[Federal Register Volume 67, Number 131 (Tuesday, July 9, 2002)]
[Rules and Regulations]
[Pages 45380-45387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17176]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2, 27 and 73

[GN Docket No. 01-74; FCC 02-185]


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

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission addresses petitions for 
reconsideration filed by eight parties. The Commission affirms its 
prior decisions regarding issues relating to the transition to DTV 
service and the rules for auctioning and licensing of new services on 
the 698-746 MHz spectrum band (Lower 700 MHz Band), which has been 
reallocated pursuant to statutory requirements. The Commission takes 
these actions to promote the transition to DTV, meet its statutory 
mandate to reclaim and license this spectrum by competitive bidding, 
and enable the flexible use of the Lower 700 MHz Band for a wide range 
of new services.

DATES: Effective June 18, 2002.

FOR FURTHER INFORMATION CONTACT: Michael Rowan, Wireless 
Telecommunications Bureau, at (202) 418-7240.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Memorandum Opinion and Order (MO&O), FCC 
02-185, in GN Docket No. 01-74, adopted on June 14, 2002, and released 
on June 14, 2002. The full text of this MO&O is available for 
inspection and copying during normal business hours in the FCC 
Reference Information Center, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The complete text may be purchased from the 
Commission's duplicating contractor, Qualex International, 445 12th 
Street, SW., Room CY-B402, Washington, DC 20554, (202) 863-2893. The 
complete text may also be downloaded at: http://www.fcc.gov.

Synopsis of MO&O

    In the MO&O, the Commission: (1) Affirms the band plan and 
geographic license areas adopted in the Report and Order (Lower 700 MHz 
R&O) (67 FR 5491, February 6, 2002); (2) affirms the

[[Page 45381]]

Lower 700 MHz Band out-of-band emission (``OOBE'') limit and decision 
in the Lower 700 MHz R&O to adopt a uniform maximum power limit of 50 
kW effective radiated power (``ERP'') for services operating on the 
Lower 700 MHz Band; (3) denies the petition for reconsideration of the 
Office of the Chief Technology Officer, Government of the District of 
Columbia (``OCTO''), which argues that public safety users should be 
permitted to obtain Lower 700 MHz band licenses under the ``public 
safety radio services'' auction exemption found at section 309(j)(2)(A) 
of the Communications Act, as amended (``Communications Act'' or 
``Act''); (4) affirms the decision in the Lower 700 MHz R&O to dismiss 
all pending petitions for NTSC channel allotments in the Lower 700 MHz 
Band; (5) clarifies that broadcast stations clearing from Channels 59-
69 in connection with voluntary band clearing arrangements may seek a 
modified NTSC or DTV channel allotment on Channels 52-58; (6) affirms 
the decision in the Lower 700 MHz R&O not to authorize additional new 
NTSC construction permits in the Lower 700 MHz Band and to open a 45-
day window, during which such pending applications could be modified, 
either (a) to provide analog or digital television service in the core 
channels (2-51), or (b) to provide digital television service in 
Channels 52-58; and (7) affirms the decision of the Mass Media Bureau 
(now the Media Bureau) adopted pursuant to the Lower 700 MHz R&O 
providing that, where multiple applicants have filed for a single NTSC 
allotment in the Lower 700 MHz Band, they must file a petition for 
rulemaking proposing a single replacement channel to which all 
applicants agree to modify their applications.

I. Background

    1. In the Lower 700 MHz R&O, the Commission reallocated the 
spectrum in the Lower 700 MHz Band to flexible use by fixed, mobile and 
new broadcast services, as well as incumbent broadcast services during 
their transition to DTV. The Commission established technical criteria 
designed to protect incumbent television operations in the band during 
the DTV transition period, and adopted a mechanism by which pending 
broadcast applications may be amended to provide analog or digital 
service in the core television spectrum or to provide digital service 
on TV Channels 52-58.
    2. The Commission also adopted service rules required for use of 
the Lower 700 MHz Band by fixed, mobile, and broadcast services. The 
Commission divided the Lower 700 MHz Band into five blocks across 
different service areas for geographic area licensing: two 6-megahertz 
blocks of contiguous unpaired spectrum, as well as two 12-megahertz 
blocks of paired spectrum, were to be assigned over six Economic Area 
Groupings (``EAGs''); a remaining 12 megahertz block of paired spectrum 
(710-716 MHz and 740-746 MHz) was designated for licensing over 734 
Metropolitan Statistical Areas (``MSAs'') and Rural Service Areas 
(``RSAs''). The Commission decided that all operations in the Lower 700 
MHz Band would be generally regulated under the framework of part 27's 
technical, licensing, and operating rules. However, in order to permit 
both wireless services and certain new broadcast operations in the 
Lower 700 MHz Band, the Commission adopted maximum power limits for the 
Lower 700 MHz Band that would permit 50 kW ERP transmissions under 
certain conditions. The Commission declined to restrict any of the 
spectrum in the Lower 700 MHz Band exclusively to public safety or 
private radio services, but noted that its flexible use allocation 
under part 27 permits fixed and mobile wireless uses for private, 
internal radio communications.

II. Discussion

A. Service Rules

1. Band Plan and Geographic Scope of Licenses
    3. In petitions for reconsideration/clarification, Spectrum 
Exchange Group, LLC and Allen & Company (``Spectrum Exchange/Allen'') 
and Spectrum Clearing Alliance (``SCA'') claim that the Commission 
should reconsider the plan for assignment of spectrum within the Lower 
700 MHz Band, in particular the use of MSAs/RSAs to license Block C. In 
the MO&O, the Commission decides not to alter the band plan or 
geographic service areas that were adopted in the Lower 700 MHz R&O, 
including the assignment of MSA/RSA license areas to Block C currently 
occupied by TV Channels 54 and 59. Based on the Commission's 
consideration of the arguments raised on reconsideration and the 
factors previously considered in the Lower 700 MHz R&O, the Commission 
reaffirms that the band plan adopted in that order represents the best 
approach for achieving the Commission's policy objectives for the Lower 
700 MHz Band. Thus, the Commission denies the petitions for 
reconsideration/clarification that raise issues regarding the band plan 
and geographic scope of Lower 700 MHz Band licenses.
    4. In determining the optimum initial scope of licenses for the 
Lower 700 MHz Band, the Commission maintained its commitment to several 
spectrum management policies, including the statutory mandate to 
promote opportunities for a wide variety of applicants, including small 
and rural wireless providers, to obtain spectrum and participate in the 
provision of spectrum-based services. The MO&O states that a primary 
result of this process was a band plan that assigned the majority of 
spectrum over large service areas defined by EAGs. According to the 
Commission, this approach is consistent with the Commission's decision 
in the Upper 700 MHz Band proceeding to assign the majority of 
commercial spectrum in the Upper 700 MHz Band over EAGs. As the 
Commission noted in the Upper 700 MHz Band proceeding, large geographic 
areas such as EAGs offer several advantages. The MO&O states that large 
areas provide optimum opportunity to aggregate spectrum, which may be 
particularly useful for services that require nationwide footprints. It 
states that large geographic areas also make it easier for providers to 
take advantage of economies of scale, allowing existing technologies to 
grow and new technologies to develop. The Commission notes that large 
geographic areas also reduce the potential transaction costs to both 
auction participants seeking adjoining smaller geographic areas and 
carriers seeking to consolidate such areas post-auction. Finally, the 
Commission states that these large areas may help address problems due 
to incumbent TV stations. Because of these advantages associated with 
the assignment of larger licensing areas, the Commission designated the 
bulk of Lower 700 MHz Band spectrum as EAGs.
    5. Nevertheless, based on the record, the statutory mandate of 
section 309(j) of the Communications Act, and a desire to promote 
opportunities for a wide variety of applicants in the provision of 
spectrum-based services in the Lower 700 MHz Band, the Commission also 
sought to define a band plan that afforded meaningful opportunities to 
the interested parties seeking licenses with smaller initial geographic 
scope. Because the Commission decided to assign only one 12 megahertz 
block of paired spectrum over MSAs/RSAs, the MO&O states that it is of 
consequential significance to such parties whether that block is 
assigned to spectrum with high incumbency, potential for interference, 
or other obstructions to use. Given the

[[Page 45382]]

lack of any significant difference in the relative incumbency levels on 
Blocks A, B, and C, the Commission focused on factors such as band plan 
architecture and adjacent channel interference in selecting the various 
license block assignments.
    6. Given these considerations in the Lower 700 MHz R&O, the 
Commission finds its assignment of MSAs/RSAs to Block C to be in the 
public interest. Of the three paired 12-megahertz blocks, the MO&O 
states that Block B would have been the most suitable to meet the 
spectrum needs of the many parties interested in acquiring additional 
spectrum to complement existing networks of a local or smaller scale. 
However, the MO&O states that the use of MSAs/RSAs for Block B would 
have conflicted with another Commission goal that of making it possible 
to aggregate 24 megahertz of paired spectrum within the same EAG. As 
the Commission recognizes in the MO&O and in the Lower 700 MHz R&O, the 
ability to aggregate spectrum may offer important benefits. In order to 
provide additional opportunities for firms seeking to aggregate paired 
spectrum within the same EAG, the Commission had to designate either 
Blocks A and B or Blocks B and C as the EAG blocks. The MO&O states 
that using Block B for MSA/RSA licenses would result in the two EAG 
blocks being split, frustrating this objective. Thus, according to the 
Commission, the alternative locations for MSA/RSA licenses were Block A 
or Block C. Given these alternatives, the Commission finds Block C to 
be the best choice to meet its specific objective for the Lower 700 MHz 
Band to provide opportunities for provision of services by rural 
telephone companies, small businesses, and/or other entities seeking 
spectrum licenses of smaller geographic scope.
    7. The Commission does not view the alternative, Block A, to be 
sufficient to meet its objectives. Compared to Blocks B through E, the 
MO&O states that Block A may pose the most burdens for new licensees 
seeking to offer services while protecting DTV operations on Channel 
51. Unlike these other blocks, the Commission finds that Block A 
licensees will have to meet additional part 27 adjacent channel 
interference obligations involving these DTV operations on Channel 51, 
which are in the TV core and are therefore of a permanent nature. The 
MO&O states that these permanent DTV operations on Channel 51 
underscore the advantages of licensing Channel 52 across EAGs, as these 
large geographic areas match and can be aggregated with those used for 
Block B. According to the Commission, such aggregation may permit 
licensees greater flexibility to engineer their systems around Channel 
51 DTV operations by the use of measures such as internal guard bands. 
Accordingly, compared to Block C, the Commission finds that adjacent 
channel protection requirements may limit the usability of Block A as a 
stand-alone block.
    8. The Commission rejects Spectrum Exchange/Allen's proposal to 
rearrange the Lower 700 MHz Band licensing arrangement and/or band 
plan. The Commission finds that their alternative proposals will not 
preserve the equitable distribution of licenses. In particular, the 
Commission does not accept the suggestion that an unpaired block should 
be assigned to the current Channel 52 spectrum instead of to Channels 
55 and 56. The Commission does not find adequate support to change the 
existing separation between segments of the 12 megahertz paired blocks 
that were adopted in the Lower 700 MHz R&O. The MO&O states that the 
separation between the blocks that the Commission adopted in the Lower 
700 MHz R&O is consistent with the band plan adopted in the Upper 700 
MHz Band, and is appropriate for many two-way technologies to operate. 
According to the Commission, locating the 6-megahertz unpaired licenses 
at the center of the band plan maintains this separation.
    9. The Commission finds that the spectrum policy objectives for the 
Lower 700 MHz Band are a balancing of a number of factors. According to 
the Commission, petitioners' specific arguments regarding the potential 
for Channel 59 ``free-riders'' to hinder band-clearing efforts on 
Channels 59-69 are outweighed by other considerations in the Lower 700 
MHz band plan. While the Commission identified the early clearing of 
incumbents as an Upper 700 MHz Band consideration that would also be 
important in the Lower 700 MHz Band, the MO&O states that it does not 
follow that removing potential obstacles to band clearing on Channel 59 
should be the overriding objective of the Commission's service rules 
for the Lower 700 MHz Band. Rather, the Commission finds that the 
aforementioned advantages of the band plan for a wide variety of 
applicants and spectrum-based services outweigh the potential that the 
band plan may present some obstacles to clearing Channel 59. The 
Commission notes that under the Commission's voluntary band-clearing 
policy, there has always been the potential for certain new licensees 
to benefit from the early clearing of a Channel 59-69 incumbent without 
being a party to the particular band-clearing agreement. The MO&O 
states that this potential exists for new licensees on Channels 58 and 
59, as well as commercial and guard band licensees in the Upper 700 MHz 
Band. In particular, the Commission explains that there originally was 
no expectation that Lower 700 MHz licensees would contribute to Upper 
700 MHz band-clearing efforts. According to the Commission, at the time 
the Upper 700 MHz band-clearing rules were adopted, it was assumed that 
Channels 52-59 would be auctioned later than Channels 60-69. Thus, the 
MO&O states that placing MSA/RSA licensees on Block C does not make 
band clearing more costly or difficult for petitioners than originally 
conceived.
2. Power and Out-of-Band Emission Limits
    10. In a petition for reconsideration, Access Spectrum, LLC 
(``Access Spectrum'') requests that the Commission reconsider 
permitting licensees on TV Channels 57-59 to operate base stations at a 
power level of up to 50 kW ERP. In the MO&O the Commission declines to 
adopt petitioner's proposal to reduce the power limits in the upper 
portions of the Lower 700 MHz Band. In the Lower 700 MHz R&O, the 
Commission devoted considerable discussion to the possibility of 
harmful interference from 50 kW ERP operations to systems on adjacent 
channels operating at lower power levels. Contrary to the statements of 
the petitioner and other commenting parties, the Commission evaluated 
fully the potential impact of 50 kW transmissions on operations in the 
Upper 700 MHz Band, including users of spectrum licensed to guard band 
managers on 746-747 MHz.
    11. To address the potential for adjacent channel interference 
resulting from operations on the Lower 700 MHz Band, the Commission 
adopted general rules that protect all adjacent channel licensees, 
whether they are operating in the Lower 700 MHz Band or in the lower 
portion of the Upper 700 MHz Band. As the MO&O states, by its very 
compliance with the power flux density (``PFD'') limit in 
Sec. 27.55(b), a Block A, B, and/or C Lower 700 MHz licensee operating 
at 50 kW protects mobile receivers operating on 746-747 MHz from 
desensitization or front-end overload because they will experience PFD 
levels that are no greater than the PFD levels that could occur from 
stations operating at 1 kW ERP or less.
    12. The MO&O states that licensees operating at power levels that 
exceed 1 kW are required to notify all licensees authorized on adjacent 
blocks that are

[[Page 45383]]

located within 75 km. The MO&O explains that this requirement provides 
adjacent channel licensees, including licensees on 746-747 MHz, the 
opportunity to adopt measures to mitigate interference. Finally, by 
meeting the limits of Sec. 27.53(f) of the Commission's rules on the 
power of any emission outside a licensee's frequency band(s), which 
would include any OOBE on 746-747 MHz, the MO&O states that a Block A, 
B, and/or C Lower 700 MHz licensee operating at up to 50 kW will 
protect mobile and base receive stations on 746-747 MHz from harmful 
interference that could arise due to out-of-band emissions.
    13. Petitioner claims that transmitters operating at 50 kW will 
produce high levels of interference to mobile and portable receivers in 
the 746-747 MHz guard band and that the PFD limit established in the 
Lower 700 MHz R&O is inadequate to protect receivers in the guard band 
from being overwhelmed. However, on the basis of petitioner's own 
calculations referenced in the Lower 700 MHz R&O, the Commission 
determined that the interference environment of mobile and portable 
receivers in adjacent bands, such as the 746-747 MHz guard band, would 
be not substantially changed with 50 kW ERP stations operating under 
the conditions of the PFD limit adopted in the Lower 700 MHz R&O. To 
protect adjacent channel mobile receivers from overload conditions, the 
Commission concluded that it is only necessary that 50 kW transmitters 
produce radio fields on the ground that are no greater than what would 
occur from commercial land mobile systems operating at power levels of 
1 kW or less. Thus, the Commission adopted Sec. 27.55(b) of the 
Commission's rules, which established a PFD limit for Lower 700 MHz 
Band stations operating up to 50 kW. The MO&O states that Sec. 27.55(b) 
ensures that the interference environment for mobile and portable 
receivers operating on spectrum adjacent to 50 kW ERP transmitters is 
substantially the same as what it would be for mobile and portable 
receivers operating on spectrum adjacent to 1 kW ERP transmitters.
    14. In support of Access Spectrum's petition, Motorola, Inc. 
(``Motorola'') filed an engineering analysis purporting to demonstrate 
that the PFD limit does not adequately protect adjacent channel 
licensees in the guard band. The Commission disagrees with Motorola's 
finding that there is a discontinuity in the provisions of its rules 
that affects systems operating below 1 kW differently from those 
operating at higher power levels. Motorola suggests that because of the 
Commission's rule, which places a particular PFD limit on above-1 KW 
ERP systems in the Lower 700 MHz Band, licensees will operate with 
antennas and antenna configurations that might put the full 3000 
microwatts per square meter PFD on the ground in the vicinity of the 
transmitter and, therefore, cause excessively high out-of-band 
emissions into 746-747 MHz guard band handsets. According to the MO&O, 
Motorola's claimed large discontinuity in the level of out-of-band 
emissions produced when licensees operate at power levels above 1 kW 
suggests a sudden, large increase in emissions automatically occurring 
when a licensee operating at 1 kW ERP increases its power level to just 
above 1 kW ERP. According to the MO&O, this assertion, however, is 
groundless. The Commission explains that its 3000-microwatt per square 
meter rule merely places a limit on the energy a licensee operating 
above 1 kW can put on the ground 1 km away. In the course of operating 
at such power levels, and designing their systems to not exceed the 
3000 mw/sq m limit, the MO&O states that if a licensee employs a 
particular antenna and/or an antenna configuration in an effort to 
actually reach this rather generous PFD limit, there would, as Motorola 
contends, be greater out-of-band emissions into guard band receivers 
than the Commission may have anticipated when it adopted its 43 + 10log 
P OOBE standard. However, the MO&O explains that it is far more likely 
that licensees designing commercial systems operating at power levels 
just above and just below 1 KW ERP will employ virtually the same 
antennas and antenna configurations, which, according to Motorola, 
would produce a much more modest 140 mw/sq m PFD level. Thus, the MO&O 
states that a licensee operating at a power level above 1 kW ERP will 
produce no greater emissions into guard band receivers than a licensee 
operating below 1 kW ERP--i.e., there would be no sudden increase or 
discontinuity in emissions occurring from systems that choose to 
operate at power levels above 1 kW ERP.
    15. The Commission states that it should also be noted that 
commercial licensees operating in the Upper 700 MHz Band, e.g., the 
747-752 megahertz license immediately above the guard band, could 
design systems that produce that same PFD level and thus create the 
same out-of-band emissions into guard band receivers that concern 
Motorola with regard to Lower 700 MHz Band systems. According to the 
MO&O, the Commission's rule, which is designed simply to place a limit 
on energy produced by high-powered systems in the Lower 700 MHz band, 
will not cause any greater out-of-band interference to occur to guard 
band receivers from commercial systems operating in Lower 700 MHz Band 
than could occur from commercial systems operating in the Upper 700 MHz 
Band.
    16. The petitioner also claims that the use of antenna down tilting 
and improved filtering is inadequate to mitigate interference for users 
of the guard band utilizing portable handsets. From this observation, 
the petitioner concludes that the Commission failed to address the 
circumstances that will be faced by guard band users operating mobile 
or portable receivers and that the Commission's conclusions regarding 
interference mitigation are therefore baseless. As the petitioner 
recognizes, however, the Commission explains in the MO&O that antenna 
down tilting and filtering are measures that it suggested may be 
applied to base station receiving receivers, not mobiles or portables. 
Because of the potential interference scenarios involving base-to-base 
interference (i.e., scenarios that the adoption of a PFD limit on the 
ground would not address), the Commission provided a table 
demonstrating how a licensee could mitigate potential base-to-base 
interference from 50 kW transmissions by use of a selective antenna 
pattern or down tilting of its base receive antenna. The MO&O states 
that protection of mobiles and portables is already ensured by the PFD 
limitation of 3000 microwatts per square meter on the ground. Thus, the 
Commission squarely addressed and mitigated the potential impact to 
adjacent channel mobiles on 746-747 MHz by the adoption of 
Sec. 27.55(c).
    17. The Commission disagrees with the petitioner's supposition that 
the notification requirement placed on licensees that intend to operate 
base or fixed stations in excess of 1 kW ERP provides no practical 
benefit for users of the 746-747 guard band. The MO&O states that the 
petitioner's position relies on a misunderstanding that the 
notification requirement is intended to solve a base-to-mobile 
interference potential. As stated in the MO&O, the potential 
interference to mobile and portable receivers on the 746-747 MHz guard 
band is addressed by the PFD limitation of 3000 mw/sq m on the ground. 
As explained in the Lower 700 MHz R&O, the Commission states that the 
notification requirement is a means to implement the mitigation 
measures cited by the Commission to address the potential for base-to-
base interference from 50 kW ERP operations.

[[Page 45384]]

    18. Access Spectrum finally contends that the OOBE limit 
established in the Lower 700 MHz R&O should be significantly greater in 
order to mitigate adjacent channel interference caused by high power 
base station operations on license blocks occupying TV channels 57-59. 
In the MO&O, the Commission disagrees. According to the Commission, the 
OOBE limit will result in the identical out-of-band emission level for 
1 kW transmitters as for 50 kW transmitters (i.e., producing the 
absolute power of -43 dBw, or 50 microwatts, out of the transmitter). 
The MO&O states that the protection afforded adjacent channel receivers 
is independent of the maximum power allowed for Lower 700 MHz Band 
operations, finding that the requirement proposed by petitioner is 
unnecessary.
    19. In sum, the Commission does not agree with the petitioner that 
the technical rules jeopardize users of the 746-747 MHz guard band. 
After full consideration of the arguments made by petitioner, and the 
commenters supporting its petition, the Commission will not alter the 
OOBE limit or maximum power limit of 50 kW ERP for any operations in 
the Lower 700 MHz Band. The Commission also leaves intact the related 
mitigation requirements that were adopted in the Lower 700 MHz R&O as 
reasonable measures to maintain the flexibility provided by the higher 
power limit, while mitigating the risk that any interference from 
stations operating in excess of 1 kW ERP will occur.
3. Applicability of Statutory Exemptions From Auction
    20. In a petition for reconsideration or clarification, OCTO asks 
that the Commission confirm that the part 27 service rules that have 
been amended in the Lower 700 MHz R&O permit public safety eligibles to 
apply to provide private, internal communications services in the 
spectrum without participating in an auction. In the MO&O, the 
Commission denies OCTO's petition. The Commission did not designate any 
portion of the band to ``public safety radio services'' in the Lower 
700 MHz R&O. Instead, the Commission allocated the entire band for 
flexible use by fixed, mobile, and broadcast services. Thus, the MO&O 
states that this band is not subject to the ``public safety radio 
services'' auction exemption found at section 309(j)(2)(A) of the Act.
    21. OCTO argues that, because the Lower 700 MHz R&O permits private 
internal uses and public safety eligibles such as OCTO who have 
historically used private internal systems, the section 309(j)(2)(A) 
competitive bidding exemption applies to public safety radio service 
eligibles that seek to acquire licenses on the Lower 700 MHz Band. In 
previous rulemakings, the Commission examined the scope of section 
309(j)(2)(A)'s exemption for public safety radio services, and 
concluded that the public safety radio services exemption applies to 
spectrum for particular services, rather than individual users of 
spectrum. Thus, the MO&O explains that the rules for a particular 
service determine whether spectrum is designated for public safety 
radio services exclusively, and the MO&O states that part 27 rules do 
not define any portion of the Lower 700 MHz spectrum as ``public safety 
radio services'' band. In developing service rules in this proceeding, 
the Commission relied on the record which demonstrated demand for 
commercial wireless and broadcast services in the Lower 700 MHz Band. 
According to the MO&O, these service rules reflect established 
Commission policy that favors flexibility of use as well as the 
Commission's experience in allocating spectrum, predictions about 
future demands and technologies, and statutory and other public 
interest considerations. To the extent that public safety users desire 
spectrum in a particular band, the Commission encourages them to 
participate in the service rule proceedings to help craft rules 
conducive to public safety needs. The MO&O states that public safety 
users, such as OCTO, may apply for unassigned spectrum in the Lower 700 
MHz Band pursuant to the Commission's established section 337 
procedures, or apply for designated public safety spectrum.
    22. In the MO&O, the Commission finds that National Public Radio, 
Inc. v. FCC (NPR) (254 F.3d 226 (D.C.Cir.2001)) does not alter its 
determination that the public radio services exemption in section 
309(j)(2)(A) does not apply to spectrum to be auctioned in the Lower 
700 MHz Band. The MO&O states that in NPR, the court held that the 
section 309(j)(2)(C) exemption from competitive bidding for non-
commercial educational broadcasters (``NCEs'') exempts NCEs from 
participating in auctions for any broadcasting spectrum, whether or not 
the spectrum has been reserved for noncommercial educational use. The 
MO&O states that, because section 309(j)(2)(C) specifically exempts NCE 
``stations,'' the court concluded that the NCE exemption ``is based on 
the nature of the station that ultimately receives the license, not on 
the part of the spectrum in which the station operates.'' In contrast 
to section 309(j)(2)(C)'s NCE exemption specifically at issue in NPR, 
the Commission states that the public safety radio services exemption 
in section 309(j)(2)(A) does not refer to the ultimate recipient of the 
license. Rather, the MO&O states that it specifically refers to 
``public safety radio services'' used by public safety entities, and 
not to public safety stations or licensees themselves. Thus, the 
Commission has previously found that the NCE exemption addressed in NPR 
is not analogous to the application of the section 309(j)(2)(A) 
exemption, as OCTO claims. The Commission therefore believes that the 
plain language analysis used in NPR supports the Commission's 
interpretation of section 309(j)(2)(A) in the MO&O.
    23. The MO&O states that the interpretation of the public safety 
radio services exemption is also consistent with the Commission's 
obligations to auction and manage the Lower 700 MHz Band. Section 
309(j)(14) of the Communications Act requires the Commission to reclaim 
and assign the Lower 700 MHz Band by competitive bidding. Thus, the 
Commission finds that allowing public safety entities to acquire 
spectrum in the band under the section 309(j)(2)(A) exemption would 
undermine Congress' intent to auction this spectrum. Under section 
309(j)(3) of the Act, in using competitive bidding to assign licenses 
the Commission must seek to promote a number of competing objectives 
such as: promoting the introduction and deployment of new technologies 
and services for the public; encouraging economic opportunity and 
competition; and allowing time for interested parties to develop their 
business plans. The MO&O states that once Congress has determined that 
a band should be licensed through competitive bidding, allowing public 
safety eligibles to override that designation under the section 
309(j)(2)(A) exemption would undermine Congress' directive and the 
Commission's auction authority. Because the approach advocated by OCTO 
would make spectrum freely available to public safety radio service 
eligibles on demand, the Commission explains that it and other 
potential applicants would not know in advance which licenses would be 
available at auction. According to the MO&O, such uncertainty would 
cause delays in the deployment of new spectrum-based services and would 
frustrate the statutory objectives of reclaiming the spectrum and 
subjecting it to competitive bidding.

[[Page 45385]]

    24. For similar reasons, the Commission decides on its own motion, 
that NCEs are not eligible to apply for initial licenses for new 
services in the Lower 700 MHz Band. The MO&O states that, in arriving 
at this decision, the Commission does not reach the issue of whether 
the section 309(j)(2)(C) exemption applies to mutually exclusive 
license applications for new services in the Lower 700 MHz Band. The 
MO&O states that prohibiting NCE broadcasters from acquiring spectrum 
in this band under the section 309(j)(2)(C) exemption is necessary to 
implement the Commission's decisions to establish flexible mixed use 
licenses assigned by competitive bidding. By taking a flexible use 
approach and using competitive bidding, the Commission established a 
market-based approach that allows the spectrum to be employed for a 
full range of allocated services, so long as such operations comply 
with part 27's technical requirements. The Commission recognized 
recently that the restriction the Commission adopts would be consistent 
with the statutory language, as interpreted by the court in the NPR 
case. The Commission believes that this approach as applied to new 
services in the Lower 700 MHz Band will eliminate uncertainties about 
the outcome of the competitive bidding process and promote the 
Commission's goals of assigning these licenses expeditiously and 
promoting the intensive and efficient use of this spectrum. The 
Commission's decision does not in any way prejudge the outcome that 
will be taken in MM Docket No. 95-31. In this regard, the Commission 
notes that the Lower 700 MHz band is flexible mixed use spectrum, and 
very different considerations apply to conventional broadcast licenses 
regulated under parts 73 and 74 that are the subject of that 
proceeding. In arriving at a decision in that proceeding, the 
Commission intends to ensure that NCE broadcasters will continue to 
have adequate access to broadcast spectrum.
B. DTV Transition Issues
1. Temporary Relocation of Analog Stations to Channels 52-58 To 
Facilitate Band Clearing
    25. SCA seeks clarification that the Commission's decision in the 
Lower 700 MHz R&O does not prohibit proposals to relocate analog 
stations to channels 52-58 in connection with Upper 700 MHz band-
clearing agreements. Pursuant to the Commission's band-clearing policy, 
the Commission will entertain proposals to temporarily relocate analog 
operations to Channel 52-58 in connection with voluntary band-clearing 
arrangements that would result in the clearing of a Channel 59-69 
station. As stated in the MO&O, the Commission adopted a policy in the 
Upper 700 MHz proceeding not to prohibit three-way band-clearing 
agreements pursuant to which a station might relocate temporarily into 
Channels 52-58. In so doing, the Commission observed that this 
alternative could provide necessary flexibility to incumbents on 
Channels 59-69 to enter into early clearing arrangements. The 
Commission has consistently recognized that extending flexibility to 
Channel 59-69 broadcasters to enter into voluntary arrangements for the 
early clearing of the Upper 700 MHz bands may make this spectrum 
available more quickly for new public safety and other services and 
promote the transition of analog television licensees to digital 
television service.
    26. Contrary to Council Tree Communications, LLC's (``Council 
Tree's'') suggestion, the Commission does not believe that this policy 
presents significant uncertainties for potential bidders for licenses 
in the Lower 700 MHz band. The MO&O states that an analog broadcaster 
that seeks to move temporarily into this band must move into an 
existing Channel 52-58 allotment because the Commission has previously 
determined that it will not create new allotments in the Upper or Lower 
700 MHz bands. Thus, as the Commission pointed out in the Upper 700 MHz 
proceeding, the MO&O states that such temporary moves will not increase 
the number of stations that will have to be cleared from Channels 52-
58, but merely replace one station on those channels with another. For 
this reason, the Commission states that potential new 700 MHz licensees 
should be able to determine prior to the auctions the number of 
incumbent broadcast operations that may exist in (and adjacent to) the 
geographic areas and frequency bands that they are interested in 
serving.
    27. The Commission also disagrees with Council Tree's argument that 
some broadcasters might be able to obtain excessive payments from new 
700 MHz licensees in exchange for early band clearing. The MO&O states 
that the Commission's voluntary band-clearing policy merely permits 
bidders and broadcasters to negotiate for the economic value of early 
clearing. According to the Commission, once a particular allotment is 
cleared, the allotment would become part of the relevant 700 MHz 
license (or licenses), and no incumbent broadcast operation would be 
permitted to move into that allotment, except with the agreement of the 
new 700 MHz licensee. Thus, the MO&O states that a new 700 MHz licensee 
would not be liable for multiple payments to clear a single allotment. 
Further, the MO&O states that this policy is entirely voluntary. The 
Commission finds that there are possible uses for this spectrum that 
would allow new Lower 700 MHz licensees to begin operating immediately, 
subject to the requirement that they protect incumbent TV and DTV 
facilities from harmful interference. According to the Commission, such 
licensees would have full use of the licensed spectrum at the end of 
the DTV transition period in each market, at which time all incumbent 
broadcasters will be required to vacate the 700 MHz bands. In addition, 
the MO&O states that market forces should act to keep the total amount 
of all clearing payments at a reasonable level both because the 
interests of broadcasters and bidders in these negotiations are not 
congruent and because bidders that participate in band-clearing 
arrangements will have to outbid other wireless entities which may be 
willing to hold licenses for encumbered spectrum. When it extended this 
flexibility to Upper 700 MHz band-clearing broadcasters, the Commission 
explicitly recognized that, because relocations from Channels 59-69 to 
Channels 52-58 would be interim in nature, such moves could result in 
duplicative costs for broadcasters, additional disruption to viewers, 
and other inefficiencies. However, the Commission observed that the 
benefits of such an arrangement may well be substantial, and that a 
broadcaster will have considered the costs in its individual situation 
before voluntarily agreeing to move into Channels 52-58 with the 
knowledge that it will subsequently be obligated to vacate that 
allotment. Consistent with the Commission's policy regarding the early 
voluntary clearing of the 700 MHz bands, the Commission will consider 
any such public interest issues in its review of regulatory requests 
filed in connection with such voluntary clearing agreements.
2. Pending NTSC Petitions and Applications
    28. In the MO&O, the Commission affirms its decision in the Lower 
700 MHz R&O to (1) dismiss pending petitions for new NTSC channel 
allotments on channels 52-59, but permit such petitioners to refile new 
DTV allotment petitions on a core channel, subject to meeting DTV

[[Page 45386]]

spacing requirements; and (2) permit entities with pending applications 
to modify their filings to provide analog or digital service in the 
core or digital service on channels 52-58.
    29. Univision Television Group, Inc. (``Univision'') requests that 
the Commission exclude it from the category of applicants who must 
amend their applications to specify an in-core channel or DTV 
operation, or face dismissal. According to the MO&O, Univision was the 
winning bidder in FCC Auction No. 80 (July 2000) for NTSC Channel 52 at 
Blanco, Texas. In the alternative, Univision asks that the Commission 
grant its pending petition for rulemaking (filed March 8, 2002) 
proposing to substitute NTSC Channel 17 for NTSC Channel 52 
(``Petition''). In the MO&O, the Commission requires the Media Bureau 
to work with Univision to expedite the allotment process. In addressing 
Univision's Petition, the Commission directs the Media Bureau to 
consider waiver of the applicable land mobile distance separation 
criterion for the site proposed in Univision's petition for rulemaking 
based on the record in that proceeding. According to the MO&O, such 
wavier relief, if granted, should be conditioned on Univision agreeing 
to (1) accept interference from current and future 488-494 MHz land 
mobile facilities operating from base stations located within 50 miles 
of the Houston reference point and mobile units operating within 30 
miles of their associated base stations and (2) not radiate a signal in 
the Houston area where land mobile operation is permitted with a field 
strength greater than that permitted by a full-power TV station that 
meets the co-channel distance separation criteria (341.1 km).
    30. Two other petitioners, Pappas Telecasting of America, a 
California Limited Partnership, and Iberia Communications, LLC 
(``Pappas/Iberia'') and WB Television Network (``WB''), argue that the 
decision to permit NTSC applicants to provide digital service in the 
Lower 700 MHz Band will not ensure the recovery of this spectrum 
because DTV operations will encumber this spectrum just as much as NTSC 
operations. WB also argues that limiting new Lower 700 MHz Band 
stations to DTV service would not further the transition to DTV. The 
MO&O states that the Commission disagrees. The Commission continues to 
believe that authorizing new NTSC allotments or stations in the Lower 
700 MHz Band is inconsistent with the 1997 Budget Act mandate to 
reclaim this spectrum for new services, and to facilitate the 
transition to digital television service. As the Commission noted in 
the Lower 700 MHz R&O, digital deployment in the Lower 700 MHz Band 
will introduce new digital service and could promote the acquisition of 
digital equipment by consumers. Moreover, according to the MO&O, new 
service providers in the band may be able to co-exist more easily with 
digital television stations because such stations operate with less 
power than most analog stations and are more resistant to interference. 
In addition, the MO&O states that this approach can avoid the 
complications that could arise with requiring licensees to convert 
their NTSC operations to digital relatively soon after they commence 
operations.
    31. The Commission also disagrees with Pappas/Iberia's and WB's 
argument that the grant of additional requests for NTSC allotments and 
stations in the band would constitute a negligible increase and would 
have a low overall impact on the Lower 700 MHz Band. The MO&O states 
that, while not all of the 57 requests for new NTSC stations and 
allotments pending at the time the Commission released the Lower 700 
MHz R&O could have been granted, there are approximately 100 NTSC 
stations in the band and, even assuming that only ten of them were 
granted, the number of NTSC stations in the band would increase by 
approximately ten percent. According to the Commission, such an 
increase would not be de minimis and could substantially increase the 
burden on new licensees to protect incumbents particularly because NTSC 
stations are more susceptible to interference.
    32. Pappas/Iberia argue that the Lower 700 MHz R&O conflicts with 
section 309(l)(3) of the Act, which directs the Commission to waive any 
provisions of its regulations necessary to permit settlements between 
mutually exclusive applicants for commercial television stations during 
the 180-day period beginning on the date of enactment of the 1997 
Budget Act. Pappas/Iberia claim that they may not be able to effectuate 
their settlement agreements, and that they have been deprived of due 
process. The MO&O states that the Commission disagrees. According to 
the MO&O, neither the plain language of section 309(l)(3) nor its 
legislative history suggests that Congress intended to limit the 
Commission's ability to require modification of settlement agreements. 
The MO&O states that it is well established that the filing of an 
application with the FCC creates no vested rights in the applicant, and 
that the Commission may make midstream rule adjustments, even though it 
disrupts expectations and alters the competitive balance among 
applicants. The Commission did not deprive Pappas/Iberia of their 
ability to have their settlement proposals considered using the same 
procedures as used for all other similarly situated applicants. Because 
Pappas/Iberia can effectuate their settlement agreements by specifying 
either digital service in channels 2-58 or NTSC service in the core, 
the Commission states that the Lower 700 MHz R&O does not conflict with 
section 309(l)(3) of the Act.
    33. Pappas/Iberia also argue that the Commission's decision not to 
grant additional NTSC facilities in the Lower 700 MHz Band constitutes 
an unjustified departure from the Commission's first local service 
policy. In the Lower 700 MHz R&O, the Commission acknowledged that 
several commenters, including Pappas and WB, identified the potential 
benefits of first local service. The Commission, however, weighed 
competing policy considerations and found that not granting additional 
NTSC facilities in the Lower 700 MHz Band would further the 1997 Budget 
Act mandate to recover spectrum in the band. The MO&O also states that 
the Lower 700 MHz Band R&O did not foreclose the ability of applicants 
for NTSC stations in the band to provide first local television 
service: the order afforded applicants an opportunity to amend their 
applications to specify digital operations in channels 2-58 or analog 
service in the core.
3. Mutually Exclusive Applications
    34. KM Communications, Inc. (``KM'') filed a petition for 
reconsideration or clarification in which it requested that the 
Commission overturn the Media Bureau's requirement that all pending 
mutually exclusive applicants for NTSC allotments in the Lower 700 MHz 
Band join in any petition or amendment to petition for rulemaking to 
substitute an alternate channel. The Commission denies KM's petition. 
The MO&O states that KM does not cite any case law, statute, rule, or 
FCC policy in support of its arguments. According to the Commission, it 
is not aware of any. The Commission has previously stated that 
elimination of vacant NTSC allotments would help it achieve its goals 
of full accommodation, replication and spectrum recovery. The 
Commission stated that in some areas a DTV channel could not be 
accommodated unless the unused NTSC allotments were eliminated and, in 
other areas, the presence of unused NTSC allotments would crowd the 
expected service areas of DTV allotments. The Commission therefore 
eliminated all vacant NTSC allotments. The Commission's decision was 
founded on the need to preserve

[[Page 45387]]

spectrum for use by new DTV stations and to avoid prolonging the DTV 
transition. The Commission finds that grant of the relief requested by 
KM would hinder the DTV transition in that the uncertainty created by 
the filing of allotment modification petitions for different channels 
by mutually exclusive applicants would frustrate the efforts of parties 
seeking new or modified DTV allotments.

Procedural Matters

    35. The MO&O states that alternative formats (computer diskette, 
large print, audiocassette and Braille) are available to persons with 
disabilities by contacting Martha Contee at (202) 418-0260, TTY (202) 
418-2555, or at [email protected]. According to the Commission, the MO&O 
can also be downloaded at http://www.fcc.gov/cgb/dro/.

Ordering Clauses

    36. Pursuant to sections 1, 2, 4(i), 5(c), 7, 201, 202, 208, 214, 
301, 302, 303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 332, 333, 
336, 405, 614 and 615 of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 152, 154(i), 155(c), 157, 201, 202, 208, 214, 301, 302, 
303, 307, 308, 309, 310, 311, 314, 316, 319, 324, 332, 333, 336, 405, 
614 and 615, the Commission takes this action.
    37. The MO&O concludes that the Petitions for Reconsideration filed 
by Access Spectrum, LLC, Pappas Telecasting of America, a California 
Limited Partnership, and Iberia Communications, LLC, Spectrum Exchange 
Group, LLC and Allen & Company, WB Television Network, and Univision 
Television Group, Inc. are denied; that the Petitions for 
Reconsideration or Clarification filed by KM Communications, Inc., and 
Office of the Chief Technology Officer, Government of the District of 
Columbia are denied; and that the Petition for Clarification or 
Reconsideration filed by Spectrum Clearing Alliance is granted, to the 
extent indicated above, and is otherwise denied.
    38. On the Commission's own motion, pursuant to sections 1.106 and 
1.108 of the Commission's rules, 47 CFR 1.106, 1.108, the eligibility 
to apply for new services in the Lower 700 MHz Band is modified to the 
extent indicated in Section III.A.3 of the MO&O.
    39. The Commission orders that its determinations are effective 
immediately upon release of the MO&O. The Commission states that good 
cause exists for the Commission's determinations to take effect 
immediately because, at the time the MO&O was released, Auction No. 44 
for the Lower 700 MHz Band was scheduled to commence on June 19, 2002.

    Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-17176 Filed 7-8-02; 8:45 am]
BILLING CODE 6712-01-P