[Federal Register Volume 67, Number 42 (Monday, March 4, 2002)]
[Rules and Regulations]
[Pages 9596-9610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4552]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 22

[FCC 01-387]


Cellular Service and Other Commercial Mobile Radio Services in 
the Gulf of Mexico

AGENCY: Federal Communications Commission

ACTION: Final rule.

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SUMMARY: In this Report and Order, the Commission resolves certain 
issues

[[Page 9597]]

raised in the Second Further Notice of Proposed Rule Making (Second 
Further NPRM) in WT Docket No. 97-112 and CC Docket No. 90-6, and 
adopts a bifurcated approach to cellular licensing in the Gulf of 
Mexico Service Area (``GMSA'') based on the differences between the 
deployment of cellular service in the Eastern Gulf and the Western 
Gulf. In the Eastern Gulf, the Commission establishes a Coastal Zone in 
which its cellular unserved area licensing rules will apply. Cellular 
service in the Western Gulf will continue to be governed by current 
rules, with certain modifications to facilitate negotiated solutions to 
ongoing coverage conflicts between Gulf-based and land-based carriers. 
The Commission establishes the Gulf of Mexico Exclusive Zone in which 
the Gulf carriers will be exclusively licensed to operate. Further, the 
Commission concludes that the issue of establishing new Gulf licensing 
areas for non-cellular services should be addressed on a service-by-
service basis. The Commission also clarifies the rights of land-based 
licensees in those services in which it has not provided for licensing 
of carriers in the Gulf. The Commission concludes that these actions 
will spur the development of reliable service where needed, minimize 
disturbance to current operations and contractual arrangements, and 
help to resolve coverage conflicts.

DATES: Effective May 3, 2002.

FOR FURTHER INFORMATION CONTACT: Roger Noel, Michael Ferrante, or Linda 
Chang at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This Report and Order, adopted December 21, 
2001, and released January 15, 2002, will be available for public 
inspection during regular business hours at the FCC Reference 
Information Center, Room CY-A257, at the Federal Communications 
Commission, 445 12th St., SW., Washington, DC 20554. The complete text 
is available through the Commission's duplicating contractor: Qualex 
International, Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, 
or via e-mail at [email protected].

Synopsis of Report and Order

I. Background

    1. Initial Licensing of Cellular Service in the Gulf of Mexico. The 
Commission first authorized the provision of cellular service in the 
Gulf of Mexico in 1983 and licensed two carriers to serve the region in 
1985. The original rules allowed the Gulf carriers to operate 
throughout the GMSA, which extends to the shoreline and, therefore, 
includes coastal water areas. However, the Gulf carriers were limited 
to placing their transmitter sites on offshore platforms (predominantly 
oil and gas drilling platforms) and were prohibited from using land-
based transmitters to serve the GMSA. In addition, in order to prevent 
interference to adjacent land-based cellular systems, the Gulf carriers 
were required to limit transmitter power from offshore sites to the 
extent necessary to avoid extending their service area contours over 
land.
    2. The presence of the Gulf licensees placed similar limitations on 
land-based cellular operations in adjacent coastal areas. Land-based 
carriers were prohibited by the Commission's rules from extending their 
service area contours into the GMSA, i.e., beyond the mean high-tide 
line that defined the service area border, except for de minimis 
extensions. As a result, land-based carriers seeking to cover shore 
areas, e.g., to provide comprehensive service along coastal roads and 
in coastal communities, were unable to site transmitters close to the 
shoreline without incurring substantial engineering costs to avoid 
their signals being transmitted over water.
    3. From the outset, these rules have caused conflict between the 
Gulf carriers and adjacent land carriers regarding the provision of 
service in the Gulf coastal region. Because offshore drilling has not 
occurred in the Eastern Gulf, these conflicts have occurred almost 
exclusively in the Western Gulf, particularly in areas where offshore 
and onshore sites were in close proximity. In some instances, the 
requirement to avoid encroachment into adjacent service areas has led 
to gaps in coverage, both on land and over water, because neither Gulf-
based nor land-based carriers could extend coverage into these areas 
without capture of each other's subscriber traffic. In other instances, 
disputes have arisen over whether particular Gulf or land carriers were 
improperly extending coverage and capturing subscribers in the adjacent 
land or Gulf service area.
    4. Unserved Area Rules. In 1993, the Commission adopted the 
Unserved Area Second Report and Order, 57 FR 13646 (April 17, 1992), 
which established unserved area licensing rules for land-based cellular 
service. Under these rules, the Cellular Geographic Service Area 
(``CGSA'') of each cellular system was redefined as the composite 
contour created by the actual service areas of all cells in the system. 
See 47 CFR 22.911. The CGSA is the area in which carriers are entitled 
to protection from interference and from capture of subscriber traffic 
by adjacent carriers. In addition, areas not within any carrier's CGSA 
were subject to reclamation by the Commission and licensing as unserved 
areas. In the Unserved Area Third Report and Order, 57 FR 53446 
(November 10, 1992), the Commission extended these rules to cellular 
service in the Gulf. See Amendment of Part 22 of the Commission's Rules 
to Provide for Filing and Processing of Applications for Unserved Areas 
in the Cellular Service and to Modify Other Cellular Rules, CC Docket 
90-6, Third Report and Order and Memorandum Opinion and Order on 
Reconsideration, 57 FR 53446 (November 10, 1992). As a result, the Gulf 
carriers' service areas no longer comprised the entire GMSA, but were 
now limited to areas in the Gulf that received actual coverage from an 
offshore platform-based cell site. This caused portions of the Gulf 
that were outside the coverage area of any offshore cell site to be 
redefined as ``unserved'' areas, which could not be served by the Gulf 
carriers without further application and licensing.
    5. PetroCom Remand. In the PetroCom decision, the D.C. Circuit 
reversed and remanded certain aspects of the unserved area rules as 
they applied to the Gulf. See Petroleum Communications, Inc. v. FCC, 22 
F.3d 1164 (D.C. Cir. 1994) (PetroCom). The Court found that the 
Commission had failed adequately to consider the distinctive nature of 
Gulf-based service, which relied on movable drilling platforms for 
placement of cell sites, in comparison to land-based service, which 
used stationary sites. The Court stated that, while it did not 
foreclose the possibility of a convincing rationale for applying a 
uniform standard to both Gulf and land-based licensees, the Commission 
had failed adequately to justify the decision in the Unserved Area 
proceeding to treat Gulf licensees in the same manner as land-based 
cellular licensees in light of their reliance on transitory sites. The 
Court remanded the issue and instructed the Commission to vacate the 
rule that defined the Gulf carriers' CGSAs based on their areas of 
actual service. The effect of the remand was the restoration of the 
service area of the Gulf carriers as the entire GMSA, regardless of the 
location of their platform-based cell sites.
    6. Second Further NPRM Proposal. Following the PetroCom decision, 
the Commission issued the Second Further NPRM, in which it initiated a 
comprehensive reexamination of the cellular service rules for the Gulf. 
See Cellular Service and Other Commercial Mobile Radio Services in the 
Gulf of

[[Page 9598]]

Mexico, Amendment of Part 22 of the Commission's Rules to Provide for 
Filing and Processing of Applications for Unserved Areas in the 
Cellular Service and to Modify Other Cellular Rules, WT Docket No. 97-
112 and CC Docket No. 90-6, Second Further NPRM, 65 FR 24168 (April 25, 
2000). Specifically, the Commission proposed dividing the GMSA into a 
Coastal Zone and an Exclusive Zone. Under this proposal, the Coastal 
Zone would consist of the portion of the GMSA extending from the 
coastline of the Gulf of Mexico to the twelve-mile offshore limit, 
while the Exclusive Zone would extend from the twelve-mile limit to the 
southern boundary of the GMSA. In the Exclusive Zone, the two existing 
Gulf carriers would be able to move their offshore transmitters freely 
and to expand or modify their systems without being required to file 
additional applications, obtain prior Commission approval, or face 
competing applications for the right to serve the territory. In the 
Coastal Zone, the Commission proposed to apply its Phase II unserved 
area licensing rules. Thus, within the Coastal Zone, any qualified 
applicant (including both Gulf- and land-based carriers) would be 
permitted to apply to serve unserved areas, and all mutually exclusive 
applications would be subject to competitive bidding procedures.
    7. Comments and Carriers' Proposals. While commenting land carriers 
generally support the Commission's proposal to bifurcate the GMSA into 
a Coastal Zone and Exclusive Zone, most oppose its proposal to use 
cellular unserved area licensing rules to award licenses in the Coastal 
Zone. Instead, many of the land-based carriers support a proposal by 
ALLTEL to treat the Coastal Zone as a ``buffer zone'' extending twelve 
miles out to sea from the Gulf coastline. Within this buffer zone, 
ALLTEL proposes that Gulf and land carriers could freely extend their 
SABs and overlap contours, subject to mandatory frequency coordination, 
but without protection from subscriber capture. In the GMSA outside the 
buffer zone, Gulf carriers would be fully protected from interference.
    8. A second alternative proposal has been advanced by PetroCom, the 
A-side Gulf licensee, and US Cellular, an adjacent land-based licensee 
in certain markets. PetroCom and US Cellular propose a bifurcated 
approach in the Eastern and Western Gulf. In the Eastern Gulf, they 
would redraw the GMSA boundary ten miles seaward from the shoreline, 
thus allowing land-based carriers in Florida to expand their coverage 
over water to that extent. In the Western Gulf, this proposal would 
retain the existing GMSA boundary along the coastline, and for a period 
of five years would prohibit either side from expanding over that 
boundary without the other carrier's consent. A carrier, however, would 
be allowed to use a higher effective radiated power than that resulting 
from the Commission's SAB formula, based on measurement data 
demonstrating equal signal strengths at the coastline. The resulting 
SAB extensions, however, would not be included as part of the other 
carrier's CGSA. After five years, their proposal would allow a land 
carrier to serve portions of the Gulf from land without consent from 
the Gulf carrier, so long as the latter was not serving that area, but 
the Gulf carrier would have the right to ``reclaim'' the area if a new 
or relocated drilling platform enabled it to provide service. PetroCom 
and US Cellular also propose that pending, non-mutually exclusive Phase 
II applications to serve coastal waters be granted.
    9. Coastel, the B-side Gulf carrier, argues that the current rules 
are sufficient to meet the Commission's objectives, and therefore 
proposes that the Commission terminate this rulemaking without adopting 
new rules. According to Coastel, the Gulf carriers have substantially 
expanded their coverage of the Gulf in recent years, eliminating gaps 
in coverage and providing more reliable service to coastal waters in 
the Gulf. Coastel contends that this change in circumstances obviates 
the need for further rulemaking, and further argues that the 
Commission's proposals in the Second Further NPRM would not reduce 
conflict because many issues would still remain to be resolved between 
carriers.

II. Discussion

    10. The Commission finds that the record in this proceeding 
demonstrates that different approaches toward the Eastern and Western 
Gulf are warranted. The development of cellular service has followed 
different paths in these two areas, which justifies treating them 
differently so as to spur the development of reliable service where 
needed, minimize the disturbance to current operations and contractual 
arrangements, and address the issues raised in the PetroCom remand.
A. Establishment of the Eastern Gulf Coastal Zone
    11. As noted above, the circumstances with respect to the Gulf 
carriers' current service to and ability to serve the coastal areas 
vary greatly between the Eastern and Western Gulf. Unlike the Western 
Gulf, where the Gulf carriers have substantial offshore operations, the 
Eastern Gulf has no offshore oil or gas drilling platforms, and 
consequently, the Gulf carriers have no offshore base stations from 
which to provide service in the coastal waters off Florida. The record 
also indicates no likelihood of such platforms being constructed in the 
Eastern Gulf any time in the near future. The Commission agrees with 
PetroCom and US Cellular that, in light of these circumstances, there 
is a basis to differentiate between its approach to the Eastern Gulf 
and the Western Gulf.
    12.The Commission concludes that, in the Eastern Gulf, the best way 
to ensure that seamless cellular service is provided `` both on land 
and in coastal waters--is to adopt its proposal to create a Coastal 
Zone along the eastern portion of the GMSA. The current positioning of 
the eastern GMSA boundary directly along the Florida coastline does not 
accomplish this because it requires land carriers to engineer their 
systems to limit signal strength along the coast so as to avoid 
extending their coverage over water. Moreover, Sec. 22.911(d)(2)(i) 
requires a land-based carrier in Florida to obtain the consent of the 
Gulf carrier to extend coverage over water, even though the Gulf 
carriers have no cellular facilities to serve Florida coastal waters.
    13. Establishing a Coastal Zone in the Eastern Gulf will improve 
cellular service to coastal areas by providing an opportunity for land-
based carriers to extend their service area contours into territorial 
coastal waters, which will in turn enable them to add cell sites close 
to shore and to increase signal strength, thereby improving the 
reliability of service, from existing sites. This will not only lead to 
improved coverage of coastal communities, beach resorts, and coastal 
roads, but will also facilitate service to coastal boat traffic 
operating close to shore that can be served from land-based 
transmitters.
    14. The remainder of the Eastern Gulf that is not included in the 
Coastal Zone, along with the entire Western Gulf, will be designated as 
the Gulf of Mexico Exclusive Zone. In this area, as proposed in the 
Second Further NPRM, the Gulf carriers will have the unrestricted and 
exclusive right to operate cellular facilities. The Gulf carriers will 
also have the flexibility to add, remove, modify, or relocate sites in 
the Exclusive Zone without notice to or approval by the Commission.
    15. In the Second Further NPRM, the Commission proposed that the 
Coastal Zone would be coextensive with the territorial waters of the 
United States, a maritime zone that extends

[[Page 9599]]

approximately twelve nautical miles from the U.S. coastline. The 
Commission concludes that the territorial water limit will serve as an 
appropriate boundary between the Coastal Zone and the Exclusive Zone in 
the Eastern Gulf. This approach is also consistent with the approach 
the Commission has taken more recently in established services where it 
has provided for licensing in the Gulf. In the context of WCS, the 
Commission drew the boundary between land-based operations and Gulf-
based operations at the territorial water limit. See Amendment of the 
Commission's Rules to Establish Part 27, the Wireless Communications 
Service, Report and Order, 62 FR 09636 (March 3, 1997). Therefore, the 
Commission defines the Eastern Gulf Coastal Zone as the portion of the 
Gulf that is bounded by a line extending approximately twelve nautical 
miles due south from the coastline boundary of the States of Florida 
and Alabama, and continuing along the west coast of Florida at a 
distance of approximately twelve nautical miles from the shoreline. A 
map setting out the coordinates of the Eastern Gulf Coastal Zone is 
attached at Appendix A.
    16. The Commission believes that the most advisable course for 
licensing the Eastern Gulf Coastal Zone will be to define the region as 
unserved area. This will enable all entities to apply to serve areas of 
the Coastal Zone that are not currently served. Accordingly, the 
Commission will begin accepting Phase II unserved area applications to 
serve portions of the Coastal Zone sixty days after the effective date 
of the rules. Further, in the event of mutually exclusive applications, 
use of the Commission's unserved area competitive bidding rules will 
ensure that the authorization to serve a given area is awarded to the 
carrier that values it most and will help maximize the use of the 
spectrum. Carriers who apply to serve portions of the Eastern Gulf 
Coastal Zone will be required, consistent with the Commission's rules 
for terrestrial unserved areas, to construct facilities in these areas 
within one year from the date of receiving approval to serve this area.
    17. The Commission recognizes that as a result of its decision to 
apply unserved area licensing rules to the Eastern Gulf Coastal Zone, 
the Gulf carriers will no longer have the exclusive right to serve 
Florida coastal waters as part of the GMSA. The Commission concludes, 
however, that the above-described public interest benefits of this 
course outweigh the costs. Because the Gulf carriers have no operations 
in the Eastern Gulf, this decision will not result in any reduction in 
cellular service or stranded investment in cellular facilities by the 
Gulf carriers. Moreover, given the lack of existing or planned 
installation of offshore platforms in the Eastern Gulf Coastal Zone, 
there is no likelihood that the Gulf carriers would be in a position to 
provide service there in the foreseeable future. Nonetheless, the 
Commission's decision does not preclude the Gulf carriers from seeking 
to provide service in the Coastal Zone in conformity with the unserved 
area licensing rules the Commission is adopting for this region, either 
from land-based sites or from offshore platforms, at any point in the 
future should they become available.
    18. Finally, the Commission notes that some land-based carriers in 
Florida have previously-granted de minimis extensions extending into 
the GMSA. The creation of the Eastern Gulf Coastal Zone is not intended 
to limit the scope of existing cellular operations, and the Commission 
therefore grandfathers all existing de minimis extensions of land 
carriers in the Eastern Gulf Coastal Zone. However, if a land carrier 
wishes to incorporate the area within an existing de minimis extension 
into its CGSA, it must file an unserved area application. In addition, 
carriers who are currently operating on the Florida coast under Special 
Temporary Authorization must file an unserved area application if they 
wish to operate on a permanent basis.
B. Licensing in the Western Gulf
    19. While the Gulf carriers do not have offshore facilities in the 
Eastern Gulf, they have built an extensive offshore cellular network on 
oil and gas drilling platforms in the Western Gulf. In substantial 
portions of the Western Gulf, particularly off the coast of Louisiana, 
Mississippi, and Alabama, many of these platforms are located only a 
few miles from shore, enabling the Gulf carriers to extend coverage to 
the coastline.
    20. The close proximity of these water-based sites to the coastline 
has given rise to technical and operational conflicts between the Gulf 
carriers seeking to provide service in coastal waters and the adjacent 
land-based carriers seeking to provide service to coastal communities, 
resorts, beaches, and coastal roads. In areas where land and water-
based sites are close to one another, Gulf and land carriers must 
reduce their respective signal strength near the coastline in order to 
avoid incursions into their counterparts' markets. Some land-based 
carriers contend that the requirement to limit signal strength has led 
to gaps in their coverage along the coast, and that the Gulf carriers 
refuse to consent to SAB extensions into the Gulf that are needed to 
allow the land-based carriers to provide seamless service on land. The 
Gulf carriers dispute this characterization, and contend that it is the 
land-based carriers who are preventing them from providing ubiquitous 
service in the Gulf.
    21. In addition, both Gulf and land carriers accuse one another of 
improperly extending coverage across the coastline into their 
counterparts' markets and consequently capturing subscriber traffic 
that should be served by the home carrier. Some land-based carriers 
contend that their customers have complained about placing calls on 
land that were captured by the Gulf carrier's system rather than the 
land-based system, requiring the customer to pay extremely high roaming 
charges to the Gulf carrier. The Gulf carriers argue that the land 
carriers have failed to document these alleged incidents of capture, 
that such capture is extremely uncommon, and that it is far more common 
in the Gulf for offshore cellular calls to be captured by land-based 
systems.
    22. In the Second Further NPRM, the Commission proposed to 
bifurcate the Western Gulf into a Coastal and Exclusive Zone in the 
same manner that the Commission proposed (and is adopting today) for 
the Eastern Gulf. The Commission stated that it would grandfather all 
existing Gulf facilities, but that any unserved area in the Coastal 
Zone (i.e., area not currently served by the Gulf carrier from an 
existing offshore drilling platform) would be available for licensing 
under its cellular unserved area licensing rules. As noted above, 
commenters generally oppose this proposal, though from different 
perspectives. Most land carriers, led by ALLTEL, propose that the 
Coastal Zone should not be subject to unserved area licensing, but 
should instead be open to both Gulf and land-based carriers on a 
shared, coordinated basis. PetroCom, with the concurrence of US 
Cellular, opposes the creation of a Coastal Zone in the Western Gulf, 
proposing instead that land-based carriers be allowed to expand their 
SAB contours into unserved portions of the Gulf but also required to 
pull back if a Gulf carrier sought to serve the area. Coastel opposes 
the Second Further NPRM proposal and advocates continuing to apply the 
current rules without modification.
    23. In evaluating its proposal and the alternatives presented by 
commenters,

[[Page 9600]]

the Commission considers it important to note that circumstances in the 
Western Gulf appear to have changed significantly since the adoption of 
the Second Further NPRM. First, in the Second Further NPRM, the 
Commission expressed concern regarding gaps in coverage of the Western 
Gulf, and sought to advance a solution that would ensure ubiquitous 
coverage of coastal waters (whether from land or water-based 
transmitters) in order to make service available not only to personnel 
on drilling platforms but also to coastal boat traffic. The record in 
this proceeding indicates that, in the past few years, the Gulf 
carriers have substantially expanded their networks and improved their 
coverage of the Western Gulf. As a result, there appear to be fewer 
gaps in coverage of coastal waters than there were previously.
    24. Second, while there are still significant disputes between Gulf 
and land-based carriers generally, some Gulf and land carriers have 
successfully negotiated agreements since the Second Further NPRM that 
provide a mutually agreed-upon framework for cooperative operation 
along portions of the Western Gulf coast. In particular, PetroCom, the 
A-side Gulf carrier, has entered into a series of extension and 
collocation agreements with US Cellular and several other A-side land-
based carriers. These agreements facilitate seamless coverage of 
coastal areas (over both land and water) and apply negotiated solutions 
to issues such as coverage, capture, and roaming rates. A similar 
accord has been negotiated by Coastel, the B-side Gulf carrier, and 
ALLTEL, the principal B-side land carrier, by which they have reached 
agreement with respect to their operations along the Alabama coastline, 
specifically in Mobile Bay.
    25. In light of these developments, the Commission believes that 
the best way to achieve reliable, ubiquitous service in the Western 
Gulf is to encourage further reliance on negotiation and market-based 
solutions to the fullest extent possible. The fact that some Gulf- and 
land-based carriers have reached negotiated agreements suggests that 
carrier-driven solutions to these issues are possible without 
substantial changes to existing rules. Moreover, in other instances 
where negotiations have not been successful, a partial cause may be 
uncertainty and speculation regarding possible rule changes that could 
result from this proceeding. Thus, adopting rules that substantially 
change the relationship between land and Gulf carriers in the Western 
Gulf could be counter-productive by further delaying negotiated 
solutions and even leading parties to seek to unwind existing 
agreements.
    26. Therefore, upon review of the record, the Commission concludes 
that it should not adopt its Second Further NPRM proposal to create a 
Coastal Zone subject to unserved area licensing rules in the Western 
Gulf. First, because of the buildout that has occurred in the Western 
Gulf in recent years, there is relatively little unserved area in what 
would comprise the Coastal Zone. Second, to the extent that applying 
unserved area licensing rules would impose a ``use or lose'' regime on 
the Gulf carriers (i.e., a Gulf carrier providing service from an 
offshore platform could permanently lose the right to serve that 
portion of the Gulf if the platform were moved out of the area, even if 
the relocation was not permanent), the Commission is concerned that 
such a fundamental change in the rules could delay resolution of 
coverage conflicts and discourage negotiation of extension and 
collocation agreements between land and Gulf carriers.
    27. The Commission similarly declines to adopt the ALLTEL proposal 
that the Coastal Zone be available for use by both Gulf and land-based 
carriers on a shared, coordinated basis. Although ALLTEL's proposal is 
designed to provide a basis for negotiated agreements, implementing it 
as a formal rule would, in effect, turn the Coastal Zone into a ``no-
man's land'' where the prohibition against capture of a neighboring 
carrier's subscriber traffic would not apply. Moreover, by eliminating 
capture protection in a portion of the GMSA while retaining it in the 
CGSAs of the adjacent land carriers, the effect of the ALLTEL proposal 
would be to shift the protections afforded by existing rules in favor 
of the land carriers and against the Gulf carriers. While the 
Commission has no objection to voluntary agreements along the lines of 
ALLTEL's proposal, it sees no compelling public interest reason to 
codify it in its rules, and is concerned that doing so could reduce the 
incentive for land carriers to negotiate with Gulf carriers regarding 
traffic capture in the Coastal Zone. In addition, because the ALLTEL 
proposal does not provide a mechanism for settling frequency 
coordination disputes, there is a substantial likelihood that the 
Commission would be burdened with resolving such matters in instances 
where frequency coordination failed.
    28. The Commission concludes that the wisest course is to designate 
a Gulf of Mexico Exclusive Zone by generally maintaining the currently 
applicable rules and continuing to encourage carriers to resolve their 
differences through negotiated agreements. Specifically, the Commission 
identifies the GMSA area west of the Eastern Gulf Coastal Zone as part 
of the Gulf of Mexico Exclusive Zone, which will reach landward up to 
the land-water boundary in the western portion of the Gulf. In reaching 
this conclusion, the Commission does not agree with Coastel's position 
that no revisions to the rules are required. However, the Commission 
believes that, with relatively minor modifications, the current rules 
should provide sufficient incentives for both Gulf and land carriers to 
negotiate agreements that lead to seamless cellular coverage in coastal 
areas at competitive rates.
    29. Accordingly, in the Western Gulf, the Commission will maintain 
the GMSA border at the coastline as currently defined in its rules, and 
will allow the Gulf carriers to provide service throughout the Gulf of 
Mexico Exclusive Zone regardless of the location of their cell sites at 
any particular time. Thus, Gulf carriers will not be subject to a ``use 
or lose'' regime based on the movement of offshore drilling platforms. 
The Commission notes that this approach addresses the concern expressed 
by the court in PetroCom that the Commission's rules for the Gulf 
carriers take into account the transitory nature of water-based 
transmission sites. The Commission's decision gives the Gulf carriers 
full flexibility to build, relocate, modify and remove offshore 
facilities throughout the Western Gulf without seeking prior Commission 
approval or facing competing applications.
    30. In the Second Further NPRM, the Commission noted that, although 
under its proposal only the Gulf carriers would have exclusive rights 
within the Exclusive Zone, the Commission tentatively concluded that de 
minimis extensions into unserved areas in the GMSA Exclusive Zone 
should be permitted. Upon further consideration of the proposal, 
however, the Commission does not believe it is necessary to permit de 
minimis extensions into the Exclusive Zone in light of the ability of 
the land-based and Gulf carriers to enter into agreements regarding 
their operations. In instances where it is necessary for a carrier to 
extend into an adjacent carrier's licensed area, the record reflects 
that contract extensions (i.e. where the Gulf and land licensees 
mutually agree to the extension) are sufficient to ensure reliable 
coverage.
    31. The Commission recognizes that the rules it is adopting for the 
Western

[[Page 9601]]

Gulf cannot resolve all of the technical and operational conflicts 
(e.g., interference, subscriber capture) that have arisen in areas 
where Gulf carriers and land carriers operate in close proximity to one 
another. Ultimately, only negotiation and cooperative arrangements 
between land and Gulf-based carriers can resolve these conflicts. 
Nonetheless, because the Commission's decision provides finality 
regarding its licensing and operational rules, the Commission expects 
that it will facilitate and speed the progress of such negotiations. 
The Commission emphasizes that under its decision today, parties remain 
free to negotiate consensual agreements that provide for extensions, 
coordination of frequencies, collocation, facilities sharing, or other 
solutions, so long as such agreements do not affect the rights of third 
parties. Thus, nothing in the decision is intended to modify or alter 
the effect of the existing agreements that have been negotiated by 
PetroCom or Coastel with adjacent land-based carriers. The Commission 
encourages Gulf and land-based carriers who have not reached negotiated 
agreements to enter into negotiations that could result in such 
agreements.
    32. In seeking to facilitate negotiated agreements, it is the 
Commission's goal to create incentives for carriers to reach agreements 
that are not only mutually beneficial, but that also benefit existing 
and potential cellular subscribers. For example, while the Commission 
recognizes that the operating costs of Gulf carriers are typically 
higher than those of land-based carriers, the Commission seeks to 
ensure that they cannot recover those costs by charging uncompetitive 
rates or roaming charges to their customers, including the numerous 
land-based subscribers who may roam onto a Gulf carrier's network when 
close to the coastline (e.g., recreational boaters). The Commission 
believes that the rules it adopts will help to foster a competitive 
marketplace in the Gulf that will protect consumers from such charges 
and practices. The Commission notes, for example, that some of the 
recently negotiated agreements between Gulf and land-based carriers 
provide for ``in-shore'' roaming rates that are comparable to roaming 
rates on land as opposed to the higher rates that PetroCom charges 
roamers operating significantly further out to sea. This creates a 
competitive incentive for similar terms to be negotiated in future 
agreements also. Moreover, the deployment of non-cellular services such 
as PCS along the Gulf coast will apply pressure on both cellular 
providers in the Gulf, and their land-based counterparts, to offer 
competitive services and rates.
C. Service Area Boundary Formula
    33. In the Unserved Area Second Report and Order, the Commission 
applied the standard land-based SAB formula to operations by land 
carriers along the Gulf coast (``land formula''), but adopted a 
separate mathematical formula to define the SABs of facilities operated 
by the Gulf carriers from offshore sites (``water formula'') in the 
Unserved Area Third Report and Order. The use of different formulas 
recognized that cellular signals transmitted over water typically have 
stronger propagation characteristics (i.e., can be received at greater 
distances from the transmitter) than comparable signals transmitted 
over land, which are attenuated by variations in terrain, buildings, 
trees, and other obstacles. The two SAB formulas also incorporated 
different assumptions regarding receivers: the land formula determined 
the distance to the service area boundary that results in reliable 
service to a conventional mobile unit, while the water formula 
established the distance to the service area boundary that results in 
reliable service to a marine mobile unit with a mast-mounted antenna. 
In the Second Further NPRM, the Commission sought comment on whether to 
retain the two-formula approach or to adopt an alternative ``hybrid'' 
approach that would account for signals in the Gulf coastal region that 
are transmitted over both land and water.
    34. The Commission will continue to use the two existing SAB 
formulas for land and water-based sites, respectively. While no 
mathematical formula can precisely duplicate actual signal propagation 
in all circumstances, the Commission concludes that the two-formula 
approach adequately accounts for the different characteristics of 
signal propagation over land and water. In addition, the record 
reflects little support for a hybrid formula, and the Commission finds 
that it would be difficult to establish such a formula that would 
account for the variation in propagation of a single signal over both 
land and water. Finally, retaining the existing SAB formulas is 
consistent with the Commission's overall decision to maintain the 
existing relationship between land and Gulf carriers in the Western 
Gulf as the basis for negotiated solution of their operational 
conflicts. The Gulf carriers have been using the water formula to 
depict SAB contours for their facilities operating in the Gulf since 
the formula was adopted, while the land carriers have used the land-
based formula for their facilities. Consequently, changing the SAB 
definitions at this point could lead to one side or the other 
unilaterally increasing their transmitter power under the revised 
definitions, which could upset existing agreements and create new 
conflicts. Of course, this does not preclude parties from entering into 
voluntary agreements that would allow for consensual transmitter power 
adjustments based on alternative contour definitions.
D. Placement of Transmitters
    35. When the Commission initially licensed carriers to provide 
cellular service in the Gulf, it did not prohibit them from placing 
sites on land, but required Gulf carriers to avoid causing significant 
overlap of their reliable service area contours with land-based 
licensees. Subsequently, the Commission determined that allowing Gulf 
carriers to place transmitters on land would cause significant 
incursions over land and hamper the ability of land-based MSA and RSA 
licensees to carry out the initial build out of their systems. Thus the 
Commission concluded that Gulf carriers should not be permitted to 
place transmitters on land without the consent of the affected land-
based carrier.
    36. In the Second Further NPRM, the Commission observed that the 
land-based licensees along the Gulf coast have built out their cellular 
systems to encompass nearly the entire coastal land area of the Gulf 
region, and tentatively concluded that it was no longer necessary to 
prohibit Gulf carriers from siting on land, so long as no overlap with 
any land-based carrier's CGSA occurred. The Commission therefore 
proposed to abandon its blanket prohibition against Gulf carriers 
placing their transmitters on land, and proposed to rely solely on its 
CGSA and SAB extension rules to determine whether or not the placement 
of a particular transmitter was permissible. See 47 CFR 22.912. In 
light of the course the Commission now takes, the Commission believes 
that it is appropriate to adopt this part of the proposal from the 
Second Further NPRM and permit Gulf carriers to operate land-based 
sites, subject to SAB extension rules as discussed above. The 
Commission believes that this additional flexibility will help 
facilitate contractual resolutions of the issues facing adjacent 
carriers along the Gulf of Mexico.

[[Page 9602]]

E. Pending Applications

1. Pending Phase II Applications

    37. In December 1992, following its adoption of cellular unserved 
area licensing rules applicable to the Gulf, the Commission accepted 
Phase II applications for unserved area licenses in the GMSA. Many of 
these applications were petitioned against by the Gulf carriers. In 
addition, PetroCom filed a Phase II application that remains pending. 
However, following the PetroCom remand of the unserved area rules as 
they applied to the GMSA, the Commission suspended processing of these 
applications pending reconsideration of its policies in the Gulf 
region. In the Second Further NPRM, the Commission proposed that areas 
of the Coastal Zone that do not receive cellular service be treated as 
unserved areas and that Phase II competitive bidding procedures should 
be implemented for those areas. The Commission further proposed that 
all unserved area applications previously filed to serve Coastal Zone 
areas would be dismissed without prejudice, and that applicants would 
be allowed to resubmit their applications sixty days after the 
effective date of this rulemaking.
    38. In light of its actions set out here, the Commission will 
dismiss all pending Phase II applications and associated petitions to 
deny. In both the Western Gulf, where the Commission has decided not to 
apply unserved area licensing procedures, and the Eastern Gulf, where 
the Commission is instituting unserved area licensing in the Coastal 
Zone, the Commission will allow carriers to refile to the extent 
allowed under the new rules adopted in this Report and Order. In light 
of the passage of several years since the applications were filed, the 
Commission concludes that dismissing applications filed under 
superseded rules and allowing carriers currently serving or desiring to 
serve the Eastern Gulf Coastal Zone to submit new applications is the 
fairest and most efficient manner to license cellular service in that 
region.

2. Pending De Minimis Extension Applications

    39. Following the PetroCom remand, the Commission also suspended 
processing of applications for de minimis extensions into the Gulf. In 
the Second Further NPRM, the Commission proposed to dismiss all such 
pending applications because the PetroCom court directed us to vacate 
former Sec. 22.903(a) to the extent that it applied to the Gulf 
carriers, and because virtually all applications for contour extensions 
were subject to petitions to deny and applications for review. The 
Commission also noted that pending applicants would not be prejudiced 
by a dismissal of extension applications, because such applicants would 
have the opportunity to resubmit applications under the Commission's 
revised licensing rules for unserved areas in the Gulf.
    40. Based on the actions the Commission takes in the Report and 
Order, the Commission will dismiss all pending extension applications 
and allow carriers to refile to the extent permissible under the rules 
the Commission adopts in this Report and Order. The Commission 
concludes that dismissal is the more equitable course in light of the 
passage of time since the applications were filed and the fact that the 
rules under which they were filed have undergone some modification.
F. Other Services.
    41. In the Second Further NPRM, the Commission requested comment 
regarding possible operations in the Gulf by CMRS licensees in services 
other than cellular. Specifically, the Commission asked whether the 
Commission should establish a Gulf licensing area, analogous to the 
cellular GMSA, for use in other CMRS services and, if such a licensing 
area were established, where the boundary should lie between it and the 
adjacent licensing areas of land-based CMRS providers. The Commission 
received only limited comment on the issue of licensing such services 
in the Gulf. Stratos Offshore Services Company (``Stratos''), which 
operates a microwave network that supports communications in the Gulf, 
generally supports creating a license area for the non-cellular 
services to protect licensees operating in the Gulf. Stratos, however, 
does not support licensing PCS in the Gulf because of the high cost of 
relocating microwave networks operating at 2 GHz. On the other hand, DW 
Communications, a 900 MHz operator with at least one license along the 
Gulf coast, argues that creating Gulf area licenses in other services 
would create more problems than would be solved. PCS licensees Sprint 
PCS and Verizon Wireless each argue that the Commission's PCS service 
area rules define boundaries based on county lines, which, under state 
law, extend into the Gulf's offshore areas, and therefore, the 
Commission should not create a separate license area for PCS in the 
Gulf.
    42. Since the issuance of the Second Further NPRM, the Commission 
has established Gulf licensing areas in several other services, 
including Wireless Communications Service (``WCS''), Multiple Address 
Systems (MAS), 746-747/776-777 and 762-764/792-794 MHz bands (``700 MHz 
Guardband''), 24.25-24.45 GHz and 25.05-25.25 GHz bands (``24 GHz''), 
and the 746-764 MHz and 776-794 MHz bands (``700 MHz''). In the case of 
WCS, the Commission incorporated United States territorial waters in 
the Gulf, i.e., waters from the shoreline to a line 12 nautical miles 
offshore, into the adjacent land-based licensing areas. Thus, the WCS 
licensing area, unlike the original cellular GMSA, extends seaward from 
the 12-mile limit, and includes coastal waters. For 700 MHz, the 
Commission established Economic Area Groupings (EAGs) whereby the Gulf 
of Mexico is divided in two, with the eastern portion being included in 
the license for Southeast EAG, and the western portion being included 
in the license for the Central/Mountain EAG.
    43. With respect to non-cellular CMRS services, the Commission 
concludes that it should not create a Gulf licensing area in this 
proceeding for all such services, but instead should take up the issue 
of establishing a Gulf licensing area on a service-by-service basis, as 
it did for WCS, MAS, 24 GHz, 700 MHz Guardband, and 700 MHz. The dearth 
of support in this proceeding advocating creation of Gulf licensing 
areas suggests that there is limited interest among carriers in many 
non-cellular CMRS services in providing service to offshore drilling 
facilities analogous to that provided by the Gulf cellular carriers. 
Furthermore, to the extent that carriers in a particular service may 
wish to establish a Gulf licensing area for that service, it can 
address such issues separately, taking into account the specific 
characteristics of that service.
    44. On the other hand, land-based carriers in services that have no 
service provider licensed in the Gulf have expressed significant 
interest in the Commission clarifying whether they can extend their 
coverage offshore from land-based sites. The Commission finds that in 
those services where there is no licensed carrier in the Gulf, it is in 
the public interest to allow land-based CMRS carriers to extend their 
coverage offshore, both to increase coverage and service quality for 
land-based customers along the coastline and to offer service to 
coastal boating traffic. In general, the geographic service area 
definitions used for non-cellular CMRS services are based on county 
boundaries, which extend over water pursuant to state law. The 
Commission therefore clarifies that the licensing areas of land-based

[[Page 9603]]

licensees in such services extend to the limit of county boundaries 
that extend over water. In addition, licensees may provide service 
extending further into the Gulf on a secondary basis so long as they 
comply with the technical limitations applicable to the radio service 
and do not cause co-channel or adjacent channel interference to others.
    45. Finally, PetroCom has filed a petition for rulemaking with 
respect to establishment of special interference criteria for Gulf-
based facilities. Although the Commission has never adopted specific 
rules for licensing of water-based SMR facilities, the Commission has 
issued some site-specific SMR licenses to PetroCom for sites in the 
Gulf. Under the existing SMR rules, these sites are entitled to 
interference protection on the same basis as site-specific licenses on 
land. In its petition, PetroCom sought to change the interference 
protection rules for site-based SMR facilities in the Gulf, arguing 
that the land-based rules did not adequately protect its water-based 
facilities. The Commission incorporated PetroCom's petition into the 
Second Further NPRM and sought comment on it. However, the Commission 
received only limited comment on issues relating to Gulf-based SMR 
facilities. Moreover, since the Second Further NPRM, the Commission has 
issued land-based EA licenses in the 800 MHz SMR service, and have 
received no indication that the operations of these licensees have 
caused interference to Gulf-based SMR facilities. The Commission 
concludes that in light of these circumstances, the record before us 
does not support amending the existing SMR rules as they apply to 
service in the Gulf, and the Commission therefore denies PetroCom's 
petition. However, PetroCom or any other party is free to file an 
updated petition for rulemaking if it believes that current or 
potential circumstances warrant revision of the SMR rules to protect 
the operation of Gulf-based facilities.

III. Conclusion

    46. The Commission concludes this reevaluation of its Gulf cellular 
rules by finding that the carriers themselves are best able to resolve 
most of the issues standing in the way the provision of reliable, 
ubiquitous cellular coverage to both land-based and Gulf-based 
subscribers in the Gulf region. The imposition of a new regulatory 
structure would cause additional and unnecessary delay in meeting this 
goal. In addition, the record reflects that a number of carriers have 
been able to resolve their differences under the current rules. The 
Commission believes the few changes it now makes help to strike a fair 
balance between the interests of the carriers, the interest of the 
public, and the need for flexibility to deal with these issues.

IV. Procedural Matters

Final Regulatory Flexibility Act Analysis
    47. As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 
604 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Second Further NPRM. The Commission sought written 
public comment on the proposals in the Second Further NPRM, including 
comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.
A. Need for, and Objectives of, the Order
    48. In this Report and Order, the Commission resolves certain 
issues raised in the Second Further NPRM in this proceeding, in which 
the Commission proposed changes to its cellular service rules for the 
Gulf of Mexico Service Area (GMSA). This decision also responds to the 
remand by the United States Court of Appeals for the District of 
Columbia Circuit in the PetroCom. In the PetroCom decision, the D.C. 
Circuit reversed and remanded certain aspects of the unserved area 
rules as they applied to the Gulf. The Court found that the Commission 
had failed adequately to consider the distinctive nature of Gulf-based 
service, which relied on movable drilling platforms for placement of 
cell sites, in comparison to land-based service, which used stationary 
sites. The Court stated that, while it did not foreclose the 
possibility of a convincing rationale for applying a uniform standard 
to both Gulf and land-based licensees, the Commission had failed to 
adequately justify the decision to treat Gulf licensees in the same 
manner as land-based cellular licensees in light of their reliance on 
transitory sites. The Court remanded the issue and instructed the 
Commission to vacate the rule that defined the Gulf carriers' Cellular 
Geographic Service Areas (CGSA) based on their areas of actual service. 
The effect of the remand was the restoration of the original rules that 
defined the service area of the Gulf carriers as the entire GMSA, 
regardless of the location of their platform-based cell sites. In this 
Report and Order, the Commission adopts a bifurcated approach to 
cellular licensing in the Gulf, based on the differences between the 
deployment of cellular service in the Eastern Gulf (the Florida Gulf 
coast) and the Western Gulf (the Texas, Louisiana, Mississippi, and 
Alabama Gulf Coast). In the Eastern Gulf, where there are no offshore 
oil and gas drilling platforms on which to site cellular facilities, 
the Commission adopts its proposal to establish a Coastal Zone in which 
its cellular unserved area licensing rules will apply. In the Western 
Gulf, the Commission finds that the extensive deployment of both Gulf-
based and land-based facilities that has occurred in the past few years 
makes adoption of its Second Further NPRM proposal impractical. 
Instead, the Commission concludes that cellular service in the Western 
Gulf should continue to be governed by current rules, with certain 
modifications to facilitate negotiated solutions to ongoing coverage 
conflicts between Gulf-based and land-based carriers. Accordingly, the 
Commission establishes the Gulf of Mexico Exclusive Zone, encompassing 
the Western Gulf and areas of the Eastern Gulf outside of the Coastal 
Zone, in which the Gulf carriers will have the exclusive right to 
operate.
    49. The Second Further NPRM also requested comment regarding 
possible operations in the Gulf by Commercial Mobile Radio Services 
(CMRS) licensees for services other than cellular. Given the limited 
comment the Commission received on these issues, it declines to adopt 
specific licensing and service rules for the provision of non-cellular 
services in the Gulf at this time. The Commission concludes, however, 
that the boundaries of non-cellular CMRS markets with market areas that 
are derived from the aggregation of counties (e.g. Economic Areas, 
Basic Trading Areas), are coterminous with county boundaries absent 
specific service rules to the contrary.
B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    50. Although the Commission has received a number of comments in 
response to the Second Further NPRM, it received only one comment in 
response to the IRFA. However, as described below, the Commission has 
nonetheless considered potential significant economic impacts of the 
rules on small entities.
    51. Comments raised in response to the Second Further NPRM 
regarding proposals that may have an impact on small entities. In 
response to the Second Further NPRM, the Commission received a number 
of comments and alternative proposals from land-based and Gulf-based 
carriers, many of which have been supplemented recently with ex parte 
presentations. Some

[[Page 9604]]

commenting land carriers generally support the proposal to bifurcate 
the GMSA into a Coastal Zone and Exclusive Zone, while most oppose the 
Commission's proposal to use cellular unserved area licensing rules to 
award licenses in the Coastal Zone. Many of the land-based carriers 
support a proposal by ALLTEL to treat the Coastal Zone as a ``buffer 
zone'' extending twelve miles out to sea from the Gulf coastline. 
Within this buffer zone, ALLTEL proposes that Gulf and land carriers 
could freely extend their service area boundaries (SABs), subject to 
mandatory frequency coordination, but without protection from 
subscriber capture. In the GMSA outside the buffer zone, Gulf carriers 
would be fully protected from interference.
    52. A second alternative proposal has been advanced by PetroCom, a 
Gulf licensee, and US Cellular, an adjacent land-based licensee in 
certain markets. PetroCom and US Cellular advocate a bifurcated 
approach in the Eastern and Western Gulf. In the Eastern Gulf, they 
propose that the Commission extend the GMSA boundary ten miles seaward 
from the shoreline, thus allowing land-based carriers in Florida to 
expand their coverage over water to that extent. In the Western Gulf, 
PetroCom and US Cellular would retain the existing GMSA boundary along 
the coastline, and for a period of five years would prohibit either 
side from expanding over that boundary without the other carrier's 
consent. After five years, their proposal would allow a land carrier to 
serve portions of the Gulf from land without consent from the Gulf 
carrier, so long as the latter was not serving that area, but the Gulf 
carrier would have the right to ``reclaim'' the area if a new or 
relocated drilling platform enabled it to provide service.
    53. Another commenter, Coastel, argues that the current rules are 
sufficient to meet the Commission's objectives, and therefore proposes 
that the Commission terminate this rulemaking without adopting new 
rules. Coastel asserts that the Gulf carriers have substantially 
expanded their coverage of the Gulf in recent years, eliminating gaps 
in coverage and providing more reliable service to coastal waters in 
the Gulf. Coastel contends that this change in circumstances obviates 
the need for further rulemaking, and argues that the Commission's 
proposals in the Second Further NPRM would not reduce conflict because 
many issues would still remain to be resolved between carriers.
    54. With respect to the issue of whether or not to create Gulf of 
Mexico service areas for non-cellular commercial mobile radio services 
(CMRS), a few commenters state that customers in the Gulf would benefit 
from additional CMRS options. Others, however, oppose the creation of 
additional market areas in the Gulf. Commenters argue that creating 
Gulf area licenses in other services would create more problems than 
would be solved. A few commenters assert that incumbent licensees with 
markets adjacent to the Gulf are already authorized to serve the Gulf's 
offshore areas.
    55. Certain commenters also express concern over the Commission's 
proposal to dismiss all pending Phase II and de minimis applications. 
Some commenters object to the dismissing of applications because 
applicants have spent time and resources to file the applications, and 
suggest that the Commission process the pending applications instead.
    56. Further, the two Gulf carriers argue that they should be 
permitted to site their transmitters on land. Other commenters argue 
that such sites should not be permitted, because interference and 
capture issues will likely arise if Gulf carriers are permitted to 
locate transmitters on land without the land-based carrier's consent. 
Commenters also generally oppose the proposal to adopt a ``hybrid'' 
propagation approach that would account for signals in the Gulf coastal 
region that are transmitted over both land and water. Commenters argue 
that a hybrid formula would be unworkable and expensive.
    57. Comment in response to the IRFA. In an ex parte submission 
filed on August 21, 2001, PetroCom revised its proposal and that of 
U.S. Cellular for consideration by the Commission as an alternative to 
the agency's proposed rules in this proceeding pursuant to the RFA. 
PetroCom contends that it has opposed any changes to the current 
definition of its CGSA on the Western (non-Florida) side of the Gulf 
where it has fully built out infrastructure providing cellular service 
to customers throughout the proposed Coastal Zone, and that such action 
would adversely impact the proposed Coastal Zone rules. PetroCom states 
that there is no factual, legal or policy reason to change the current 
rules that require it's consent to the SAB extensions of land carriers 
that cross the coastline into it's CGSA.
    58. PetroCom asserts that paragraphs 64-72 of the Second Further 
NPRM violates several RFA requirements. Among its assertions, PetroCom 
states that the Commission's IRFA does not describe the impact of the 
proposed Coastal Zone on small entities, and that the Commission failed 
to describe alternatives to the Coastal Zone as required by the RFA. 
Further, PetroCom asserts that the Commission failed to provide a small 
entity impact analysis with respect to the agency's proposal and an 
analysis of alternatives. Further still, PetroCom calls attention to 
the Commission's IRFA in the Second Further NPRM, which it avers, 
contained no discussion or analysis of the 15-day reporting rule that 
was proposed in paragraph 47 which conflicts with Section 1.947 of the 
rules that contains a 30-day reporting rule. PetroCom also asserts that 
the Commission's definition of a small business has not complied with 
SBA rules.
    59. PetroCom states that there is nothing in the record that will 
support a finding in an FRFA that the creation of a Coastal Zone as 
proposed in the Second Further NPRM is the best alternative. Further, 
PetroCom asserts that the alternatives advocated by other carriers (see 
infra) will significantly affect the annual revenues of the Gulf 
carriers. PetroCom argues that, among the various alternatives, its 
joint proposal best minimizes adverse impacts on small entities.
C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply
    60. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act. 5 U.S.C. 601(3). A ``small 
business concern'' is one which: (1) is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). 15 U.S.C. 632.
    61. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities specific to cellular 
licensees. Therefore, the applicable definition of small entity is the 
definition under the SBA rules applicable to radiotelephone (wireless) 
companies. This provides that a small entity is a radiotelephone 
(wireless) company employing no more than 1,500 persons. 13 CFR 
121.201. According to the Census Bureau, only twelve radiotelephone 
(wireless) firms from a

[[Page 9605]]

total of 1,178 such firms which operated during 1992 had 1,000 or more 
employees. Even if all twelve of these firms were cellular telephone 
companies, nearly all cellular carriers were small businesses under the 
SBA's definition. In addition, the Commission notes that there are 
1,758 cellular licenses; however, a cellular licensee may own several 
licenses. According to a recent Telecommunications Reporting Worksheet 
data, 806 wireless telephony providers reported that they were engaged 
in the provision of either cellular service or Personal Communications 
Service (PCS) services, and Specialized Mobile Radio (SMR) telephony 
carriers, which are placed together in the data. The Commission does 
not have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
are unable at this time to estimate with greater precision the number 
of cellular service carriers that would qualify as small business 
concerns under the SBA's definition. The Commission estimates that 
there are fewer than 806 small wireless service providers that may be 
affected by these revised rules.
    62. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
definition of small entities specifically applicable to such incumbent 
220 MHz Phase I licensees. To estimate the number of such licensees 
that are small businesses, the Commission applies the definition under 
the SBA rules applicable to Radiotelephone (Wireless) Communications 
companies. This definition provides that a small entity is a 
radiotelephone (wireless) company employing no more than 1,500 persons. 
According to the Census Bureau, only 12 radiotelephone (wireless) firms 
out of a total of 1,178 such firms which operated during 1992 had 1,000 
or more employees. If this general ratio continues in 2001 in the 
context of Phase I 220 MHz licensees, the Commission estimates that 
nearly all such licensees are small businesses under the SBA's 
definition.
    63. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz 
service is a new service, and is subject to spectrum auctions. In the 
220 MHz Third Report and Order, the Commission adopted criteria for 
defining small and very small businesses for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. The Commission has defined a small business as an 
entity that, together with its affiliates and controlling principals, 
has average gross revenues not exceeding $15 million for the preceding 
three years. A very small business is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that do not exceed $3 million for the preceding three 
years. The SBA has approved these definitions. Auctions of Phase II 
licenses commenced on September 15, 1998, and closed on October 22, 
1998. In the first auction, 908 licenses were auctioned in three 
different-sized geographic areas: three nationwide licenses, 30 
Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) 
Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine 
small businesses won licenses in the first 220 MHz auction. The second 
auction included 225 licenses: 216 EA licenses and 9 EAG licenses. 
Fourteen companies claiming small business status won 158 licenses.
    64. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
the Commission adopted criteria for defining small businesses and very 
small businesses for purposes of determining their eligibility for 
special provisions such as bidding credits and installment payments. 
The Commission has defined a small business as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years. 
Additionally, a very small business is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years. An auction of 52 Major Economic Area (MEA) licenses 
commenced on September 6, 2000, and closed on September 21, 2000. Of 
the 104 licenses auctioned, 96 licenses were sold to 9 bidders. Five of 
these bidders were small businesses that won a total of 26 licenses. A 
second auction of 700 MHz Guard Band licenses commenced on February 13, 
2001 and closed on February 21, 2001. All eight of the licenses 
auctioned were sold to three bidders. One of these bidders was a small 
business that won a total of two licenses.
    65. Paging. The Commission has adopted a two-tier definition of 
small businesses in the context of auctioning licenses in the Common 
Carrier Paging and exclusive Private Carrier Paging services. A small 
business will be defined as either (1) an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
for the three preceding years of not more than $3 million, or (2) an 
entity that, together with affiliates and controlling principals, has 
average gross revenues for the three preceding calendar years of not 
more than $15 million. Because the SBA has not yet approved this 
definition for paging services, the Commission will utilize the SBA's 
definition applicable to radiotelephone companies, i.e., an entity 
employing no more than 1,500 persons. At present, there are 
approximately 24,000 Private Paging licenses and 74,000 Common Carrier 
Paging licenses. According to a recent Telecommunications Industry 
Revenue data, 172 carriers reported that they were engaged in the 
provision of either paging or ``other mobile'' services, which are 
placed together in the data. The Commission does not have data 
specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
paging carriers that would qualify as small business concerns under the 
SBA's definition. Consequently, the Commission estimates that there are 
fewer than 172 small paging carriers that may be affected by the rules 
adopted herein. The Commission estimates that the majority of private 
and common carrier paging providers would qualify as small entities 
under the SBA definition.
    66. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years. For Block F, an additional classification for ``very 
small business'' was added and is defined as an entity that, together 
with their affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These regulations 
defining ``small entity'' in the context of broadband PCS auctions have 
been approved by the SBA. No small businesses within the SBA-approved 
definition bid successfully for licenses in Blocks A and B. There were 
90 winning bidders that qualified as small entities in the Block C 
auctions. A total of 93 small and very small business bidders won 
approximately 40% of the

[[Page 9606]]

1,479 licenses for Blocks D, E, and F. On March 23, 1999, the 
Commission reauctioned 347 C, D, E, and F Block licenses; there were 48 
small business winning bidders. On January 26, 2001, the Commission 
completed the reauction of 422 C and F Block licenses. Of the 35 
winning bidders, 30 were small business entities. Based on this 
information, the Commission concludes that there are approximately 261 
small entity broadband PCS providers as defined by the SBA and the 
Commission's auction rules.
    67. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded by auction. Such auctions have not 
yet been scheduled, however. Given that nearly all radiotelephone 
companies have no more than 1,500 employees and that no reliable 
estimate of the number of prospective MTA and BTA narrowband licensees 
can be made, the Commission assumes, for purposes of this IRFA, that 
all of the licenses will be awarded to small entities, as that term is 
defined by the SBA.
    68. Specialized Mobile Radio (SMR). Pursuant to 47 CFR 
90.814(b)(1), the Commission has defined ``small business'' for 
purposes of auctioning 900 MHz SMR licenses, 800 MHz SMR licenses for 
the upper 200 channels, and 800 MHz SMR licenses for the lower 230 
channels on the 800 MHz band as a firm that has had average annual 
gross revenues of $15 million or less in the three preceding calendar 
years. The SBA has approved this small business size standard for the 
800 MHz and 900 MHz auctions. Sixty winning bidders for geographic area 
licenses in the 900 MHz SMR band qualified as small businesses under 
the $15 million size standard. The auction of the 525 800 MHz SMR 
geographic area licenses for the upper 200 channels began on October 
28, 1997, and was completed on December 8, 1997. Ten (10) winning 
bidders for geographic area licenses for the upper 200 channels in the 
800 MHz SMR band qualified as small businesses under the $15 million 
size standard.
    69. The auction of the 1,030 800 MHz SMR geographic area licenses 
for the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven (11) winning bidders for 
geographic area licenses for the General Category channels in the 800 
MHz SMR band qualified as small businesses under the $15 million size 
standard. The Commission anticipates that a total of 2,823 EA licenses 
will be auctioned in the lower 80 channels of the 800 MHz SMR service. 
Therefore, the Commission concludes that the number of 800 MHz SMR 
geographic area licensees for the lower 80 channels that may ultimately 
be affected by these proposals could be as many as 2,823. In addition, 
there are numerous incumbent site-by-site SMR licensees on the 800 and 
900 MHz band. The Commission awards bidding credits in auctions for 
geographic area 800 MHz and 900 MHz SMR licenses to firms that had 
revenues of no more than $15 million in each of the three previous 
calendar years.
D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    70. In this Report and Order, the Commission reexamines its 
cellular service rules as they apply to the Gulf of Mexico Service 
Area. The principal goals in this proceeding are to establish a 
comprehensive regulatory scheme that will reduce conflict between 
water-based and land-based carriers, to provide regulatory flexibility 
to Gulf carriers because of the transitory nature of water-based sites, 
and to provide reliable, seamless service to the Gulf region. The 
Commission does not impose reporting or record keeping requirements in 
this Report and Order.
E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    71. The RFA requires an agency to describe any significant 
alternatives that it has considered in developing its approach, 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. 5 U.S.C. 603(c).
    72. Creation of the Eastern Gulf Coastal Zone and Gulf of Mexico 
Exclusive Zone. The record in this proceeding demonstrates that 
different approaches toward the Eastern and Western Gulf are warranted. 
Unlike the Western Gulf, where the Gulf carriers have substantial 
offshore operations, the Eastern Gulf has no offshore oil or gas 
drilling platforms, and consequently, the Gulf carriers have no 
offshore base stations from which to provide service in the coastal 
waters off Florida. As the Commission explains in its Report and Order, 
the best way to ensure that seamless cellular service is provided in 
the Eastern Gulf--both on land and in coastal waters--is to create a 
Coastal Zone along the eastern portion of the GMSA. The current 
positioning of the eastern GMSA boundary directly along the Florida 
coastline does not accomplish this because it requires land carriers to 
engineer their systems to limit signal strength along the coast so as 
to avoid extending their coverage over water.
    73. Establishing an Eastern Gulf Coastal Zone will improve cellular 
service to coastal areas by providing an opportunity for land-based 
carriers to extend their service area contours into territorial coastal 
waters, which will in turn enable them to add cell sites close to shore 
and to increase signal strength (and resulting coverage) from existing 
sites. This will not only lead to improved coverage of coastal 
communities, beach resorts, and coastal roads, but will also facilitate 
service to coastal boat traffic operating close to shore that can be 
served from land-based transmitters.
    74. The remainder of the eastern half of the Gulf that is not 
included in the Eastern Gulf Coastal Zone will be designated, along 
with the entire Western Gulf, as the Gulf of Mexico Exclusive Zone. In 
this area, as proposed in the Second Further NPRM, the Gulf carriers 
will have the unrestricted and exclusive right to operate cellular 
facilities. The Gulf carriers will have full flexibility to build, 
relocate, modify and remove offshore facilities throughout the Gulf of 
Mexico Exclusive Zone without seeking prior FCC approval or facing 
competing applications. While the Commission does not agree with 
Coastel's position that no revisions to the rules are required, the 
Commission believes that with relatively minor modifications, the 
current rules should provide sufficient incentives for both Gulf and 
land carriers to negotiate agreements that lead to seamless cellular 
coverage in coastal areas at competitive rates.
    75. The Commission recognizes that as a result of its decision to 
apply unserved area licensing rules to the Eastern Gulf Coastal Zone, 
the Gulf

[[Page 9607]]

carriers will no longer have the exclusive right to serve Florida 
coastal waters as part of the GMSA. The Commission must weigh, however, 
not only the interests of the Gulf carriers, but also the interests of 
adjacent land-based carriers and, most of all, the need to provide 
cellular subscribers in the coastal region with seamless coverage by 
the most technically efficient means, whether from land or water-based 
sites. Because the Gulf carriers have no operations in the Eastern 
Gulf, this decision will not result in any reduction in cellular 
service or stranded investment in cellular facilities by the Gulf 
carriers. Moreover, given the lack of existing or planned installation 
of offshore platforms in the Eastern Gulf Coastal Zone, there is no 
likelihood that the Gulf carriers would be in a position to provide 
service there in the foreseeable future. Nonetheless, the Commission's 
decision does not preclude the Gulf carriers from seeking to provide 
service in the Coastal Zone in conformity with the unserved area 
licensing rules the Commission is adopting for this region, either from 
land-based sites or from offshore platforms, at any point in the future 
should they become available.
    76. The Commission declines to adopt the ALLTEL proposal that the 
Coastal Zone be available for use by both Gulf and land-based carriers 
on a shared, coordinated basis. Although ALLTEL's proposal is designed 
to provide a basis for negotiated agreements, the Commission believes 
the effect of this proposal would be to turn the Coastal Zone into a 
``no-man's land'' where the prohibition against capture of a 
neighboring carrier's subscriber traffic would not apply. Moreover, by 
eliminating capture protection in a portion of the GMSA while retaining 
it in the CGSAs of the adjacent land carriers, the effect of the ALLTEL 
proposal would be to shift the protections afforded by existing rules 
in favor of the land carriers and against the Gulf carriers. The 
Commission is concerned that adopting the ALLTEL proposal could reduce 
the incentive for land carriers to negotiate with Gulf carriers 
regarding traffic capture in the Coastal Zone. In addition, because the 
ALLTEL proposal does not provide a mechanism for settling frequency 
coordination disputes, there is a substantial likelihood that the 
Commission would be burdened with resolving such matters in instances 
where frequency coordination failed.
    77. Service Area Boundary Formula. In this Report and Order the 
Commission concludes that it should retain the existing land-based and 
water-based SAB formulas. The Commission concludes that the two-formula 
approach adequately accounts for the different characteristics of 
signal propagation over land and water, and are easier to use than a 
hybrid formula. Moreover, retaining the existing SAB formulas is 
consistent with the Commission's overall decision to maintain the 
existing relationship between land and Gulf carriers in the Western 
Gulf as the basis for negotiated solution of their operational 
conflicts.
    78. Placement of Transmitters. The Gulf carriers urge the 
Commission to allow them to site their transmitters on land without the 
express consent of the applicable land-based licensees. The Commission 
believes that a blanket prohibition against Gulf carriers placing their 
transmitters on land is not necessary, and it will rely on its CGSA and 
SAB extension rules to determine whether or not the placement of a 
particular transmitter is permissible. Although the Gulf carriers argue 
that this action is insufficient, the Commission believes that this 
will provide additional flexibility that will facilitate contractual 
resolutions of the issues facing adjacent carriers along the Gulf of 
Mexico.
    79. Pending applications. In its Report and Order, the Commission 
concludes that areas of the Eastern Gulf Coastal Zone that do not 
receive cellular service shall be defined as unserved areas and that 
Phase II competitive bidding procedures implemented for those areas. 
All unserved area applications previously filed to serve Eastern Gulf 
Coastal Zone areas are dismissed, as well as their associated petitions 
to deny. Similarly, the Commission dismisses all pending de minimis 
extensions into the Gulf in this Report and Order. The Commission 
considered whether or not the dismissal of pending licenses would 
impose significant additional costs or burdens on carriers. The 
Commission finds that this action will not prejudice carriers because 
such applicants have the opportunity to resubmit applications to the 
extent allowed under the new rules adopted in the Report and Order. The 
Commission concludes that, in light of the passage of several years 
since the applications were filed, dismissing applications filed under 
superseded rules and allowing carriers currently serving or desiring to 
serve the Eastern Gulf Coastal Zone to submit new applications is the 
fairest and most efficient manner to license cellular service in that 
region.
    80. Report to Congress: The Commission will send a copy of this 
Report and Order, including this FRFA, in a report to be sent to 
Congress pursuant to the Small Business Regulatory Enforcement Fairness 
Act of 1996. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission 
will send a copy of the Report and Order, including the FRFA, to the 
Chief Counsel for Advocacy of the SBA.

Paperwork Reduction Act Analysis

    81. The actions taken in this Report and Order have been analyzed 
with respect to the Paperwork Reduction Act of 1995, Public Law 104-13, 
and found to impose no new or modified reporting and record-keeping 
requirements or burdens on the public.

VI. Ordering Clauses

    82. Pursuant to the authority of sections 4(i), 7, 303(c), 303(f), 
303(g), 303(r), and 332 of the Communications Act of 1934, as amended, 
47 U.S.C. 154(i), 303(c), 303(f), 303(g), 303(r), and 332, the rule 
changes are adopted.
    83. Pursuant to section 4(i) of the Communications Act, as amended, 
47 U.S.C. 154(i), the applications set forth below are dismissed.
    84. The Wireless Telecommunications Bureau will begin accepting 
Phase II unserved area applications for the Gulf of Mexico Coastal Zone 
on July 2, 2002.
    Pursuant to section (4)(i) of the Communications Act, as amended, 
47 U.S.C. 154(i), the creation of the Gulf of Mexico Coastal Zone, the 
coordinates of which are represented in Appendix A, is adopted.
    85. The Petition for Rulemaking filed by Petroleum Communications 
is Denied.
    86. The rule changes set forth below will become effective May 3, 
2002.
    87. It is further ordered that this proceeding is Terminated.

List of Subjects in 47 CFR Part 22

    Communications common carriers.

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

    Note: The following appendix to the preamble will not appear in 
the Code of Federal Regulations.

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[[Page 9608]]

[GRAPHIC] [TIFF OMITTED] TR04MR02.025

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[[Page 9609]]

Phase II and De Minimis Extension Applications

    The following pending Phase II applications for unserved area 
licenses in the Gulf of Mexico Service Area (GMSA) and applications for 
de minimis extensions into the GMSA will be dismissed. Any associated 
pleadings relating to these applications are also dismissed.

------------------------------------------------------------------------
                                                Cellular Block aaB''
     Cellular Block ``A'' applications              applications
------------------------------------------------------------------------
07433-CL-MP-902...........................  10152-CL-P-306-B-93
07440-CL-MP-95............................  01621-CL-MP-93
01091-CL-CP-95............................  01613-CL-MP-93
01094-CL-CP-95............................  04076-CL-MP-95
01096-CL-CP-95............................  04915-CL-MP-95
01328-CL-CP-95............................  06794-CL-MP-95
01329-CL-CP-95............................  07427-CL-MP-95
02025-CL-CP-95............................  00103-CL-MP-96
02163-CL-CP-95............................  02245-CL-MP-96
02165-CL-CP-95............................  03856-CL-P2-97
04160-CL-CP-95............................  03857-CL-P2-97
05605-CL-P2-95............................  03858-CL-P2-97
05913-CL-MP-95............................  03859-CL-MP-97
06361-CL-P2-95............................  03860-CL-MP-97
01743-CL-P2-96............................
04235-CL-P2-96............................
04992-CL-P2-96............................
00700-CL-P2-97............................
02590-CL--97..............................
02591-CL--97..............................
02592-CL--97..............................
02593-CL--97..............................
02594-CL--97..............................
02595-CL--97..............................
02596-CL--97..............................
02597-CL--97..............................
02600-CL-P2-97............................
01242-CL-MP-98............................
01243-CL-MP-98............................
01244-CL-MP-98............................
01245-CL-MP-98............................
02407-CL-P2-98............................
------------------------------------------------------------------------

Rule Changes

    For the reasons discussed in the Preamble, the Federal 
Communications Commission amends 47 CFR Part 22 as follows:

PART 22--[AMENDED]

    1. The authority citation for Part 22 continues to read as follows:

    Authority: 47 U.S.C. 151, 222, 303, 309 and 332.


    2. Section 22.99 is amended by adding the following definition, in 
alphabetical order to read as follows:


Sec. 22.99  Definitions.

* * * * *
    Gulf of Mexico Service Area (GMSA). The cellular market comprising 
the water area of the Gulf of Mexico bounded on the West, North and 
East by the coastline. Coastline, for this purpose, means the line of 
ordinary low water along that portion of the coast which is in direct 
contact with the open sea, and the line marking the seaward limit of 
inland waters. Inland waters include bays, historic inland waters and 
waters circumscribed by a fringe of islands within the immediate 
vicinity of the shoreline.
* * * * *

    3. Section 22.911 is amended by removing the Note to paragraph (a) 
and revising paragraph (a)(2) introductory text to read as follows:


Sec. 22.911  Cellular geographic service area.

* * * * *
    (a) * * *
    (2) For cellular systems with facilities located within the Gulf of 
Mexico Service Area, the distance from a cell transmitting antenna to 
its SAB along each cardinal radial is calculated as follows:
* * * * *

    4. Section 22.946 is revised to read as follows:


Sec. 22.946  Service commencement and construction systems.

    (a) Commencement of service. New cellular systems must be at least 
partially constructed and begin providing cellular service to 
subscribers within the service commencement periods specified in Table 
H-1 of this section. Service commencement periods begin on the date of 
grant of the initial authorization, and are not extended by the grant 
of subsequent authorizations for the cellular system (such as for major 
modifications). The licensee must notify the FCC (FCC Form 601) after 
the requirements of this section are met (see Sec. 1.946 of this 
chapter).

                   Table H-1.--Commencement of Service
------------------------------------------------------------------------
        Type of cellular system          Required to commence service in
------------------------------------------------------------------------
The first system authorized on each      36 months.
 channel block in markets 1-90.
The first system authorized on each      18 months.
 channel block in all other markets and
 any subsequent systems authorized
 pursuant to contracts in partitioned
 markets.
The first system authorized on each      No requirement.
 channel block in the Gulf of Mexico
 Exclusive Zone.
All other systems......................  12 months.
------------------------------------------------------------------------

    (b) To satisfy the requirement of paragraph (a) of this section, a 
cellular system must be interconnected with the public switched 
telephone network (PSTN) and must be providing service to mobile 
stations operated by its subscribers and roamers. A cellular system is 
not considered to be providing service to subscribers if mobile 
stations can not make telephone calls to landline telephones and 
receive telephone calls from landline telephones through the PSTN, or 
if the system intentionally serves only roamer stations.
    (1) [Reserved]
    (2) The licensee must notify the FCC (FCC Form 489) no later than 
15 days after the requirements of paragraph (a) of this section are 
met.
    (c) Construction period for specific facilities. The construction 
period applicable to specific new or modified cellular facilities for 
which an authorization has been granted is one year from the date the 
authorization is granted. Failure to comply with this requirement 
results in termination of the authorization for the specific new or 
modified facility, pursuant to Sec. 22.144(b).

    5. Section 22.947 is amended by revising the introductory text to 
read as follows:


Sec. 22.947  Five-year buildout period.

    Except for systems authorized in the Gulf of Mexico Exclusive Zone, 
the licensee of the first cellular system authorized on each channel 
block in each cellular market is afforded a five year period, beginning 
on the date the initial authorization for the system is granted, during 
which it may expand the system within that market.
* * * * *

[[Page 9610]]


    6. Section 22.949 is amended by revising the introductory text to 
read as follows:


Sec. 22.949  Unserved area licensing process.

    This section sets forth the process for licensing unserved areas in 
cellular markets on channel blocks for which the five year build-out 
period has expired. This process has two phases: Phase I and Phase II. 
This section also sets forth the Phase II process applicable to 
applications to serve the Gulf of Mexico Coastal Zone.
* * * * *

    7. Section 22.950 is added to read as follows:


Sec. 22.950  Provision of service in the Gulf of Mexico Service Area 
(GMSA)

    The GMSA has been divided into two areas for licensing purposes, 
the Gulf of Mexico Exclusive Zone (GMEZ) and the Gulf of Mexico Coastal 
Zone (GMCZ). This section describes these areas and sets forth the 
process for licensing facilities in these two respective areas within 
the GMSA.
    (a) The GMEZ and GMCZ are defined as follows:
    (1) Gulf of Mexico Exclusive Zone. The geographical area within the 
Gulf of Mexico Service Area that lies between the coastline line and 
the southern demarcation line of the Gulf of Mexico Service Area, 
excluding the area comprising the Gulf of Mexico Coastal Zone.
    (2) Gulf of Mexico Coastal Zone. The geographical area within the 
Gulf of Mexico Service Area that lies between the coast line of Florida 
and a line extending approximately twelve nautical miles due south from 
the coastline boundary of the States of Florida and Alabama, and 
continuing along the west coast of Florida at a distance of twelve 
nautical miles from the shoreline. The line is defined by Great Circle 
arcs connecting the following points (geographical coordinates listed 
as North Latitude, West Longitude) consecutively in the order listed:
(i) 30 deg.16'49" N 87 deg.31'06" W
(ii) 30 deg.04'35" N 87 deg.31'06" W
(iii) 30 deg.10'56" N 86 deg.26'53" W
(iv) 30 deg.03'00" N 86 deg.00'29" W
(v) 29 deg.33'00" N 85 deg.32'49" W
(vi) 29 deg.23'21" N 85 deg.02'06" W
(vii) 29 deg.49'44" N 83 deg.59'02" W
(viii) 28 deg.54'00" N 83 deg.05'33" W
(ix) 28 deg.34'41" N 82 deg.53'38" W
(x) 27 deg.50'39" N 83 deg.04'27" W
(xi) 26 deg.24'22" N 82 deg.23'22" W
(xii) 25 deg.41'39" N 81 deg.49'40" W
(xiii) 24 deg.59'02" N 81 deg.15'04" W
(xiv) 24 deg.44'23" N 81 deg.57'04" W
(xv) 24 deg.32'37" N 82 deg.02'01" W
    (b) Service Area Boundary Calculation. The service area boundary of 
a cell site located within the Gulf of Mexico Service Area is 
calculated pursuant to Sec. 22.911(a)(2). Otherwise, the service area 
boundary is calculated pursuant to Secs. 22.911(a)(1) or 22.911(b).
    (c) Operation within the Gulf of Mexico Exclusive Zone (GMEZ). GMEZ 
licensees have exclusive right to provide service in the GMEZ, and may 
add, modify, or remove facilities anywhere within the GMEZ without 
prior Commission approval. There is no five-year buildout period for 
GMEZ licensees, no requirement to file system information update maps 
pursuant to Sec. 22.947, and no unserved area licensing procedure for 
the GMEZ.
    (d) Operation within the Gulf of Mexico Coastal Zone (GMCZ). The 
GMCZ is subject to the Phase II unserved area licensing procedures set 
forth in Sec. 22.949(b).

[FR Doc. 02-4552 Filed 3-1-02; 8:45 am]
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