[Federal Register Volume 67, Number 242 (Tuesday, December 17, 2002)]
[Rules and Regulations]
[Pages 77175-77192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31382]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22 and 24

[WT Docket No. 01-108; FCC 02-229 and FCC 02-247]


Public Mobile Services and Personal Communications Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this Report and Order and Second Report and Order, the 
Commission makes significant modifications to its rules that cover the 
Cellular Radiotelephone and other services as part of its Biennial 
Review of rules. The Commission modifies or eliminates various rules 
that have become outdated due to supervening rules, technological 
change, or increased competition among providers of Commercial Mobile 
Radio Services (CMRS). The actions that the Commission takes in these 
items amends its rules to modify the requirement that cellular carriers 
provide analog service compatible with Advanced Mobile Phone Service 
(AMPS) specifications by establishing a five-year transition period 
after which the analog standard will not be required, but may still be 
provided.

DATES: Effective February 18, 2003. The incorporation by reference of 
certain publications listed in the regulations is approved by the 
Director of the Federal Register as of February 18, 2003.

FOR FURTHER INFORMATION CONTACT: Roger Noel or Linda Chang, Wireless 
Telecommunications Bureau, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a consolidated summary of the 
Federal Communications Commission's Report and Order (R&O), FCC 02-229, 
adopted August 8, 2002, and released September 24, 2002, and Second 
Report and Order (2nd R&O), FCC 02-247, adopted September 10, 2002, and 
released September 24, 2002. The full text of the R&O and 2nd R&O is 
available for public inspection during regular business hours at the 
FCC Reference Information Center, 445 12th St., 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, telephone 202-863-
2893, facsimile 202-863-2898, or via e-mail at [email protected].

Synopsis of Report and Order

I. Background

    1. In June 2001, the Commission issued a Notice of Proposed 
Rulemaking seeking to identify and address outdated rule sections of 
part 22. See Year 2000 Biennial Regulatory Review--Amendment of part 22 
of the Commission's Rules to Modify or Eliminate Outdated Rules 
Affecting the Cellular Radiotelephone Service and other Commercial 
Mobile Radio Services, Notice of Proposed Rulemaking, 66 FR 31589 (June 
12, 2001) (NPRM). As the Commission observed in the NPRM, technological 
advances have allowed cellular carriers to increase the capacity of 
their systems, and to provide advanced services to their customers in 
the form of enhanced service quality and advanced calling features. 
Moreover, the mobile telephony industry has become much more 
competitive with the entry of CMRS providers using technologies other 
than analog cellular into the market. Many of the Commission's cellular 
rules, however, do not reflect these developments, and continue to be 
more applicable to the earlier forms of cellular than the more advanced 
digital services available today. Accordingly, the Commission concluded 
in the NPRM that it is appropriate to re-examine its original cellular 
rules to determine whether certain rules should be eliminated or 
modified.

II. Discussion

A. Section 11 of the Communications Act

    2. In 1996, Congress anticipated that the development of 
competition would lead market forces to reduce the need for regulation 
and amended the Communications Act of 1934 to permit and encourage 
competition in various communications markets. See Telecommunications 
Act of 1996, Pub.

[[Page 77176]]

Law No. 104-104, 110 Stat. 56 (1996) (``1996 Act''), introductory 
statement (the 1996 Act was intended ``[t]o promote competition and 
reduce regulation in order to secure lower prices and higher quality 
services for American telecommunications consumers and encourage the 
rapid deployment of new telecommunications technologies.''); Joint 
Managers' Statement, S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 
113 (1996) at 1 (stating that the 1996 Act would establish a ``pro-
competitive, deregulatory national policy framework''). Section 11 of 
the 1996 Act requires the Commission to review biennially all of its 
regulations ``that apply to the operations or activities of any 
provider of telecommunications service'' and to ``determine whether any 
such regulation is no longer necessary in the public interest as a 
result of meaningful economic competition between providers of such 
service.'' See 47 U.S.C. 161. In the past, the Commission has looked to 
the plain meaning of the text for guidance in exercising its obligation 
pursuant to section 11. See In the Matter of 2000 Biennial Regulatory 
Review Spectrum Aggregation Limits for Commercial Mobile Radio 
Services, WT Docket No. 01-14, Report and Order, 67 FR 1626 (Jan. 14, 
2002). The Commission has stated that ``the language places an 
obligation on the Commission to `determine' if the regulation in 
question `is no longer necessary in the public interest as the result 
of meaningful economic competition.' '' Id. at 1617. Further, section 
11 explicitly provides that ``the Commission shall repeal or modify'' 
any regulation that it determines is no longer necessary in the public 
interest as a result of meaningful economic competition. 47 U.S.C. 
161(b). The Commission notes that section 11 places the burden on the 
Commission to make the requisite determinations; no particular burden 
is placed on the opponents or proponents of a given rule. The 
Commission has previously interpreted the language of section 11 as 
directing it to examine why a rule originally was ``necessary'' and 
whether it continues to be necessary. The Commission has found that in 
making the determination whether a rule remains ``necessary'' in the 
public interest once meaningful economic competition exists, the 
Commission must consider whether the concerns that led to the rule or 
the rule's original purposes may be achieved without the rule or with a 
modified rule. Id. at 1628.

B. Analog Cellular Compatibility Standard

    3. In establishing the Cellular Radiotelephone Service in the early 
1980s, the Commission found that a single technology--analog--should be 
mandated to accomplish two goals: (1) To enable subscribers of one 
cellular system to be able to use their existing terminal equipment 
(i.e., mobile handset) in a cellular market in a different part of the 
country (roaming); and (2) to facilitate competition by eliminating the 
need for cellular consumers to acquire different handset equipment in 
order to switch between the two competing carriers within the 
consumers' home market (thus ensuring reasonable consumer costs.). To 
facilitate these goals, all carriers were required to provide service 
exclusively in accordance with the then-existing compatibility standard 
for analog systems, known as Advanced Mobile Phone Service (AMPS). The 
detailed technical standards for AMPS were set out in the Office of 
Engineering and Technology Bulletin No. 53 (OET 53) in April 1981. The 
OET 53 specifications established technical operational parameters and 
descriptions of call processing algorithms and protocols to be used by 
analog cellular systems. Pursuant to Sec.  22.901, a carrier must 
provide service to any subscriber within the carrier's CGSA, including 
both the carrier's subscribers and roaming customers that are using 
technically compatible equipment. 47 CFR 22.901. Section 22.901(d) 
specifically requires that carriers make mobile services available to 
subscribers whose mobile equipment conforms to the AMPS compatibility 
standard. 47 CFR 22.901(d). The Commission's cellular rules, in effect, 
continue to obligate carriers to provide analog service consistent with 
the standard identified two decades ago in OET 53.
    4. After reviewing the record, the Commission concludes that in 
light of the present competitive state of mobile telephony, the 
nationwide coverage achieved by cellular carriers, and the clear market 
demand for nationwide, ubiquitous coverage by carriers, the analog 
requirement has substantially achieved its purpose of ensuring that the 
public has access to low-cost, compatible equipment and to nationwide 
roaming. Not only does the Commission determine that the rule is no 
longer necessary to achieve its purposes, it concludes that it imposes 
costs and impedes spectral efficiency. The development of the mobile 
telephony industry further leads the Commission to find that these 
objectives can largely be accomplished by market forces without the 
need for regulation. The Commission therefore concludes that the analog 
requirement should be removed. However, eliminating the rule 
immediately without a reasonable transition period would be extremely 
disruptive to certain consumers, particularly those with hearing 
disabilities as well as emergency-only consumers, who currently 
continue to rely on the availability of analog service and lack digital 
alternatives. Accordingly, the Commission modifies its rules requiring 
application of the analog compatibility standard to include a sunset 
period of five years, during which time the Commission anticipates that 
problems regarding access will likely be resolved. In order to enable 
the Commission to monitor the adequacy of access to mobile telephony by 
those currently reliant on analog service, certain CMRS carriers will 
be required to file reports prior to the sunset, describing the extent 
to which hearing aid-compatible digital devices are available to and 
usable by consumers with hearing disabilities, and the progress made in 
informing their customers of the impact of the 5-year sunset date on 
911-only phones and analog-only phones, as well as the availability of 
digital replacements for donated analog phones.
1. Indefinite Retention of the Analog Requirement is not Warranted
    5. The Commission finds that it is not necessary to retain the 
analog requirement in order to ensure competition. Indeed, the 
Commission concludes that continuing to require carriers to operate 
consistent with the AMPS standard may hinder competition by causing 
spectral inefficiencies and increased costs to those carriers who would 
prefer to concentrate on digital technology. Additionally, the robust 
mobile telephony market leads the Commission to conclude that the 
analog requirement is no longer necessary to ensure reasonable costs, 
as well as the continued availability of roaming to the vast majority 
of consumers. Removal of the requirement is consistent with its desire 
to move toward a less regulatory approach, as well as a congressional 
directive to treat similarly-situated CMRS in a like manner.
    6. The analog requirement is no longer needed to foster 
competition. The Commission sought to ensure that there was 
competition, albeit limited, within any given market by compelling 
carriers to operate consistent with AMPS specifications as well as 
requiring that carriers serve all consumers using AMPS-compatible 
handsets. The mobile

[[Page 77177]]

telephony industry, however, has changed immensely in the two decades 
since the establishment of the cellular service. The market for mobile 
telephony service now includes the Personal Communications Services 
(PCS) and the Specialized Mobile Radio (SMR) service in addition to 
cellular. The Commission noted in its Seventh CMRS Competition Report 
that 268 million people, or 94 percent of the total U.S. population, 
currently reside in areas in which three or more different operators 
(cellular, broadband PCS, and/or digital SMR providers) offer mobile 
telephony service in the counties in which they live. Over 229 million 
people, or 80 percent of the U.S. population, live in counties with 
five or more mobile telephony operators offering service, while 151 
million people, or 53 percent of the population live in counties with 
at least six different mobile telephony operators.
    7. Rather than encouraging competition, the Commission concludes 
that, in many instances, the analog requirement harms competition by 
imposing unnecessary operating costs and impeding the spectral 
efficiency of the two cellular providers in the market. First, the 
analog requirement places a financial burden on cellular licensees who 
would prefer to use their spectrum and other resources on digital 
technology rather than setting aside a portion to support their analog 
facilities. Cellular licensees that deploy digital technologies must 
also maintain a minimum scale analog network. These cellular licensees 
incur operation and maintenance costs for two mobile telephony networks 
in order to comply with Commission rules. Also, by maintaining two 
networks, operation and maintenance costs associated with the digital 
network may be higher because the carrier is not able to optimize the 
system as efficiently as it would if there was only one network. 
Second, the Commission also agrees with commenters who argue that 
imposition of the analog requirement impedes spectral efficiency. 
Digital technologies are more efficient than analog, use less 
bandwidth, and give consumers access to advanced services not feasible 
with analog. The analog requirement prevents cellular licensees from 
choosing to efficiently utilize their spectrum by installing an all-
digital network and potentially providing additional advanced services. 
Further, the analog requirement may result in certain carriers being 
capacity constrained in certain geographic markets depending on the 
amount of spectrum dedicated to AMPS, usage by AMPS customers, type of 
digital technology, and how intensively their digital customers utilize 
their services. Thus, to the extent that a cellular carrier incurs 
costs to operate an analog network that it would not maintain but for 
the analog requirement, the Commission concludes that the rule imposes 
unnecessary financial burdens and hinders spectral efficiency. These 
factors in turn impede the ability of the cellular carrier to compete 
vis-[agrave]-vis other mobile telephony providers who are not subject 
to the requirement.
    8. Access to reasonably priced equipment is not dependent on the 
continued imposition of the analog requirement. It is no longer the 
case that the analog requirement is needed to ensure reasonably priced 
equipment, and, as a result, increased competition. Because early 
cellular mobile equipment was expensive, the Commission concluded that 
it was cost-prohibitive for consumers to switch providers in the event 
the two carriers in the market utilized different technical standards. 
The Commission found that consumers would be discouraged from switching 
cellular providers if they had to purchase additional equipment in 
order to be served by the second carrier. The Commission found that 
mandating a specific technology would enable consumers to choose 
between carriers without regard to cost of equipment, thereby 
encouraging competition between the carriers. Today, however, mobile 
handsets are much less expensive. The declining cost of such equipment 
as well as the frequent carrier subsidy of the cost of the telephones 
have diminished the handset disincentives for consumers switching 
between providers (whether cellular or other CMRS). Consumers are now 
able to easily choose from a panoply of carriers and technologies.
    9. Roaming is not dependent on the analog requirement. The 
Commission continues to consider the existence of a nationwide, 
compatible service to be a major goal for the cellular service. 
However, given the current competitive state of mobile telephony, the 
Commission concludes that consumers will continue to have the ability 
to roam outside of their home markets even in the absence of the analog 
requirement. In the years since the cellular service was established, 
many CMRS providers using digital technology, particularly broadband 
PCS and SMR services, have developed and established a strong market 
presence. When the rules for market-based PCS and SMR services were 
established, the Commission declined to impose technological 
compatibility rules, and allowed carriers the flexibility to implement 
air interface technologies of their own choosing. In the absence of a 
Commission-mandated standard for PCS and SMR, carriers have nonetheless 
established systems providing seamless nationwide service in response 
to customer demand. Service providers have been successful in 
establishing nationwide systems, even though they employ different air 
interface technologies, by acquiring licenses in as many markets as 
possible, establishing roaming agreements with other carriers who have 
implemented the same digital technology, and providing multimode 
handsets that allow customers to roam using analog cellular service 
where interoperable digital service is not available.
    10. The Commission does not find persuasive arguments that 
elimination of the analog requirement will force small and regional 
carriers to convert to digital earlier than they would otherwise in 
order to ensure seamless service to their customers and other 
consumers, or that such a transition will be cost-prohibitive for such 
service providers or their customers. The choice to switch from analog 
to digital technology, as well as the rate at which the transition 
occurs, are business decisions made by the individual carrier. Indeed, 
the Commission concludes that market forces are already at work with 
respect to small and regional carriers. After reviewing current and 
future market trends in mobile telephony, the Commission finds that 
many small and regional carriers are or will be shifting their systems 
towards digital technology. The Commission expects that construction by 
PCS licensees in rural areas will continue to increase, thereby 
providing digital services to customers in rural areas. With the 
introduction of digital services by PCS providers, cellular licensees 
are likely to find it competitively necessary to install or expand 
their digital network, regardless of whether or not the analog 
requirement is retained. Moreover, the Commission expects that the 
increasing presence of multimode handsets will minimize the necessity 
for small and regional carriers to completely switch to a digital 
system. Accordingly, the Commission concludes that roaming and 
interoperability concerns held by small and regional carriers are not a 
sufficient basis to require the continued application of the analog 
requirement.
    11. The Commission notes that the five-year sunset period it is 
establishing for other reasons should mitigate the concerns of small or 
regional carriers, such as the disruptions to operations that an 
immediate elimination of the

[[Page 77178]]

analog requirement might cause. For example, a transition period 
permits carriers to evaluate their current and future technology 
choices as well as those of their current roaming partners. Carriers 
will have the opportunity to negotiate new contracts where needed to 
ensure the availability of roaming services to their customers. Also, 
the elimination of the cellular analog requirement will increase the 
demand for the development and commercial implementation of multimode/
multiband handsets, a process that is already occurring. By the end of 
the transition period, these handsets should be widely available and 
customers may choose to migrate to these new handsets depending on 
their roaming needs. Further, the transition period provides additional 
time for PCS licensees in both Rural Service Areas (RSAs) and 
Metropolitan Statistical Areas (MSAs) to further build out their 
licensed service areas in order to enhance opportunities for roaming 
for all consumers.
    12. The possible impact on telematics providers does not justify 
retention of the analog requirement. Telematics providers argue that 
the elimination of the rule will significantly impair their ability to 
provide service because these systems require analog technology due to 
its ubiquitous coverage, and that there is currently no other widely-
deployed technology available to adequately support telematics 
services. While digital service providers are continuing to expand 
their service area footprint, commenters argue that there are still 
large gaps in coverage, and note that the various digital standards are 
not interoperable. Commenters argue that digital systems cannot yet 
transmit both voice and data on the same call, a feature that 
commenters argue is important for telematics providers. Commenters 
assert that the interoperability problem is particularly difficult for 
telematics devices because manufacturers must choose a technology that 
is embedded in a vehicle that will have a useful life of ten or more 
years. Telematics providers contend that, unlike the typical cellular 
subscriber who can readily switch to digital handsets if necessary, the 
development cycle (the length of time necessary to design, test, and 
install equipment in vehicles) and hardware basis of telematics-
equipped vehicles prevents users of such services from quickly and 
easily migrating to a new technology. Commenters argue that, in 
evaluating this issue, the Commission should take into account the 
useful life of the vehicle, the vehicle development cycle, as well as 
investments made by owners of vehicles with embedded telematics 
systems.
    13. The Commission concludes that arguments advanced by telematics 
providers do not constitute sufficient basis to warrant the indefinite 
imposition of an outdated technical standard. Each of the factors 
identified by telematics providers--e.g. development cycles of 
vehicles, choice of hardware and technology platforms--are 
considerations within the control of the individual provider or the 
original equipment manufacturer with whom it partners. However, as in 
the case of regional carriers, the Commission finds that the sunset 
period it is establishing for other reasons should also mitigate any 
significant impacts that might affect telematics providers. During the 
transition period, the Commission anticipates that telematics providers 
will be able to partner with cellular, PCS, and SMR carriers in order 
to secure service on the carriers' digital networks. Based on the 
record, the Commission concludes that within the next five years, the 
telematics industry will make great strides towards developing 
multimode devices that will provide interoperability and facilitate 
roaming on digital networks. Moreover, the majority of commenters 
concede that a reasonable transition period would ease any concerns 
regarding the elimination of the analog requirement.
    14. Modification of the rule is supported by section 332 of the 
Communications Act. Another factor supporting the modification of the 
analog requirement to include a five-year sunset is section 332 of the 
Act, which directs the Commission to regulate CMRS providers to 
technical and operational rules comparable to those that apply to 
providers of substantially similar common carrier services. Section 332 
requires that differences between rules governing competing services 
should be conformed if the Commission determines that the differences 
distort competition by placing unequal regulatory burdens on different 
types of CMRS providers. Over the years, the Commission has shifted 
towards taking a less regulatory approach in setting out technical 
standards for the various wireless services. Yet in the case of 
cellular, while the Commission has afforded carriers the flexibility to 
deploy new technologies and to offer digital services similar to that 
offered by PCS providers, cellular carriers must nonetheless continue 
to provide analog service. The analog standard forces cellular carriers 
to incur costs and burdens not assumed by other CMRS licensees despite 
the similarity of services provided by cellular carriers as compared 
with other providers.
2. Sunset of the Analog Requirement
a. 911-Only Phones and Unsubscribed Emergency Phones
    15. A primary reason for the growth of mobile telephony is the 
safety and security functions of wireless telephones. Indeed, some 
consumers acquire wireless telephones that can only make 911 calls. 
These 911-only consumers can be categorized as: (1) ``Unsubscribed'' 
consumers of recycled phones that were previously, but are no longer, 
service-initialized by a wireless carrier, and have been reissued under 
some type of donor program, such as phones donated to victims of 
domestic violence, and (2) subscribers of newly manufactured 911-only 
phones that can only make 911 calls but are incapable of receiving any 
incoming calls. Consumers of the latter are often elderly persons who 
cannot afford basic wireless service or do not want typical wireless 
service, but desire immediate access to emergency services. The 
Commission concludes that a transition period is warranted in order to 
mitigate possible negative effects to emergency-only consumers that 
might otherwise occur with an immediate elimination of the analog 
requirement. Also, in some geographic areas in which digital coverage 
is currently insufficient, a transition period will allow carriers time 
to enhance coverage. The transition period will allow for the continued 
expansion of digital networks and further conversion of analog networks 
to digital, thereby providing for a more extensive network of digital 
technologies. During the transition period, service providers can 
conduct customer outreach in order to educate consumers that analog 
services may be discontinued on a certain date, thereby providing 
emergency-only consumers with time to migrate from analog to digital 
handsets.
    16. Although there is currently a sizable number of unsubscribed 
analog and 911-only consumers, it can be assumed that the total number 
of such users will decline in the future, as digital networks expand 
and carriers migrate current analog customers to digital services. The 
Commission expects that unsubscribed consumers will have access to 
digital equipment as digital handsets are being donated as well as 
analog handsets. It is reasonable to assume that the number of digital 
handsets will increase over time because the number of digital 
subscribers is approximately three times that of analog subscribers, 
and a

[[Page 77179]]

consumer uses a handset on average for 1.5 to 2.5 years before 
acquiring a new one. Because handsets are recycled every 18 to 30 
months, the Commission concludes that a transition period should ensure 
that recipients of donated mobile telephones have access to digital 
equipment.
b. Accessibility Issues
    17. The Commission has for some time been cognizant of the concerns 
held by persons with hearing disabilities regarding their ability to 
access wireless technologies and services. Although most consumers have 
a variety of mobile technologies and services available to them, 
persons with hearing disabilities desiring to use wireless devices must 
currently rely on analog service or the small number of digital phones 
that are currently compatible with hearing aids--a compatibility that 
is limited to certain types of hearing aids. Unlike analog handsets, 
digital technologies have been shown to cause interference to hearing 
aids and cochlear implants. For the most part, analog wireless 
equipment does not pose interference problems for hearing aid wearers 
because they transmit signals at a steady rate; no extraneous audible 
noise is produced because these signals are not demodulated by the 
handset and in turn amplified by the hearing aid. Unlike analog 
equipment, however, digital wireless telephones do not transmit 
electromagnetic energy at a steady rate, and the fluctuations can cause 
disruptive interference to hearing aids or cochlear implants. 
Currently, nearly all digital equipment can cause some interference to 
many types of hearing aids and cochlear implants.
    18. The Commission's review of the record leads it to conclude that 
immediately removing the requirement that cellular carriers operate 
consistent with the analog compatibility standard would indeed be 
detrimental to persons with hearing disabilities. Because persons with 
hearing disabilities must continue to rely on analog technology for 
access to wireless service at this time, the Commission finds that the 
record supports implementing a transition period during which time it 
anticipates that digital solutions to the hearing aid-compatibility 
problem will be developed and made widely available. In order to ensure 
that analog service remains available to persons with hearing 
disabilities while industry seeks to develop accessible digital 
technologies, the Commission provides for a five-year transition period 
before the elimination of the analog requirement. The Commission 
concludes that a five-year period provides a reasonable time frame for 
the development of solutions to hearing aid-compatibility issues. The 
progress made in developing digital TTY solutions leads it to determine 
that the industry will also likely be able to develop digital solutions 
for telephones within a five-year period. Moreover, mandating a shorter 
timeframe may result in persons with hearing disabilities gaining 
access to digital handsets more quickly than if the Commission sets out 
a longer period. Because the Commission is reserving the right to 
extend the sunset period in the event that solutions to hearing aid-
compatibility problems are unsatisfactory, the industry has an 
incentive to develop digital solutions to the access problem.
    19. The Commission notes that it is establishing a transition 
period to safeguard the ability of persons with hearing disabilities to 
access mobile telephony services even though carriers are otherwise 
obligated to ensure that telecommunications service is accessible to 
persons with disabilities. Section 255 of the Communications Act 
requires that ``[a] provider of telecommunications service shall ensure 
that the service is accessible to and usable by individuals with 
disabilities, if readily achievable.'' See 47 U.S.C. 255(c). In the 
NPRM, the Commission observed that if the analog requirement was 
eliminated, section 255 would still require that carriers to make 
digital services compatible with hearing aid devices. Although a few 
commenters argue that mobile telephony providers and manufacturers can 
circumvent the provisions of section 255, the Commission concludes that 
section 255 requires providers to ensure that their services remain 
accessible to persons with hearing disabilities. However, the 
independent requirements of section 255 notwithstanding, the Commission 
finds that it is appropriate to also establish a five-year transition 
period in order to address the particular current problem of hearing 
aid-compatibility with digital handsets, and ensure access to mobile 
telephony service for persons with hearing disabilities.
    20. Reporting requirement. In order to monitor the progress made by 
the wireless and hearing aid industries in developing solutions, and to 
ensure that wireless services are continuing to be made available to 
persons with hearing disabilities as well as 911-only consumers, the 
Commission will require that, no later than the third and fourth 
anniversary of the effective date of this order, certain CMRS licensees 
and other entities file reports with the Commission. The reports will 
be required from all cellular licensees providing nationwide coverage. 
In addition, the reports must inform the Commission whether each 
carrier intends to discontinue analog service, identify the markets in 
which it plans to discontinue analog service, and for how long it plans 
to continue analog service and in which markets. If a carrier intends 
to discontinue analog service, the carrier must certify and provide 
information in its report that there are hearing aid-compatible digital 
devices available to persons with hearing disabilities at the time of 
filing, or, if no such equipment is available at the time of filing, 
describe the extent to which, by the end of the fifth year, digital 
equipment will be available to persons with hearing disabilities in 
market(s) where the carrier intends to discontinue analog service. 
Carriers may also be required to show in their reports that they are in 
compliance with the provisions of section 255 of the Act, as well as 
with any other obligations required of them by the Commission. Such 
carriers, in their reports, may also be required to describe their plan 
for informing its subscribers, the public and other interested parties 
regarding plans to discontinue analog service. Finally, other 
interested parties will be able to file reports or comments as 
appropriate, and the Commission encourages joint efforts. Such Reports 
will be made publicly available to all interested parties who may file 
supplemental information as appropriate to ensure that the Commission 
has a full record. The information contained in the reports will be 
used to determine whether or not the Commission will initiate a 
proceeding to extend the sunset date or take appropriate enforcement 
action under section 255.
    21. Further, the Hearing Aid Compatibility Act of 1988 (HAC Act) 
requires almost all new telephones to ``provide internal means for 
effective use with hearing aids that are designed to be compatible with 
telephones which meet established technical standards for hearing aid 
compatibility,'' but provides an exemption for certain categories of 
phones including those used with CMRS and the private mobile radio 
services (or PMRS). 47 U.S.C. 610(b)(1); see 47 CFR 68.4(a). In 
November 2001, the Commission initiated a proceeding to examine whether 
this exemption continues to remain necessary, or whether the statutory 
criteria for revocation or limitation of the exemption have been 
satisfied. See In the Matter of Section 68.4(a) of the Commission's 
Rules Governing Hearing Aid-Compatible Telephones, WT Docket

[[Page 77180]]

No. 01-309, Notice of Proposed Rulemaking, 16 FCC Rcd 20558 (2001) (HAC 
Proceeding). The action taken here does not preclude the Commission 
from independently requiring carriers to comply with HAC requirements, 
even during the 5-year transition period, in the event that the 
Commission determines in the HAC Proceeding that the statutory criteria 
for revocation or limitation of the exemption have been satisfied. 
Finally, the Wireless Telecommunications Bureau, in conjunction with 
the Consumer & Governmental Affairs Bureau, will work closely with the 
Food and Drug Administration and the Commission's Office of Engineering 
and Technology in the development of standards for hearing aid design 
that alleviate interference.

C. Electronic Serial Number Rule

    22. In the NPRM, the Commission proposed to remove Sec.  22.919 of 
its rules, which sets forth electronic serial number (ESN) design 
requirements for manufacturers of cellular telephones. The purpose of 
this rule was to address the problem of cellular ``cloning'' fraud that 
was prevalent in the mid-1990s. Over the years, however, other measures 
have developed to combat cloning fraud. For example, Congress enacted 
the Wireless Telephone Protection Act of 1998 to address fraudulent and 
unauthorized use of wireless telecommunications services. Further, the 
cellular industry has developed a more secure access protocol, known as 
authentication. Other anti-fraud countermeasures developed by the 
industry include ``radio frequency fingerprinting,'' which identifies a 
mobile handset by its unique radio transmission characteristics, as 
well as ``call profiling,'' which enables carriers to monitor for 
unusual, sudden changes in calling patterns.
    23. After reviewing the original purpose of the rule, the anti-
fraud techniques that have been developed since the adoption of the 
rule, as well as the comments in this proceeding, the Commission 
concludes that the ESN rule is no longer necessary in the public 
interest and adopts its proposal to eliminate Sec.  22.919. The 
concerns that led to the adoption of this rule have been addressed and 
no longer require retention of this rule. The Commission finds that it 
is unnecessary to continue to mandate detailed hardware design 
requirements given the success the wireless industry has had in 
developing other more effective anti-fraud measures.

D. Channelization Requirements

    24. Section 22.905 identifies the part of the electromagnetic 
spectrum that is allocated to the Cellular Radiotelephone Service and 
divides it into two blocks, labeled A and B. See 47 CFR 22.905. It also 
sets forth a channelization plan that sub-divides each block into 416 
paired 30 kHz channels and designates 21 of these paired channels as 
control channels. Alternative technologies, including the principal 
digital technologies many cellular licensees have overlaid on top of 
their analog networks, are exempt from this channelization plan rule. 
The Commission proposed in the NPRM to remove the channelization plan 
for compatible AMPS cellular systems from Sec.  22.905 of its rules, 
and to rephrase the remainder of that section such that it specifies 
only the portions of the electromagnetic spectrum allocated to the 
Cellular Radiotelephone Service and which frequency ranges make up the 
two initial blocks. The Commission reasoned that the analog technology 
to which the channelization plan is applicable is well-established 
nationwide, and thus removing the plan would not pose any risk of 
decreased cellular technical compatibility.
    25. Given the number of standard analog base stations and handsets 
in use today and the efficiencies to be gained by implementing 
alternative digital (not analog) technologies, it appears highly 
unlikely that any carrier would have the incentive to deploy an 
alternative analog technology during the five-year sunset adopted in 
this proceeding. Further, carriers will continue to be bound by 
existing roaming agreements for at least some portion of the sunset, 
again making it highly unlikely that there would be any incentive to 
deploy an alternative analog technology. The Commission notes that the 
AMPS channelization plan is the current industry standard for AMPS and 
will presumably continue to provide guidance to licensees through the 
sunset of the analog requirement.

E. Modulation Requirements and In-band Emissions Limitations

    26. In the NPRM, the Commission sought comment on its proposal to 
modify Sec.  22.915 of its rules, which sets out a number of technical 
specifications for, inter alia, the performance of audio filter and 
deviation limiter circuitry in analog cellular telephones, and 
adjustment of the modulation levels in analog cellular telephones. 
Consistent with its less regulatory approach with PCS and other CMRS, 
as well as its proposal to eliminate the analog requirement, the 
Commission proposed to eliminate the provision set out in Sec.  22.915 
requiring cellular systems to have the capability to provide service 
using the modulation types specified in OET 53 (analog compatibility 
standard). The Commission also proposed to remove all rules governing 
audio filter and deviation limiter performance, modulation levels, and 
in-band radio frequency emission limits.
    27. The Commission also proposed changes to Sec.  22.917 of its 
rules, which prescribes emission masks limiting both in-band and out-
of-band radio frequency emissions. As with the proposal to remove the 
channelization requirements, the Commission proposed changes to the 
introductory paragraph of Sec.  22.917, which requires that analog 
modulated emissions be transmitted only on the communication channels. 
Further, the Commission sought comment regarding how it should define 
the out-of-band emission limit in order to provide an adequate measure 
of interference protection to other licensees and service, while also 
allowing licensees the flexibility to establish a different limit where 
appropriate. Specifically, the Commission asked whether licensees 
should be permitted to operate transmitters on frequencies closer to 
the edge of their authorized spectrum than full compliance with Sec.  
22.917 would normally allow, as long as all potentially affected 
parties (i.e. adjacent licensees) agree to such a provision. The 
Commission also noted that its Wireless Communications Service (WCS) 
rules provide this flexibility, and it indicated that cellular and 
broadband PCS licensees would also benefit from such flexibility. 
Accordingly, the Commission sought to conform the language and 
provisions of the out-of-band emission limit rules specific to the 
cellular service and broadband PCS with those applicable to WCS.
    28. As the Commission is moving toward a less regulatory approach 
with respect to its service rules and is permitting carriers to deploy 
technologies that best fit the needs of the market, the Commission 
adopts its proposal with certain modifcations. Further, the Commission 
concludes that, because it seeks to ensure regulatory conformity 
wherever practical, its rules regarding out-of-band emissions limits 
for the various services should be similar.
    29. However, certain commenters to the proceeding point out that 
implementation of the measurement resolution bandwidth specified in the 
proposed rule would have the effect of imposing a stricter out-of-band 
emission

[[Page 77181]]

limit than that which currently applies. Specifically, the commenters 
object to the proposed rule's specification that compliance with the 
out-of-band emissions limit should be measured by using instrumentation 
employing a resolution bandwidth of 1 MHz or more from the center of 
the band. In proposing the rule change, the Commission sought only to 
harmonize certain procedures in the WCS, PCS and cellular services, and 
did not intend to make the out-of-band emission limits more 
restrictive. Accordingly, the Commission modifies the proposed rule by 
substituting in language that is more consistent with recently adopted 
International Telecommunications Union (ITU) standards for emissions. 
See ITU-R SM.329.

F. Vertical Wave Polarization Requirement

    30. Section 22.367(a)(4) of the Commission's rules provides that 
electromagnetic waves radiated by base, mobile, and auxiliary test 
transmitters in the Cellular Radiotelephone Service must be vertically 
polarized. 47 CFR 22.367(a)(4). This rule was originally adopted in 
order to promote technical compatibility for cellular systems, as well 
as to reduce the likelihood of interference from cellular transmitters 
to broadcast television (TV) reception on the upper UHF TV channels. 
See  In the Matter of Revision of part 22 of the Commission's Rules 
Governing the Public Mobile Services, CC Docket No. 92-115, Report and 
Order, 9 FCC Rcd 6513 (1994). The Commission tentatively concluded in 
the NPRM to relax Sec.  22.367 of its rules to provide that cellular 
stations no longer be limited as to the polarization of the transmitted 
waves. The Commission specifically sought comment on what interference 
or adverse effects might be caused to mobile, fixed, and broadcast 
services operating in the cellular service spectrum or adjacent 
spectrum.
    31. The original purposes of the rule no longer warrant this 
requirement on cellular carriers. The Commission is persuaded that 
relaxation of this requirement will have little effect on 
interoperability or UHF television channels. Even if a base station's 
transmissions are vertically polarized, many hand-held mobile units may 
not benefit from vertical polarization because they are either held in 
a manner such that their antenna is not vertical, or because the 
transmission's polarization will be shifted due to reflections from 
man-made structures. Accordingly, a vertically polarized transmission 
generally will provide little interoperability benefit to users of 
hand-held mobile phones. Furthermore, cellular base stations transmit 
on frequencies above 869 MHz (a minimum separation of 63 MHz from the 
closest UHF television frequency), thereby reducing the likelihood of 
interference with upper-band UHF television channels.
    32. The Commission is not persuaded by arguments that the vertical 
polarization requirement should not be removed because it could result 
in reduced RF coverage for its end users, and impair telematics' 
ability to provide geographic location information for emergency 
services. The Commission notes that such concerns are limited to rural 
areas, where cellular carriers are unlikely to use other than vertical 
polarization because they have little incentive to do so. In addition, 
it is anticipated that cellular carriers will make the appropriate 
technical adjustments to account for varying polarization of transmit 
and receive antennas, and thereby obtain equivalent analog cellular 
performance at the boundaries of a rural cell site when using 
alternative technologies. The Commission notes that cellular carriers 
already have the flexibility to reduce coverage or turn off their 
systems for short or long periods without seeking prior approval of the 
Commission or notifying customers of their intended action. Further, 
telematics carriers may negotiate with cellular carriers and may enter 
into voluntary contractual relationships to accommodate specific 
coverage needs. Finally, the Commission believes that the industry and 
not regulation should dictate technical specifications wherever 
possible. Given these reasons, the Commission is not persuaded that it 
is necessary to retain this rule simply to ensure coverage for 
telematics subscribers attempting calls on the fringe of rural cell 
sites.

G. Assignment of System Identification Numbers

    33. Section 22.941 of the Commission's rules sets forth the 
procedure by which the Commission assigns system identification numbers 
(SIDs) to systems in the Cellular Radiotelephone Service. SIDs are used 
by cellular systems to identify the home system of a cellular telephone 
and by cellular telephones to determine their roaming status. 47 CFR 
22.941. In the NPRM, the Commission proposed to no longer consider SIDs 
as a term of the cellular license and to remove the requirement in 
Sec.  22.941 of its rules that cellular licensees notify the Commission 
of the use of additional SIDs. The Commission proposed to retain 
portions of that rule that provide that a cellular system may transmit 
another system's SID only if that system consents to such use.
    34. The Commission concludes that it is not necessary in the public 
interest to retain the current cellular SID rules as set out in Sec.  
22.941 of its rules as there is no public policy rationale that SIDs 
must be a term of cellular authorizations. There are no SID rules for 
PCS, SMR, or other CMRS, and this administrative function is carried 
out successfully within those radio services by the private sector 
without Commission involvement. Further, the Commission removes the SID 
rule in its entirety, including the ``consent for use'' portion of the 
rule (i.e. allowing the usage of another system's SID only pursuant to 
consent). The Commission finds no reason to retain a portion of the 
rule or intervene when the private sector has shown, as in the case of 
PCS, for example, that it is capable of coordinating these types of 
administrative functions on its own. For the reasons stated above, the 
Commission is eliminating the SID rule in favor of administration of 
this function by the private sector. In eliminating this rule, the 
Commission must take certain steps to provide a smooth transition of 
the SID administration function to the private sector. These steps 
include identifying a party or parties to administer the function, 
transitioning the Commission's SID database to the party(s), and 
publicizing the change to the cellular industry. Therefore, the 
Commission authorizes and directs the Wireless Telecommunications 
Bureau to take all necessary steps to privatize this function.

H. Determination of Cellular Geographic Service Area

    35. Section 22.911(a) of the Commission's rules sets forth a 
standardized method for determining the CGSA of a cellular system. A 
system's CGSA is defined as the geographic area served by the system, 
within which that system is entitled to protection and adverse effects 
are recognized for the purpose of determining whether a petitioner has 
standing. See 47 CFR 22.99. Cellular licensees must provide the 
Commission with certain technical parameters describing each cell site 
that makes up the external boundary of its system. These technical 
parameters (latitude, longitude, height above average terrain, and 
power), or in some cases, an alternative study, are used to determine 
the service area boundary (SAB) for each cell site. In this vein, the

[[Page 77182]]

geographic area within the aggregated SAB contours of a system 
(excluding areas outside the market boundary) is its CGSA. The method 
for determining the CGSA uses a general mathematical formula to 
calculate distances from the cell site along the cardinal radials to 
the SAB of each cell in the system. See 47 CFR 22.911, 22.912.
    36. Section 22.911(b) provides, however, that any cellular licensee 
may apply for a modification of its licensed CGSA if it believes that 
the standard method produces a CGSA that is substantially different 
from the actual coverage of its system. In adopting this alternative 
approach for calculating the CGSA, the Commission stated that 
alternative showings would only be accepted where the change to the 
CGSA is substantial and justified by unique or unusual circumstances, 
or where the SAB formula is clearly inapplicable. When preparing to 
file an application requesting such a modification, the licensee must 
employ alternative methods (actual measurements, more accurate 
prediction models or a combination of the two) to determine the 
location of the median 32 dBuV/m field strength contour and the 
distances along cardinal radials to that contour. In describing how 
these distances to the median 32 dBuV/m contours must be used to 
determine the CGSA, paragraphs (b)(1) and (b)(3) of Sec.  22.911 use 
the term SAB in several places. In the Commission's experience, this 
occasionally leads licensees to believe that they may employ the 
alternative methods to determine an SAB, as opposed to the CGSA, and 
then to use that ``alternate'' SAB in connection with various other 
rules such as the SAB extension rule or the traffic capture protection 
rule. In the NPRM, the Commission sought to clarify that the SAB of a 
cell derived using the standard method and the 32 dBuV/m contour that 
is used when preparing an alternative CGSA determination are different 
and not interchangeable. Accordingly, the Commission proposed to reword 
paragraphs (b)(1) and (b)(3) of Sec.  22.911 to replace the word 
``SAB'' with ``32 dBuV/m contour.''
    37. The Commission adopts the rule clarification as proposed. In 
setting out the standard method, the Commission sought to establish a 
method that would simplify and remove a measure of uncertainty from the 
process of calculating and plotting CGSAs. The Commission sought to 
prevent disagreements between parties and the Commission regarding the 
accuracy of methods used by parties to predict or measure actual 
coverage for a particular location or terrain. Although there may be 
certain situations in which it may not represent actual coverage as 
closely as other methods, the standard formula provides a simple and 
consistent method by which to calculate cellular system coverage. The 
Commission's decision to clarify Sec.  22.911(a) is consistent with its 
original intent in limiting the scope of alternate CGSA showings, i.e., 
to expedite Commission processing of applications, thereby avoiding 
delays in the provision of cellular service to the public. The 
Commission does not foreclose, however, the ability of carriers in 
adjacent markets to agree to the use of an alternative propagation 
method, or to enter into contract agreements, pursuant to Sec.  22.912, 
to allow SAB extensions calculated using the standard method into the 
other carrier's CGSA. The Commission believes that a process that 
affords carriers flexibility and permits parties to enter into 
contractual agreements will expedite service to subscribers, in 
comparison to a more protracted process whereby parties must present 
and argue the merits of conflicting engineering studies before the 
Commission.

I. Service Commencement and Construction Periods

    38. Section 22.946, which sets out construction requirements 
relating to the deployment of new cellular systems, was previously 
amended in the Commission's Universal Licensing System proceeding. See 
In the Matter of Biennial Regulatory Review--Amendment of parts 1, 13, 
22, 24, 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules 
to Facilitate the Development and Use of the Universal Licensing 
System, WT Docket No. 98-20, Report and Order, 63 FR 6894 (Dec. 14, 
1998) (ULS Report and Order). In implementing the ULS Report and Order, 
however, a table entitled ``H-1--Commencement of Service,'' was 
inadvertently deleted from Sec.  22.946. Because certain information in 
the table was out-dated, the Commission proposed to correct Sec.  
22.946 by re-inserting the table, and to reflect updated information. 
The Commission also proposed to delete the final phrase of Sec.  
22.946(b), which prohibits cellular system licensees from 
``intentionally serv[ing] only roamer stations.''
    39. As consumers now have numerous mobile telephony offerings from 
which to choose, the concern regarding lack of competition no longer 
exists. Accordingly, the Commission will remove the provision that 
prohibits service only to roamer stations. Further, after the 
Commission adopted the NPRM, it issued a Report and Order in WT Docket 
No. 97-112 regarding cellular service in the Gulf of Mexico. See In the 
Matter of Cellular Service and Other Commercial Mobile Radio Services 
in the Gulf of Mexico, WT Docket No. 97-112, 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 No. 90-6, Report and Order, 67 FR 9596 
(March 4, 2002). In that proceeding, the Commission amended Sec.  
22.946 to reflect construction requirements for licensees in the Gulf 
of Mexico. Because it was necessary to amend Sec.  22.946 to add the 
Gulf of Mexico construction requirements, the Commission decided to re-
insert the inadvertently omitted Table H-1 at that time. The Commission 
notes that Sec.  22.946 was amended to re-insert Table H-1 after the 
comment period in this proceeding had run, and that no one filed 
comments opposing that correction to this rule section.

J. Incidental Services Rule

    40. Section 22.323 of the Commission's rules authorizes carriers to 
provide other communications services incidental to the primary public 
mobile service, provided certain conditions are met. In general, Sec.  
22.323 requires carriers providing incidental services to protect 
mobile subscribers by ensuring that: (1) The costs and charges of 
subscribers not wishing to use incidental services are not increased as 
a result of the carrier's provision of incidental services to other 
subscribers; (2) the quality and availability of primary public mobile 
service does not materially deteriorate; and (3) provision of such 
incidental services is not inconsistent with the Communications Act of 
1934 or the Commission's rules and policies. 47 CFR 22.323. In the 
NPRM, the Commission proposed to eliminate these conditions, and sought 
comment on whether it should also remove the remaining provision (i.e., 
the statement that incidental services are permitted) as it applies to 
some or all part 22 services.
    41. In a related matter, the NPRM also sought comment on FreePage 
Corporation's (FreePage) request that Sec.  22.323 be amended to 
include the ``Limited Program Distribution Service'' (LPDS) service 
proposed by FreePage as an ``incidental service.'' In February 2000, 
the Wireless Telecommunications Bureau sought comment on a petition for 
rulemaking filed by FreePage requesting that the Commission amend Sec.  
22.323 to permit paging licensees to use their assigned channels to 
transmit audio programming of interest to a

[[Page 77183]]

narrow or specialized audience. Possible services cited by FreePage 
included, without limitation, children's programming, foreign language 
programming, and reading services for persons who have sight 
disabilities.
    42. In the NPRM, the Commission invited comments on whether 
spectrum assigned to CMRS licensees could be used for the LPDS service 
proposed by FreePage. In particular, the Commission sought comments 
addressing whether the service proposed by FreePage is in fact a 
broadcast service, and, therefore, whether it would need to change 
existing spectrum allocation and service rules to permit LPDS service 
in spectrum assigned to CMRS licensees. More generally, the Commission 
also requested comments on what effects, if any, the implementation of 
FreePage's LPDS proposal would have on other authorized service 
offerings or services proposed in pending Commission rulemaking 
proceedings. Finally, the Commission solicited comments from members of 
the disability community regarding how they might benefit from a 
revision of the Commission's rules that would permit use of the 
spectrum for programming to narrow or specialized audiences.
    43. The Commission agrees with commenters that the imposing of 
conditions on the provision of incidental services by part 22 licensees 
is no longer necessary. Section 22.323(a) imposes the condition that 
the costs and charges to subscribers not wishing to receive incidental 
services may not be increased as a result of the provision of 
incidental services to other subscribers. Because of the competitive 
wireless environment, however, CMRS licensees are not subject to 
federal rate regulation and are not permitted to file tariffs with the 
Commission. Under these circumstances, the Commission concludes that 
this rate restriction is unnecessary, as any dissatisfied subscriber 
will have the option of switching to a competing carrier. The 
Commission further concludes that there is no reason to retain the 
remainder of the rule in the absence of those conditions. The 
Commission recognizes that some commenters advocated that it retain 
this portion of the rule on the grounds that having an express 
provision for incidental services codified in the rules is helpful in 
demonstrating to state commissions that certain services must be 
treated as CMRS exempt from state and local regulation of rates and 
entry.
    44. With respect to FreePage's request to include a provision in 
Sec.  22.323 that LPDS is an incidental service within the meaning of 
the rule, the Commission denies the request but grants alternative 
relief as follows. First, the Commission finds that it is unnecessary 
to determine whether FreePage's LPDS service constitutes an incidental 
service because FreePage may provide any form of fixed or mobile 
service under a part 22 authorization, provided only that its service 
does not constitute broadcasting. Second, to the extent FreePage's 
intended service offering constitutes broadcast service, the Commission 
finds that it is in the public interest to provide FreePage with the 
flexibility to provide its LPDS service pursuant to the terms of a 
developmental authorization. The Commission therefore directs 
Commission staff to waive the allocation if necessary in order to 
process the developmental license. Accordingly, FreePage may file an 
application for developmental authority with the Commission, which will 
be processed by the Wireless Telecommunications Bureau pursuant to the 
regulations set forth in Sec.  22.401 of the Commission's rules. The 
Commission believes that a developmental license will afford FreePage 
the opportunity to assess consumer demand for its LPDS service 
offering.

K. Cellular Anti-Trafficking Rules

    45. In the NPRM, the Commission noted that Sec. Sec.  22.937, 
22.943, and 22.945 were originally adopted to prevent speculation and 
trafficking in cellular licenses that were awarded by random selection. 
Because the Commission is now required to resolve mutually exclusive 
applications for initial cellular licenses through competitive bidding, 
it proposed to eliminate or substantially modify rule Sec. Sec.  
22.937, 22.943, and 22.945 as they are now unnecessary and no longer 
serve the public interest.
    46. In adopting Sec.  22.937, the Commission stated that it was 
requiring applicants to show financial qualification because of the 
large capital investment required to finance the complex and 
sophisticated technology associated with cellular operations. The 
Commission noted that cellular service was viewed as a relatively high-
cost business venture because the service was still at an early stage 
of development. The Commission concludes that Sec.  22.937 is no longer 
necessary as a general matter because the cellular radiotelephone 
service has matured and there are two authorized cellular carriers in 
all MSAs and virtually all RSAs. The Commission's cellular rules have 
been amended to permit interested parties to file applications for any 
areas not serviced by cellular carriers after the expiration of the 
applicable build-out period, and such applications are now subject to 
competitive bidding. Although it proposed to retain Sec.  22.937 in the 
context of comparative renewal proceedings, the Commission finds that 
the rule is not necessary. The Commission has the authority to seek 
financial qualification information in a comparative renewal proceeding 
if it so chooses. The Commission therefore eliminates Sec.  22.937 in 
its entirety.
    47. The Commission similarly concludes that Sec.  22.943 should be 
removed as unnecessary. The Commission's anti-trafficking rules were 
developed to deter speculation on cellular licenses. In setting out the 
anti-trafficking rules, the Commission sought to balance the public 
interest in liberal transferability of licenses with a means to deter 
insincere applicants from speculating on unbuilt facilities. 
Accordingly, the Commission proposed to eliminate Sec.  22.943 to the 
extent that it prohibits trafficking in cellular licenses and precludes 
unserved area licensees from assigning or transferring an authorization 
until they have provided service to subscribers for at least one year. 
The Commission noted that the cellular service-specific anti-
trafficking rule set out in Sec.  22.943 may be unnecessary and 
duplicative as there are similar provisions in part 1 of its rules that 
are applicable to all wireless services.
    48. While Sec.  22.943 was useful in deterring speculation during 
the time period in which it used lotteries to select licensees, the 
Commission now uses competitive bidding to resolve mutual exclusivity. 
Mutually exclusive applications for licenses in other CMRS are also 
required to be resolved through the use of competitive bidding. Yet in 
those cases, the Commission does not impose service-specific anti-
trafficking rules, or mandate specific holding periods prior to 
assignment or transfer of licenses acquired through competitive 
bidding. Accordingly, the Commission eliminates the portions of Sec.  
22.943 that prohibit trafficking in cellular licenses, and that require 
carriers who acquired unserved area licenses to provide service to 
subscribers for at least one year before such licenses may be assigned 
or transferred. The Commission further finds that the cellular service-
specific anti-trafficking rule set out in Sec.  22.943 is unnecessary, 
given the presence of the anti-trafficking provisions of Sec.  
1.948(i), which is applicable to all services. See 47 CFR 1.948(i).
    49. The Commission's conclusion to remove service-specific anti-
trafficking provisions of Sec.  22.943 extends to Sec.  22.943(c), 
which states that it will not

[[Page 77184]]

accept applications for consent to assign or transfer a cellular 
authorization acquired by a current licensee for the first time as a 
result of a comparative renewal proceeding until the system has 
provided service to subscribers for at least three years. See 47 CFR 
22.943(c). The Commission noted in the NPRM that it would leave intact 
portions of Sec.  22.937 relating cellular renewal proceedings, but 
requested comment on whether to retain Sec.  22.943(c). Although Sec.  
22.943(c) also relates to cellular renewals, it is nonetheless an anti-
trafficking provision and should be removed as duplicative of rule 
Sec.  1.948(i).
    50. Similarly, because Sec.  22.945 was adopted for the sole 
purpose of preventing lottery system abuses, the Commission's 
obligation to resolve mutual exclusivity through competitive bidding 
also makes this rule unnecessary. An applicant filing more than one 
application for a specific unserved area under the current rules would 
have no advantage over other applicants seeking authorization to serve 
the same geographic area.

L. Other Rule Changes Recommended by Commenters

    51. In the NPRM, the Commission not only sought comment on its 
specific proposals, but also invited comment on whether it should 
modify any additional provisions of its part 22 rules as a result of 
competitive or technological developments.
1. Overhaul of the Unserved Area Licensing Rules
    52. Section 22.941 sets forth the ``unserved area'' licensing 
process for the cellular service. Certain carriers recommend that the 
Commission replace the unserved area licensing process. 47 CFR 22.941. 
In general, the commenters point out that the current site-by-site 
approach requires pre-approval each time a licensee wishes to expand 
its system. Proposals by two of the commenters favor a one-time process 
that licenses the remaining unserved areas, so that pre-approval of 
future expansions is no longer necessary. One recommendation proposes 
that the Commission abandon the per-application approach of the 
unserved area rules and instead: (1) Automatically incorporate areas of 
50 square miles or less into the CGSAs of the first-authorized 
incumbent adjoining the unserved area; and (2) open a filing window for 
all unserved areas exceeding 50 square miles, resulting in either the 
incorporation of the unserved area into the incumbent carrier's CGSA, 
or an auction among mutually exclusive applicants. Another proposal 
recommends eliminating filings for unserved areas of less than 50 
square miles that are completely surrounded by an incumbent's CGSA 
(i.e., the incumbent is the only one eligible under the rules to file 
an application), while another recommends that incumbents should be 
able to cover unserved areas of less than 50 square miles on a 
secondary basis without having to obtain prior Commission approval.
    53. The Commission declines to adopt such changes. Suggestions made 
by commenters constitute a fundamental change to its cellular service 
licensing model, and, as such, are beyond the scope of this proceeding. 
The Commission also notes that under its current process, the 
Commission receives approximately 40 unserved area applications each 
month, disposing of each usually within 45-60 days. Given that so few 
unserved area applications are filed with the Commission today and are 
processed quickly, it questions whether the burdens on all licensees of 
a major overhaul at this point warrants any corresponding benefits. In 
considering the wisdom of making significant changes within the 
cellular unserved licensing context, the Commission would need to 
identify an alternative approach that is administratively efficient, 
less complicated than the current approach, represents an improvement 
over the status quo in terms of speed of licensing and convenience for 
licensees, and continues to provide small as well as large carriers 
with reasonable opportunities to serve currently unserved areas. Given 
that the current system results in little administrative delay, the 
Commission does not find that commenters have done so. Moreover, 
commenters have failed to adequately address construction, interference 
protection, and market structure issues that would need to be addressed 
under a new processing regime. The Commission believes that a more 
complete record must be developed before any Commission action is 
warranted.
2. CGSA Expansion Notifications
    54. One commenter seeks to remove the requirement that licensees 
notify the Commission of each CGSA expansion for markets within the 
initial five-year construction period. Currently, Sec.  22.165(e) 
requires licensees to notify the Commission within 15 days of expanding 
their CGSAs, even during the initial five-year construction period. 
Cellular licensees are free to construct facilities anywhere within 
their markets without the possibility of competing applications during 
the initial construction period. The proposal would have the Commission 
require the licensee to file a system information update at the end of 
the five-year period, i.e., identify the areas that are served and 
unserved in preparation for the unserved area Phase I process.
    55. The Commission agrees that generally it and other licensees 
have no interest in knowing the precise location of an initial 
licensee's CGSA until the end of the initial five-year period. At that 
point, the CGSA must be a matter of record available to potential Phase 
I unserved area applicants as well as the Commission's staff in order 
to process the unserved area applications. Presently, there are only 
eleven cellular markets that are still within the initial five-year 
construction period. In addition, the Commission will soon issue 
initial licenses in three of the remaining RSAs. Even though very few 
licensees will be in a position to take advantage of this change, the 
Commission will revise the rule substantially as requested. Therefore, 
the Commission will revise Sec.  22.165(e) to require licensees in 
their initial five-year build-out period to notify the Commission of 
cell sites making up their CGSAs once yearly on the anniversary of 
license grant, rather than requiring licensees to file notifications 
within 15 days of initiating service at each site. The Commission 
concludes that revising this requirement to provide for an annual 
reporting obligation will minimize unnecessary regulatory burdens for 
initial cellular licensees while providing a reasonably up-to-date 
source of data for other cellular licensees and Commission staff.
3. Contract Extension Clarification
    56. Section 22.912 of the Commission's rules provides that any SAB 
extensions into an adjacent carrier's CGSA requires the consent of the 
adjacent carrier. One commeter requested the Commission to clarify 
that, in the case where an adjacent carrier has already consented to 
analog SAB extensions into its CGSA, a separate agreement is not 
required in order to extend the SAB of a digital signal into the CGSA 
so long as it does not exceed boundary established by the initial 
analog agreement. The Commission clarifies that its rules do not limit 
the scope of private, contractual agreements between cellular licensees 
in this case. To the extent that a carrier enters into an agreement 
that provides for extensions of both analog and digital signals into an 
adjacent carrier's CGSA, the Commission's rules

[[Page 77185]]

do not require separate notification to the Commission of such 
extensions; a single notification of the scope of that extension will 
be adequate notice.

III. Administrative Matters

A. Paperwork Reduction Act Analysis

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

B. Final Regulatory Flexibility Analysis

    58. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM. 
The Commission sought written public comment on the proposals in the 
NPRM, including comment on the IRFA. The comments received are 
discussed below. The Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.
Need for, and Objectives of, the Order
    59. In the Telecommunications Act of 1996, Congress added sections 
11 and 202(h) to the Communications Act of 1934, as amended, requiring 
the Commission to (1) review biennially its regulations that pertain to 
the operations or activities of telecommunications service providers, 
and (2) determine whether those regulations are no longer necessary in 
the public interest as a result of meaningful economic competition. 47 
U.S.C. 11(b). Following such review, the Commission is required to 
modify or repeal any such regulations that are no longer in the public 
interest. Accordingly, as part of the Commission's year 2000 Biennial 
Review of regulations, the Report and Order amends part 22 of the 
Commission's rules by modifying or eliminating various rules that have 
become outdated due to technological change, increased competition in 
the Commercial Mobile Radio Services (CMRS) market, or supervening 
rules.
    60. In particular, the Report and Order removes the cellular analog 
requirement after a five-year transition period and requires reports by 
certain CMRS licensees and other entities showing the level of access 
to mobile telephony had by persons with hearing disabilities or those 
using emergency-only phones. The Report and Order also removes the 
manufacturing requirements governing Electronic Serial Numbers (ESNs) 
in cellular telephones, as well as modifying several other technical 
rules. In the same vein, the Commission found some of the cellular 
anti-trafficking rules to be outdated because they were adopted during 
a period when the Commission resolved mutually exclusive applications 
for initial cellular services through lottery, rather than the current 
system of resolving such mutually exclusive applications through 
competitive bidding. The Commission also reevaluated certain other part 
22 rules that apply both to cellular and to other CMRS, specifically 
Sec.  22.323, which imposes conditions on the provision of 
``incidental'' services by Public Mobile Services providers.
Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA
    61. Although the Commission received numerous comments in response 
to the NPRM, it received no comments in response to the IRFA. However, 
as described below, the Commission nonetheless considered potential 
significant economic impacts of the rules on small entities.
    62. Analog Compatibility Requirement. Although the comments suggest 
that elimination of the analog requirement would not affect the 
majority of wireless consumers that are already using digital service, 
some commenters contend that there are particular classes of consumers 
and service providers that would be harmed by elimination of the rule. 
These commenters focus particularly on the possibility that, if the 
rule were eliminated, cellular carriers in major markets would be 
likely to drop analog service in those markets to provide more capacity 
for their digital systems. Commenters argue that, at the very least, 
the requirement should be eliminated only after a transition period. 
The unavailability of analog service in these markets, commenters 
contend, would have an adverse impact on the following groups:
    63. Small and regional carriers. Small and regional carriers argue 
that, if the analog requirement is eliminated, they will be forced to 
transition from solely analog services to digital in order to ensure 
that their customers will have service outside of their home market, as 
well as to continue to provide roaming service to customers of the 
large nationwide carriers. They argue that eliminating the analog 
requirement will force them to bear the financial burden of immediately 
converting to digital, regardless of consumer demand within their 
particular markets. Further, these commenters assert that a decision to 
adopt any particular digital technology will be dictated by a small/
regional carrier's larger roaming partner. Moreover, commenters argue 
that, in certain areas, a small or regional licensee may be positioned 
between major markets whose licensees have chosen incompatible digital 
technologies, forcing it to choose between roaming partners and 
multiple digital standards in the absence of analog technology. These 
commenters argue that, in the absence of interoperable digital 
technology, the analog requirement should not be eliminated.
    64. Analog-only consumers. It is estimated that there are 
approximately 26 million analog-only subscribers. These include 
consumers who use analog-only handsets because their carriers do not 
provide digital service (mainly rural cellular carriers) as well as 
subscribers who have purchased 911-only mobile phones. Remaining 
analog-only users are non-subscribers, such as certain elderly or 
victims of domestic violence, who have received recycled analog 
equipment for use for emergency purposes. Presently, a customer using 
analog-only equipment can roam on other cellular networks in the event 
the consumer is outside of his/her home market. Commenters argue that 
these cellular customers would lose the ability to roam with their 
current analog-only handset if the analog standard is eliminated and 
both carriers within a given area shut down their analog networks.
    65. Telematics. Telematics services providers have, for the most 
part, relied on analog technology to ensure interoperable 
communications nationwide. Telematics advocates assert that analog 
service is vital, due to the ambulant nationwide nature of telematics 
technology. It is argued that digital systems cannot yet transmit both 
voice and data on the same call, a feature that commenters argue is 
important for telematics providers. These commenters assert that the 
interoperability problem is particularly difficult for telematics 
devices because manufacturers must choose a technology that is embedded 
in a vehicle that will have a useful life of ten or more years. 
Moreover, these providers assert that, unlike the typical cellular 
subscriber who can readily switch to digital handsets if necessary, the 
development cycle (the length of time necessary to design equipment, 
test, and install in compatible vehicles) and hardware basis of 
telematics-equipped vehicles prevents users of such services from 
quickly and easily migrating to a new technology. These providers argue 
that telematics devices are imbedded into vehicles in such a

[[Page 77186]]

way as to make it cost prohibitive to retrofit legacy vehicles with 
analog-based equipment. Given the development cycles and life spans of 
such vehicles (often longer than ten years), commenters argue that the 
immediate elimination of the analog rule would be a setback for 
telematics providers and their customers. Instead, certain telematics 
providers argue that if the analog requirement must be eliminated, the 
industry must be given a reasonable transition period, and suggest that 
such a transition period would be ten years.
    66. Persons with hearing disabilities. Persons with hearing 
disabilities desiring to use wireless devices must currently rely on 
analog service or the small number of digital phones that are currently 
compatible with only certain hearing aids. Unlike analog handsets, 
digital technologies have been shown to cause interference to hearing 
aids and cochlear implants. Accessibility advocates and those with 
hearing disabilities note that market forces (e.g. need for spectrum 
efficiency, enhanced services such as wireless data) make a shift to 
digital technology inevitable. These commenters argue that at this 
point, however, due to the lack of hearing aid-compatible digital 
equipment, persons with hearing disabilities must rely on analog 
equipment to access mobile telephony, thereby settling for inferior 
sound quality, fewer service options, and higher prices. Commenters 
argue that, because persons with hearing disabilities account for only 
a small percentage of mobile telephony users, there are not sufficient 
economic incentives for carriers to expend resources to ensure that 
these individuals have access to wireless service. Accessibility 
advocacy groups maintain that the analog requirement should not be 
eliminated (if at all) until new digital services are accessible and 
readily available to persons with hearing disabilities.
    67. Electronic Serial Number. Numerous commenters support the 
proposal to remove Sec.  22.919. Commenters agree that the industry is 
capable of developing anti-fraud measures on its own and that the rule 
prevents carriers from deploying advanced technologies such as smart 
cards. One commenter, however, supports elimination of the detailed 
design requirements in the rule, but would keep the requirement that 
cellular telephones have a unique ESN. Further, two other commenters 
argue that removing the ESN rule would be disruptive to other aspects 
of cellular service. Alternatively, another commenter supports the 
Commission's proposal, but does so because it believes that it should 
be legal to clone cellular telephones (in particular, as a small 
business activity) for customers who are already legitimate cellular 
subscribers, as opposed to those who are not subscribers.
    68. Channelization Requirements. A majority of the commenters 
addressing this issue support the Commission's proposal. One commenter, 
however, opposes the elimination of the channelization plan rule prior 
to the elimination of the analog service requirement, stating that some 
cellular carriers might start providing analog service using a 
different and incompatible analog channel plan, which would leave some 
subscribers without roamer service. Another commenter also opposes 
removal of the channelization plan because it believes that the rule 
provides a legal basis for ``frequency protection'' from adjacent 
systems using digital technologies.
    69. Modulation Requirements and In-band Emissions Limitations. The 
Commission received a number of comments supporting various aspects of 
its proposal to a number of technical specifications for, inter alia, 
the performance of audio filter and deviation limiter circuitry in 
analog cellular telephones, and adjustment of the modulation levels in 
analog cellular telephones. One commenter states that Sec.  22.915 
should be eliminated because the rule's requirements are specific to 
the AMPS analog compatibility standard, and, as such, are contrary to 
the goal of allowing carriers to implement the technologies of their 
choice, and stifles the development of technologically advanced 
systems. Certain commenters, however, object to the specific language 
the Commission proposed for the out-of-band emission limit measurement 
rule in Sec.  22.917. These parties point out that implementation of 
the measurement resolution bandwidth specified in the proposed rule 
would have the effect of imposing a stricter out-of-band emission limit 
than that which currently applies. A few commenters submitted 
alternative language which more accurately reflect the Commission's 
intended goal of harmonizing certain procedures in the wireless 
communications services (WCS), personal communications services (PCS) 
and cellular services.
    70. Wave Polarization Requirement. A majority of the commenters 
addressing this issue generally support relaxation of the rule 
requiring electromagnetic waves radiated by transmitters to be 
vertically polarized because of the technical flexibility it will 
provide cellular carriers. One commenter notes that flexibility in 
polarization is beneficial in order to reduce multipath fading and to 
improve signal quality, while another points out that eliminating the 
vertical polarization requirement will permit carriers to reduce the 
antenna space needed on towers, thereby benefiting carriers as well as 
the public by fostering more aesthetically pleasing antenna sites, 
reducing the number of antennas required at a particular site (thereby 
reducing the need for local zoning clearance in many cases), permitting 
collocation of multiple carriers' facilities on the same tower, and 
reducing site deployment costs.
    71. One commenter, however, objects to relaxing the rule on the 
basis that non-vertical antenna polarization could result in reduced RF 
coverage for its end users and impair telematics' ability to provide 
geographic location information for emergency services. Specifically, 
the commenter notes that it utilizes analog cellular technology to 
provide location-based telematics service offerings, such as automatic 
crash notification, through systems embedded in vehicles of certain 
automobile manufacturers. Likewise, another commenter objects to 
relaxing the requirement because of the ``isolation'' it provides to 
cellular systems from co-channel and adjacent-channel transmitters.
    72. Assignment of System Identification Numbers. Commenters 
generally support the proposal to eliminate the procedures and rules 
set forth in Sec.  22.941 by which the Commission administers cellular 
system identification numbers (SIDs). The commenters agree that there 
is no regulatory purpose in retaining SIDs as a term of cellular 
licenses. As commenters point out, there are no SID rules for PCS, SMR, 
or other CMRS, and this administrative function is carried out 
successfully within those radio services by the private sector without 
Commission involvement.
    73. Determination of Cellular Geographic Service Area. Several 
cellular carriers oppose the Commission's intent to clarify the 
language in Sec.  22.911(b) regarding the term ``SAB'' (service area 
boundary) in situations in which a carrier employs alternative methods 
to calculate the CGSA of its system. One commenter advocates that the 
Commission in fact allow alternative propagation methods to be used for 
evaluating signal extensions into adjacent systems, in lieu of the 
formula in Sec.  22.911(a), and another commenter argues that when a 
carrier has determined its CGSA by use of an alternative method, it is 
``illogical

[[Page 77187]]

and inconsistent'' to require that cell SABs be used for all other 
purposes.
    74. Incidental Services Rule. Commenters generally agree that the 
Commission should modify Sec.  22.323 of its rules that permits 
carriers to provide other communications services incidental to the 
primary public mobile service. Commenters, on the other hand, believe 
that the provision in Sec.  22.323 that states that incidental services 
are permitted should be retained. Several of the carriers addressing 
this issue point out that an express provision for incidental services 
is helpful in demonstrating to state commissions that certain services 
must be treated as CMRS exempt from state and local regulation of rates 
and entry.
Description and Estimate of the Number of Small Entities to which the 
Rules Will Apply
    75. 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.
    76. This Report and Order results in rule changes that could affect 
small businesses that currently are or may become Cellular 
Radiotelephone Service providers that are regulated under subpart H of 
part 22 of the Commission's rules. In addition, changes to Sec.  22.323 
of the Commission's rules could affect service providers that are 
regulated under any provisions of part 22 of the Commission's rules. 
These include, in addition to Cellular Radiotelephone Service 
providers, providers of Paging and Radiotelephone (Common Carrier 
Paging), Air-Ground Radiotelephone, Offshore Radiotelephone, and Rural 
Radiotelephone services. In addition, pursuant to Sec.  90.493(b) of 
the Commission's rules, paging licensees on exclusive channels in the 
929-930 MHz bands are subject to the licensing, construction, and 
operation rules set forth in part 22. See 47 CFR 90.493(b). As this 
rulemaking proceeding may apply to multiple services, the Commission 
analyzes the number of small entities affected on a service-by-service 
basis. In addition to service providers, some of the proposed rule 
changes may also affect manufacturers of cellular telecommunications 
equipment. The Commission will include a separate discussion regarding 
the number of small cellular equipment manufacturing entities that are 
potentially affected by the proposed rule changes.
    77. Cellular Radiotelephone Service. The SBA has developed a small 
business size standard for small businesses in the category ``Cellular 
and Other Wireless Telecommunications.'' 13 CFR 121.201, North American 
Industry Classification System (NAICS) code 513322. Under that SBA 
category, a business is small if it has 1,500 or fewer employees. 
According to the Bureau of the Census, only twelve firms from a total 
of 1,238 cellular and other wireless telecommunications firms operating 
during 1997 had 1,000 or more employees. Therefore, 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 Commision notes that there are 1,807 cellular licenses; however, a 
cellular licensee may own several licenses. According to the most 
recent Trends in Telephone Service data, 806 carriers reported that 
they were engaged in the provision of either cellular service, PCS, or 
SMR telephony services, which are placed together in that data. See 
Trends in Telephone Service, Industry Analysis Division, Common Carrier 
Bureau, Table 5.3--Number of Telecommunications Service Providers that 
are Small Businesses (August 2001). The Commission has estimated that 
323 of these are small under the SBA small business size standard. 
Accordingly, based on this data, the Commission estimates that not more 
than 323 cellular service providers will be affected by these revised 
rules.
    78. Paging. The Commission has adopted, and the SBA has approved, a 
two-tier definition of small businesses in the context of auctioning 
licenses in the paging services. Under this definition, a small 
business is 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. See Implementation of Section 6002(b) of the Omnibus 
Budget Reconciliation Act of 1993, Third Report, FCC 98-91(rel. June 
11, 1998). The Commission has estimated that as of January 1998, there 
were more than 600 paging companies in the United States. In the August 
2001 Trends in Telephone Service data, 427 carriers reported that they 
were engaged in the provision of paging and messaging service; 407 of 
these firms identified themselves as having 1,500 or fewer employees. 
The Commission does not have data specifying the number of these 
carriers that are not independently owned and operated or meet the 
small business thresholds set forth above, or the number of these 
carriers that are regulated under part 22 of the Commission's rules, 
and thus is unable at this time to estimate with precision the number 
of affected paging carriers that would qualify as small business 
concerns under its definition. However, the Commission estimates that 
the majority of existing paging providers qualify as small entities 
under its definition. Consequently, the Commission estimates that there 
are up to approximately 600 currently licensed small paging carriers 
that may be affected by the rule changes set out in the Report and 
Order. Further in December 2001, 182 bidders placed high bids for 5,323 
geographic area paging licenses in Auction No. 40. Applications remain 
pending as of the release of this Report and Order. Thus, in addition 
to existing licensees, the rule changes adopted in the Report and Order 
could affect paging licenses won in Auction No. 40.
    79. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small business specific to the Air-Ground 
radiotelephone service. Accordingly, the Commission uses the SBA 
definition applicable to radiotelephone companies, i.e., an entity 
employing no more than 1,500 persons. There are approximately 24 
licensees in the Air-Ground radiotelephone service, and the Commission 
estimates that almost all of them qualify as small entities under the 
SBA definition.
    80. Offshore Radiotelephone Service. This service operates on 
several ultra high frequency (UHF) TV broadcast channels that are not 
used for TV broadcasting in the coastal area of the states bordering 
the Gulf of Mexico. At present, there are less than ten licensees in 
this service. The Commission has not adopted a definition of small 
business specific to the Offshore Radiotelephone Service. Accordingly, 
the Commission uses the SBA definition applicable to radiotelephone 
companies, i.e., an entity employing no more than 1,500

[[Page 77188]]

persons. The Commission assumes that all licensees in this service are 
small entities, as that term is defined by the SBA.
    81. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio Systems (BETRS). The Commission 
therefore uses the SBA definition applicable to radiotelephone 
companies; i.e., an entity employing no more than 1,500 persons. There 
are approximately 100 licensees in the Rural Radiotelephone Service, 
and the Commission estimates that almost all of them qualify as small 
entities under the SBA definition.
    82. Cellular Equipment Manufacturers. Some of the actions adopted 
in the Report and Order will also affect manufacturers of cellular 
equipment. The Commission does not know how many cellular equipment 
manufacturers are in the current market. The 1997 Economic Census 
provides that there were 1,089 communications-related equipment 
manufacturing companies as of 1997. This category includes not only 
cellular equipment manufacturers, but television and AM/FM radio 
manufacturers as well. Under SBA regulations, a ``radio and television 
broadcasting and wireless communications equipment manufacturing'' 
company, which includes not only U.S. cellular equipment manufacturers 
but also firms that manufacture radio and television broadcasting and 
other communications equipment as well as electronic components, must 
have a total of 750 or fewer employees in order to qualify as a small 
business concern. 13 CFR 121.201, NAICS code 334220. Although the exact 
number is unknown, the number of cellular equipment manufacturers is 
considerably lower than 1,089. U.S. Census Bureau, 1997 Economic 
Census, Manufacturing Subject Series, at Table 3--Detailed Statistics 
by Industry: 1997, NAICS code 334220 (October 2000).
    83. Broadband Personal Communications Service. 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 has 
created a small business size standard 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 small business size 
standard 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 small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA. No small businesses within the 
SBA-approved small business size standards 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 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. Based on this information, the 
Commission concludes that the number of small broadband PCS licensees 
will include the 90 winning C Block bidders and the 93 qualifying 
bidders in the D, E, and F blocks plus the 48 winning bidders in the 
re-auction, for a total of 231 small entity PCS providers as defined by 
the SBA small business standards and the Commission's auction rules. On 
January 26, 2001, the Commission completed the auction of 422 C and F 
Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in 
this auction, 29 qualified as ``small'' or ``very small'' businesses.
Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements
    84. The Commission will require that, (1) three years from the 
effective date of this order and (2) four years from the effective date 
of this order, certain CMRS licensees and other entities file reports 
with the Commission. In the reports, the carrier must either certify 
that, within their own markets, there are, at the time of filing, 
hearing aid-compatible digital devices available to and usable by 
persons with hearing disabilities for use with that carrier's digital 
network, or, if no such equipment is available at the time of filing, 
describe the extent to which, by the end of the fifth year, digital 
equipment will be available to and usable by persons with hearing 
disabilities, and describe how the public is being informed of their 
availability. If upon review of the filings, the Commission determines 
that significant problems remain regarding access to mobile telephony 
by persons with hearing disabilities, the Commission may find that the 
analog requirement will be removed only for technologies where hearing 
aid-compatibility solutions are available, or that the sunset period 
will be extended for all carriers. Steps Taken to Minimize Significant 
Economic Impact on Small Entities, and Significant Alternatives 
Considered.
    85. 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 (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. See 5 U.S.C. 603.
    86. Because several commenters argued that certain entities, such 
as persons with hearing disabilities and small and regional carriers, 
may be harmed by the immediate removal of the analog requirement, the 
Commission instituted a five-year transition period to ease the 
transition to digital technology. By establishing this five-year 
transition period, the Commission takes account of the potentially 
smaller resources available to small entities.
    87. The Report and Order concluded that several of the Commission's 
technical and anti-trafficking cellular rules are outdated. Therefore, 
modifying or eliminating these rules should decrease the costs 
associated with regulatory compliance for cellular service providers, 
provide additional flexibility in manufacturing cellular equipment, and 
also enhance the market demand for some products. Also, amending the 
incidental services rules will allow licensees in the part 22 services 
greater flexibility in the types of services they offer. The Commission 
notes that the intent underlying its actions is to lessen the levels of 
regulation, consistent with its mandate for undertaking biennial 
reviews. The Commission has therefore described, supra, actions 
intended to lessen the regulatory burden on carriers and equipment 
manufacturers, including small entities.
    88. Report to Congress: The Commission will send a copy of the 
Report and Order, including the associated FRFA, in a report to be sent 
to Congress pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A). In addition, the Commission will send a copy of the 
Report and Order, including the associated FRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration. A copy of the Report

[[Page 77189]]

and Order and associated FRFA (or summaries thereof) will also be 
published in the Federal Register. See 5 U.S.C. 604(b).

IV. Ordering Clauses

    89. 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 specified below are adopted.
    90. The rule changes set forth below will become effective February 
18, 2003.
    91. Certain commercial mobile radio service carriers and other 
entities must submit reports regarding access to mobile telephony 
services by emergency-only consumers and persons with hearing 
disabilities at one and two years prior to the sunset of the rules 
requiring cellular carriers to provide analog service compatible with 
Advanced Mobile Phone Service (AMPS) specifications.
    92. The Wireless Telecommunications Bureau is authorized to carry 
out such actions necessary to transfer the administration of cellular 
system identification numbers as identified herein.

Synopsis of the Second Report and Order

I. Background

    93. In the NPRM, the Commission proposed to modify various general 
cellular service requirements set out in Sec.  22.901 of the 
Commission's rules. First, the Commission proposed deleting current 
Sec.  22.901(d), which addresses alternative cellular technologies. 
Because the rule is drafted as though the principal cellular technology 
is analog technology, the Commission therefore proposed deleting 
current Sec.  22.901(d) and adding the following language to the 
introductory paragraph of the rule: ``In providing cellular services, 
each cellular system may incorporate any technology that meets all 
applicable technical requirements in this part.''
    94. The Commission also proposed deleting certain Sec. Sec.  
22.901(a) and 22.901(b) of its rules. Section 22.901(a) requires that 
cellular licensees provide subscribers with information regarding the 
service area of the cellular provider. The Commission sought comment on 
whether there is any material difference between the service-area-
related information provided by cellular providers in comparison with 
other providers of CMRS services. The NPRM also requested comment on 
whether, in light of the current level of competition in the provision 
of CMRS services, such a requirement is still necessary to ensure that 
consumers have access to service-area-related information. Section 
22.901(b) requires the cellular licensee to notify the Commission in 
the event that a subscriber's request for service is denied due to lack 
of cellular system capacity. See 47 CFR 22.901(b). The Commission 
proposed removing this requirement, noting that the rule does not 
provide any mechanism for ameliorating any instance of a lack of system 
capacity. The Commission also explained that, given the current level 
of competition, consumers who are denied service by a particular 
provider due to lack of capacity will be very likely to have other 
service options.
    95. Further, the Commission proposed deleting the first sentence of 
the introductory paragraph, which provides that ``Cellular system 
licensees must provide cellular mobile radiotelephone service upon 
request to all cellular subscribers in good standing . . . .'' 47 CFR 
22.901. The Commission also proposed removing the specific reference in 
the introductory paragraph that provides that a cellular system may 
terminate service when a subscriber ``operates a cellular telephone in 
an airborne aircraft.''

II. Discussion

    96. First, the Commission concludes that the competitive state of 
the mobile telephony market renders unnecessary both Sec.  22.901(d) to 
the extent it characterizes certain technologies as ``primary'' or 
``alternative'' as well as the first sentence in the introductory 
paragraph of Sec.  22.901 to the extent it requires licensees to 
``provide cellular mobile radiotelephone service upon request to all 
cellular subscribers in good standing.'' The Commission deletes the 
existing text of Sec.  22.201(d) (which implies that analog is the 
principal technology in use). The Commission adds a technologically-
neutral statement to Sec.  22.901: ``In providing cellular services, 
each cellular system may incorporate any technology that meets all 
applicable technical requirements of this part.'' Further, the 
Commission finds that the statement in the introductory paragraph about 
provision of service to ``cellular subscribers in good standing'' is 
unnecessary because, even in the absence of this rule, cellular service 
providers, like all common carriers, are required to comply with 
sections 201 and 202 of Title II of the Act. Those sections require 
cellular carriers to provide service upon reasonable request, to have 
charges, practices, classifications, and regulations that are just and 
reasonable, and to avoid unjust or unreasonable discrimination in their 
charges, practices, classifications, regulations, facilities, or 
services. Further, the Commission notes that there are no other 
comparable rule requirements placed on other CMRS licensees.
    97. Second, the Commission finds that it is no longer necessary to 
require cellular carriers to provide subscribers with information 
regarding the service area of the provider and therefore delete Sec.  
22.901(a). While the Commission agrees that consumers should have 
access to information about carriers' service areas prior to purchasing 
wireless services, as well as while using the services, it finds that 
cellular carriers, as well as PCS and digital SMR carriers are already 
making this information available at retail outlets, as well as via the 
internet. The Commission notes that PCS and digital SMR providers are 
doing so without any comparable regulatory requirement, presumably 
because consumers demand this information. Notably, the Commission 
believes the rule is no longer necessary because, even in the absence 
of the rule, cellular carriers will continue to make this information 
available while marketing their services in today's competitive 
marketplace.
    98. Third, the Commission finds that the current level of 
competition renders unnecessary the provision in Sec.  22.901(b) that 
carriers must notify the Commission in the event that a subscriber's 
request for service is denied due to lack of capacity. As a threshold 
matter, the Commission is unaware of any cellular licensee having filed 
such a notification with the Commission. The Commission notes that 
carriers must provide sufficient capacity for analog service in 
instances where it is required. In fact, revised Sec.  22.901(b)(2) 
states in part that ``[c]ellular licensees must allot sufficient system 
resources such that the quality of AMPS provided, in terms of 
geographic coverage and traffic capacity, is fully adequate to satisfy 
the concurrent need for AMPS availability.'' The Commission believes 
that this rule provision, combined with the choices of wireless 
services available to consumers today, will ensure that consumers of 
analog services will continue to receive adequate service even in the 
absence of the notification requirement.
    99. Finally, the Commission concludes that it is unnecessary to 
retain the provision in the introductory paragraph to Sec.  22.901 
stating that a carrier may terminate service to a customer who operates 
a cellular telephone while on board an airborne aircraft. The 
Commission finds that there is no basis to retain this provision

[[Page 77190]]

because its rules already explicitly prohibit operation of cellular 
telephones on board airborne aircraft, and a cellular licensee would be 
within its obligations under sections 201 and 202 of the Act in 
terminating the service of customers who violate the Commission's 
rules. Further, such a rule could be misinterpreted to limit a cellular 
or other CMRS licensee's ability to terminate service to customers in 
the case of other types of rule violations. Therefore, the Commission 
finds that an express condition regarding airborne operation is 
unnecessary and potentially confusing to licensees.

III. Administrative Matters

A. Paperwork Reduction Act Analysis

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

B. Final Regulatory Flexibility Analysis

    101. As required by the Regulatory Flexibility Act (RFA), an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the 
NPRM. The Commission sought written public comment on the proposals in 
the NPRM, including comment on the IRFA. The comments received are 
discussed below. The Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.
Need for, and Objectives of, the Order
    102. As part of the Commission's year 2000 Biennial Review of 
regulations, the Second Report and Order amends part 22 of the 
Commission's rules by modifying or eliminating various rules that have 
become outdated due to technological change, increased competition in 
the Commercial Mobile Radio Services (CMRS) market, or supervening 
rules.
Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA
    103. A number of commenters argue that certain portions of Sec.  
22.901 should be removed as outdated, duplicative, and unnecessary. 
Other commenters, however, argued that the Commission should retain the 
requirement in Sec.  22.901(a) requiring cellular licensees to provide 
service area a information to potential customers. They argue that 
consumers require access to this information in order to make sound 
choices when purchasing wireless services. Likewise, other commenters 
urge the Commission to retain the requirement in Sec.  22.901(b) 
requiring cellular licensees to notify the Commission in the event a 
consumer's request for service is denied due to lack of capacity. They 
argue that eliminating the rule may lead to cellular carriers not 
providing sufficient capacity for analog services going forward.
Description and Estimate of the Number of Small Entities To Which the 
Rules Will Apply
    104. Cellular Radiotelephone Service. The SBA has developed a small 
business size standard for small businesses in the category ``Cellular 
and Other Wireless Telecommunications.'' 13 CFR 121.201, North American 
Industry Classification System (NAICS) code 513322. Under that SBA 
category, a business is small if it has 1,500 or fewer employees. 
According to the Bureau of the Census, only twelve firms from a total 
of 1,238 cellular and other wireless telecommunications firms operating 
during 1997 had 1,000 or more employees. Therefore, 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 Commision notes that there are 1,807 cellular licenses; however, a 
cellular licensee may own several licenses. According to the most 
recent Trends in Telephone Service data, 806 carriers reported that 
they were engaged in the provision of either cellular service, PCS, or 
SMR telephony services, which are placed together in that data. See 
Trends in Telephone Service, Industry Analysis Division, Common Carrier 
Bureau, Table 5.3--Number of Telecommunications Service Providers that 
are Small Businesses (August 2001). The Commission has estimated that 
323 of these are small under the SBA small business size standard. 
Accordingly, based on this data, the Commission estimates that not more 
than 323 cellular service providers will be affected by these revised 
rules.
Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements
    105. None.
Steps Taken To Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered
    106. The Second Report and Order concluded that certain provisions 
of Sec.  22.901 are unnecessary in light of meaningful economic 
competition or technological advances. Therefore, modifying or 
eliminating these provisions should decrease the costs associated with 
regulatory compliance for cellular service providers, provide 
additional flexibility in manufacturing cellular equipment, and also 
enhance the market demand for some products.
Federal Rules That May Duplicate, Overlap or Conflict With the Proposed 
Rules
    107. None.
    108. Report to Congress: The Commission will send a copy of the 
Second Report and Order, including the associated FRFA, in a report to 
be sent to Congress pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of 
the Second Report and Order, including the associated FRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration. A copy 
of the Second Report and Order and FRFA (or summaries thereof) will 
also be published in the Federal Register. See 5 U.S.C. 604(b).

List of Subjects

47 CFR part 22

    Communications common carriers, Communications equipment , 
Incorporation by reference, Reporting and recordkeeping requirements.

47 CFR part 24

    Communications common carriers.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

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

PART 22--PUBLIC MOBILE SERVICES

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

    Authority: 47 U.S.C. 154, 222, 303, 309 and 332.

    2. Section 22.165 is amended by revising paragraph (e) to read, as 
follows:


Sec.  22.165  Additional transmitters for existing systems.

* * * * *
    (e) Cellular radiotelephone service. During the five-year build-out 
period, the service area boundaries of the additional transmitters, as 
calculated by the method set forth in Sec.  22.911(a), must remain 
within the market, except that the service area boundaries may extend 
beyond the market boundary into the area that is part of the CGSA or is 
already encompassed by the service area boundaries of previously 
authorized

[[Page 77191]]

facilities. After the five-year build-out period, the service area 
boundaries of the additional transmitters, as calculated by the method 
set forth in Sec.  22.911(a), must remain within the CGSA. Licensees 
must notify the Commission (FCC Form 601) of any transmitters added 
under this section that cause a change in the CGSA boundary. The 
notification must include full size and reduced maps, and supporting 
engineering, as described in Sec.  22.953(a)(1) through (3). If the 
addition of transmitters involves a contract service area boundary 
(SAB) extension (see Sec.  22.912), the notification must include a 
statement as to whether the five-year build-out period for the system 
on the relevant channel block in the market into which the SAB extends 
has elapsed and whether the SAB extends into any unserved area in the 
market. The notification must be made electronically via the ULS, or 
delivered to the filing place (see Sec.  1.913 of this chapter) once 
yearly during the five-year build-out on the anniversary of the license 
grant date.
* * * * *


Sec.  22.323  [Removed]

    3. Section 22.323 is removed.

    4. Section 22.367 is amended by removing and reserving paragraph 
(a)(4) and by revising paragraph (d), to read as follows:


Sec.  22.367  Wave polarization.

* * * * *
    (a) * * *
    (4) [Reserved]
* * * * *
    (d) Any polarization. Base, mobile and auxiliary test transmitters 
in the Cellular Radiotelephone Service are not limited as to wave 
polarization. Public Mobile Service stations transmitting on channels 
higher than 960 MHz are not limited as to wave polarization.


Sec.  22.377  [Amended]

    5. Section 22.377 is amended by removing paragraph (c).

    6. Section 22.901 is revised to read as follows:


Sec.  22.901  Cellular service requirements and limitations.

    The licensee of each cellular system is responsible for ensuring 
that its cellular system operates in compliance with this section.
    (a) Each cellular system must provide either mobile service, fixed 
service, or a combination of mobile and fixed service, subject to the 
requirements, limitations and exceptions in this section. Mobile 
service provided may be of any type, including two way radiotelephone, 
dispatch, one way or two way paging, and personal communications 
services (as defined in part 24 of this chapter). Fixed service is 
considered to be primary service, as is mobile service. When both 
mobile and fixed service are provided, they are considered to be co 
primary services. In providing cellular services, each cellular system 
may incorporate any technology that meets all applicable technical 
requirements in this part.
    (b) Until February 18, 2008, each cellular system that provides 
two-way cellular mobile radiotelephone service must--
    (1) Maintain the capability to provide compatible analog service 
(``AMPS'') to cellular telephones designed in conformance with the 
specifications contained in sections 1 and 2 of the standard document 
ANSI TIA/EIA-553-A-1999 Mobile Station--Base Station Compatibility 
Standard (approved October 14, 1999); or, the corresponding portions, 
applicable to mobile stations, of whichever of the predecessor standard 
documents was in effect at the time of the manufacture of the 
telephone. This incorporation by reference was approved by the Director 
of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. Copies of the standard may be purchased from Global 
Engineering Documents, 15 Inverness Way East, Englewood, CO 80112-5704 
(or via the internet at http://global.ihs.com). Copies are available 
for inspection at the Federal Communications Commission, 445 12th 
Street, SW, Washington, DC 20554, or the Office of the Federal 
Register, 800 North Capitol Street, NW., Suite 700, Washington, DC.
    (2) Provide AMPS, upon request, to subscribers and roamers using 
such cellular telephones while such subscribers are located in any 
portion of the cellular system's CGSA where facilities have been 
constructed and service to subscribers has commenced. See also Sec.  
20.12 of this chapter. Cellular licensees must allot sufficient system 
resources such that the quality of AMPS provided, in terms of 
geographic coverage and traffic capacity, is fully adequate to satisfy 
the concurrent need for AMPS availability.

    7. Section 22.905 is revised to read as follows:


Sec.  22.905  Channels for cellular service.

    The following frequency bands are allocated for assignment to 
service providers in the Cellular Radiotelephone Service.
    (a) Channel Block A: 869--880 MHz paired with 824--835 MHz, and 
890--891.5 MHz paired with 845--846.5 MHz.
    (b) Channel Block B: 880--890 MHz paired with 835--845 MHz, and 
891.5--894 MHz paired with 846.5--849 MHz.

    8. Section 22.911 is amended by revising the first sentence in 
paragraphs (b)(1) and (b)(3), to read as follows:


Sec.  22.911  Cellular geographic service area.

* * * * *
    (b) * * *
    (1) The alternative CGSA determination must define the CGSA in 
terms of distances from the cell sites to the 32 dBuV/m contour along 
the eight cardinal radials, with points in other azimuthal directions 
determined by the method given in paragraph (a)(6) of this section. * * 
*
* * * * *
    (3) The provision for alternative CGSA determinations was made in 
recognition that the formula in paragraph (a)(1) of this section is a 
general model that provides a reasonable approximation of coverage in 
most land areas, but may under-predict or over-predict coverage in 
specific areas with unusual terrain roughness or features, and may be 
inapplicable for certain purposes, e.g., cells with a coverage radius 
of less than 8 kilometers (5 miles). * * *
* * * * *


Sec.  22.915  [Removed]

    9. Section 22.915 is removed.

    10. Section 22.917 is revised to read as follows:


Sec.  22.917  Emission limitations for cellular equipment.

    The rules in this section govern the spectral characteristics of 
emissions in the Cellular Radiotelephone Service.
    (a) Out of band emissions. The power of any emission outside of the 
authorized operating frequency ranges must be attenuated below the 
transmitting power (P) by a factor of at least 43 + 10 log(P) dB.
    (b) Measurement procedure. Compliance with these rules is based on 
the use of measurement instrumentation employing a resolution bandwidth 
of 100 kHz or greater. In the 1 MHz bands immediately outside and 
adjacent to the frequency block a resolution bandwidth of at least one 
percent of the emission bandwidth of the fundamental emission of the 
transmitter may be employed. A narrower resolution bandwidth is 
permitted in all cases to improve measurement accuracy provided the 
measured power is integrated over the full required measurement 
bandwidth (i.e. 100 kHz or 1 percent of emission

[[Page 77192]]

bandwidth, as specified). The emission bandwidth is defined as the 
width of the signal between two points, one below the carrier center 
frequency and one above the carrier center frequency, outside of which 
all emissions are attenuated at least 26 dB below the transmitter 
power.
    (c) Alternative out of band emission limit. Licensees in this 
service may establish an alternative out of band emission limit to be 
used at specified band edge(s) in specified geographical areas, in lieu 
of that set forth in this section, pursuant to a private contractual 
arrangement of all affected licensees and applicants. In this event, 
each party to such contract shall maintain a copy of the contract in 
their station files and disclose it to prospective assignees or 
transferees and, upon request, to the FCC.
    (d) Interference caused by out of band emissions. If any emission 
from a transmitter operating in this service results in interference to 
users of another radio service, the FCC may require a greater 
attenuation of that emission than specified in this section.


Sec.  22.919  [Removed]

    11. Section 22.919 is removed.

    12. Section 22.921 is revised to read as follows:


Sec.  22.921 911  call processing procedures; 911-only calling mode.

    Mobile telephones manufactured after February 13, 2000 that are 
capable of operating in the analog mode described in the standard 
document ANSI TIA/EIA-553-A-1999 Mobile Station--Base Station 
Compatibility Standard (approved October 14, 1999--available for 
purchase from Global Engineering Documents, 15 Inverness East, 
Englewood, CO 80112), must incorporate a special procedure for 
processing 911 calls. Such procedure must recognize when a 911 call is 
made and, at such time, must override any programming in the mobile 
unit that determines the handling of a non-911 call and permit the call 
to be transmitted through the analog systems of other carriers. This 
special procedure must incorporate one or more of the 911 call system 
selection processes endorsed or approved by the FCC.


Sec.  22.933  [Removed]

    13. Section 22.933 is removed.


Sec.  22.937  [Removed]

    14. Section 22.937 is removed.


Sec.  22.941  [Removed]

    15. Section 22.941 is removed.

    16. Section 22.943 is revised to read as follows:


Sec.  22.943  Limitations on transfer of control and assignment for 
authorizations issued as a result of a comparative renewal proceeding.

    Except as otherwise provided in this section, the FCC does not 
accept applications for consent to transfer of control or for 
assignment of the authorization of a cellular system that has been 
acquired by the current licensee for the first time as a result of a 
comparative renewal proceeding until the system has provided service to 
subscribers for at least three years.
    (a) The FCC may accept and grant applications for consent to 
transfer of control or for assignment of the authorization of a 
cellular system that is to be transferred as a part of a bona fide sale 
of an on-going business to which the cellular operation is incidental.
    (b) The FCC may accept and grant applications for consent to 
transfer of control or for assignment of the authorization of a 
cellular system that is to be transferred as a result of the death of 
the licensee.
    (c) The FCC may accept and grant applications for consent to 
transfer of control or for assignment of authorization if the transfer 
or assignment is pro forma and does not involve a change in ownership.


Sec.  22.945  [Removed]

    17. Section 22.945 is removed.

    18. Section 22.946 is amended by revising paragraph (b) and (c) to 
read as follows:


Sec.  22.946  Service commencement and construction systems.

* * * * *
    (b) To satisfy this requirement, 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 considered to be 
providing service only if mobile stations can originate telephone calls 
to and receive telephone calls from wireline telephones through the 
PSTN.
    (c) Construction period for specific facilities. The construction 
period applicable to specific new or modified cellular facilities for 
which a separate authorization is granted is one year, beginning on the 
date the authorization is granted.

PART 24--PERSONAL COMMUNICATIONS SERVICES

    19. The authority citation for part 24 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 309 and 332.

    20. Section 24.238 is revised to read as follows:


Sec.  24.238  Emission limitations for Broadband PCS equipment.

    The rules in this section govern the spectral characteristics of 
emissions in the Broadband Personal Communications Service.
    (a) Out of band emissions. The power of any emission outside of the 
authorized operating frequency ranges must be attenuated below the 
transmitting power (P) by a factor of at least 43 + 10 log(P) dB.
    (b) Measurement procedure. Compliance with these rules is based on 
the use of measurement instrumentation employing a resolution bandwidth 
of 1 MHz or greater. However, in the 1 MHz bands immediately outside 
and adjacent to the frequency block a resolution bandwidth of at least 
one percent of the emission bandwidth of the fundamental emission of 
the transmitter may be employed. A narrower resolution bandwidth is 
permitted in all cases to improve measurement accuracy provided the 
measured power is integrated over the full required measurement 
bandwidth (i.e. 1 MHz or 1 percent of emission bandwidth, as 
specified). The emission bandwidth is defined as the width of the 
signal between two points, one below the carrier center frequency and 
one above the carrier center frequency, outside of which all emissions 
are attenuated at least 26 dB below the transmitter power.
    (c) Alternative out of band emission limit. Licensees in this 
service may establish an alternative out of band emission limit to be 
used at specified band edge(s) in specified geographical areas, in lieu 
of that set forth in this section, pursuant to a private contractual 
arrangement of all affected licensees and applicants. In this event, 
each party to such contract shall maintain a copy of the contract in 
their station files and disclose it to prospective assignees or 
transferees and, upon request, to the FCC.
    (d) Interference caused by out of band emissions. If any emission 
from a transmitter operating in this service results in interference to 
users of another radio service, the FCC may require a greater 
attenuation of that emission than specified in this section.

[FR Doc. 02-31382 Filed 12-16-02; 8:45 am]
BILLING CODE 6712-01-P