[Federal Register Volume 67, Number 96 (Friday, May 17, 2002)]
[Proposed Rules]
[Pages 35083-35086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12429]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 21 and 74

[WT Docket No. 02-68; RM-9718; FCC 02-101]


Multipoint Distribution Service (``MDS'') and Instructional 
Television Fixed Service (``ITFS'')

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission has before it an amended petition for 
rulemaking filed by PetroCom License Corporation (``Petitioner''), 
requesting that the Commission amend its rules to permit licensing of 
the MDS and ITFS spectrum in the Gulf of Mexico. The Commission 
proposes to establish a Basic Trading Area (``BTA'')-like area in the 
Gulf of Mexico. The Commission's goal in instituting this proceeding is 
to encourage the most efficient utilization of spectrum.

DATES: Comments due June 17, 2002. Reply comments are due August 15, 
2002.

FOR FURTHER INFORMATION CONTACT: Shellie Blakeney, (202) 418-1784, 
Public Safety Private Wireless Division, Wireless Telecommunications 
Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Amendment of Parts 21 and 74 of the Commission's Rules With Regard to 
Licensing the Multipoint Distribution Service and in the Instructional 
Television Fixed Service for the Gulf of Mexico, WT Docket No. 02-68; 
RM-9718; FCC 02-101, adopted March 27, 2002 and released May 3, 2002. 
Pursuant to Sec. 1.415 and 1.419 of the Commission's rules, 47 CFR 
1.415, 1.419, interested parties may file comments on or before July 
16, 2002. Reply comments are due August 15, 2002. Comments may be filed 
using the Commission's Electronic Comment Filing System (ECFS) or by 
filing paper copies. See Electronic Filing of Documents in Rulemaking 
Proceedings, 63 FR 24121 (1998). Comments filed through the ECFS can be 
sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission 
must be filed. If multiple docket or rulemaking numbers appear in the 
caption of this proceeding, however, commenters must transmit one 
electronic copy of the comments to each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, 
commenters should include their full name, U.S. Postal Service mailing 
address, and the applicable docket or rulemaking number. Parties may 
also submit an electronic comment by Internet e-mail. To get filing 
instructions for e-mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the body of the 
message, ``get form  .'' A sample form 
and directions will be sent in reply. Parties who choose to file by 
paper must file an original and four copies of each filing. If more 
than one docket or rulemaking number appear in the caption of this 
proceeding, commenters must submit two additional copies for each 
additional docket or rulemaking number. Filings can be sent by hand or 
messenger delivery, by commercial overnight courier, or by first-class 
or overnight U.S. Postal Service mail (although we continue to 
experience delays in receiving U.S. Postal Service

[[Page 35084]]

mail). The Commission's contractor, Vistronix, Inc., will receive hand-
delivered or messenger-delivered paper filings for the Commission's 
Secretary at 236 Massachusetts Avenue, NE ., Suite 110, Washington, DC 
20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building. Commercial 
overnight mail (other than U.S. Postal Service Express Mail and 
Priority Mail) must be sent to 9300 East Hampton Drive, Capitol 
Heights, MD 20743. U.S. Postal Service first-class mail, Express Mail, 
and Priority Mail should be addressed to 445 12th Street, SW., 
Washington, DC 20554. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
The full text of this Notice of Proposed Rulemaking is available for 
inspection and copying during normal business hours in the FCC 
Reference Room, Room CY-A257, Portals II, 445 12th Street, SW., 
Washington, DC, and also may be purchased from the Commission's copy 
contractor, Vistronix, Inc.

Synopsis of Notice of Proposed Rulemaking

    The Commission rejects arguments by the Wireless Communications 
Association (``WCA'') against the creation of the Gulf Service Area 
based on the possibility that higher prices were paid for BTAs 
bordering the Gulf because of a guaranteed lack of interference on that 
side of those BTAs. Rather, in light of the Commission's actions over 
the last several years to encourage the most efficient use of spectrum 
by private users, WCA and other interested parties had no reason to 
expect that, absent substantial and compelling public interest reasons, 
we would leave a portion of the spectrum under our jurisdiction 
permanently fallow. The Commission proposes to exclude all ITFS 
channels from the proposed Gulf auction. ITFS licensees have not 
expressed interest in obtaining licenses in the Gulf, the area most 
likely has little need for educational service, and the requested 
commercial use does not require the full bandwidth available in the 
2500-2690 MHz band.
    Because of the potential for interference to land-based MDS and 
ITFS systems in the Gulf coast area, the Commission proposes that an 
offshore frequency allocation should be limited in size to no more than 
is absolutely essential for successful deployment and growth of the 
proposed service. Given the type of communications circuits deployed in 
Petitioner's previously existing developmental system, and the circuits 
likely to be deployed if we authorize regular service in the Gulf, the 
Commission proposes to auction two blocks of spectrum, each consisting 
of two 6 MHz MDS channels.
    The Commission proposes to conduct the auction for MDS licenses in 
the Gulf in conformity with the general competitive bidding rules set 
forth in Part 1, subpart Q of the Commission's rules, and substantially 
consistent with the bidding procedures that have been employed in 
previous Commission auctions. Specifically, the Commission proposes to 
employ the Part 1 rules governing designated entities, application 
issues, payment issues, competitive bidding design, procedure and 
timing issues, and anti-collusion.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA),\1\ this 
Initial Regulatory Flexibility Analysis (IRFA) of the possible 
significant economic impact on small entities by the policies and rules 
proposed in the Notice of Proposed Rulemaking (``NPRM''). Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for 
comments as set forth in paragraph 47 of the NPRM. The Commission will 
send a copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. See 5 U.S.C. 
Sec. 603(a). In addition, the NPRM and IRFA (or summaries thereof) will 
be published in the Federal Register. Id.

I. Need for, and Objectives of, the Proposed Rules

    Section 309(j) of the Communications Act directs the Commission to 
disseminate licenses among a wide variety of applicants, including 
small businesses and other designated entities.\2\ Section 309(j) also 
requires that the Commission ensure the development and rapid 
deployment of new technologies, products, and services for the benefit 
of the public, and recover for the public a portion of the value of the 
public spectrum resource made available for commercial use.\3\ On 
November 23, 1998, PetroCom License Corporation (``Petitioner'') filed 
an amended petition for rulemaking requesting that the Commission amend 
its rules to permit licensing of the Multipoint Distribution Service 
(``MDS'') and Instructional Television Fixed Services (``ITFS'') 
spectrum in the Gulf of Mexico. Petitioner asks that the Commission 
establish a Basic Trading Area like-service area in the Gulf similar to 
the 1995 MDS Report and Order.\4\
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    \1\See 5 U.S.C. 603.The RFA, see 5 U.S.C. 601 et seq., has been 
amended by the Contract With America Advancement ACt of 1996, Public 
Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA).
    \2\47 U.S.C. 309(j)(3)(B).
    \3\Id, 309(j)(3)(A), (C).
    \4\Report and Order on Amendment of Parts 21 and 74 of the 
Commission's Rules With Regard to Filing Procedures in the 
Multipoint Distribution Service and in the Instructional Television 
Fixed Service and Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding, 10 FCC Rcd 9589, 9619 
(1995) (``MDS Report and Order'').
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    Upon consideration of these numerous requests, the Commission has 
tentatively concluded that it is in the public interest to permit 
licensing of the MDS spectrum in the Gulf of Mexico. The Commission 
believes that this NPRM will provide the Commission with an opportunity 
to develop a record on the specific proposals to open eligibility for 
this spectrum in the Gulf of Mexico and otherwise revise the MDS rules 
for the benefit of consumers and the economy. In addition, the 
Commission believes that the tentative conclusions and proposals set 
forth in this NPRM help meet the goals and objectives of section 
309(j), and promote competition while maintaining the fair and 
efficient implementation of the auctions program. Accordingly, the 
Commission seeks comment on all proposals, alternatives, tentative 
conclusions, and other issues described in the NPRM; and the impact 
that such proposals, alternatives, tentative conclusions, and other 
issues may have on small entities.

II. Legal Basis

    This action is authorized under Sections 4(i), 303(r), and 309(j) 
of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 
303(r), and 309(j).

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

    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\ The Regulatory 
Flexibility Act defines the term ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction'' under section 3 of the Small 
Business Act.\6\ A small business concern is one which: (1) Is

[[Page 35085]]

independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.\7\
    A small organization is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.''\8\ Nationwide, as of 1992, there were approximately 275,801 
small organizations.\9\ The definition of ``small governmental 
jurisdiction'' is one with populations of fewer than 50,000.\10\ There 
are 85,006 governmental jurisdictions in the nation.\11\ This number 
includes such entities as states, counties, cities, utility districts 
and school districts. There are no figures available on what portion of 
this number has populations of fewer than 50,000. However, this number 
includes 38,978 counties, cities and towns, and of those, 37,556, or 96 
percent, have populations of fewer than 50,000.\12\ The Census Bureau 
estimates that this ratio is approximately accurate for all government 
entities. Thus, of the 85,006 governmental entities, we estimate that 
96 percent, or about 81,600, are small entities that may be affected by 
our rules. Nationwide, there are 4.44 million small business firms, 
according to SBA reporting data.\13\ 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 company employing no more than 1,500 persons.\14\ 
According to the Bureau of the Census, only 12 radiotelephone firms 
from a total of 1,178 such firms that operated during 1992 had 1,000 or 
more employees;\15\ therefore, at least 1,166 radiotelephone firms in 
1992 had 1,500 or fewer employees. We are unable at this time to 
quantify the specific impact of our proposals on these firms, but 
invite comment on this issue.
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    \5\5 U.S.C. 603(b)(3).
    \6\Id. 601(3).
    \7\Id. 632.
    \8\Id. 601(4).
    \9\Department of Commerce, U.S. Bureau of the Census, 1992 
Economic Census, Table 6 (special tabulation of data under contract 
to Office of Advocacy of the U.S. Small Business Administration).
    \10\5 U.S.C. 601(5).
    \11\1992 Census of Governments, U.S. Bureau of the Census, U.S. 
Department of Commerce.
    \12\Id.
    \13\See 1992 Economic Census, U.S. Bureau of the Census, Table 6 
(special tabulation of data under contract to Office of Advocacy of 
the U.S. Small Business Administration).
    \14\14 CFR 121.201, NAICS codes 513321, 513322, and 513330.
    \15\1992 Census, Series UC92-S-1, at Table 5, NAICS codes 
513321, 513322, and 513330.
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    MDS historically provided primarily point-to-multipoint, one-way 
video services to subscribers.\16\ The Commission later amended its 
rules to allow MDS licensees to provide a wide range of high-speed, 
two-way services to a variety of users.\17\ In connection with the 1996 
MDS auction, the Commission defined small businesses as entities that 
had annual average gross revenues for the three preceding years not in 
excess of $40 million.\18\ The Commission established this small 
business definition in the context of this particular service and with 
the approval of the SBA.\19\ The MDS auction resulted in 67 successful 
bidders obtaining licensing opportunities for 493 Basic Trading Areas 
(BTAs).\20\ Of the 67 auction winners, 61 met the definition of a small 
business. At this time, we estimate that of the 61 small business MDS 
auction winners, 48 remain small business licensees. In addition to the 
48 small businesses that hold BTA authorizations, there are 
approximately 392 incumbent MDS licensees that are considered small 
entities.\21\ After adding the number of small business auction 
licensees to the number of incumbent licensees not already counted, we 
find that there are currently approximately 440 MDS licensees that are 
defined as small businesses under either the SBA or the Commission's 
rules. Some of those 440 small business licensees may be affected by 
the proposals in this Order.
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    \16\For purposes of this item, MDS includes both the single 
channel Multipoint Distribution Service (MDS) includes Local 
Multipoint Distribution Service (LMDS), and the Multichannel 
Multipoint Distribution Service (MMDS).
    \17\Amendment of Parts 21 and 74 to Enable Multipoint 
Distribution Service and Instructional Television Fixed Service 
Licensees to Engage in Fixed Two-Way Transmissions, 13 FCC Rcd 19112 
(1998), recon., 14 FCC Rcd 12764 (1999), further recon., 15 FCC Rcd 
14566 (2000).
    \18\47 CFR 21.961 and 1.2110.
    \19\Amendment of Parts 21 and 74 of the Commission's Rules with 
Regard to Filing Procedures in the Multipoint Distribution Service 
and in the Instructional Television Fixed Service and Implementation 
of Section 309(j) of the Communications Act--Competitive Bidding, 10 
FCC Rcd 9589, 9670 (1995), 60 FR 36524 (July 17, 1995).
    \20\Basic Trading Areas (BTAs) were designed by Rand McNally and 
are the geographic areas by which MDS was auctioned and authorized. 
See Id. at 9608.
    \21\47 U.S.C. 309(j). (Hundreds of stations were licensed to 
incumbent MDS licensees prior to implementation of Section 309(j) of 
the Communications Act of 1934, 47 U.S.C. Section 309(j). For these 
pre-auction licenses, the applicable standard is SBA's small 
business size standard for ``other telecommunications'' (annual 
receipts of $11 million or less). See 13 CFR 121.201, NAICS code 
513220.
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IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    At this time, the Commission does not anticipate the imposition of 
new reporting, recordkeeping, or other compliance requirements as a 
result of this NPRM. We seek comment on this tentative conclusion.

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

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include the following four alternatives: (1) The establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any party thereof, for small entities.
    In this action, we tentatively reject Petitioner's suggestion that 
we set aside one or more licenses for small businesses. Because we are 
only proposing to auction two blocks of spectrum, each consisting of 
two 6 MHz MDS channels, we believe that a set-aside would prevent the 
timely and efficient use of such spectrum. We seek comment on our 
rejection of Petitioner's request to set aside one or more licenses for 
small businesses. In lieu of setting aside a license in the Gulf, we 
note that Section 309(j)(4)(A) of the Communications Act provides that 
to promote small businesses, we shall consider alternative payment 
schedules, including lump sums or guaranteed installment payments.\22\ 
However we note that previous Commission actions, the Commission has 
upheld its prior determination that installment payments should not be 
used in the immediate future as a means of financing small business 
participation in our auction program. Moreover, in recent legislation, 
Congress dictated that certain future auctions effectively be conducted 
without installment payments.\23\
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    \22\47 U.S.C. 309(j)(4)(A).
    \23\See Section 3001 of the Omnibus Consolidated Appropriations 
Act for 1997, Public Law 104-208, 110 Stat. 3009 (1996). See also 
the Balanced Budget Act of 1997, Public Law 105-33, 111 Stat. 251 
(1997).
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    The Commission expects that the creation of a Gulf Service Area 
will have

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a minimal impact on small entities. Moreover, the NPRM does not propose 
any reporting requirements applicable to small entities. We tentatively 
conclude that our proposals in the NPRM would impose minimum burdens on 
small entities. We encourage comment on this tentative conclusion.

VI. Federal Rules That May Duplicate, Overlap, or Conflict With 
Proposed Rules

    None.

Ordering Clauses

    56. Pursuant to the authority contained in sections 4(i), 303(r), 
and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 303(r), and 309(j), this Notice of Proposed Rulemaking is 
hereby Adopted.
    57. The Commission's Office of Consumer and Governmental Affairs, 
Reference Information Center, Shall send a copy of this Notice of 
Proposed Rulemaking including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects

47 CFR Parts 21 and 74

    Communications common carriers, Education.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-12429 Filed 5-16-02; 8:45 am]
BILLING CODE 6712-01-P