[Federal Register Volume 68, Number 138 (Friday, July 18, 2003)]
[Rules and Regulations]
[Pages 42610-42613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18221]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 101

[ET Docket No. 98-206; RM-9147; RM-9245; FCC 03-152]


Commission's Rules To Permit Operation of NGSO FSS Systems Co-
Frequency With GSO and Terrestrial Systems in the Ku-Band Frequency 
Range

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document we revise our service area definition and 
build out requirement for the Multichannel Video Distribution and Data 
Service (MVDDS) in the 12.2-12.7 GHz band (12 GHz band). Specifically, 
we adopt Designated Market Areas (DMAs) as the service area definition 
for MVDDS. We also conclude that a five-year substantial service build 
out requirement is more appropriate for the MVDDS. We believe that 
these actions will better facilitate the delivery of advanced wireless 
services in the 12 GHz band and promote expeditious deployment of such 
services to a wide range of populations, including unserved and 
underserved communities.

DATES: Effective September 16, 2003.

ADDRESSES: Federal Communications Commission 445 12th Street, SW., TW-
A325, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Jennifer Burton, Public Safety and 
Private Wireless Division, Wireless Telecommunications Bureau at (202) 
418-0680, email [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the FCC's Third Report 
and Order, FCC 03-152, adopted on June 25, 2003, and released on July 
7, 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: http://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 the Third R&O, we revise our service area definition and 
build out requirement for the Multichannel Video Distribution and Data 
Service (MVDDS) in the 12.2-12.7 GHz band (12 GHz band). In the Second 
Further Notice of Proposed Rule Making (Second Further Notice), 68 FR 
19486, (April 21, 2003), in this proceeding, we sought further comment 
on the most appropriate service area definition for the geographic 
licensing of MVDDS. In this connection, we sought comment on whether 
use of the DMAs defined by Nielsen Media Research (Nielsen) 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 sought 
comment on whether we should modify the MVDDS build out requirement as 
a means to foster expeditious deployment of advanced wireless services 
to these communities as well.
    2. Upon consideration of the record in this proceeding, including 
but not limited to the comments filed in response to the Second Further 
Notice, we adopt DMAs as the service area definition for MVDDS. We also 
conclude that a five-year substantial service build out requirement is 
more appropriate for the MVDDS. We believe that these actions will 
facilitate delivery of advanced wireless services in the 12 GHz band 
and promote expeditious deployment of such services to a wide range of 
populations, including unserved and underserved communities.

Procedural Matters

Final Regulatory Flexibility Analysis

    3. The Final Regulatory Flexibility Analysis, required by section 
603 of the Regulatory Flexibility Act, as amended by the Congressional 
Review Act, Public Law No. 104-121 (1996).

Paperwork Reduction Act

    4. The Third R&O contains modified information collection(s) 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under the PRA. OMB, the general public and other Federal 
agencies are invited to comment on the modified information 
collection(s) contained in this proceeding.

Final Regulatory Flexibility Analysis

    5. As required by the Regulatory Flexibility Act (RFA), we 
incorporated an Initial Regulatory Flexibility Analysis (IRFA) in the 
Second Further Notice of Proposed Rule Making. In view of the fact that 
we have adopted a further rule amendment in the Third Report and Order, 
we have included this Final Regulatory Flexibility Analysis (FRFA). 
This present FRFA conforms to the RFA.

Need for, and Objectives of the Third Report and Order

    6. In the Third Report and Order, we revisit the geographic 
licensing plan adopted in the Second Report and Order, 67 FR 63279, 
(October 11, 2002), and adopt a revised licensing framework for MVDDS. 
In the Second Report and Order, the Commission adopted a service area 
definition for MVDDS on the basis of Component Economic Areas (CEAs). 
Based on the previously-established record in this proceeding, 
differing responsive comments to the January 20, 2003 Auction PN 
received from Northpoint Technology, Ltd. (Northpoint) and MDS America 
on the issue of service area designations, and on subsequent 
discussions between Commission staff and Nielsen representatives 
concerning the use of its DMAs, we revisited the service area 
designation. We are persuaded to adopt a service area definition for 
MVDDS on

[[Page 42611]]

the basis of DMAs instead of CEAs. We believe that licensing MVDDS on 
the basis of DMAs may place wireless competitors on the same economic 
footing as cable systems, which generally have a royalty-free statutory 
copyright license to retransmit local television programming within the 
DMA of the station being rebroadcast. In addition, we believe that the 
use of DMAs may be administratively easier for licensees due to the 
close nexus between the television viewer market areas as determined by 
the DMA delineation and the proposed use of the service (the delivery 
of television programming).
    7. We also took the opportunity to explore whether the current 
build out requirement sufficiently promotes expeditious deployment of 
service. We believe that reducing the build out period from ten years 
to five years will ensure effective use of the spectrum and a faster 
deployment of service to the public.

Summary of Significant Issues Raised by Public Comments in Response to 
the FRFA

    8. We received no comments in response to the IRFA in the Second 
Further Notice.

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

    9. 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).
    10. Small Multichannel Video Programming Distributors (MVPDs). The 
SBA has developed a small business size standard for Cable and Other 
Program Distribution, which includes all such companies generating 
$12.5 million or less in annual receipts. According to Census Bureau 
data for 1997, there were a total of 1,311 firms in this category, 
total, that had operated for the entire year. Of this total, 1,180 
firms had annual receipts of under $10 million and an additional 52 
firms had receipts of $10 million or more but less than $25 million. 
Consequently, we estimate that the majority of providers in this 
service category are small businesses that may be affected by the rules 
and policies adopted herein. We address below each service individually 
to provide a more precise estimate of small entities.
    11. Cable Services. The Commission has developed, with SBA's 
approval, a 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. 
In 1996, the Commission estimated that 1,439 cable operators 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 merge with other cable 
operators. Consequently, using this definition, we estimate that the 
decisions and rules may affect fewer than 1,439 small entity cable 
system operators.
    12. The Communications Act defines a small cable system operator as 
``a cable operator that, directly or through an affiliate, serves in 
the aggregate less 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, we deem an operator serving fewer than 617,000 
subscribers to be 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 
1,450. 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.
    13. DBS Service. DBS falls within the SBA definition of Cable and 
Other Program Distribution (NAICS 513220). As noted, this definition 
provides that a small entity has $12.5 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.
    14. 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 
stations (NAICS 513112), and television broadcasting (NAICS 513120). 
These definitions provide, respectively, that a small entity is one 
with either $6 million or less in annual receipts or $12 million in 
annual receipts. The numbers of these stations are very small. The 
Commission does not collect financial information on these auxiliary 
broadcast facilities. The Commission, however, continues to believe 
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 $6 million for a radio station or $12 
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.
    15. Private Operational Fixed Service. Incumbent microwave services 
in the 12.2-12.7 GHz bands include common carrier, private operational 
fixed (POF), and broadcast auxiliary service (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

[[Page 42612]]

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 1,500 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.
    16. The rules set forth in the Third Report and Order will affect 
all entities that intend to provide terrestrial MVDDS operations in the 
12.2-12.7 GHz band.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    17. The Third Report and Order modifies the reporting, 
recordkeeping or other compliance requirements previously adopted in 
this proceeding. We are changing the service area designation from CEAs 
to DMAs, resulting in a change in the number and definition of the 
service areas. In addition, we are changing the build out period from 
ten years to five years, resulting in compliance with these rules in 
half the time. However, we believe that these rule changes will not 
have a burdensome result, especially in light of our finding that small 
businesses will benefit from the new service area designation and 
because the record indicates that interested parties will have no 
difficulty complying with the new five year build out.

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

    18. 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.
    19. Regarding our revisiting the service area issue to utilize DMAs 
in the Third Report and Order in lieu of the CEA service area 
designation adopted in the Second Report and Order, we do not 
anticipate any adverse impact on small entities. We believe that the 
use of DMAs better comports with the proposed service and that this 
decision will place wireless competitors to cable services on the same 
economic footing as cable systems, which generally have a royalty-free 
statutory copyright license to retransmit local TV programming within 
the DMA of the station being rebroadcast.
    20. We also revisited the build out requirement to establish a 
five-year construction period in the Third Report and Order, in lieu of 
the ten-year construction period established in the Second Report and 
Order. We do not anticipate any adverse impact on small entities. We 
determined that the revised time frame was necessary in order to 
promote timely service to the public, and that those interested in 
providing service will have ample time to modify their business plans 
prior to a competitive bidding procedure.

Report to Congress

    21. The Commission will send a copy of the Third Report and Order, 
including this FRFA, in a report to Congress pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of the Third Report and Order, including this FRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration.

Ordering Clauses

    22. Pursuant to the authority contained in sections 4(i), 7(a), 
301, 303(c), 303(f), 303(g), 303(r), 308, and 309(j) of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 157(a), 301, 
303(c), 303(f), 303(g), 303(r), 308, 309(j), the Third Report and Order 
is adopted.
    23. Part 101 of the Commission's Rules is amended as specified in 
rule changes, effective September 16, 2003. This action is taken 
pursuant to sections 4(i), 303(c), 303(f), 303(g), 303(r), and 309(j) 
of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 
303(c), 303(f), 303(g), 303(r) and 309(j).

List of Subjects in 47 CFR Part 101

    FCC equipment, Radio, Reporting and recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble the FCC amends 47 CFR part 
101 as follows:

PART 101--FIXED MICROWAVE SERVICES

0
1. The authority citation for part 101 continues to read as follows:

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


0
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 publication 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.

0
3. Section 101.1413 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  101.1413  License term and renewal expectancy.

* * * * *
    (b) Application of a renewal expectancy is based on a showing of 
substantial service at the end of five years into the license period 
and ten years into the license period. The substantial service 
requirement is defined as a service that is sound, favorable, and 
substantially above a level of mediocre service which might minimally 
warrant renewal. At the end of five years into the license term and ten 
years into the license period, the Commission will consider factors 
such as:
* * * * *

0
4. 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

[[Page 42613]]

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 as 
Appendix I to the 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. 03-18221 Filed 7-17-03; 8:45 am]
BILLING CODE 6712-01-P