[Federal Register Volume 68, Number 76 (Monday, April 21, 2003)]
[Proposed Rules]
[Pages 19486-19490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9681]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 101

[ET Docket No. 98-206; RM-9147; RM-9245; FCC 03-85]


Permit Operation of NGSO FSS Systems Co-Frequency With GSO and 
Terrestrial Systems in the Ku-Band Frequency Range

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document the Commission seeks comment on the 
appropriate service area definition for the Multichannel Video 
Distribution and Data Service (MVDDS) in the 12.2-12.7 GHz band (12 GHz 
band). This action is taken in response to comments received in 
response to a January 30, 2003, auction public notice which sought 
comment on an MVDDS auction based on either CEAs or DMAs. Given that we 
are revisiting the service area definition, we also take this 
opportunity to explore whether the current build out requirement 
sufficiently promotes expeditious deployment of service. By these 
actions, we seek to deploy the new MVDDS in a manner that most 
efficiently and effectively allows for flexible use of the spectrum.

DATES: Comments are due on or before April 28, 2003, and reply comments 
are due on or before May 5, 2003.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., TW-
A325, Washington, DC 20554. See SUPPLEMENTARY INFORMATION for filing 
instructions.

FOR FURTHER INFORMATION CONTACT: Jennifer Burton, Public Safety and 
Private Wireless Division, Wireless

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Telecommunications Bureau at (202) 418-0680, e-mail [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the FCC's Further 
Notice of Proposed Rulemaking, FCC 03-85, adopted on April 10, 2003, 
and released on April 15, 2003. The full text of this document is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, 445 12th Street, SW., Washington, DC 20554. 
The complete text may be purchased from the FCC's copy contractor, 
Qualex International, 445 12th Street, SW., Room CY-B402, Washington, 
DC 20554. The full text may also be downloaded at: www.fcc.gov. 
Alternative formats are available to persons with disabilities by 
contacting Brian Millin at (202) 418-7426 or TTY (202) 418-7365 or at 
[email protected].
    1. In this Second Further Notice of Proposed Rulemaking (NPRM), we 
seek further comment on the appropriate service area definition for the 
Multichannel Video Distribution and Data Service (MVDDS) in the 12.2-
12.7 GHz band (12 GHz band). Specifically, we seek comment on the most 
appropriate service area definition for the geographic licensing of 
MVDDS. We also seek comment on whether Designated Market Areas (DMAs) 
will facilitate delivery of advanced wireless services, such as video 
and data broadband services, to a wide range of populations, including 
those areas that are unserved and underserved. In addition, we seek 
comment on whether we should modify the MVDDS build out requirement as 
a means to foster expeditious deployment of advanced wireless services, 
such as video and data broadband services, to these communities as 
well.

Procedural Matters

Initial Regulatory Flexibility Analysis

    2. As required by section 603 of the Regulatory Flexibility Act, 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the expected impact on small entities of the proposals 
suggested in this document. Below contains the IRFA. We request written 
public comments on the IRFA. In order to fulfill the mandate of the 
Contract with America Advancement Act of 1996 regarding the Final 
Regulatory Flexibility Analysis, we ask a number of questions regarding 
the prevalence of small businesses in the affected industries.
    3. Interested parties must file comments in accordance with the 
same filing deadlines as comments filed in this NPRM, but they must 
have a separate and distinct heading designating them as responses to 
the IRFA. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this NPRM, including the IRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration 
in accordance with section 603(a) of the Regulatory Flexibility Act.

Ex Parte Rules--Permit-But-Disclose Proceedings

    4. This is a permit-but-disclose notice and comment rule making 
proceeding. Our rules permit ex parte presentations, except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's rules. See generally 47 CFR 1.1202, 1.1203, and 1.2306(a).

Comment Dates

    5. Pursuant to Sec. Sec.  1.415 and 1.419 of our rules, interested 
parties may file comments on or before 7 days from the date of 
publication in the Federal Register and reply comments on or before 14 
days from the date of publication in the Federal Register. Comments may 
be filed using the Commission's Electronic Comment Filing System 
(ECFS), http://www.fcc.gov/e-file/ecfs.html, or by filing paper copies.
    6. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, U.S. Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should including the following words in the body of the message, ``get 
form [email protected].
    9. Alternative formats (computer diskette, large print, audio 
cassette and Braille) are available to persons with disabilities by 
contacting Brian Millin at (202) 418-7426, TTY (202) 418-7365 or via e-
mail to [email protected]. This NPRM can also be downloaded at http://www.fcc.gov/wtb.

Further Information

    10. The World Wide Web addresses/URLs that we give here were 
correct at the time this document was prepared but may change over 
time. They are included herein in addition to the

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conventional citations as a convenience to readers. We are unable to 
update these URLs after adoption of this NPRM, and readers may find 
some URLs to be out of date as time progresses. We also advise readers 
that the only definitive text of FCC documents is the one that is 
published in the FCC Record. In case of discrepancy between the 
electronic documents cited here and the FCC Record, the version in the 
FCC Record is definitive.

Initial Regulatory Flexibility Analysis

    11. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on a substantial number of small entities by the 
policies and rules proposed in this Second Further Notice of Proposed 
Rulemaking (NPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM provided in paragraph 124 of 
the item. The Commission will send a copy of this NPRM, including this 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, the NPRM and IRFA (or summaries 
thereof) will be published in the Federal Register.

Need for, and Objectives of, the Proposed Rule

    12. In this NPRM, we revisit the issues of the geographic licensing 
scheme for MVDDS and build-out requirements. In the Second Report and 
Order, the Commission adopted geographic license service areas for 
MVDDS on the basis of Component Economic Areas (CEAs). Based on the 
previously-established record in this proceeding, and on subsequent 
discussions between Commission staff and Nielsen representatives which 
indicate that, although Nielsen remains unable to enter into a formal 
agreement to allow the Commission to use its Designated Market Area 
(DMA) designation for the MVDDS service areas, Nielsen does not object 
to the Commission's use of DMAs in this manner, subject to certain 
parameters. Specifically, in a letter received on March 26, 2003, it 
appears that Nielsen would agree to extend a perpetual, royalty-free 
license to the Commission, without the right to sublicense, to its DMA 
mark and regions, provided that the Commission:

    (i) Agrees, and continues to communicate to prospective MVDDS 
suppliers, that a territorial license from the Commission to supply 
MVDDS does not confer the right to use Nielsen Media Research's DMA 
mark, regions or data, and that such right must be obtained from 
Nielsen Media Research on such terms as may be mutually acceptable 
to Nielsen Media Research and the supplier, in their sole and 
respective discretion, and (ii) does not republish DMA regions or 
data in any statute, regulation or rule or otherwise.

    13. We are concerned that Nielsen's conditions on the use of DMAs 
may unduly limit the business plans and opportunities for MVDDS 
licensees. By its most recent letter, Nielsen makes it clear that it is 
unwilling to consent to allowing the Commission's MVDDS licensees use 
the DMA mark, regions or data in their MVDDS business without an 
individual license from Nielsen. Thus, it does not appear that the 
license Nielsen described would give Commission licensees sufficient 
flexibility to make practical use of the DMA designation in connection 
with their MVDDS operations. Additionally, although the Commission 
could cross-reference DMAs in its rules, Nielsen's limitations may 
interfere with our enforcement flexibility, since Nielsen does not want 
us to ``republish DMA regions or data in any statute, regulation or 
rule or otherwise.'' We seek comment on whether the conditions 
described by Nielsen are so restrictive that use of DMAs would be of 
limited utility to small businesses. We also request comment on the 
potential impact on small business plans if we change the service area 
designation.
    14. Given that we are revisiting the service area definition, we 
also take this opportunity to explore whether the current build out 
requirement sufficiently promotes expeditious deployment of service, 
particularly for those communities that are traditionally unserved or 
underserved. As indicated earlier, the Second R&O establishes a ten-
year build out requirement for the MVDDS licensees based on substantial 
service as a basis for a renewal expectancy. MDS America has expressed 
concern that a ten-year build out period for MVDDS licenses was too 
long given the potential for anti-competitive warehousing of spectrum 
in this service and the great demand for rural broadband service. MDS 
America supports a five-year build out period, a requirement advocated 
by other commenters in this record.
    15. We seek limited comment on the timing of whether a 10-year 
build out requirement is optimal for fostering expeditious delivery of 
advanced wireless services to all communities, in particular 
communities that are traditionally unserved or underserved. In 
addition, we seek comment on whether a shorter build out requirement 
will facilitate more effective deployment of these services as well as 
the appropriate benchmark for a buildout requirement. Finally, we seek 
comment on the potential impact on small business plans if we change 
the build out requirement.
    16. We seek comment on the following issues under consideration in 
this NPRM:
    [sbull] The appropriate service area designation for MVDDS.
    [sbull] The appropriate buildout requirement for MVDDS.

Legal Basis

    17. The proposed action is authorized under the Administrative 
Procedure Act, 5 U.S.C. 553; and sections 1.4(i), 7, 301, 303, 308 and 
309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 
157, 301, 303, 308 and 309(j).

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    18. 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 rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
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 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).
    19. Small Multichannel Video Programming Distributors (MVPDs). SBA 
has developed a definition of small entities for cable, which includes 
all such companies generating $11 million or less in annual receipts. 
This definition includes cable system operators and DBS services. 
According to the Census Bureau data from 1992, there were 1,758 total 
cable and other pay television services and 1,423 had less than $11 
million in revenue. We address below each service individually to 
provide a more precise estimate of small entities.
    20. Cable Services. The Commission has developed, with SBA's 
approval, our own definition of a small cable system operator for the 
purposes of rate regulation. Under the Commission's rules, a ``small 
cable company'' is one serving 400,000 or fewer subscribers nationwide. 
We last estimated that there

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were 1439 cable operators that qualified as small cable companies. 
Since then, some of those companies may have grown to serve over 
400,000 subscribers, and others may have been involved in transactions 
that caused them to be combined with other cable operators. 
Consequently, using this definition, we estimate that there are fewer 
than 1439 small entity cable system operators that may be affected by 
the decisions and rules adopted in the Second Report and Order.
    21. The Communications Act defines a small cable system operator as 
``a cable operator that, directly or through an affiliate, serves in 
the aggregate fewer than one percent of all subscribers in the United 
States and is not affiliated with any entity or entities whose gross 
annual revenues in the aggregate exceed $250,000,000.'' The Commission 
has determined that there are 61,700,000 subscribers in the United 
States. Therefore, an operator serving fewer than 617,000 subscribers 
shall be deemed a small operator under the Communications Act 
definition, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 617,000 subscribers or less totals approximately 
1450. Although it seems certain that some of these cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250,000,000, we are unable at this time to estimate with 
greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.
    22. DBS Service. Because DBS provides subscription services, DBS 
falls within the SBA definition of Cable Networks (NAIC 513210) and 
Cable and Other Program Distribution (NAIC 513220). This definition 
provides that a small entity is expressed as one with $11 million or 
less in annual receipts. The operational licensees of DBS services in 
the United States are governed by part 100 of the Commission's Rules. 
The Commission, however, does not collect annual revenue data for DBS 
and, therefore, is unable to ascertain the number of small DBS 
licensees meeting this definition that could be impacted by these 
rules. DBS service requires a great investment of capital for 
operation, and we acknowledge that there are entrants in this field 
that may not yet have generated $11 million in annual receipts, and 
therefore may be categorized as a small business by the SBA, if 
independently owned and operated.
    23. Auxiliary, Special Broadcast and other program distribution 
services. This service involves a variety of transmitters, generally 
used to relay broadcast programming to the public (through translator 
and booster stations) or within the program distribution chain (from a 
remote news gathering unit back to the station). The Commission has not 
developed a definition of small entities applicable to broadcast 
auxiliary licensees. Therefore, the applicable definition of small 
entity is the definition under the SBA rules applicable to radio 
networks (NAICS 513111), radio stations (NAICS 513112), and television 
broadcasting (NAICS 513120). These definitions provide, respectively, 
that a small entity is one with either $5 million or less in annual 
receipts or $10.5 million in annual receipts. The numbers of these 
stations are very small. The Commission does not collect financial 
information on these auxiliary broadcast facilities. We continue to 
believe, however, that most, if not all, of these auxiliary facilities 
could be classified as small businesses by themselves. We also 
recognize that most of these types of services are owned by a parent 
station which, in some cases, would be covered by the revenue 
definition of small business entity discussed above. These stations 
would likely have annual revenues that exceed the SBA maximum to be 
designated as a small business (as noted, either $5 million for a radio 
station or $10.5 million for a TV station). Furthermore, they do not 
meet the SBA's definition of a ``small business concern'' because they 
are not independently owned and operated.
    24. Private Operational Fixed Service. Incumbent microwave services 
in the 12.2-12.7 GHz bands include common carrier, private operational 
fixed (POF), and BAS services. Presently, there are approximately 
22,015 common carrier licensees, and approximately 61,670 POF licensees 
and broadcast auxiliary radio licensees in the microwave service. 
Inasmuch as the Commission has not yet defined a small business with 
respect to these incumbent microwave services, we utilized the SBA's 
definition applicable to cellular and other wireless telecommunications 
companies (NAICS 513322); i.e., an entity with no more than 1500 
persons. We estimate, for this purpose, that all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition for radiotelephone companies.
    25. The rules set forth in the Second Report and Order will affect 
all entities that intend to provide terrestrial MVDDS operations in the 
12.2-12.7 GHz band. In the Second Report and Order, the Commission 
stated that licensees are permitted to use MVDDS spectrum for, among 
other things, fixed one-way direct-to-home/business video and data 
services.
    26. Additionally, in the Second Report and Order, the Commission 
adopted definitions for three tiers of small businesses for the purpose 
of providing bidding credits to small entities. Specifically, we 
defined the three tiers of small business as: (a) An ``entrepreneur'' 
is an entity with average annual gross revenues not exceeding $40 
million for the preceding three years; (b) a ``small business'' is an 
entity with average annual gross revenues not exceeding $15 million for 
the preceding three years; and (c) a ``very small business'' is an 
entity with average annual gross revenues not exceeding $3 million for 
the preceding three years. We will not know how many auction 
participants or licensees will qualify under these definitions as 
entrepreneurs, small businesses, or very small businesses until an 
auction is held. However, upon reviewing the record in the MVDDS 
proceeding, we assume that, for purposes of our evaluations and 
conclusions in the FRFA, a number of the prospective licensees will be 
entrepreneurs, small businesses, or very small businesses under our 
adopted definitions.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    27. This NPRM imposes no new reporting, recordkeeping or other 
compliance requirements not previously adopted in this proceeding 
Paperwork Reduction Act of 1995, Pub. L. No. 104-13.

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

    28. 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

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coverage of the rule, or any part thereof, for small entities.
    29. With respect to its decision to use CEAs as the basis for the 
MVDDS service, the Commission noted that adopting CEAs would provide 
similar benefits as DMAs but would better promote its objectives and 
address commenters' concerns. Specifically, the Commission premised its 
decision on three factors. First, the smaller CEA service areas would 
better track actual deployment of fixed services. Second, CEAs would 
encourage rapid service deployment to less populated and rural regions 
because they will permit additional opportunities for small businesses 
to provide MVDDS. Third, the use of CEAs would encourage the meaningful 
participation of small businesses better than a nationwide or regional 
geographic licensing approach because the smaller areas would likely 
require a lower minimum investment. Further, the Commission noted that 
for those seeking a regional or national footprint, the use of CEAs 
would not prevent them from aggregating areas to create such larger 
networks.
    30. While we do not prejudge the type of services licensees will 
offer in the 12 GHz band, we nonetheless believe that it is appropriate 
to adopt a service area definition that will afford MVDSS licensees the 
opportunity to provide a wide array of services. Based on the record in 
this proceeding, we believe that utilizing DMAs may be more effective 
in this regard. DMAs, as compared to CEAs, provide a better method to 
delineate television markets based on viewing patterns. Consequently, 
for those MVDDS licensees seeking to provide MVPD service offerings 
involving the retransmission of broadcast programming, the use of DMAs 
could provide additional economic benefits. For example, MVDDS 
licensees with service offerings involving the delivery of television 
programming may find the use of DMAs to be administratively easier due 
to the close nexus between the television viewer market areas as 
determined by the DMA delineation and the proposed use of the service.
    31. As to other uses, including fixed services, we believe that 
DMAs and CEAs are equally advantageous because they are both local in 
nature. While we recognize that CEAs are smaller than DMAs, we continue 
to believe that DMAs, which are county-based, provide a viable option 
in facilitating local access to cable, non-cable, and MVDDS service 
offerings. Consequently, we believe that both DMAs and CEAs would 
encourage rapid service deployment in unserved or underserved areas and 
encourage meaningful participation by small businesses. Additionally, 
entities desiring a national footprint, may aggregate either DMAs or 
CEAs to create such larger networks.

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

    32. None.

Ordering Clauses

    33. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Second Further 
Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration in accordance with section 603(a) of the 
Regulatory Flexibility Act, 5 U.S.C. 603(a).
    34. Pursuant to the authority contained in sections 4, 4(i), 7, 
303, 303(g), 303(r), 307 and 332(c)(7) of the Communications Act of 
1934, as amended, 47 U.S.C. 154, 154(i), 157, 303, 303(g), 303(r), 307, 
this Second Further Notice of Proposed Rulemaking is adopted.

List of Subjects in 47 CFR Part 101

    Communication equipment, Radio, Reporting and recordkeeping 
requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

    For the reasons discussed in the preamble the FCC proposes to amend 
47 CFR part 101 as follows:

PART 101--FIXED MICROWAVE SERVICES

    1. The authority citation for part 101 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303.

    2. Section 101.1401 is revised to read as follows:


Sec.  101.1401  Service areas.

    Multichannel Video Distribution and Data Service (MVDDS) is 
licensed on the basis of Designated Market Areas (DMAs). The 214 DMA 
service areas are based on the 210 Designated Market Areas delineated 
by Nielsen Media Research and published in its pamphlet entitled U.S. 
Television Household Estimates, September 2002, plus four FCC-defined 
DMA-like service areas:
    (a) Alaska--Balance of State (all geographic areas of Alaska not 
included in Nielsen's three DMAs for the state: Anchorage, Fairbanks, 
and Juneau);
    (b) Guam and the Northern Mariana Islands;
    (c) Puerto Rico and the United States Virgin Islands; and
    (d) American Samoa.
    3. Section 101.1421 is amended by revising paragraphs (b) and (c) 
to read as follows:


Sec.  101.1421  Coordination of adjacent area MVDDS stations and 
incumbent public safety POFS stations.

* * * * *
    (b) Harmful interference to public safety stations, co-channel 
MVDDS stations operating in adjacent geographic areas, and stations 
operating on adjacent channels to MVDDS stations is prohibited. In 
areas where the DMAs are in close proximity, careful consideration 
should be given to power requirements and to the location, height, and 
radiation pattern of the transmitting and receiving antennas. Licensees 
are expected to cooperate fully in attempting to resolve problems of 
potential interference before bringing the matter to the attention of 
the Commission.
    (c) Licensees shall coordinate their facilities whenever the 
facilities have optical line-of-sight into other licensees' areas or 
are within the same geographic area. Licensees are encouraged to 
develop operational agreements with relevant licensees in the adjacent 
geographic areas. Incumbent public safety POFS licensee(s) shall retain 
exclusive rights to its channel(s) within the relevant geographical 
areas and must be protected in accordance with the procedures in Sec.  
101.103 of this part. A list of public safety incumbents is attached to 
the released Memorandum Opinion and Order and Second Report and Order, 
Docket 98-206 released May 23, 2002. Please check with the Commission 
for any updates to that list.

[FR Doc. 03-9681 Filed 4-18-03; 8:45 am]
BILLING CODE 6712-01-P