[Federal Register Volume 67, Number 246 (Monday, December 23, 2002)]
[Proposed Rules]
[Pages 78209-78215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32213]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22, 24 and 27

[WT Docket No. 02-353; FCC 02-305]


Service Rules for Advanced Wireless Services

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document solicits comment on service rules for Advanced 
Wireless Services in the 1710-1755 MHZ and 2110-2155 MHz bands, 
including provisions for application, licensing, operating and 
technical rules, and for competitive bidding. These frequency bands 
have previously been used for a variety of Government and non-
Government services. Concurrently with this document, the Commission 
adopted another decision, published elsewhere in this Federal Register, 
allocating these frequency bands for fixed and mobile services to 
provide for the introduction of new advanced wireless services to the 
public. The Commission takes this action to eliminate barriers to and 
facilitate the provision of new services to the public, and to 
encourage optimum use of these frequencies.

DATES: Comments are due on or before February 7, 2003, and reply 
comments are due on or before March 14, 2003. Public comments on the 
information collections are due on or before February 28, 2003, and 
comments by the Office of Management and Budget (OMB) are due on or 
before April 28, 2003.

ADDRESSES: Office of the Secretary, Federal Communications Commission, 
445 12th Street, SW., Washington, DC 20554. See SUPPLEMENTARY 
INFORMATION for filing instructions.

FOR FURTHER INFORMATION CONTACT: John Spencer or Eli Johnson, Staff 
Attorneys, 202-418-1310. For additional information concerning the 
information collections contained in this document, contact Judith 
Boley Herman at 202-418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WT Docket No. 02-353, FCC 02-305, 
adopted November 7, 2002, and released November 22, 2002. The complete 
text of the NPRM and Initial Regulatory Flexibility Analysis is 
available on the Commission's Internet site, at http://

[[Page 78210]]

www.fcc.gov. It is also available for inspection and copying during 
normal business hours in the FCC Reference Information Center, 
Courtyard Level, 445 12th Street, SW., Washington, DC, and may be 
purchased from the Commission's copy contractor, Qualex International, 
Portals II, 445 12th Street, SW., CY-B4202, Washington, DC 20554 
(telephone 202-863-2893). Comments may be filed using the Commission's 
Electronic Comments Filing System (ECFS) or by filing paper copies.
    1. In this NPRM, the Commission seeks comment on service rules for 
Advanced Wireless Services (AWS) in the 1710-1755 MHz and 2110-2155 MHz 
bands, including provisions for application, licensing, operating and 
technical rules, and for competitive bidding. These frequency bands 
have previously been used for a variety of Government and non-
governmental services. Concurrently with the NPRM, the Commission is 
adopting a Report and Order (R&O) allocating these frequency bands for 
fixed and mobile services so as to provide for the introduction of new 
AWS to the public. The Commission, in taking these actions, emphasizes 
its belief that in order to best serve the public, regulatory policy 
should strive to eliminate barriers to and facilitate the provision of 
new services. The 1710-1755 MHz and 2110-2155 MHz spectrum provides a 
significant opportunity to achieve such service advances. The 
Commission hopes that the licensing and service rules proposed in the 
NPRM will benefit consumers by giving them the services and value that 
they demand, and thereby provide the new business opportunities 
necessary to support continued service enhancements by licensees.
    2. In paragraphs 10 through 15 of the NPRM, the Commission proposes 
a flexible use approach to spectrum allocation in these bands and 
discusses its tentative approach to assigning licenses. The Commission 
believes that its proposal to permit flexible use would eliminate 
uncertainties about the outcome of the competitive bidding process and 
promote the Commission's goals of assigning licenses expeditiously and 
promoting the intensive and efficient use of this spectrum. With these 
goals in mind, the Commission, in the NPRM, tentatively concludes that 
the service rules for the 1710-1755 MHz and 2110-2155 MHz bands should 
permit a licensee to use this spectrum for any use permitted by the 
United States Table of Frequency Allocations contained in part 2 of the 
Commission's rules. The NPRM solicits comments on a range of issues 
relative to its flexible use framework and also on the Commission's 
proposal to resolve mutually exclusive applications for these bands by 
competitive bidding.
    3. The Commission, in paragraphs 16 through 25 of the NPRM, 
proposes to adopt a geographic area licensing scheme for the 1710-1755 
MHz and 2110-2155 MHz bands, and seeks comment on appropriate 
geographic licensing areas for these bands and how such a licensing 
scheme can promote the objectives of 47 U.S.C. 309(j)(3), including 
promotion of economic opportunities and competition by disseminating 
licenses among a wide variety of applicants, including small 
businesses, rural telephone companies, and minority- and women-owned 
applicants. The NPRM, among other things, also seeks comment on 
including the Gulf of Mexico in the Commission's licensing scheme for 
these bands. Also, while the NPRM solicits comment from the public in 
general on the Commission's proposals, as discussed in paragraph 25 of 
the NPRM, the Commission specifically seeks comment from Indian Tribal 
governments on the effect various geographic licensing options may have 
on the deployment of service to tribal lands, as well as on other 
issues raised in the NPRM.
    4. In addition to seeking comment on the appropriate geographic 
licensing area or areas to be used to license spectrum in the 1710-1755 
MHz and 2110-2155 MHz bands, the NPRM, as addressed in paragraphs 26 
through 32, seeks comment on the amount of spectrum that should be 
included in each license, and the related issue of whether this 
spectrum should be paired.
    5. The NPRM next considers licensing and operating rules. 
Paragraphs 36 through 38 of the NPRM proposes to allow licensees in the 
1710-1755 MHz and 2110-2155 MHz bands to provide all allowable services 
anywhere within their licensed area at any time, consistent with their 
regulatory status. It also recommends that these applicants be able to 
request common carrier status as well as non-common carrier status for 
authorization in a single license, rather than to require the applicant 
to choose between common carrier and non-common carrier services. The 
NPRM further proposes that applicants and licensees in these bands be 
required to indicate a regulatory status based on any services they 
choose to provide. Lastly in this regard, the NPRM proposes that, if a 
licensee operating in this spectrum changes the service or services it 
offers, such that its regulatory status would change, that licensee 
must notify the Commission of the change.
    6. The NPRM, in paragraphs 39 through 42, discusses ownership 
restrictions in the 1710-1755 MHz and 2110-2155 MHz bands. The NPRM 
proposes to establish parity in foreign ownership reporting 
requirements, but does not suggest a single, substantive standard for 
compliance. For example, the Commission would not deny a license to an 
applicant requesting authorization exclusively to provide services not 
enumerated in section 310(b) of the Communications Act, solely because 
its foreign ownership would disqualify it from receiving a license if 
the applicant had applied for a license to provide the services 
enumerated in section 310(b).
    7. The NPRM further proposes not to adopt band-specific service 
rules addressing spectrum aggregation limits applicable to the initial 
licensing of the 1710-1755 MHz and 2110-2155 MHz bands, but seeks 
comment on whether any such limits are necessary or appropriate. In 
particular, the NPRM solicits comment on whether the Commission should 
limit the amount of spectrum in these bands that any one entity (or 
related entities) may acquire at auction in the same geographic area.
    8. Paragraphs 43 through 45 of the NPRM discusses license term 
renewal expectancy, and proposes that in the 1710-1755 MHz and 2110-
2155 MHz spectrum, the license term be 10 years. The NPRM further 
proposes that a licensee in this spectrum applying for renewal receive 
a preference or renewal expectancy if the applicant has provided 
substantial service during its past license term and has complied with 
the Communications Act and applicable Commission rules and policies.
    9. In addition, the NPRM, in paragraphs 46 through 49, seeks 
comment on whether licensees in the 1710-1755 MHz and 2110-2155 MHz 
bands should be subject to any performance requirements, in addition to 
a substantial service requirement, at license renewal. The NPRM, in 
particular, questions whether the Commission should establish any 
specific coverage requirements in this spectrum, or whether coverage 
criteria should be adopted as one means, but not the exclusive means, 
of meeting a substantial service requirement. The NPRM invites comment 
on this and other issues related to possible performance requirements.
    10. The NPRM, in paragraphs 50 and 51, asks whether the Commission 
should allow licensees in the 1710-1755 MHz and 2110-2155 MHz bands to 
partition their service areas and to disaggregate their spectrum. If 
so, the NPRM proposes to apply section 27.15

[[Page 78211]]

of the Commission's rules to this spectrum. Section 27.15, among other 
things, provides that licensees may apply to partition their licensed 
geographic service areas or disaggregate their licensed spectrum at any 
time following the grant of their license.
    11. As indicated in paragraphs 13 and 14 and paragraph 52 of the 
NPRM, even though licenses in the 1710-1755 MHz and 2110-2155 MHz bands 
may be issued pursuant to one part of the Commission's rules, licensees 
in these bands may be required to comply with rules contained in other 
parts of the Commission's rules. The NPRM therefore solicits comment 
generally on any provisions in existing, service-specific rules that 
may require specific recognition or adjustment to comport with the 
supervening application of another rule part, as well as any provisions 
that may be necessary in this other rule part to fully describe the 
scope of covered services and technologies.
    12. The NPRM next looks at technical rules for the 1710-1755 MHz 
and 2110-2155 MHz bands and the potential for interference between 
licensees using the same spectrum in adjacent service areas, or 
adjacent spectrum. Paragraphs 55 though 59 consider in-band 
interference control. In that regard, the Commission, in the NPRM, 
tentatively concludes that either a boundary limit or a coordination 
method, when properly applied, can provide a satisfactory means of 
controlling harmful interference or determining the interaction between 
systems, although there may be reasons to prefer one or the other for 
the spectrum under consideration. Commenters should provide an analysis 
of the advantages and disadvantages of the boundary limit and 
coordination approaches, or approaches that combine features of both. 
The NPRM, in paragraphs 61 and 62 also invites comment on ways of 
avoiding interference with incumbent licensees in the spectrum.
    13. Paragraphs 63 and 64 of the NPRM solicit comment regarding out-
of-band and spurious emission limits. The NPRM cites the need to 
consider interference protection for operations adjacent to the 1710-
1755 MHz and 2110-2155 MHz bands and tentatively concludes that the 
Commission should develop out-of-band emission limits that can 
accommodate each type of communications.
    14. Next, the NPRM, in paragraphs 65 through 67, invites comment on 
what limits for effective isotropic radiated power are necessary or 
appropriate under either a coordination or a field strength limit 
approach. The NPRM requests comment on a number of connected issues 
such as if such limits are necessary, what should they be and the basis 
for the suggested limits. The NPRM also seeks comment on the extent to 
which the power limits that are established in this rulemaking should 
affect the Commission's adoption of a paired or unpaired band 
structure, and vice versa. If the Commission, as suggested in paragraph 
66, decides to adopt a paired band architecture for this spectrum, 
should it also allow the use of both base and mobile transmitters in 
both bands. Finally, in this regard, the NPRM invites comment on the 
technical ramifications of potential band segmentation plans, and on 
techniques for dual use based on advance modulation techniques, antenna 
technology, or other advanced methods for channelization.
    15. The NPRM, in paragraphs 68 and 69, considers radiofrequency 
(RF) radiation safety requirements and proposes to amend its rules to 
provide a 1,000 watts effective radiated power threshold for fixed 
operations in the 1710-1755 MHz and 2110-2155 MHz bands.
    16. In paragraph 70 of the NPRM, the Commission requests comment on 
applying existing rules related to equipment authorization, frequency 
stability, antenna structures and air navigation, environmental 
requirements, quiet zones, and disturbance of AM broadcast antenna 
patterns to licensees in the 1710-1755 MHz and 2110-2155 bands, 
including licensees who acquire their licenses through partitioning or 
disaggregation. Further, the NPRM proposes, in paragraph 71, that until 
agreements between the United States, Mexico, and Canada become 
effective, to apply, as an interim requirement, for terrestrial 
licensees operating in the 1710-1755 MHz and the 2110-2155 MHz bands 
along the borders of the United States, Mexico, and Canada, the same 
technical restrictions at the border that the Commission adopts for 
operations between geographic service areas, to the extent they are not 
in violation of current bilateral agreements and arrangements.
    17. Finally, paragraphs 72 through 80 discuss competitive bidding 
issues. For example, the NPRM proposes to conduct the auction of 
initial licenses in the 1710-1755 MHz and 2110-2155 MHz bands in 
conformity with the general competitive bidding rules set forth in part 
1, subpart Q of the Commission's rules, and substantially consistent 
with the bidding procedures that have been employed in previous 
auctions. Thus, the NPRM solicits comment on whether any of the 
Commission's part 1 rules or other auction procedures would be 
inappropriate or should be modified for an auction of licenses in these 
bands.
    18. In paragraphs 74 through 80, the NPRM proposes to adopt a small 
business size standard which defines a small business as an entity with 
average annual gross revenues for the preceding three years not 
exceeding $40 million, and a very small business as an entity with 
average annual gross revenues for the preceding three years not 
exceeding $15 million. The NPRM also proposes to provide small 
businesses with a bidding credit of 15 percent, and very small 
businesses with a bidding credit of 25 percent. The Commission seeks 
comment on these size standards and on whether the proposed small 
business provisions are sufficient to promote participation by 
businesses owned by minorities and women, as well as rural telephone 
companies. To the extent that commenters propose additional provisions 
to ensure participation by minority-owned or women-owned businesses, 
they should address how such provisions should be crafted to meet the 
relevant standards of judicial review.

Administrative Matters

Ex Parte Rules

    19. This is a permit-but-disclose notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided they are disclosed pursuant to the 
Commission's rules. (See generally 47 CFR 1.1202, 1.1203, 1.1206.)

Comment Information

    20. Pursuant to applicable procedures set forth in Sec. Sec.  1.415 
and 1.419 of the Commission's rules, interested parties may file 
comments on this NPRM on or before February 7, 2003, and reply comments 
on or before March 14, 2003. Comments and reply comments should be 
filed in WT Docket No. 02-353, and may be filed using the Commission's 
Electronic Comment Filing System (ECFS) or by filing paper copies. All 
relevant and timely comments will be considered by the Commission 
before final action is taken in this proceeding.
    21. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/ecfs.html. In completing the transmittal screen, commenters 
should include their full name, Postal Service mailing address, and the 
applicable docket number. Parties may also submit an electronic comment 
by e-mail via the

[[Page 78212]]

Internet. To obtain filing instructions for e-mail comments, commenters 
should send an e-mail to [email protected], and should include the following 
words in the body of the message: ``get form .'' A sample form and directions will be sent in 
reply.
    22. Parties who choose to file by paper must file an original and 
four copies of each filing. If parties want each Commissioner to 
receive a personal copy of their comments, they must file an original 
plus nine copies. All filings must be sent to the Commission's 
Secretary, Marlene H. Dortch, Office of the Secretary, Federal 
Communications Commission, 445 12th Street, SW., Room TW-A325, 
Washington, DC 20554. Furthermore, parties are requested to provide 
courtesy copies for the following Commission staff: (1) John Spencer 
and Eli Johnson, Policy Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, 445 12th Street, SW., Room. 3-C124, 
Washington, DC 20554; and (2) Gary Michaels and Andrea Kelly, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, 445 12th Street, SW., Room. 4-A760, 
Washington, DC 20554. One copy of each filing (together with a diskette 
copy, as indicated below) should also be sent to the Commission's copy 
contractor, Qualex International, Portals II, 445 12th Street, SW., CY-
B4202, Washington, DC 20554.
    23. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be attached to the 
original paper filing submitted to the Office of the Secretary. Such a 
submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using MicrosoftTM Word 97 for Windows or 
compatible software. The diskette should be accompanied by a cover 
letter and should be submitted in ``read only'' mode. The diskette 
should be clearly labeled with the commenter's name, proceeding, type 
of pleading (comment or reply comment), date of submission, and the 
name of the electronic file on the diskette. The label should also 
include the following phrase ``Disk Copy--Not an Original.'' Each 
diskette should contain only one party's pleadings, preferably in a 
single electronic file. In addition, commenters should send diskette 
copies to the Commission's copy contractor, Qualex International, 
Portals II, 445 12th Street, SW., CY-B4202, Washington, DC 20554.
    24. The public may view the documents filed in this proceeding 
during regular business hours in the FCC Reference Information Center, 
Federal Communications Commission, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554, and on the Commission's Internet Home Page: 
<http://www.fcc.gov. Copies of comments and reply comments 
are also available through the Commission's duplicating contractor: 
Qualex International, Portals II, 445 12th Street, SW., CY-B4202, 
Washington, DC 20554 (telephone 202-863-2893). Accessible formats 
(computer diskettes, large print, audio recording and Braille) are 
available to persons with disabilities by contacting Brian Millin, of 
the Consumer & Governmental Affairs Bureau, at (202) 418-7426, TTY 
(202) 418-7365, or at [email protected].

Paperwork Reduction Act

    25. This NPRM may contain proposed information collections. As part 
of our continuing effort to reduce paperwork burdens, we invite the 
general public and the Office of Management and Budget (OMB) to take 
this opportunity to comment on the information collections contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995. Comments 
should address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    26. Written comments by the public and agencies on the proposed 
information collections are due February 14, 2003. Written comments by 
the OMB on the proposed and/or modified information collections are due 
on or before April 21, 2003. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Judith Boley Herman, Federal 
Communications Commission, 445 12th Street, SW., Room 1-C804, 
Washington, DC 20554, or via the Internet to [email protected], and to Kim 
A. Johnson, Office of Information and Regulatory Affairs (OIRA), Office 
of Management and Budget (OMB), Docket Library, Room 10236, New 
Executive Office Building (NEOB), 725 17th Street, NW., Washington, DC 
20503 or via the Internet at [email protected].
    OMB Approval Number: 3060-XXXX.
    Title: Service Rules for Advanced Wireless Services in the 1.7 GHz 
and 2.1 GHz Bands.
    Form No.: FCC Forms 601, 602, 603, 604, 605.
    Type of Review: New collection.
    Respondents: Business or other for profit, federal government, 
state, local or tribal government.
    Number of Respondents: 200.
    Estimated Time Per Response: 30 minutes to 10 hours (The reporting 
and coordination are all one time or occasional burdens that will only 
occur under certain conditions.)
    Frequency of Response: On occasion and one-time reporting 
requirements, third party disclosure requirement, recordkeeping 
requirement.
    Total Annual Cost Burden: N/A.
    Total Annual Burden: 830 hours (approximate total for three year 
term of OMB approval).
    Needs and Uses: The various information reporting and verification 
requirements, and the prospective coordination requirement, if 
ultimately adopted, will be used by the Commission to verify licensee 
compliance with Commission rules and regulations, and to ensure that 
licensees continue to fulfill their statutory responsibilities in 
accordance with the Communications Act of 1934. Such information has 
been used in the past and will continue to be used to minimize 
interference, verify that applicants are legally and technically 
qualified to hold licenses, and to determine compliance with Commission 
Rules.

Initial Regulatory Flexibility Act Analysis

    27. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules proposed in this Notice of Proposed Rulemaking 
(NPRM). This is a summary of that IRFA. The complete text of the IRFA 
may be found in Appendix B of the full NPRM. Written public comments 
are requested on this IRFA. Comments must be identified as responses to 
the IRFA and must be filed by the deadline for comments provided in 
paragraph 87 of the full text of the NPRM. The Commission will send a 
copy of the NPRM, including the full text of the IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA).

[[Page 78213]]

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

    28. The NPRM seeks comment on service rules for Advanced Wireless 
Services (AWS) in the 1710-1755 MHz and 2110-2155 MHz bands, including 
provisions for application, licensing, technical and operating rules, 
and for competitive bidding. These frequency bands have previously been 
used for a variety of Government and non-government services. The 
Commission's goal in proposing the licensing and service rules detailed 
in the NPRM is to enable service providers to put this spectrum to its 
highest value use with minimal transaction costs. The Commission's 
proposals for service rules allow for flexibility and permit this 
spectrum to be used for any purpose consistent with its allocation, 
including third generation (3G) and other advanced wireless services.

B. Legal Basis

    29. The proposed action is authorized pursuant to sections 1, 2, 
4(i), 7, 10, 201, 214, 301, 302, 303, 307, 308, 309, 310, 319, 324, 332 
and 333 of the Communications Act of 1934, 47 U.S.C. 151, 152, 154(i), 
157, 160, 201, 214, 301, 302, 303, 307, 308, 309, 310, 319, 324, 332, 
333.

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

    30. 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. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small government 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA. Nationwide, 
there are 4.44 million small business firms, according to SBA reporting 
data.
    31. A small organization is generally ``any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. Last, the definition of 
``small governmental jurisdiction'' is one with populations of fewer 
than 50,000. There are 85,006 governmental jurisdictions in the nation. 
This number includes such entities as states, counties, cities, utility 
districts and school districts. There are no figures available on what 
portion of this number have populations of fewer than 50,000. However, 
this number includes 38,978 counties, cities and towns, and of those, 
37,556, or ninety-six percent, have populations of fewer than 50,000. 
The Census Bureau estimates that this ratio is approximately accurate 
for all government entities. Thus, of the 85,006 governmental entities, 
we estimate that ninety-six percent, or about 81,600, are small 
entities that may be affected by our rules.
    32. The proposals in the NPRM affect applicants who wish to provide 
service in the 1710-1755 MHz and 2110-2155 MHz bands. The Commission 
does not know precisely the type of service that a licensee in these 
bands might seek to provide. Nonetheless, the Commission anticipates 
that the services that will be deployed in these bands may have capital 
requirements comparable to those in the broadband Personal 
Communications Service (PCS), and that the licensees in these bands 
will be presented with issues and costs similar to those presented to 
broadband PCS licensees. Therefore, the NPRM proposes to adopt the same 
small business size standards here that the Commission adopted for the 
broadband PCS service. In particular, the NPRM proposes to define a 
``small business'' as an entity with average annual gross revenues for 
the preceding three years not exceeding $40 million, and a ``very small 
business'' as an entity with average annual gross revenues for the 
preceding three years not exceeding $15 million. The NPRM also proposes 
to provide small businesses with a bidding credit of 15 percent and 
very small businesses with a bidding credit of 25 percent. The NPRM 
seeks comment on the use of these business size standards and also on 
the associated bidding credits for small business applicants to be 
licensed in the 1710-1755 MHz and 2110-2155 MHz bands, with particular 
focus on the appropriate definitions of small and very small businesses 
as they relate to the size of the geographic area to be covered and the 
spectrum allocated to each licensee.
    33. The Commission has not yet determined how many licenses will be 
awarded in the 1710-1755 MHz and 2110-2155 MHz bands. Moreover, the 
Commission does not yet know how many applicants or licensees in these 
bands will be small entities. Thus, the Commission assumes, for 
purposes of this IRFA, that all prospective licensees are small 
entities as that term is defined by the SBA or by our proposed small 
business definitions for these bands. The Commission invites comment on 
this analysis.
    34. Although the Commission does not know for certain which 
entities are likely to apply for these frequencies, we note that the 
1710-1755 MHz and 2110-2155 MHz bands are comparable to cellular 
service and personal communications service.
    35. Wireless Telephone Including Cellular, Personal Communications 
Service (PCS) and SMR Telephony Carriers. The Commission's most recent 
data, as reported in Table 5.3 of Trends in Telephone Service, 
estimates that there are 858 wireless telephone carriers and that 291 
of these carriers in combination with their affiliates have 1,500 or 
fewer employees. In addition, the SBA has developed size standards for 
wireless small businesses within the two separate Economic Census 
categories of: (1) Paging and (2) Cellular and Other Wireless 
Telecommunications. For both of those categories, the SBA considers a 
business to be small if it has 1,500 or fewer employees. According to 
the Commission's most recent Trends in Telephone Service data, 1,761 
companies reported that they were engaged in the provision of wireless 
service. Of these 1,761 companies, an estimated 1,175 have 1,500 or 
fewer employees and 586 have more than 1,500 employees. Consequently, 
the Commission estimates that most wireless service providers are small 
entities.

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

    36. The NPRM proposes a number of rule changes that will affect 
reporting, recordkeeping and other compliance requirements. The 
Commission will provide time for public comment on and seek Office of 
Management and Budget approval for any proposals that entail Paperwork 
Reduction Act burdens.
    37. The NPRM first proposes flexible use of the bands under the 
regulatory framework contained in part 27 of the Commission's rules, or 
alternatively seeks comment on governing the services in these bands by 
the part 24 or part 22 rules, or by a newly created rule part. 
(Paragraphs 13-14 of the NPRM.) Also, as discussed in paragraphs 16-18, 
the NPRM proposes a geographic area licensing scheme for the 1710-1755 
MHz and 2110-2155 MHz bands. The transfer of the 1710-1755 MHz band 
from Federal Government use to non-Government commercial use is subject 
to the provisions of the National Telecommunications and Information

[[Page 78214]]

 Administration Organization Act, as amended by the Strom Thurmond 
National Defense Authorization Act for Fiscal Year 1999 (NDAA-99). 
NDAA-99 requires new non-Governmental licensees to reimburse Federal 
users for their relocation costs. (Paragraphs 33-34 of the NPRM.) NDAA-
99 also grants the Federal user a limited reclamation right.
    38. Entities interested in acquiring initial licenses to use 
spectrum in the 1710-1755 MHz and 2110-2155 MHz bands will be required 
to file using the Universal Licensing System, as discussed in paragraph 
52 of the NPRM. As in other services, the licensees in these bands 
would be allowed to provide all allowable services anywhere within 
their licensed area. The Commission's current mobile service license 
application requires an applicant for mobile services to indicate 
whether the service it intends to offer will be Commercial Mobile Radio 
Service (CMRS), Private Mobile Radio Service (PMRS), or both, since 
service offerings may bear on eligibility and other statutory and 
regulatory requirements. The NPRM also proposes to permit applicants to 
request common carrier status as well as non-common carrier status for 
authorization in a single license, rather than to require the applicant 
to choose between common carrier and non-common services. These 
proposed regulatory status obligations are discussed at paragraphs 36-
38 of the NPRM.
    39. Also, as stated in paragraph 39 of the NPRM, sections 310(a) 
and 310(b) of the Communications Act, as modified by the 
Telecommunications Act of 1996, impose foreign ownership and 
citizenship requirements that restrict the issuance of licenses to 
certain applicants. An applicant requesting authorization for other 
than broadcast, common carrier, or aeronautical en route or fixed 
services would be subject to section 310(a), but not to the additional 
prohibitions of section 310(b). An applicant requesting authorization 
for these particular services would be subject to both sections 310(a) 
and 310(b). The NPRM provides, however, that common carriers and non-
common carriers filing an application should not be subject to varied 
reporting obligations. The NPRM does not propose a single, substantive 
standard for compliance. For example, the NPRM states that the 
Commission would not deny a license to an applicant requesting 
authorization exclusively to provide services not enumerated in section 
310(b), solely because its foreign ownership would disqualify it from 
receiving a license if the applicant had applied for a license to 
provide the services enumerated in section 310(b).
    40. In paragraphs 46-49 of the NPRM, the Commission seeks comment 
on whether licensees in the 1710-1755 MHz and 2110-2155 MHz bands 
should be subject to any performance requirements in addition to a 
substantial service requirement at license renewal. The NPRM notes that 
in some services the Commission has imposed minimum coverage 
requirements on licensees to ensure that spectrum is used effectively 
and service is implemented promptly. The NPRM seeks comment on whether 
the Commission should establish any specific coverage requirements in 
the 1710-1755 MHz and 2110-2155 MHz bands, or whether coverage criteria 
should be adopted as one means, but not the exclusive means, of meeting 
a substantial service requirement. The NPRM also seeks comment on 
whether licensees should be subject to interim performance requirements 
prior to the end of the license term.
    41. In paragraphs 50-51 of the NPRM, the Commission seeks comment 
on allowing licensees in the 1710-1755 MHz and 2110-2155 MHz bands to 
partition their service areas and to disaggregate their spectrum. If 
the Commission permits partitioning, then the partitioning licensee 
would have to include with its request a description of the partitioned 
service area and a calculation of the population of the partitioned 
service area and the licensed geographic service area.
    42. In paragraphs 54-71, the NPRM seeks comment on a number of 
technical issues and licensing obligations. The NPRM requests 
information on how best to control in-band and out-of-band 
interference, appropriate power limits, RF safety limits, and Canadian 
and Mexican coordination.
    43. The Commission requests comment on how all of these 
requirements may be modified to reduce the burden on small entities and 
still meet the objectives of the proceeding.

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

    44. 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.
    45. The NPRM solicits comment on a number of proposals and 
alternatives regarding the reallocation of, and service rules for, the 
1710-1755 MHz and 2110-2155 MHz bands. The NPRM seeks to adopt rules 
that will reduce regulatory burdens, promote innovate services and 
encourage flexible use of this spectrum. It opens up economic 
opportunities to a variety of spectrum users, including small 
businesses. The Commission considers various proposals and alternatives 
partly because we seek to minimize, to the extent possible, the 
economic impact on small businesses.
    46. Paragraph 74 of the NPRM takes particular note of the 
Commission's legislative obligation to promote ``economic opportunity 
and competition by avoiding excessive concentration of licenses and by 
disseminating licenses among a wide variety of applicants, including 
small businesses, rural telephone companies, and businesses owned by 
members of minority groups and women.'' In recognition of this 
obligation and as discussed above, the NPRM first proposes to establish 
size standards for small and very small businesses based on the 
definitions used for the broadband PCS service. The NPRM also proposes 
to provide small businesses with a bidding credit of 15 percent and 
very small businesses with a bidding credit of 25 percent.
    47. As indicated in paragraph 79 of the NPRM, the Commission 
believes that the small business size standards and corresponding 
bidding credits proposed in the NPRM would provide a variety of 
businesses with opportunities to participate in the auction of licenses 
for these bands, and afford licensees substantial flexibility for the 
provision of services with varying capital costs. However, the 
Commission recognizes that the capital costs of operational facilities 
in the 1710-1755 MHz and 2110-2155 MHz bands may vary widely. Thus, the 
NPRM particularly seeks comment on whether there may be any distinctive 
characteristics to the AWS service or these bands that suggest that the 
adoption of small business size definitions and the use of bidding 
credits would be inappropriate in this instance. Further, in paragraph 
80, the Commission seeks comment on whether the small business 
provisions proposed in the NPRM are sufficient to promote participation 
by businesses owned by minorities and women, as well as rural telephone 
companies and small entities.

[[Page 78215]]

    48. The NPRM invites comment on various alternative licensing and 
service rules and on a number of issues relating to how the Commission 
should craft service rules for this spectrum, that could have an impact 
on small entities. For example, the Commission seeks comment on the 
size of spectrum blocks for these frequencies and how the size of 
spectrum blocks would impact small entities. (Paragraphs 26-32 of the 
NPRM.) The NPRM also proposes a geographic area approach to service 
areas, as opposed to a station-defined licensing approach, and seeks 
comment on the appropriate size of service areas. Specifically, the 
NPRM asks for comment on whether smaller geographic areas would better 
serve the needs of small entities. As explained in paragraph 20 of the 
NPRM, the Commission's approach to determining optimum geographic area 
license size(s) attempts to accommodate the likely range of applicant 
desires by balancing efficiency with the policy goal of disseminating 
licenses among a wide variety of applicants. The NPRM notes that the 
Commission wishes to foster service to rural areas and tribal lands, 
and to promote investment in and rapid deployment of new technologies 
and services. The NPRM also notes that small license areas may favor 
smaller entities with regional business plans and no interest in 
providing large-area service. In summary, the NPRM seeks comment on the 
advantages and disadvantages to small entities of a large geographic 
licensing scheme over a small one in terms of impact on rural and small 
entities. (Paragraphs 19-25 of the NPRM.)
    49. The NPRM seeks comment on permitting geographic partitioning 
and spectrum disaggregation. The NPRM notes that geographic 
partitioning and spectrum disaggregation is a tool utilized by the 
Commission to promote efficient spectrum use and economic opportunity 
for a wide variety of applicants, including small business, rural 
telephone, minority-owned, and women-owned applicants. (Paragraphs 50-
51 of the NPRM.) The NPRM seeks comment on the benefits and costs of 
partitioning and disaggregation, and whether it promotes the public 
interest. Finally, the NPRM, in paragraphs 40-42, seeks comment on 
whether any band-specific limits on spectrum aggregation are necessary 
or appropriate in this case, and how this would impact the marketplace, 
including small entities.
    50. The regulatory burdens proposed in the NPRM, such as filing 
applications on appropriate forms, appear necessary in order to ensure 
that the public receives the benefits of innovative new services, or 
enhanced existing services, in a prompt and efficient manner. The 
Commission will continue to examine alternatives in the future with the 
objectives of eliminating unnecessary regulations and minimizing any 
significant economic impact on small entities. The Commission invites 
comment on any additional significant alternatives parties believe 
should be considered and on how the approach outlined in the NPRM will 
impact small entities, including small businesses and small government 
entities.

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

    51. None.

Ordering Clauses

    52. Therefore, pursuant to sections 1, 2, 4(i), 7, 10, 201, 214, 
301, 302, 303, 307, 308, 309, 310, 319, 324, 332 and 333 of the 
Communications Act of 1934, 47 U.S.C. 151, 152, 154(i), 157, 160, 201, 
214, 301, 302, 303, 307, 308, 309, 310, 319, 324, 332, 333, that this 
Notice of Proposed Rulemaking is adopted.
    53. Additionally, notice is given of the proposed regulatory 
changes described in the NPRM, and that comment is sought on these 
proposals.
    54. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of the NPRM, including 
the Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-32213 Filed 12-20-02; 8:45 am]
BILLING CODE 6712-01-P