[Federal Register Volume 72, Number 147 (Wednesday, August 1, 2007)]
[Rules and Regulations]
[Pages 41935-41937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14768]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 00-230; FCC 07-52]


Promoting Efficient Use of Spectrum Through Elimination of 
Barriers to the Development of Secondary Markets

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification.

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SUMMARY: In this document, the Federal Communications Commission 
(``Commission'') determines that, at this time, no further revisions 
are necessary with regard to the existing policies and rules relating 
to secondary markets in radio spectrum usage rights.

DATES: Effective August 1, 2007.

FOR FURTHER INFORMATION CONTACT: Paul Murray, Wireless 
Telecommunications Bureau, at (202) 418-7240, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Report and Order (hereinafter Third Report and Order) in WT Docket No. 
00-230, adopted on April 6, 2007, and released on April 11, 2007. This 
order addresses comments filed in response to the Commission's Second 
Further Notice of Proposed Rulemaking (Second Further Notice) 69 FR 
77560, December 27, 2004, in this docket. The full text of this 
document is available for inspection and copying during normal business 
hours in the FCC Reference Information Center, Portals II, 445 12th 
Street, SW., Room CY-A257, Washington, DC 20554. The complete text may 
be purchased from the FCC's copy contractor, Best Copy & Printing, 
Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, 
telephone (800) 378-3160 or 863-2893, facsimile (202) 863-2898, or via 
e-mail at http://www.bcpiweb.com. The full text is also available on 
the Commission's Web site at http://www.fcc.gov.

Paperwork Reduction Act

    This Third Report and Order does not contain any new or modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. Therefore, it does not contain 
any new or modified ``information collection burden for small business 
concerns with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

[[Page 41936]]

Synopsis of the Third Report and Order

I. Introduction

    1. In the Third Report and Order, the Commission affirms the 
Commission's policies and rules regarding ``private commons'' 
arrangements. We decline to adopt additional technical requirements 
regarding devices that might be used within a private commons, finding 
that such requirements are both premature and unnecessary. In addition, 
we determine that the proposal for licensing underutilized spectrum to 
equipment manufacturers for development of private commons is beyond 
the scope of this proceeding.

II. Background

    2. In the Second Report and Order portion of the Second Report and 
Order, Order on Reconsideration, and Second Further Notice of Proposed 
Rulemaking in WT Docket No. 00-230, (Second Report and Order, Order on 
Recon, and Second Further Notice, respectively), the Commission took 
additional steps to facilitate the development of robust secondary 
markets in spectrum usage rights involving Wireless Radio Services. In 
particular, in the Second Report and Order, 69 FR 77521, December 27, 
2004, the Commission established additional policies intended to 
facilitate the use of advanced technologies, including ``smart'' or 
``opportunistic'' devices, which have the potential to increase access 
and use of unused licensed spectrum. First, the Commission clarified 
that its spectrum leasing rules permit ``dynamic'' spectrum leasing 
arrangements, whereby licensees and spectrum lessees may enter into 
more than one spectrum leasing arrangement involving the shared use of 
the same spectrum. Second, the Commission expanded the spectrum 
licensing framework to include a new ``private commons'' option. The 
``private commons'' was intended as a means of allowing a licensee or 
spectrum lessee to make spectrum available to individual users or 
groups of users that do not fit squarely within the existing spectrum 
leasing framework or within the traditional end-user arrangements 
associated with the licensee's or lessee's network infrastructure. The 
Commission stated that it sought to provide for opportunistic uses of 
spectrum pursuant to the terms and conditions that licensees (and 
spectrum lessees) agree upon so long as these terms and conditions fall 
within the licensee's spectrum usage rights and are not inconsistent 
with applicable technical and other regulations imposed by the 
Commission to prevent harmful interference to other licensees.
    3. By establishing a private commons a licensee (or spectrum 
lessee) may permit peer-to-peer communications by other users employing 
devices in a non-hierarchical network arrangement that does not utilize 
the licensee's (or spectrum lessee's) network infrastructure. The 
licensee (or lessee) authorizes other users to operate on the licensed 
frequencies employing particular devices that meet technical parameters 
specified by the licensee (or lessee). The technical parameters for 
these devices, in turn, enable users to operate in a manner designed to 
minimize interference concerns relating to other users in the licensed 
band. The Commission stated that the licensee (or lessee) must retain 
both de facto control of the use of the spectrum within the private 
commons and ``direct responsibility'' for the users' compliance with 
the Commission's rules. Further, as manager of the private commons, the 
licensee (or lessee) is required to notify the Commission about the 
private commons, and particular features associated with it, prior to 
permitting users to operate. Requirements pertaining to private commons 
arrangements are set forth in Sec.  1.9080 of the Commission's rules.
    4. In the Second Further Notice, the Commission sought comment on 
additional policies that could facilitate the development of advanced 
technologies, including whether additional revisions should be made to 
the private commons regulatory model. The Commission also sought 
comment on whether the private commons option established in the Second 
Report and Order sufficiently accommodates the wide variety of ways in 
which licensees (and spectrum lessees) and other users may wish to 
enter cooperative arrangements that employ ``smart'' or 
``opportunistic'' devices. For example, the Commission asked whether it 
should adopt an approach to private commons that would allow 
intermediaries to facilitate transactions with users, design and set up 
communications networks for users or provide value-added services or 
applications. In addition, the Commission sought comment on the 
appropriate notification process for licensees or de facto transfer 
lessees that choose to offer a private commons to comply with the 
requirement that a licensee or spectrum lessee managing the private 
commons must notify the Commission prior to permitting users to begin 
operating within the private commons.
    5. In response to the Second Further Notice, the Commission 
received comments from Cingular Wireless LLC (Cingular Wireless), 
CTIA--The Wireless Association (CTIA), and Gateway Communications, Inc. 
(Gateway). Cingular Wireless and CTIA sought clarification of certain 
aspects of the requirements pertaining to the licensee's or spectrum 
lessee's responsibility, as manager of the private commons, to ensure 
that users and devices used in a private commons arrangement comply 
with applicable Commission rules. Gateway proposed a new scheme for 
managing a private commons in cases of ``market failure.''
    6. Cingular Wireless specifically asked for additional 
clarification regarding the circumstances under which the Commission 
would hold, and would not hold, the licensee (or lessee) ``directly 
responsible'' for users' interference in geographic areas outside of 
the private commons, in which they were not authorized to operate. For 
example, in the case of mobile opportunistic devices, Cingular Wireless 
argued that the Commission should evaluate a licensee's (or lessee's) 
compliance with its responsibilities based on the terms and conditions 
it establishes for operation within the private commons, and that non-
compliance with these provisions should not result in liability to the 
licensee (or lessee). In addition, while agreeing that it may be 
``beneficial or even necessary'' to require that smart devices used in 
the private commons include technologies enabling the private commons 
managers to shut down the devices if they were causing harmful 
interference, Cingular Wireless argued that imposing such a requirement 
at this time would be premature.
    7. CTIA urged the Commission to adopt more detailed technical 
standards concerning private commons arrangements. Specifically, to 
ensure that a private commons device cannot be used outside of the 
licensed spectrum and geographic area of the licensee (or lessee) 
authorizing the use of its spectrum, CTIA recommended adoption of 
strict rules and suggested that any private commons device should 
contain an element of positive control, in the form of technical 
intelligence, that prevents it from operating in unauthorized spectrum 
or areas.
    8. In response to the Second Further Notice, Gateway proposed that 
the Commission go beyond its secondary markets mechanisms and allow 
equipment manufacturers to file applications for authority to manage 
private commons using licensed

[[Page 41937]]

spectrum in geographic areas where there has been a ``market failure'' 
and spectrum is ``unwanted'' or ``underutilized.'' Gateway suggested 
that the Commission could issue licenses to equipment manufacturers in 
exchange for a reasonable one-time payment to the United States 
treasury, or for a modest spectrum use fee payable on an annual basis 
to the Commission, or even at no charge, but did not suggest how the 
Commission would decide among competing parties who might seek to 
obtain any such license. Gateway asserted that this new licensing 
mechanism of offering spectrum to equipment manufacturers would create 
new opportunities for small businesses and others to obtain access to 
spectrum for a variety of niche uses and services.
    9. In reply comments, CTIA asserted that the Commission should 
reject Gateway's proposal as outside of the scope of the Commission's 
Second Further Notice, which sought comment only on the use of 
opportunistic devices in licensed spectrum, not comment on new ways to 
give an interested party an initial spectrum license for a private 
commons. Accordingly, the Commission cannot consider Gateway's proposal 
in this proceeding because doing so would violate the requirement for 
adequate notice under the Administrative Procedures Act (APA). CTIA 
further asserted that the proposal would create a new licensing scheme 
in violation of the requirements under section 309(j) of the 
Communications Act, as amended, which requires that the spectrum be 
subject to competitive bidding.

III. Third Report and Order

    10. We determine that the requirements set forth in the Second 
Report and Order and codified in our rules, 47 CFR 1.9080, provide the 
right balance in encouraging the development of devices for operation 
within a private commons arrangement while at the same time placing the 
appropriate degree of responsibility on licensees (or spectrum lessees) 
to ensure that the users and devices do not cause harmful interference 
in areas outside of the private commons and the license authorization. 
Accordingly, we affirm the general policies and rules the Commission 
adopted for private commons, including the requirement that licensees 
(or spectrum lessees) retain both de facto control over use of the 
spectrum and direct responsibility for ensuring that users and the 
devices used within the private commons comply with the Commission 
technical and services rules under the license authorization, including 
those relating to interference. Because the licensees (or lessees) 
themselves, in their capacity as managers of private commons, exercise 
control under the license authorization and are responsible for 
establishing the technical parameters of the devices that would be used 
within the private commons, they must exercise their responsibilities 
so as to ensure compliance with the rules, including bearing direct 
responsibility for establishing parameters of use that prevent harmful 
interference beyond the private commons areas and the boundaries of 
their licenses.
    11. Based on the scant record before us and the wide variety of 
ways in which a private commons could be implemented, we decline to 
modify our rules at this time to further detail the responsibilities 
placed on the managers of private commons. We are in no position, based 
on what is before us, to make any determination by rule, as Cingular 
Wireless requests, as to whether a particular mechanism may or may not 
be sufficient for a licensee (or spectrum lessee) to exercise its 
responsibilities in a given instance. Nor do we conclude that 
establishing strict technical rules or requirements, as requested by 
CTIA, is appropriate. We do not want to limit at this time the various 
means by which a licensee (or lessee) might fulfill its obligations as 
manager of a private commons. While a ``shut down'' mechanism may be 
effective, it is not the only conceivable means to ensure that a 
licensee (or lessee) exercises de facto control over the use of the 
spectrum and complies with the Commission's rules under the license 
authorization. We see no need at this time to limit other possible 
means that might be consistent with the Commission's private commons 
framework.
    12. Finally, because Gateway's proposal is outside the scope of the 
Second Further Notice, and not a logical outgrowth of it, we will not 
address it in this proceeding. The Second Further Notice sought comment 
on ways to increase spectrum access through opportunistic uses of 
spectrum specifically within the context of the Commission's spectrum 
leasing policies and rules set forth in the proceeding addressing the 
development of secondary markets. The Second Further Notice did not 
contemplate revising the Commission's initial licensing rules. We note 
that the opportunities that Gateway sees for new uses of spectrum also 
exist within the private commons framework that the Commission has 
established in the Second Report and Order.

IV. Ordering Clauses

    13. Pursuant to sections 1, 4(i), 301, 303(r), and 503 of the 
Communications Act, as amended, 47 U.S.C. 151, 154(i), 301, 303(r), and 
503, it is ordered that this Third Report and Order is adopted. The 
Commission's Consumer Information Bureau, Reference Information Center, 
shall send a copy of the Third Report and Order, including the 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
 [FR Doc. E7-14768 Filed 7-31-07; 8:45 am]
BILLING CODE 6712-01-P