 MHz First 
Report and Order, the Commission finds that an applicant's Equal 
Employment Opportunity (EEO) requirements will depend on the type of 
service the applicant chooses to elect on its FCC Form 601. As 
explained in the R&O, the Commission's FCC Form 601 enables an 
applicant to choose one, or several, regulatory statuses, including 
common carrier, non-common carrier, private internal communications 
and/or broadcast services. All CMRS providers are subject to the 
Commission's EEO requirements in Secs. 22.321 and 90.168 of the 
Commission's rules. The Commission also notes that CMRS providers are 
generally subject to the Commission's common carrier EEO obligations. 
See 47 CFR 1.815.
    83. A licensee that provides broadcast service will be subject to 
the EEO rules contained in Sec. 73.2080 of the Commission's rules. The 
U.S. Court of Appeals for the D.C. Circuit held a portion of the 
broadcast EEO rule unconstitutional and vacated the rule in MD/DC/DE 
Broadcasters Associations v. FCC (236 F.3d 13 (D.C. Cir.), rehearing 
denied, 253 F.3d 732 (D.C. Cir. 2001), pet. for cert. filed, MMTC v. 
MC/DC/DE Broadcasters Ass'n, No. 01-639 (October 17, 2001)). The 
Commission thereafter suspended the EEO program requirements (but not 
the nondiscrimination requirement) for broadcasters, cable entities, 
and multichannel video program distributors (MVPDs) until further order 
of the Commission. That suspension order is still in effect. The 
Commission recently proposed new EEO requirements for broadcast, cable 
and MVPDs that would be consistent with the court's decision in MD/DC/
DE Broadcasters Associations. Thus, licensees who elect to provide 
broadcast services will be required to comply with the 
nondiscrimination requirement currently in effect and any other EEO 
requirements that may subsequently be adopted by the Commission.
5. Competitive Bidding Procedures
    84. Pursuant to statutory mandate, competitive bidding procedures 
will be

[[Page 5503]]

used to assign licenses for spectrum in the Lower 700 MHz band.
a. Incorporation by Reference of the Part 1 Standardized Auction Rules
    85. The Commission will use the general competitive bidding rules 
set forth in part 1, subpart Q, of its rules to conduct the auction of 
initial licenses in the Lower 700 MHz Band. The Commission's decision 
to adopt the part 1 rules is consistent with its ongoing effort to 
streamline the Commission's general competitive bidding rules for all 
radio services that are subject to competitive bidding and increase the 
efficiency of the competitive bidding process. Application of the part 
1 rules will be subject to any modifications that the Commission may 
subsequently adopt.
    86. The Commission will attribute casino gaming revenues in 
determining eligibility for small business preferences. The 
Commission's part 1 rules include an attribution rule that requires 
auction applicants to include gaming revenues in the calculations used 
to determine eligibility for small business status. The Commission 
adopted this policy in recognition that gaming revenues are exceptional 
revenues that, if not attributed to the applicant, could create an 
unfair competitive advantage with regard to all other applicants, and 
not just other Indian tribes. The Commission's attribution rules make 
no distinction among the types of businesses from which an attributable 
entity's gross revenues might arise, nor do they consider whether that 
entity is profitable. Given that gaming revenues are available for 
telecommunications uses, the Commission finds no basis to grant tribal 
entities an exemption from the attribution rule for gaming revenues. To 
the extent that tribal entities seek licenses with the intention to 
serve tribal lands, however, they may benefit from the Commission's 
policies and rules under which the Commission will award bidding 
credits in future auctions, including the Lower 700 MHz auction, for 
winning bidders who use licenses to deploy facilities and provide 
service to federally-recognized tribal areas that are either unserved 
by any telecommunications carrier or that have a telephone service 
penetration rate below 70 percent.
    87. The Commission acknowledges certain commenters concerns 
regarding the use of combinatorial bidding procedures, but regards them 
as speculative at this time. The Commission notes that, consistent with 
statutory obligations, the Wireless Telecommunications Bureau (WTB) 
will seek comment on auction-related procedural issues, including 
auction design, prior to the start of the Lower 700 MHz auction 
pursuant to WTB's existing delegated authority. This will provide WTB 
with an opportunity to weigh the benefits and disadvantages of any 
particular bidding design, among other auction-specific issues (e.g., 
minimum opening bids), prior to the start of the Lower 700 MHz Band 
auction.
b. Provisions for Designated Entities
    88. The Commission will extend bidding preferences to small 
business entities that seek an opportunity to participate in an auction 
of Lower 700 MHz Band licenses. The Commission has long recognized that 
bidding preferences for qualifying bidders provides such bidders with 
an opportunity to compete successfully against large, well-financed 
entities. The Commission has also found that the use of tiered or 
graduated small business definitions is useful in furthering the 
Commission's mandate under 47 U.S.C. 309(j) to promote opportunities 
for and disseminate licenses to a wide variety of applicants.
    89. The Commission will adopt the same two small business 
definitions for the EAG-based licenses in the Lower 700 MHz Band that 
were applied to the EAG-based licenses in the Upper 700 MHz Commercial 
Band. Specifically, with respect to all EAG-defined licenses in the 
Upper and Lower 700 MHz Bands, the Commission will define a ``small 
business'' as any entity with average annual gross revenues for the 
three preceding years not exceeding $40 million, and a ``very small 
business'' as any entity with average annual gross revenues for the 
three preceding years not exceeding $15 million. The Commission 
believes that the considerations that formed the basis for its decision 
in the Upper 700 MHz Band proceeding are equally applicable with 
respect to the larger, EAG-based licenses that the Commission is 
establishing in this decision.
    90. The Commission concludes that a third small business definition 
should be extended to those Lower 700 MHz Band licenses that are 
defined on the basis of MSAs and RSAs. In light of the expressions of 
interest in this proceeding by small business and rural interests in 
favor of smaller license areas, the Commission agrees to use the third 
small business definition that was suggested in the NPRM to allow 
``small business and rural telecommunications providers to participate 
more meaningfully'' in a Lower 700 MHz Band auction. The Commission 
anticipates that new services that may be deployed in the smaller, non-
EAG license areas could have different characteristics and capital 
requirements. Many of the same considerations that led the Commission 
to adopt smaller-sized licenses in the Lower 700 MHz Band also favor 
the use of a third small business size standard for those non-EAG 
licenses. Some new services that may be deployed in the smaller license 
areas may have lower capital requirements than for the larger EAG-based 
licenses. For example, these smaller license areas may be suited to 
applications with relatively low costs, such as fixed broadband 
wireless services which use only the ``white areas'' of a heavily-
encumbered, smaller license area. In this regard, the Commission 
believes that this situation is analogous to that of the 24 GHz 
service, in which license areas were defined on the basis of EAs and a 
broad range of services were permitted. For these reasons, the 
Commission will use three small business definitions for the MSA and 
RSA-based licenses in the Lower 700 MHz Band, and will adjust the terms 
for size standards in this service accordingly. Thus, for services in 
the Lower 700 MHz Band, the Commission defines a ``small business'' as 
any entity with average annual gross revenues for the three preceding 
years not exceeding $40 million, a ``very small business'' as any 
entity with average annual gross revenues for the three preceding years 
not exceeding $15 million, and an ``entrepreneur'' as any entity with 
average annual gross revenues for the three preceding years not 
exceeding $3 million. Qualifying small businesses will be entitled to a 
bidding credit of 15 percent, qualifying very small businesses will be 
entitled to a 25 percent bidding credit, and qualifying entrepreneurs 
will be entitled to a 35 percent bidding credit.
    91. We do not agree with commenters that criticize the Commission's 
designated entity preference program on the grounds that it has not 
been successful in meeting its objectives. The Commission's analysis of 
the results of its auction of licenses in the 39 GHz band demonstrates 
that small businesses can and will successfully compete for licenses. 
In that auction, entities that had average gross revenues of not more 
than $40 million for the three preceding years (including those that 
had average gross revenues of not more than $15 million for the 
preceding three years) successfully bid for 849 licenses, or almost 40 
percent of the licenses sold. Such small businesses also successfully 
bid for 21 of the 46 licenses in the

[[Page 5504]]

largest EAs (defined for this purpose as the top 25 percent of the EAs, 
as ranked by population). The Commission believes that the use of a 
third small entity definition may result in the dissemination of Lower 
700 MHz Band licenses among an even wider range of small business 
entities, consistent with the Commission's obligations under 47 U.S.C. 
309(j)(3)(B).
    92. The Commission does not find that the Communications Act 
requires it to adopt an independent bidding credit for large telephone 
companies that serve rural areas. The consideration of this issue is 
guided by a line of Commission decisions in which the Commission has 
consistently found no basis for establishing an independent bidding 
credit for large telephone companies in rural areas. Large rural telcos 
have failed to demonstrate any barriers to capital formation similar to 
those faced by other designated entities. Rural telcos have access to 
low-cost financing through the National Rural Utilities Cooperative 
Finance Corporation, and may seek below-market rate lending through the 
Department of Agriculture's Rural Utilities Service. These financing 
options suggest that rural telephone companies may have greater ability 
than other designated entities to attract capital. The Commission also 
notes that, in conducting the analysis of its 39 GHz auction, all six 
qualified bidders that identified themselves on their short-form 
applications as rural telephone companies were successful at auction.
    93. The Commission will apply unjust enrichment penalties to 
assignments of this spectrum. Congress has directed the Commission to 
establish rules that prevent unjust enrichment. Having recognized the 
potential for abuse of its designated entity preference policies, the 
Commission has established unjust enrichment rules to safeguard against 
speculation in the auction process and participation by entities that 
lack bona fide intent to offer communications services. The Commission 
does not rescind the entire bidding discount from a designated entity 
that partitions or disaggregates portions of its license to a non-
qualifying entity. Rather, in such cases, the licensee is required to 
remit an unjust enrichment payment only in an amount equal to the 
proportion of the population in the partitioned area. The Commission 
notes that the question of the applicability of the unjust enrichment 
rules to leasing situations is under consideration in the Commission's 
Secondary Markets proceeding and defers its consideration of this issue 
to that proceeding.
    94. The Commission remains committed to meeting the statutory 
objectives of promoting economic opportunity and competition, avoiding 
excessive concentration of licenses, and ensuring access to new and 
innovative technologies by disseminating licenses among a wide variety 
of applicants, including small businesses, rural telephone companies, 
and businesses owned by members of minority groups and women. The 
Commission stated that it will continue to track the rate of 
participation in the Commission's auctions by minority- and women-owned 
firms and evaluate this information with other data gathered to 
determine whether additional provisions to promote participation by 
minorities and women are warranted.
c. Public Notice of Initial Applications/Petitions to Deny
    95. The Commission intends to follow the time periods set forth 
under Sec. 1.2108 of the Commission's rules. See 47 CFR 1.2108. The 
Commission has recognized that, in most cases, a ten-day filing period 
serves the public interest by providing parties, including small 
businesses, more flexibility in challenging license awards than a five-
day period. The Commission also confirms, however, that WTB may, in its 
discretion, shorten that period to five days, if exigent circumstances 
exist. In this regard, the Commission notes that the statutory auction 
deadline is approaching, and that it may be necessary to limit this 
period to comply with that deadline. In addition, the other time 
periods set forth in Sec. 1.2108 will apply, including the requirement 
to allow at least seven days following the issuance of the public 
notice that long-form applications have been accepted for filing before 
acting on any such application.
6. Measures to Facilitate Early Clearing of the Lower 700 MHz Band and 
Accelerate the DTV Transition
a. Voluntary Band-Clearing Policies
    96. The Commission agrees with those commenters that argue that any 
efforts to clear this band must be purely voluntary. However, in light 
of certain differences between the Upper and Lower 700 MHz Bands, the 
Commission concludes that the Commission should employ a different 
approach from that established for the Upper 700 MHz Band. For 
instance, there is no public safety allocation in the Lower 700 MHz 
Band, and there is a significantly greater degree of broadcast 
incumbency relative to the Upper 700 MHz Band. In addition, the 
Commission notes that Congress has directed it to reclaim the Upper 700 
MHz Band for public safety and commercial use under an accelerated time 
frame, but did not accord the same priority to recovery of the Lower 
700 MHz Band. Therefore, rather than apply the presumptions that the 
Commission established in the Upper 700 MHz Band for analyzing 
voluntary band-clearing proposals, the Commission will not adopt any 
rules, and will instead rely on the Commission's basic responsibility 
to consider any regulatory requests related to band clearing in the 
Lower 700 MHz Band on a case-by-case basis, considering all relevant 
public interest factors. Broadcasters seeking to implement early band-
clearing agreements must generally comply with existing broadcast rules 
and policies. Accordingly, the Commission does not extend to the Lower 
700 MHz Band the extended DTV construction period that was provided to 
certain single-channel broadcasters in connection with the arrangements 
for early clearing of the Upper 700 MHz Band.
b. Other Issues
    97. Although the Commission did not seek comment in the NPRM on 
broader issues relating the DTV transition process generally, a number 
of commenters urge the Commission to adopt proposals that they have 
been advocating in the Commission's DTV and DTV must-carry proceedings. 
The Commission believes that these requests in this proceeding do not 
raise distinctive or additional factual or policy considerations that 
justify departure from the broad determinations made or under 
consideration in those other proceedings. The Commission therefore 
defers consideration of those requests to the proper proceedings.
    98. The Commission agrees that incumbent broadcasters and new 700 
MHz licensees should not be constrained from developing new and 
innovative approaches to band clearing, however, the Commission 
declines to adopt a rule of general applicability for approving sharing 
arrangements at this time, particularly in light of the limited record 
on the issue. While the Commission does not adopt a general sharing 
rule at this time, the Commission will consider any such proposal on a 
case-by-case basis.

Final Regulatory Flexibility Act Analysis

    99. As required by section 603 of the Regulatory Flexibility Act 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in Appendix C of the NPRM in this proceeding. The 
Commission sought written public

[[Page 5505]]

comment on the proposals set forth in the NPRM, including comment on 
the IRFA. This Final Regulatory Flexibility Analysis (FRFA) complies 
with the RFA, as amended by the Contract with America Advancement Act 
of 1996 (CWAAA) (Public Law No. 104-121, 110 Stat. 847 (1996)).

A. Need for, and Objectives of, the R&O

    100. In the R&O, the Commission adopts rules to reclaim and 
reallocate the Lower 700 MHz Band currently used for TV Channels 52-59, 
for new commercial services as part of the Commission's transition of 
TV broadcasting from analog to digital transmission systems, consistent 
with the statutory directives enacted in the Balanced Budget Act of 
1997. This R&O reallocates the entire 48 megahertz of spectrum in the 
Lower 700 MHz Band to fixed and mobile services, while retaining the 
existing broadcast allocation. The R&O establishes technical criteria 
designed to protect incumbent television operations in the band during 
the DTV transition period, allows LPTV and TV translator stations to 
retain secondary status and operate in the band after the transition, 
and sets forth a mechanism by which pending broadcast applications may 
be amended to provide analog or digital service in the core television 
spectrum or to provide digital service on TV Channels 52-58. The 
decision to reallocate this band in a manner that will permit new 
licensees to provide a broad range of services was guided by the 
Commission's previously announced policies favoring flexible spectrum 
allocations. This reallocation is also consistent with the Commission's 
obligations under sections 303(y) and 309(j)(3) of the Communications 
Act.
    101. The R&O also establishes service rules for the Lower 700 MHz 
Band using the flexible regulatory framework in part 27 of the 
Commission's rules. In particular, the band plan for the Lower 700 MHz 
Band divides this spectrum into three 12-megahertz blocks (with each 
block consisting of a pair of 
6-megahertz segments) and two 
6-megahertz blocks of contiguous, unpaired spectrum. The Commission 
will license the five blocks in the Lower 700 MHz Band plan as follows: 
the two 6-megahertz blocks of contiguous unpaired spectrum, as well as 
two of the three 12-megahertz blocks of paired spectrum, will be 
assigned over six EAGs; the remaining 12 megahertz block of paired 
spectrum will be licensed over 734 MSAs and Rural Service Areas RSAs. 
The service rules have been designed to promote the objectives 
identified in 47 U.S.C. 309(j), including the development and rapid 
deployment of new technologies, products, and services for the benefit 
of the public; the promotion of economic opportunity and competition; 
the recovery of a portion of the value of the spectrum made available 
for commercial use; and the efficient and intensive use of the 
spectrum.
    102. Although the decisions in the R&O were patterned on the 
approach adopted for the Upper 700 MHz Band, the R&O adopts a 
geographic area licensing approach to assign licenses in the Lower 700 
MHz Band that includes smaller license areas than were established for 
the Upper 700 MHz Band. As with the Upper 700 MHz Band, the R&O for the 
Lower 700 MHz Band also uses relatively small spectrum block sizes. The 
48 megahertz of spectrum that comprises the Lower 700 MHz Band will be 
licensed with two six-megahertz blocks of contiguous unpaired spectrum 
and two 
12-megahertz blocks of paired spectrum over 6 EAGs. The remaining 
12-megahertz block of paired spectrum will be licensed over 734 MSAs/
RSAs.
    103. The use of these small license areas also is intended to 
satisfy the Commission's obligations in prescribing characteristics of 
licenses to ``promot[e] economic opportunity and competition and 
ensur[e] that new and innovative technologies are readily accessible to 
the American people by avoiding excessive concentration of licenses and 
by disseminating licenses among a wide variety of applicants, including 
small businesses, rural telephone companies, and businesses owned by 
members of minority groups and women.'' 47 U.S.C. 309(j)(3)(B). 
Establishing such small license areas also furthers the Commission's 
obligation to ``prescribe area designations and bandwidth assignments 
that promote `` economic opportunity for a wide variety of applicants, 
including small businesses, rural telephone companies, and businesses 
owned by members of minority groups and women.'' 47 U.S.C. 
309(j)(4)(C).
    104. The R&O also establishes competitive bidding rules and 
voluntary clearing procedures for the Lower 700 MHz Band. Consistent 
with the Commission's responsibility under 47 U.S.C. 309(j) to promote 
opportunities for, and disseminate licenses to, a wide variety of 
applicants, the R&O also adopts small business size standards and 
bidding preferences for qualifying bidders that will provide such 
bidders with opportunities to compete successfully against large, well-
financed entities. In particular, for services in the Lower 700 MHz 
Band, the Commission has defined a ``small business'' as any entity 
with average annual gross revenues for the three preceding years not 
exceeding $40 million, a ``very small business'' as any entity with 
average annual gross revenues for the three preceding years not 
exceeding $15 million, and an ``entrepreneur'' as any entity with 
average annual gross revenues for the three preceding years not 
exceeding $3 million. The Commission will use its standard schedule of 
bidding credits, which may be found at Sec. 1.2110(f)(2) of the 
Commission's rules. See 47 CFR 1.2110(f)(2). The entrepreneur standard 
and associated 35 percent bidding credit will, however, not apply to 
the larger EAG-based licenses in the Lower 700 MHz Band. Drawing on 
recent precedent involving another flexible-use service (the 24 GHz 
service), the Commission found that ``[b]ecause the capital costs of 
operational facilities in the `` band are likely to vary widely, the 
Commission believe that the use of three small business definitions 
will be useful in promoting opportunities for a wide variety of 
applicants * * *.'' The Commission has concluded that these bidding 
credits will provide adequate opportunities for small businesses to 
participate in the Lower 700 MHz Band auction.
    105. The R&O also establishes a policy of permitting incumbent 
broadcasters and new licensees to reach voluntary agreements that would 
result in the early clearing of incumbents from the Lower 700 MHz 
spectrum. These policies are intended to further the Commission's 
objective of establishing rules that will facilitate, rather than 
hinder, the clearing of incumbent broadcasters from this spectrum in a 
manner consistent with the Commission's DTV transition policy goals.

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

    106. Only one commenter, the National Telephone Cooperative 
Association (NTCA), specifically raises issues in response to the IRFA. 
NTCA urges the Commission to assign spectrum in the Lower 700 MHz Band 
across small geographic areas, arguing that small businesses such as 
rural telephone companies cannot compete against large carriers in 
auctions for large geographic areas. According to NTCA, assigning at 
least a portion of this spectrum across small geographic areas will 
allow small providers an opportunity to bid on, acquire, and develop 
service in the more limited areas in which they wish to operate. In

[[Page 5506]]

response to comments made by NTCA and other small business interests on 
this issue, the Commission decided to use the smallest geographic area 
option that was described in the NPRM, the 734 MSAs and RSAs, for 12 of 
the 48 megahertz of spectrum in the Lower 700 MHz Band.

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

    107. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of, the number of small entities to which 
the rule will apply or an explanation of why no such estimate is 
available. The RFA generally defines the term ``small entity'' as 
having the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction'' under section 3 
of the Small Business Act. In addition, the term ``small business'' has 
the same meaning as the term ``small business concern'' under the Small 
Business Act. 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 SBA. According to SBA reporting 
data, there were approximately 4.44 million small business firms 
nationwide in 1992. 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 local governments in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96 percent, have populations of fewer than 50,000. The Census Bureau 
estimates that this ratio is approximately accurate for all 
governmental entities. The Commission therefore estimates that, of the 
85,006 governmental entities, 81,600 (96 percent) are small entities. 
The Commission further describes and estimates the number of small 
entity licensees and regulatees that may be affected by the rules 
adopted in the R&O.
    108. The policies and rules adopted in the R&O and discussed in 
this FRFA will affect all entities, including small entities, that seek 
to acquire licenses in wireless services in the 698-746 MHz band, or 
are television broadcasters in this band.
    109. Wireless services. The policies and rules adopted in this R&O 
affect all small entities that seek to acquire licenses in wireless 
services in the Lower 700 MHz Band currently used for television 
broadcasts on Channels 
52-59, or are incumbent television broadcasters on Channels 52-59. The 
Commission has adopted small business size standards that define a 
``small business'' as any entity with average annual gross revenues for 
the three preceding years not exceeding $40 million, a ``very small 
business'' as any entity with average annual gross revenues for the 
three preceding years not exceeding $15 million, and an 
``entrepreneur'' as any entity with average annual gross revenues for 
the three preceding years not exceeding $3 million. (The entrepreneur 
standard does not extend to the larger EAG-based licenses in the Lower 
700 MHz Band.) The SBA has approved this small business size standard 
for the Lower 700 MHz auction. However, the Commission cannot know 
until the auction begins how many entities will seek entrepreneur, 
small business, or very small business status. The Commission will 
allow partitioning and disaggregation, yet it cannot determine in 
advance how many licensees will partition their license areas or 
disaggregate their spectrum blocks. In view of the Commission's lack of 
knowledge of these factors, it is therefore assumed that, for purposes 
of the Commission's evaluations and conclusions in the FRFA, all of the 
prospective licenses are small entities, as that term is defined by the 
SBA or the Commission's small business definitions for these bands.
    110. Television Broadcast. The SBA defines a television 
broadcasting station as a small business where it is independently 
owned and operated, is not dominant in its field of operation, and has 
no more than $10.5 million in annual receipts. Television broadcasting 
stations consist of establishments primarily engaged in broadcasting 
visual programs by television to the public, except cable and other pay 
television services. Included in this industry are commercial, 
religious, educational, and other television stations. Also included 
are establishments primarily engaged in television broadcasting and 
which produce taped television program materials. There were 1,509 
television stations operating in the United States in 1992, of which 
1,155 (76.5 percent) produced less than $10.0 million in revenue. As of 
May 31, 1998, official Commission records indicate that 1,579 full 
power television stations, 2,089 low power television stations, and 
4,924 television translator stations were licensed. Using the 
percentage of television broadcasting licensees that were small 
entities in 1992 (76.5 percent) and the 1998 records indicating 1,579 
full power stations, the Commission concludes that there are 
approximately 1,208 full power television stations that are small 
entities.
    111. The rules adopted in the R&O may affect approximately 1,663 
television stations currently operating in the Lower 700 MHz Band, 
approximately 1,281 of which are considered small businesses. In 
addition, the rules adopted in the R&O will affect some 12,717 radio 
stations currently operating in this band, approximately 12,209 of 
which are small businesses. These estimates may overstate the number of 
small entities because the revenue figures on which they are based do 
not include or aggregate revenues from non-television or non-radio 
affiliated companies. There are also 2,366 LPTV stations. Given the 
nature of this service, the Commission presume that all LPTV licensees 
qualify as small entities under the SBA definition.
    112. Auxiliary or Special Broadcast. This service involves a 
variety of transmitters, generally used to relay broadcast programming 
to the public (through translator and booster stations) or within the 
program distribution chain (from a remote news gathering unit back to 
the station). The Commission has not developed a definition of small 
entities applicable to broadcast auxiliary licensees. The applicable 
SBA definition is that noted previously, under the SBA rules applicable 
to television broadcasting stations. The Commission estimates that 
there are approximately 2,700 translators and boosters. The Commission 
does not collect financial information on any broadcast facility, and 
the Department of Commerce does not collect financial information on 
these auxiliary broadcast facilities. The Commission believes that 
most, if not all, of these auxiliary facilities could be classified as 
small businesses if viewed apart from any associated broadcasters. The 
Commission also recognizes that most commercial translators and 
boosters are owned by a parent station which, in some cases, would be 
covered by the revenue definition of small business entity. These 
stations would likely have annual revenues that exceed the SBA maximum 
to be designated as a small business ($10.5 million for a TV

[[Page 5507]]

station). Furthermore, they do not meet the Small Business Act's 
definition of a ``small business concern'' because they are not 
independently owned and operated.

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

    113. Entities interested in acquiring initial licenses for new 
services in the 698-746 MHz band will be required to submit short form 
applications (FCC Form 175) to participate in an auction and high 
bidders will be required to apply for their individual licenses. Also, 
commercial licenses will be required to make showings that they are in 
compliance with construction requirements, file applications for 
license renewals, and make certain other filings as required by the 
Communications Act and Commission regulations. Entities seeking to 
acquire licenses (or disaggregated or partitioned portions of licenses) 
from Commission licensees in the post-auction market are also required 
to submit long-form applications (FCC Form 601) seeking Commission 
authority to complete any such transactions. In addition to the general 
licensing requirements of part 27 of the Commission's rules, other 
parts may be applicable to commercial licensees, depending on the 
nature of service provided. For example, commercial licensees proposing 
to provide broadcast services on these bands may be required to comply 
with all or part of the broadcast-specific regulations in part 73 of 
the Commission's rules.
    114. By this R&O, the Commission requires licensees to notify the 
Commission within 30 days of a change in regulatory status between 
common carrier and/or non-common carrier. In addition, because the 
Commission considers partitioning and disaggregation to be a form of 
license assignment, the Commission requires such action to receive 
Commission approval via application for assignment on FCC Form 603. 
With regard to alien ownership, the Commission requires 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.

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

    115. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its decision, which may 
include the following four alternatives (among others): (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.
    116. Commenters in this proceeding recommend a variety of steps the 
Commission may take to lessen the impact on small businesses while 
assigning spectrum in the Lower 700 MHz Band. For example, the majority 
of commenters advocate the use of small geographic license areas, 
especially MSAs and RSAs, so that small providers may avoid having to 
bid on areas that are larger than they need. A few commenters suggest 
the Commission could benefit small providers in a similar manner by 
assigning the spectrum across multiple blocks, and one party urges a 
set-aside for small businesses. Another commenter argues that spectrum 
aggregation limits must be maintained so as to prevent an excessive 
concentration of licenses by large providers that may work against the 
interests of other competitors.
    117. With these RFA requirements and comments from the record in 
mind, the Commission adopts rules in the R&O that are designed to 
reduce regulatory burdens, promote innovative services and encourage 
flexible use of this spectrum. They increase economic opportunities to 
a variety of spectrum users, including small businesses. Specifically, 
the Commission reallocates the entire 48 megahertz of spectrum in the 
698-746 MHz band to fixed and mobile services, while retaining the 
existing broadcast allocation. New licensees, including smaller 
entities, will enjoy flexible use for the full range of proposed 
allocated services consistent with necessary interference requirements.
    118. In addition, the Commission adopts rules on spectrum block 
size and geographic areas that may be of even greater significance for 
small entities. For example, with respect to the size of spectrum 
blocks for licensees, the Commission declines to allocate the 48 
megahertz over a single block, instead choosing an allocation over 
multiple blocks of six and twelve megahertz each. The Commission also 
permits disaggregation and partitioning of these spectrum blocks. With 
respect to the size of geographic license areas, the Commission 
allocates licenses over large regional EAGs as well as small MSAs/RSAs. 
As small business commenters have observed, a MSA/RSA-based license 
area may be a particularly appropriate alternative for small providers 
that wish to avoid having to acquire a larger license area that they 
must subsequently partition. At the same time, consistent with the 
Commission's flexible approach, the Commission allows both partitioning 
and aggregation of all of these licenses, such that licensees may 
increase or decrease the size of their service areas to better meet 
market demands. Because the Commission believes that the use of 
multiple spectrum blocks and MSAs/RSAs effectively meets the needs of 
small providers, it therefore declines to adopt other suggested 
alternatives, such as spectrum aggregation limits, in this band.
    119. The Commission further notes that the R&O adopts small 
business definitions and preferences for qualifying bidders in the 698-
746 MHz band. These standards define an ``entrepreneur'' as any entity 
with average annual gross revenues for the three preceding years not 
exceeding $40 million, a ``small business'' as any entity with average 
annual gross revenues for the three preceding years not exceeding $15 
million, and a ``very small business'' as any entity with average 
annual gross revenues for the three preceding years not exceeding $3 
million. Although the Commission had initially proposed the adoption of 
only two small business definitions, it has found that the use of a 
third small business definition for MSA/RSA-based licenses will allow 
small business and rural telecommunications providers to participate 
more meaningfully in a Lower 700 MHz Band auction.
    120. Finally, the R&O establishes a policy of permitting incumbent 
broadcasters and new licensees to reach voluntary agreements that would 
result in the early clearing of the Lower 700 MHz spectrum. 
Broadcasters electing to enter into such agreements may be required to 
seek Commission approvals in order to implement such agreements. Such 
regulatory requests may be submitted using existing application forms. 
Because the Commission's policy is entirely voluntary, broadcasters and 
new licensees, including small entities, are under no obligation to 
enter into such early clearing arrangements or to seek Commission 
approval of same.
    121. The regulatory burdens contained in the R&O, such as filing 
applications on appropriate forms, are necessary in order to ensure 
that the public receives the benefits of innovative new services, or 
enhanced existing services, in a prompt and

[[Page 5508]]

efficient manner. The Commission will continue to examine alternatives 
in the future with the objectives of eliminating unnecessary 
regulations and minimizing any significant economic impact on small 
entities.
    122. 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 Congressional Review Act, 5 U.S.C. 801(a)(1)(A). In addition, 
the Commission will send a copy of this R&O, including this FRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration. A 
copy of the R&O and FRFA (or summaries thereof) will also be published 
in the Federal Register. See 5 U.S.C. 604(b).

Paperwork Reduction Act of 1995 Analysis

    123. This R&O contains either a new or modified information 
collection. The Commission is seeking immediate approval for the 
information collection contained herein pursuant to the ``emergency 
processing'' provisions of the Paperwork Reduction Act of 1995. See 5 
CFR 1320.13. The Commission will publish a document in the Federal 
Register announcing the effective date of the information collection.

Procedural Matters and Ordering Clauses

    124. Pursuant to sections 1, 2, 4(i), 5(c), 7, 201, 202, 208, 214, 
301, 302, 303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 331, 332, 
333, 336, 614 and 615 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 152, 154(i), 155(c), 157, 201, 202, 208, 214, 301, 302a, 
303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 331, 332, 333, 336, 
534, 535, this R&O is hereby ADOPTED and parts 2, 27 and 73 of the 
Commission's rules, 47 CFR parts 2, 27 and 73, ARE AMENDED to establish 
service rules for the 698-746 MHz band, as set forth in the R&O, 
effective April 8, 2002. The information collection contained in these 
rules will become effective upon OMB approval.
    125. Authority is delegated to the Mass Media Bureau to implement 
the policies for the introduction of new wireless services and to 
promote the early transition of incumbent analog television licensees 
to DTV service to the extent discussed in the R&O.
    126. A 45-day filing window period will commence on January 22, 
2002 and will end March 8, 2002 for applicants to amend their pending 
proposals in accordance with the policies and procedures set forth in 
the R&O.
    127. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this R&O, including the FRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects

47 CFR Part 2

    Radio, Television.

47 CFR Part 27

    Communications common carriers, Radio.

47 CFR Part 73

    Radio, Television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 2, 27, and 73 as follows:

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

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

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


    2. Section 2.106, the Table of Frequency Allocations, is amended as 
follows:
    a. Revise page 37.
    b. In the International Footnotes under heading I., revise 
footnotes S5.293, S5.296, and S5.297.
    c. In the list of non-Government (NG) Footnotes, revise footnotes 
NG149 and NG159.


Sec. 2.106  Table of Frequency Allocations.

* * * * *
BILLING CODE 6712-01-P

[[Page 5509]]

[GRAPHIC] [TIFF OMITTED] TR06FE02.020

BILLING CODE 6712-01-C

[[Page 5510]]

International Footnotes

* * * * *

I. New ``S'' Numbering Scheme

* * * * *
    S5.293  Different category of service: in Canada, Chile, Colombia, 
Cuba, the United States, Guyana, Honduras, Jamaica, Mexico, Panama and 
Peru, the allocation of the bands 470-512 MHz and 614-806 MHz to the 
fixed and mobile services is on a primary basis (see No. S5.33), 
subject to agreement obtained under No. S9.21. In Argentina and 
Ecuador, the allocation of the band 470-512 MHz to the fixed and mobile 
services is on a primary basis (see No. S5.33), subject to agreement 
obtained under No. S9.21.
* * * * *
    S5.296  Additional allocation: in Germany, Austria, Belgium, 
Cyprus, Denmark, Spain, Finland, France, Ireland, Israel, Italy, Libya, 
Lithuania, Malta, Morocco, Monaco, Norway, the Netherlands, Portugal, 
Syria, the United Kingdom, Sweden, Switzerland, Swaziland and Tunisia, 
the band 470-790 MHz is also allocated on a secondary basis to the land 
mobile service, intended for applications ancillary to broadcasting. 
Stations of the land mobile service in the countries listed in this 
footnote shall not cause harmful interference to existing or planned 
stations operating in accordance with the Table of Frequency 
Allocations in countries other than those listed in this footnote.
    S5.297  Additional allocation: in Costa Rica, Cuba, El Salvador, 
the United States, Guatemala, Guyana, Honduras, Jamaica and Mexico, the 
band 512-608 MHz is also allocated to the fixed and mobile services on 
a primary basis, subject to agreement obtained under No. S9.21.
* * * * *

Non-Federal Government (NG) Footnotes

* * * * *
    NG149  The frequency bands 54-72 MHz, 76-88 MHz, 174-216 MHz, 470-
512 MHz, 512-608 MHz, and 614-698 MHz are also allocated to the fixed 
service to permit subscription television operations in accordance with 
part 73 of the rules.
* * * * *
    NG159  Full power analog television stations licensed and new 
digital television (DTV) broadcasting operations in the band 698-806 
MHz shall be entitled to protection from harmful interference until the 
end of the DTV transition period. Low power television and television 
translators in the band 746-806 MHz must cease operations in the band 
at the end of the DTV transition period. Low power television and 
television translators in the band 698-746 MHz are secondary to all 
other operations in the band 698-746 MHz.
* * * * *

PART 27--MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES

    3. The authority citation for part 27 continues to read as follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 307, 309, 332, 336, and 
337 unless otherwise noted.


    4. Section 27.1 is amended by adding paragraph (b)(3) to read as 
follows:


Sec. 27.1  Basis and purpose.

* * * * *
    (b) * * *
    (3) 698-746 MHz.
* * * * *

    5. Section 27.3 is amended by redesignating paragraph (n) as 
paragraph (p), and by adding new paragraphs (n) and (o) to read as 
follows:


Sec. 27.3  Other applicable rule parts.

* * * * *
    (n) Part 73. This part sets forth the requirements and conditions 
applicable to radio broadcast services.
    (o) Part 90. This part sets forth the requirements and conditions 
applicable to private land mobile radio services.
* * * * *

    6. Section 27.5 is amended by adding paragraph (c) to read as 
follows:


Sec. 27.5  Frequencies.

* * * * *
    (c) 698-746 MHz band. The following frequencies are available for 
licensing pursuant to this part in the 698-746 MHz band:
    (1) Three paired channel blocks of 12 megahertz each are available 
for assignment as follows:
    Block A: 698-704 MHz and 728-734 MHz;
    Block B: 704-710 MHz and 734-740 MHz; and
    Block C: 710-716 MHz and 740-746 MHz.
    (2) Two unpaired channel blocks of 6 megahertz each are available 
for assignment as follows:
    Block D: 716-722 MHz; and
    Block E: 722-728 MHz.

    7. Section 27.6 is amended by adding paragraph (c) to read as 
follows:


Sec. 27.6  Service areas.

* * * * *
    (c) 698-746 MHz band. WCS service areas for the 698-746 MHz band 
are as follows.
    (1) Service areas for Blocks A, B, D, and E in the 698-746 MHz band 
are based on Economic Area Groupings (EAGs) as defined in paragraph 
(b)(2) of this section.
    (2) Service areas for Block C in the 698-746 MHz band are based on 
cellular markets comprising Metropolitan Statistical Areas (MSAs) and 
Rural Service Areas (RSAs) as defined by Public Notice Report No. CL-
92-40 ``Common Carrier Public Mobile Services Information, Cellular 
MSA/RSA Markets and Counties,'' dated January 24, 1992, DA 92-109, 7 
FCC Rcd 742 (1992), with the following modifications:
    (i) The service areas of cellular markets that border the U.S. 
coastline of the Gulf of Mexico extend 12 nautical miles from the U.S. 
Gulf coastline.
    (ii) The service area of cellular market 306 that comprises the 
water area of the Gulf of Mexico extends from 12 nautical miles off the 
U.S. Gulf coast outward into the Gulf.

    8. Section 27.10 is amended by revising paragraphs (a), (b), and 
(c)(1)(ii) to read as follows:


Sec. 27.10  Regulatory status.

* * * * *
    (a) Single authorization. Authorization will be granted to provide 
any or a combination of the following services in a single license: 
common carrier, non-common carrier, private internal communications, 
and broadcast services. A licensee may render any kind of 
communications service consistent with the regulatory status in its 
license and with the Commission's rules applicable to that service. An 
applicant or licensee may submit a petition at any time requesting 
clarification of the regulatory status for which authorization is 
required to provide a specific communications service.
    (b) Designation of regulatory status in initial application. An 
applicant shall specify in its initial application if it is requesting 
authorization to provide common carrier, non-common carrier, private 
internal communications, or broadcast services, or a combination 
thereof.
    (c) * * *
    (1) * * *
    (ii) Add to the pending request in order to obtain common carrier, 
non-common carrier, private internal communications, or broadcast 
services status, or a combination thereof, in a single license.
* * * * *

[[Page 5511]]


    9. Section 27.11 is amended by adding paragraph (d) to read as 
follows:


Sec. 27.11  Initial authorization.

* * * * *
    (d) 698-746 MHz band. Initial authorizations for the 698-746 MHz 
band shall be for 6 or 12 megahertz of spectrum in accordance with 
Sec. 27.5(c).
    (1) Authorizations for Blocks A and B, consisting of two paired 
channels of 6 megahertz each, will be based on those geographic areas 
specified in Sec. 27.6(c)(1).
    (2) Authorizations for Block C, consisting of two paired channels 
of 6 megahertz each, will be based on those geographic areas specified 
in Sec. 27.6(c)(2).
    (3) Authorizations for Blocks D and E, consisting of an unpaired 
channel block of 6 megahertz each, will be based on those geographic 
areas specified in Sec. 27.6(c)(1).

    10. Section 27.13 is amended by revising paragraph (b) to read as 
follows:


Sec. 27.13  License period.

* * * * *
    (b) 698-764 MHz and 776-794 MHz bands. Initial authorizations for 
the 698-764 MHz and 776-794 MHz bands will extend until January 1, 
2015, except that a part 27 licensee commencing broadcast services will 
be required to seek renewal of its license for such services at the 
termination of the eight-year term following commencement of such 
operations.

    11. Section 27.50 is amended by redesignating paragraph (c) as 
paragraph (d), adding a new paragraph (c), and revising the heading of 
Table 1, which follows newly redesignated paragraph (d), to read as 
follows:


Sec. 27.50  Power and antenna height limits.

* * * * *
    (c) The following power and antenna height requirements apply to 
stations transmitting in the 698-746 MHz band:
    (1) Fixed and base stations are limited to a maximum effective 
radiated power (ERP) of 50 kW, with the limitation on antenna heights 
as follows:
    (i) Fixed and base stations with an ERP of 1000 watts or less must 
not exceed an antenna height of 305 m height above average terrain 
(HAAT) except when the power is reduced in accordance with Table 1 of 
this section;
    (ii) The antenna height for fixed and base stations with an ERP 
greater than 1000 watts but not exceeding 50 kW is limited only to the 
extent required to satisfy the requirements of Sec. 27.55(b).
    (2) Control and mobile stations are limited to 30 watts ERP.
    (3) Portable stations (hand-held devices) are limited to 3 watts 
ERP.
    (4) Maximum composite transmit power shall be measured over any 
interval of continuous transmission using instrumentation calibrated in 
terms of RMS-equivalent voltage. The measurement results shall be 
properly adjusted for any instrument limitations, such as detector 
response times, limited resolution bandwidth capability when compared 
to the emission bandwidth, etc., so as to obtain a true maximum 
composite measurement for the emission in question over the full 
bandwidth of the channel.
    (5) Licensees intending to operate a base or fixed station at a 
power level greater than 1 kW ERP must provide advanced notice of such 
operation to the Commission and to licensees authorized in their area 
of operation. Licensees that must be notified are all licensees 
authorized under this part to operate a base or fixed station on an 
adjacent spectrum block at a location within 75 km of the base or fixed 
station operating at a power level greater than 1 kW ERP. Notices must 
provide the location and operating parameters of the base or fixed 
station operating at a power level greater than 1 kW ERP, including the 
station's ERP, antenna coordinates, antenna height above ground, and 
vertical antenna pattern, and such notices must be provided at least 90 
days prior to the commencement of station operation.
* * * * *

Table 1--Permissible Power and Antenna Heights for Base and Fixed 
Stations in the 698-764 MHz and 
777-792 MHz Bands
* * * * *

    12. Section 27.53 is amended by redesignating paragraph (f) as 
paragraph (g), and adding a new paragraph (f) to read as follows:


Sec. 27.53  Emission limits.

* * * * *
    (f) For operations in the 698-746 MHz band, the power of any 
emission outside a licensee's frequency band(s) of operation shall be 
attenuated below the transmitter power (P) within the licensed band(s) 
of operation, measured in watts, by at least 43 + 10 log (P) dB. 
Compliance with this provision is based on the use of measurement 
instrumentation employing a resolution bandwidth of 100 kilohertz or 
greater. However, in the 100 kilohertz bands immediately outside and 
adjacent to a licensee's frequency block, a resolution bandwidth of at 
least 30 kHz may be employed.
* * * * *

    13. Section 27.55 is revised to read as follows:


Sec. 27.55  Signal strength limits.

    (a) Field strength limits. For the following bands, the predicted 
or measured median field strength at any location on the geographical 
border of a licensee's service area shall not exceed the value 
specified unless the adjacent affected service area licensee(s) 
agree(s) to a different field strength. This value applies to both the 
initially offered service areas and to partitioned service areas.
    (1) 2305-2320 and 2345-2360 MHz bands: 47 dB V/m.
    (2) 698-764 and 776-794 MHz bands: 40 dB V/m.
    (b) Power flux density limit. For base and fixed stations operating 
in the 698-746 MHz band, with an effective radiated power (ERP) greater 
than 1 kW, the power flux density that would be produced by such 
stations through a combination of antenna height and vertical gain 
pattern must not exceed 3000 microwatts per square meter on the ground 
over the area extending to 1 km from the base of the antenna mounting 
structure.
    14. Section 27.57 is amended by designating the existing text as 
paragraph (a) and adding a new paragraph (b) to read as follows:


Sec. 27.57  International coordination.

* * * * *
    (b) Operation in the 698-764 MHz and 776-794 MHz bands is subject 
to international agreements between Mexico and Canada. Unless otherwise 
modified by international treaty, licenses must not cause interference 
to, and must accept harmful interference from, television broadcast 
operations in Mexico and Canada.

    15. Section 27.60 is amended by revising introductory text, 
paragraphs (a)(1) and (b) to read as follows:


Sec. 27.60  TV/DTV interference protection criteria.

    Base, fixed, control, and mobile transmitters in the 698-764 MHz 
and 776-794 MHz frequency bands must be operated only in accordance 
with the rules in this section to reduce the potential for interference 
to public reception of the signals of existing TV and DTV broadcast 
stations transmitting on TV Channels 51 through 68.
    (a) * * *
    (1) The minimum D/U ratio for co-channel stations is:
    (i) 40 dB at the hypothetical Grade B contour (64 dB V/m) 
(88.5 kilometers (55 miles)) of the TV station;
    (ii) For transmitters operating in the 698-746 MHz frequency band, 
23 dB at the equivalent Grade B contour (41 dB V/m) (88.5 
kilometers (55 miles)) of the DTV station; or

[[Page 5512]]

    (iii) For transmitters operating in the 746-764 MHz and 776-794 MHz 
frequency bands, 17 dB at the equivalent Grade B contour (41 
dB 
V/m) (88.5 kilometers (55 miles)) of the DTV station.
* * * * *
    (b) TV stations and calculation of contours. The methods used to 
calculate TV contours and antenna heights above average terrain are 
given in Secs. 73.683 and 73.684 of this chapter. Tables to determine 
the necessary minimum distance from the 698-764 MHz or 776-794 MHz 
station to the TV/DTV station, assuming that the TV/DTV station has a 
hypothetical or equivalent Grade B contour of 88.5 kilometers (55 
miles), are located in Sec. 90.309 of this chapter and labeled as 
Tables B, D, and E. Values between those given in the tables may be 
determined by linear interpolation. Distances for station parameters 
greater than those indicated in the tables should be calculated in 
accordance with the required D/U ratios, as provided in paragraph (a) 
of this section. The locations of existing and proposed TV/DTV stations 
during the period of transition from analog to digital TV service are 
given in part 73 of this chapter and in the final proceedings of MM 
Docket No. 87-268.
    (1) Licensees of stations operating within the ERP and HAAT limits 
of Sec. 27.50 must select one of four methods to meet the TV/DTV 
protection requirements, subject to Commission approval:
    (i) Utilize the geographic separation specified in Tables B, D, and 
E of Sec. 90.309 of this chapter, as appropriate;
    (ii) When station parameters are greater than those indicated in 
the tables, calculate geographic separation in accordance with the 
required D/U ratios, as provided in paragraph (a) of this section;
    (iii) Submit an engineering study justifying the proposed 
separations based on the actual parameters of the land mobile station 
and the actual parameters of the TV/DTV station(s) it is trying to 
protect; or,
    (iv) Obtain written concurrence from the applicable TV/DTV 
station(s). If this method is chosen, a copy of the agreement must be 
submitted with the application.
    (2) The following is the method for geographic separations.
    (i) Base and fixed stations that operate in the 746-764 MHz and 
777-792 MHz bands having an antenna height (HAAT) less than 152 m. (500 
ft.) shall afford protection to co-channel and adjacent channel TV/DTV 
stations in accordance with the values specified in Table B (co-channel 
frequencies based on 40 dB protection) and Table E (adjacent channel 
frequencies based on 0 dB protection) in Sec. 90.309 of this chapter. 
Base and fixed stations that operate in the 698-746 MHz band having an 
antenna height (HAAT) less than 152 m. (500 ft.) shall afford 
protection to adjacent channel DTV stations in accordance with the 
values specified in Table E in Sec. 90.309 of this chapter, shall 
afford protection to co-channel DTV stations by providing 23 dB 
protection to such stations' equivalent Grade B contour (41 dB 
V/m), and shall afford protection to co-channel and adjacent channel TV 
stations in accordance with the values specified in Table B (co-channel 
frequencies based on 40 dB protection) and Table E (adjacent channel 
frequencies based on 0 dB protection) in Sec. 90.309 of this chapter. 
For base and fixed stations having an antenna height (HAAT) between 
152-914 meters (500-3,000 ft.) the effective radiated power must be 
reduced below 1 kilowatt in accordance with the values shown in the 
power reduction graph in Figure B in Sec. 90.309 of this chapter. For 
heights of more than 152 m. (500 ft.) above average terrain, the 
distance to the radio path horizon will be calculated assuming smooth 
earth. If the distance so determined equals or exceeds the distance to 
the hypothetical or equivalent Grade B contour of a co-channel TV/DTV 
station (i.e., it exceeds the distance from the appropriate Table in 
Sec. 90.309 of this chapter to the relevant TV/DTV station), an 
authorization will not be granted unless it can be shown in an 
engineering study (see paragraph (b)(1)(iii) of this section) that 
actual terrain considerations are such as to provide the desired 
protection at the actual Grade B contour (64 dB V/m for TV and 
41 dB V/m for DTV stations) or unless the effective radiated 
power will be further reduced so that, assuming free space attenuation, 
the desired protection at the actual Grade B contour (64 dB V/
m for TV and 41 dB V/m coverage contour for DTV stations) will 
be achieved. Directions for calculating powers, heights, and reduction 
curves are listed in Sec. 90.309 of this chapter for land mobile 
stations. Directions for calculating coverage contours are listed in 
Secs. 73.683 through 73.685 of this chapter for TV stations and in 
Sec. 73.625 of this chapter for DTV stations.
    (ii) Control, fixed, and mobile stations (including portables) that 
operate in the 776-777 MHz and 792-794 MHz bands and control and mobile 
stations (including portables) that operate in the 698-746 MHz, 747-762 
MHz and 777-792 MHz bands are limited in height and power and therefore 
shall afford protection to co-channel and adjacent channel TV/DTV 
stations in the following manner:
    (A) For control, fixed, and mobile stations (including portables) 
that operate in the 776-777 MHz and 792-794 MHz bands and control and 
mobile stations (including portables) that operate in the 747-762 MHz 
and 777-792 MHz band, co-channel protection shall be afforded in 
accordance with the values specified in Table D (co-channel frequencies 
based on 40 dB protection for TV stations and 17 dB for DTV stations) 
in Sec. 90.309 of this chapter.
    (B) For control and mobile stations (including portables) that 
operate in the 698-746 MHz band, co-channel protection shall be 
afforded to TV stations in accordance with the values specified in 
Table D (co-channel frequencies based on 40 dB protection) and to DTV 
stations by providing 23 dB protection to such stations' equivalent 
Grade B contour (41 dB V/m).
    (C) For control, fixed, and mobile stations (including portables) 
that operate in the 776-777 MHz and 792-794 MHz bands and control and 
mobile stations (including portables) that operate in the 698-746 MHz, 
747-762 MHz, and 777-792 MHz band, adjacent channel protection shall be 
afforded by providing a minimum distance of 8 kilometers (5 miles) from 
all adjacent channel TV/DTV station hypothetical or equivalent Grade B 
contours (adjacent channel frequencies based on 0 dB protection for TV 
stations and -23 dB for DTV stations).
    (D) Since control, fixed, and mobile stations may affect different 
TV/DTV stations than the associated base or fixed station, particular 
care must be taken by applicants/licensees to ensure that all 
appropriate TV/DTV stations are considered (e.g., a base station may be 
operating within TV Channel 62 and the mobiles within TV Channel 67, in 
which case TV Channels 61, 62, 63, 66, 67 and 68 must be protected). 
Control, fixed, and mobile stations shall keep a minimum distance of 
96.5 kilometers (60 miles) from all adjacent channel TV/DTV stations. 
Since mobiles and portables are able to move and communicate with each 
other, licensees must determine the areas where the mobiles can and 
cannot roam in order to protect the TV/DTV stations.
* * * * *

    16. Add subpart H to part 27 to read as follows:

[[Page 5513]]

Subpart H--Competitive Bidding Procedures for the 698-746 MHz Band

Sec.
27.701   698-746 MHz band subject to competitive bidding.
27.702   Designated entities.


Sec. 27.701  698-746 MHz band subject to competitive bidding.

    Mutually exclusive initial applications for licenses in the 698-746 
MHz 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. 27.702  Designated entities.

    (a) Eligibility for small business provisions. (1) An entrepreneur 
is an entity that, together with its controlling interests and 
affiliates, has average gross revenues not exceeding $3 million for the 
preceding three years. This definition applies only with respect to 
licenses in Block C (710-716 MHz and 740-746 MHz) as specified in 
Sec. 27.5(c)(1).
    (2) A very 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) A small business 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) A consortium of entrepreneurs, a consortium of very small 
businesses, or a consortium of small businesses 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) or (a)(3) of this 
section. Where an applicant or licensee is a consortium of 
entrepreneurs, a consortium of very small businesses, or a consortium 
of small businesses, the gross revenues of each entrepreneur, very 
small business, or small business shall not be aggregated.
    (b) Bidding credits. 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(f)(2)(i) of 
this chapter. 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(f)(2)(ii) 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(f)(2)(iii) of this chapter.

PART 73--RADIO BROADCAST SERVICES

    17. The authority citation for part 73 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 334 and 336.


    18. Section 73.622 is amended by revising paragraph (a)(2) to read 
as follows:


Sec. 73.622  Digital television table of allotments.

    (a) * * *
    (2) Petitions requesting a change in the channel of an initial 
allotment must specify a channel in the range of channels 2-58.
* * * * *
    3. Section 73.3572 is amended by revising the last sentence of 
paragraph (a)(4)(ii) to read as follows:


Sec. 73.3572  Processing of TV broadcast, Class A TV broadcast, low 
power TV, TV translator and TV booster station applications.

    (a) * * *
    (4) * * *
    (ii) * * * Where such an application is mutually exclusive with 
applications for new low power TV, TV translator or TV booster 
stations, or with other nondisplacement relief applications for 
facilities modifications of Class A TV, low power TV, TV translator or 
TV booster stations, priority will be afforded to the displacement 
application(s) to the exclusion of other applications, provided the 
permittee or licensee had tendered its initial application for a new 
LPTV or TV translator station to operate on channels 52-69 prior to the 
August 2000 filing window.
* * * * *
[FR Doc. 02-2866 Filed 2-5-02; 8:45 am]
BILLING CODE 6712-01-P