[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Rules and Regulations]
[Pages 26199-26220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10223]



[[Page 26199]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 20

[WT Docket No. 05-265; FCC 11-52]


Reexamination of Roaming Obligations of Commercial Mobile Radio 
Service Providers and Other Providers of Mobile Data Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC) 
adopts a rule that requires facilities-based providers of commercial 
mobile data services to offer data roaming arrangements to other such 
providers on commercially reasonable terms and conditions, subject to 
certain limitations, thereby advancing the Commission's goal of 
ensuring that all Americans have access to competitive broadband mobile 
data services.

DATES: Effective June 6, 2011, except for Sec.  20.12(e)(2) which 
contains information collection requirements that have not been 
approved by the Office of Management and Budget (OMB). The Commission 
will publish a document in the Federal Register announcing the 
effective date of this amendment.

FOR FURTHER INFORMATION CONTACT: Peter Trachtenberg, Wireless 
Telecommunications Bureau, (202) 418-7369, e-mail 
[email protected]. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, send an e-mail to [email protected] or contact Judith B. 
Herman at 202-418-0214 or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Report and Order in WT Docket No. 05-265; FCC 11-52, adopted April 7, 
2011, and released on April 7, 2011. The full text of the Second Report 
and Order is available for public inspection and copying during 
business hours in the FCC Reference Information Center, Portals II, 445 
12th Street, SW., Room CY-A257, Washington, DC 20554. It also may be 
purchased from the Commission's duplicating contractor at Portals II, 
445 12th Street, SW., Room CY-B402, Washington, DC 20554; the 
contractor's Web site, http://www.bcpiweb.com; or by calling (800) 378-
3160, facsimile (202) 488-5563, or e-mail [email protected]. Copies of 
the public notice also may be obtained via the Commission's Electronic 
Comment Filing System (ECFS) by entering the docket number WT Docket 
No. 05-265. Additionally, the complete item is available on the Federal 
Communications Commission's Web site at http://www.fcc.gov.

Synopsis of the Second Report and Order

I. Introduction

    1. In this Second Report and Order (Second R&O), the Commission 
promotes consumer access to nationwide mobile broadband service by 
adopting a rule that requires facilities-based providers of commercial 
mobile data services to offer data roaming arrangements to other such 
providers on commercially reasonable terms and conditions, subject to 
certain limitations. Widespread availability of data roaming capability 
will allow consumers with mobile data plans to remain connected when 
they travel outside their own provider's network coverage areas by 
using another provider's network, and thus promote connectivity for and 
nationwide access to mobile data services such as e-mail and wireless 
broadband Internet access. The rule the Commission adopts today also 
serves the public interest by promoting investment in and deployment of 
mobile broadband networks, consistent with the recommendations of the 
National Broadband Plan. The deployment of mobile data networks is 
essential to achieve the goal of making broadband connectivity 
available everywhere in the United States, and the availability of data 
roaming will help ensure the viability of new wireless data network 
deployments and thus promote the development of competitive facilities-
based service offerings for the benefit of consumers. Today's actions 
will therefore advance the Commission's goal of ensuring that all 
Americans have access to competitive broadband mobile data services.
    2. The Commission adopts the data roaming rule based on its 
authority under the Act, including several provisions of Title III, 
which provides the Commission with authority to manage spectrum and 
establish and modify license and spectrum usage conditions in the 
public interest. This rule will apply to all facilities-based providers 
of commercial mobile data services regardless of whether these entities 
are also providers of commercial mobile radio service (CMRS). To 
resolve disputes arising pursuant to the rule the Commission adopts 
here, the Commission provides that parties may file a petition for 
declaratory ruling under Section 1.2 of the Commission's rules or file 
a formal or informal complaint under the rule established herein 
depending on the circumstances specific to each dispute. Also, in order 
to facilitate the negotiation of data roaming arrangements, the 
Commission provides guidance on factors that the Commission could 
consider when evaluating any data roaming disputes that might be 
brought before the agency.

II. Discussion

A. The Public Interest in a Data Roaming Rule

    3. After carefully considering the arguments in the record, the 
Commission concludes that it will serve the public interest to adopt a 
data roaming rule. Specifically, the Commission requires providers of 
commercial mobile data services to offer data roaming arrangements on 
commercially reasonable terms and conditions, subject to specified 
limitations as set forth below, pursuant to the Commission's authority 
under the Communications Act. The Commission concludes that adopting a 
roaming rule tailored for mobile data services will best promote 
consumer access to seamless mobile data coverage nationwide, 
appropriately balance the incentives for new entrants and incumbent 
providers to invest in and deploy advanced networks across the country, 
and foster competition among multiple providers in the industry, 
consistent with the National Broadband Plan. Broadband deployment is a 
key priority for the Commission, and the deployment of commercial 
mobile data networks will be essential to achieve the goal of making 
broadband connectivity available everywhere in the United States. As 
discussed above, the Commission's determination to adopt a commercial 
mobile data roaming rule is supported by the overwhelming majority of 
commenters and evidence in the record.
    4. Commercial mobile data services provided over advanced mobile 
broadband technologies have become an increasingly significant part of 
the lives of American consumers and the shape of the mobile industry. 
Mobile data services increasingly are used for a variety of both 
personal and business purposes, including back-up communications during 
emergencies and for accessibility. Data traffic has risen sharply over 
the past few years as a result of the increased adoption of smartphones 
combined with increased data consumption per device. The Commission's 
data roaming rule will maximize consumers' ability to use and

[[Page 26200]]

benefit from wireless broadband data services wherever they are by 
enhancing the ability of all facilities-based providers, including 
small and regional providers, to provide nearly nationwide data 
coverage through roaming arrangements.
    5. As data services increasingly become the focus of the mobile 
wireless services, consumers increasingly expect their providers to 
offer competitive broadband data services, and the availability of data 
roaming arrangements can be critical to providers remaining competitive 
in the mobile services marketplace. The Commission agrees that the 
availability of roaming capabilities is and will continue to be a 
critical component to enable consumers to have a competitive choice of 
facilities-based providers offering nationwide access to commercial 
mobile data services. As more and more consumers use mobile devices to 
access a wide array of both personal and business services, they have 
become more reliant on their devices. These consumers expect to be able 
to have access to the full range of services available on their devices 
wherever they go. Providers with local or regional service areas need 
roaming arrangements to offer nationwide coverage, and there may be 
areas where building another network may be economically infeasible or 
unrealistic. Even where providers have invested in and built out 
broadband networks in a regional service territory, a service 
provider's inability to offer roaming easily can deter customers from 
subscribing. For example, Cincinnati Bell represents that ``[d]ue to 
the limited availability of nationwide roaming partners for 3G and 4G 
services, [it] is seeing a steady defection of its customers to the 
national carriers even though Cincinnati Bell offers a superior network 
in its operating area.'' Availability of such roaming arrangements also 
may be particularly important for consumers in rural areas--where 
mobile data services may be solely available from small rural 
providers. According to BendBroadband, its mobile broadband product is 
``not commercially viable for most consumers primarily because we 
cannot offer mobility outside of our service area, due to our inability 
to secure reasonable rates and terms for data roaming.'' A data roaming 
requirement will therefore help to ensure that, as consumers become 
increasingly reliant on wireless devices, continuity of spectrum-based 
services is preserved across networks and geographic regions.
    6. The Commission also concludes that the data roaming rule that 
the Commission adopts today will encourage investment in and deployment 
of broadband networks by multiple service providers, including large 
nationwide providers, regional providers, and small providers. Given 
that mobile broadband networks, particularly ``fourth-generation'' 
networks, are still at an early stage of development, significant 
network investment and deployment will also be critical to nationwide 
broadband access and for the promotion of competitive choice in 
broadband services. This data roaming rule will promote mobile 
broadband network deployment, investment, and competition, consistent 
with the goals of the National Broadband Plan, by helping to ensure the 
viability of new data network deployments.
    7. The Commission is persuaded by the evidence that roaming 
arrangements help encourage investment by ensuring that providers 
wanting to invest in their networks can offer subscribers a competitive 
level of mobile network coverage. Roaming arrangements can help provide 
greater assurance to service providers that, if they make the 
investment to expand or upgrade their facilities, they will be able to 
offer competitive service options to their customers through a 
combination of local or regional facilities-based service and roaming 
arrangements. Sprint and T-Mobile state that data roaming arrangements 
will allow service providers to compete more effectively and thus 
greater certainty in access to such arrangements will give them ``the 
resources and the confidence to continue to invest in their businesses, 
including in the construction of new network infrastructure.'' 
SouthernLINC explains that ``when carriers are considering whether to 
invest in the deployment of new technologies and services, the 
availability of data roaming assures the carriers that they will be 
able to meet customers' expectations of seamless connectivity for these 
services. This in turn provides carriers with the certainty they need 
to move forward with these much-needed investments.'' NTELOS reports 
that its roaming agreement with Sprint led to its ability to upgrade 
virtually its entire network to EV-DO Revision A. Clearwire asserts 
that a data roaming obligation supports long-term facilities-based 
entry into new markets, and that once providers enter into new markets 
they will continue to build out networks to contain business costs 
associated with roaming. Further, as argued by several commenters 
representing rural providers--Blooston Rural Carriers, OPASTCO and 
NTCA, RCA, and RTG--the lack of roaming for commercial mobile wireless 
services may deter providers from investing in broadband at the exact 
time such investment is sorely needed. The Chief Financial Officer of 
regional provider Cellular South, for example, states that ``investment 
banks and other sources of investment capital are likely to make the 
judgment that a small rural or regional carrier that cannot obtain data 
roaming agreements with the large national carriers will find it more 
difficult to attract and retain customers'' and that ``[s]uch a 
judgment would lead to the withholding of investment capital which, in 
turn, would hamstring the carrier's efforts to deploy advanced 
broadband infrastructure.'' MetroPCS contends that in order to ensure 
that smaller, rural and mid-tier carriers invest now in LTE, they need 
to know that they will have access to LTE roaming once they have 
upgraded.
    8. The availability of roaming arrangements can also provide 
additional incentives to enter a market by allowing network providers 
without a presence in an area a competitive level of local coverage 
during the early period of investment and buildout. The Commission 
finds that encouraging new entry and local or regional deployments 
serves the public interest, given that such network deployments, 
particularly when these deployments are coupled with roaming 
availability beyond the network service area, would provide consumers 
with greater competitive choices in mobile broadband. Previously, the 
Commission found that lack of roaming can constitute a significant 
hurdle to new competition and can delay or deter entry into a market 
because a provider seeking to provide service in a new geographic area, 
without the ability to supplement its networks with roaming and whose 
initial facilities would necessarily be limited, would be required to 
compete with incumbents that had been developing and expanding their 
networks for many years.
    9. The record in this proceeding supports these findings. Bright 
House Networks, for example, contends that a data roaming requirement 
would remove a barrier to entry and a Senior Vice President of the 
company states that such a requirement would be key to Bright House 
investing more. T-Mobile notes that the ability to roam has enabled the 
company to ``build a facilities-based footprint over time as its 
customer base grows,'' and asserts that a roaming rule will enable it 
to ``invest in new facilities in smaller markets that

[[Page 26201]]

would not be economical to build out unless T-Mobile could use roaming 
to serve the adjacent more sparsely populated areas,'' and thus promote 
rural investment. In addition, according to US Cellular, new wireless 
providers entering the wireless marketplace today face far more 
daunting prospects than did their predecessors of decades ago unless 
they can offer their customers both voice and data roaming on a 
seamless nationwide basis. SkyTerra (now LightSquared) states that the 
absence of a data roaming obligation can discourage service providers 
from entering the market and building upon existing networks. SkyTerra 
further states that without a data roaming obligation, its potential 
customers would likely be discouraged from purchasing terrestrial-based 
services from SkyTerra, especially in the initial stages of SkyTerra's 
network build out.
    10. Accordingly, the Commission finds that availability of roaming 
arrangements helps provide consumers with greater competitive choices 
in mobile broadband by encouraging investment and network deployments 
and ensuring that providers wanting to invest in their networks or to 
enter into a new market can offer subscribers a competitive level of 
mobile network coverage and service. By removing barriers to customer 
acquisition by providers in smaller or remote areas, the rule the 
Commission adopts today will encourage greater use of spectrum and 
additional sustainable investment in broadband networks serving these 
areas.
    11. The Commission finds the roaming rule that the Commission 
adopts, discussed in greater detail below, also will provide incentives 
for host providers to invest and deploy advanced data networks, and 
avoid potential disincentives for those providers to invest. The 
Commission agrees with AT&T and Verizon Wireless that there are pro-
competitive benefits that flow from providers differentiating 
themselves on the basis of coverage in their licensed service areas, 
including in rural and remote areas. The Commission finds that the 
terms and scope of the roaming rule that the Commission adopts will 
protect these benefits, maintain incentives for host providers to 
invest and deploy advanced data networks, and avoid potential 
disincentives for those providers to invest. First, host providers will 
be paid for providing data roaming service, and the Commission adopts a 
general requirement of commercial reasonableness for all roaming terms 
and conditions, including rates, rather than a more specific 
prescriptive regulation of rates requested by some commenters. This 
will give host providers appropriate discretion in the structure and 
level of such rates that they offer. As the Commission found in the 
Order on Reconsideration, ``the relatively high price of roaming 
compared to providing facilities-based service will often be sufficient 
to counterbalance the incentive to `piggy back' on another carrier's 
network.'' The Commission notes that the pro-investment incentives that 
providers will have as a consequence of the high cost of roaming are 
reflected in the terms and conditions offered by mobile data service 
providers, which commonly include authorizing termination of service or 
other actions if a subscriber's roaming on other networks becomes too 
large a part of the subscriber's service use. At a minimum, these 
roaming limitations demonstrate that providers are unlikely to rely on 
roaming arrangements in place of network deployment as the primary 
source of their service provision, nor will such arrangements lead to 
reduced investment by requesting providers.
    12. Finally, as discussed more fully below, the Commission provides 
that, if providers bring disputes to the Commission, the Commission 
will take into account factors including the impact on buildout 
incentives and the extent and nature of providers' existing build-out 
in determining the commercial reasonableness of proffered terms. As the 
Commission has concluded before, a case-by-case determination of 
commercial reasonableness in the event of a dispute preserves 
incentives to invest and protects consumers by facilitating their 
access to nationwide service.
    13. The data roaming rule the Commission adopts today also 
adequately addresses AT&T's argument that a data roaming requirement 
would weaken host providers' investment incentives by leaving them with 
``no control'' over the terms under which they will carry roaming 
traffic and thus unable to manage the additional network congestion 
caused by such traffic. Under the Commission's data roaming rule, 
providers will have the ability to negotiate commercially reasonable 
measures to safeguard the quality of service against network congestion 
that may result from roaming traffic or to prevent harm to the network. 
This rule also includes the ability to offer individualized, 
commercially reasonable terms, including rates, and to evaluate a 
number of factors on a case-by-case basis in determining commercial 
reasonableness. The Commission finds that this approach strikes the 
best balance between concerns over the potential for congestion or 
other harms from roaming traffic and the significant benefits that data 
roaming arrangements can provide to consumers.
    14. The Commission rejects arguments by AT&T and Verizon Wireless 
that a data roaming rule is unnecessary because data roaming agreements 
are occurring without regulation. The Commission finds that providers 
have encountered significant difficulties obtaining data roaming 
arrangements on advanced ``3G'' data networks, particularly from the 
major nationwide providers. For example, Cellular South states that 
after constructing its own EVDO facilities in some portions of its 
service area, its requests for data roaming on large carriers' 
compatible networks were ``rebuffed'' for over a year. OPASTCO and NTCA 
state that ``rural wireless carriers' attempts to enter into 
negotiations with the nationwide wireless providers for data roaming 
agreements are many times rejected out of hand, with a citation to the 
lack of a data roaming requirement in the Commission's rules'' and that 
``[t]his trend has increased as the mobile wireless industry has begun 
to transition to 3G wireless services.''
    15. The Commission observes that AT&T has largely refused to 
negotiate domestic 3G roaming arrangements until recently, even though 
it launched its 3G service in 2005 and was providing coverage to 275 
major metropolitan areas in May 2008. For example, RTG has stated that 
``collectively, its members have not been able to enter into 3G data 
roaming agreements with AT&T.'' In addition, according to RCA, AT&T 
indicated ``recently'' that ``it will not negotiate any 3G data roaming 
agreements unless it helps to fill-in its nationwide coverage map.'' 
AT&T itself stated in its Reply Comments filed July 12, 2010 that it 
had just ``begun to offer 3G roaming arrangements * * *.'' In mid-
November, 2010, it stated that it was ``actively negotiating'' several 
domestic 3G agreements but did not indicate that it had entered into 
any such agreements. On March 24, 2011, AT&T filed an ex parte with the 
Commission indicating that it had entered into a domestic HSPA+ roaming 
agreement, with Mosaic Telecommunications--apparently, its first 
roaming agreement for data service above 2.5G.
    16. Commenters also assert difficulties reaching agreements with 
Verizon Wireless. Cox Communications states that obtaining an initial 
response to a request to negotiate a roaming agreement with Verizon 
Wireless

[[Page 26202]]

required nearly four months and that negotiations over the terms of 
Verizon Wireless's requirement for a nondisclosure agreement consumed 
another four months; and thus, actual negotiations over terms and 
conditions of a roaming agreement did not even begin for eight months 
after Cox's initial request. RTG and RCA assert that Verizon Wireless 
has ``told numerous RTG members that it will not enter into EV-DO (3G) 
roaming agreements in areas where it already has 3G coverage,'' and 
therefore is not open to 3G roaming agreements for customers of smaller 
providers that serve areas where Verizon Wireless has its own network 
coverage. Although Verizon Wireless indicates that it currently has a 
number of EV-DO roaming arrangements with other providers (including 
with several providers that it asserts are members of RCA), it had only 
nine EV-DO roaming agreements as of April, 2010 even though its EV-DO 
network has been in operation since October of 2003 and as of June 
2007, covered more than 210 million pops with EV-DO Rev. A. The 
Commission notes again the importance of roaming to consumers in rural 
areas, where mobile data services may be solely available from small 
rural providers, and therefore the past difficulties of rural providers 
in obtaining data roaming presents a serious concern.
    17. The Commission is also concerned that the recent successes by 
some providers in obtaining 3G data roaming agreements or offers may 
have been the result of large providers seeking to defuse an issue 
under active Commission consideration and may not accurately reflect 
the ability of requesting providers to obtain data roaming arrangements 
in the future if the Commission were to decide not to adopt any data 
roaming rules. For example, although the Commission determined in 2007 
that CMRS providers were not entitled to voice roaming within their own 
licensed service areas (the ``home roaming'' exclusion) in part because 
it contemplated that providers would negotiate home roaming agreements, 
the Commission concluded in the Order on Reconsideration that ``the 
adoption of an automatic roaming obligation with a home roaming 
exclusion appears to have significantly reduced the incentive to make 
home roaming available, and will lead to a reduction in the 
availability of home roaming arrangements over time.'' Consolidation in 
the mobile wireless industry has reduced the number of potential 
roaming partners for some of the smaller, regional and rural providers. 
In addition, this consolidation may have simultaneously reduced the 
incentives of the largest two providers to enter into such arrangements 
by reducing their need for reciprocal roaming. The Commission also 
notes that AT&T and Verizon Wireless are only now deploying ``fourth-
generation'' Long Term Evolution networks. Based on the record before 
it, the Commission finds it likely that these providers will not be 
willing to offer roaming arrangements that cover these networks any 
time in the near future, except in very limited circumstances. The 
Commission agrees with many of the commenters that, given the coverage 
of these nationwide providers, there is a serious risk they might halt 
the negotiations of roaming on their advanced mobile data networks 
altogether in the future in the absence of Commission oversight, 
harming competition and consumers. Given these developments in the 
mobile services marketplace, and in light of past difficulties that 
providers have experienced obtaining data roaming arrangements, the 
Commission finds that adopting a balanced, flexible requirement will 
help to promote the availability of data roaming in the future. The 
Commission notes that the Commission intends to closely monitor further 
development of the commercial mobile broadband data marketplace and 
stand ready to take additional action if necessary to help ensure that 
the Commission's goals in this proceeding are achieved.
    18. In sum, the Commission concludes that there are substantial 
benefits that will be derived from adoption of the data roaming rule 
set forth herein, and that these benefits substantially outweigh the 
minimal costs associated with the rule. The Commission reaches this 
conclusion even though it is not possible to quantify with precision 
the benefits and costs based on the information the Commission has 
before it, and even though many of the benefits are not subject to 
quantification. Adoption of the rule, which is designed to promote 
access to nationwide mobile broadband service and enhance incentives 
for providers to invest in deployment of broadband facilities, is 
necessary to help ensure that the benefits of mobile broadband services 
will be more fully realized. Absent such a rule, there will be a 
significant risk that fewer consumers would have nationwide access to 
competitive mobile broadband services, and that even voice roaming will 
ultimately be rolled back as voice becomes a data application.
    19. The benefits of adopting the proposed data roaming obligation 
are substantial. The rule promotes the availability of commercially 
reasonable data roaming arrangements that might not otherwise be 
available. Consistent with the record comments submitted by providers 
of all sizes serving a large portion of consumers throughout all parts 
of this country, millions of American consumers who otherwise might not 
have full access to mobile broadband services will benefit from 
adoption of the rule.
    20. Furthermore, the Commission finds that the rule will promote 
significant investment in facilities-based broadband networks 
throughout the country. As discussed above, several providers state 
that a data roaming obligation is necessary to provide an acceptable 
level of risk for the investment in data capabilities for their 
network, as it increases their chances of being able to offer their 
subscribers the nationwide coverage needed for a viable product 
offering. Based on the information in the record, the Commission 
expects that there could be billions of dollars of additional 
investment in upgraded facilities and/or expanded coverage, providing 
consumers with substantial benefits while also creating thousands of 
jobs.
    21. With the added investment and deployment of broadband services 
by multiple providers, additional benefits will result from increased 
competition. As discussed above, several commenters have stated that a 
data roaming obligation is necessary for them to provide competitive 
services, and enables them to upgrade existing services or build out 
facilities-based coverage in new markets. The benefits of competition 
include likely lower prices for such services, which will result in 
direct consumer surplus as well as greater utilization of broadband 
data services. In addition, less expensive mobile broadband services 
increase the availability of these services to consumers, which in turn 
creates incentives for edge providers to develop innovative new 
services that use this capability. Although the benefits cannot be 
calculated with precision, a rough estimate is that the benefits from 
the increased competition would be in the billions of dollars per year.
    22. By comparison with the benefits of adopting a data roaming rule 
that promotes the availability of data roaming arrangements, the 
Commission finds that the potential costs of adopting the rule that 
requires providers to offer data roaming arrangements on

[[Page 26203]]

commercial reasonable terms and conditions are small.
    23. As discussed above, the two major opponents of a data roaming 
obligation--Verizon Wireless and AT&T--assert that adoption of such an 
obligation could discourage investment by providers, particularly in 
rural areas, which in turn would reduce mobile broadband availability 
and utilization. The rule adopted in this Order, however, allows host 
providers to control the terms and conditions of proffered data roaming 
arrangements, within a general requirement of commercial 
reasonableness. For the reasons stated above, the Commission concludes 
that such terms would preserve providers' incentive to invest in their 
networks. Indeed, neither AT&T nor Verizon state that they would invest 
less under a roaming obligation and therefore do not expect the roaming 
rule to reduce the investment of host networks.
    24. Another potential cost is the possibility that requesting 
providers will substitute roaming for investment in coverage and 
accordingly under-invest in deploying new infrastructure. Again, 
however, the Commission's rule obligates the host provider only to 
offer data roaming on commercially reasonable terms and conditions. As 
discussed above, such a standard will provide the requesting provider 
with sufficient incentive to invest in facilities, except where doing 
so would be economically infeasible or unrealistic regardless of the 
availability of roaming agreements. Further, the Commission provides 
that the data roaming obligation does not create mandatory resale 
obligations.
    25. An additional potential cost could result from harm to the host 
provider's network that might result from congestion or technical 
problems. To enable a host provider to safeguard its quality of service 
against network congestion, the order expressly provides that host 
providers are permitted to negotiate commercially reasonable measures 
to safeguard against network congestion that might result from data 
roaming traffic. The host provider thus would have the flexibility to 
account for the additional traffic roaming would generate, and 
therefore avoid harmful congestion. Similarly, the rule expressly 
provides that it is reasonable for a provider not to offer a data 
roaming arrangement to a requesting provider that is not 
technologically compatible, or where it is not technically feasible to 
provide roaming for the particular data service for which roaming is 
requested, or where any changes to the host provider's network required 
to accommodate roaming are not economically reasonable.
    26. Thus, the Commission concludes that there are substantial 
benefits that will be derived from adoption of the data roaming rule 
set forth herein, and that these benefits substantially outweigh the 
minimal costs associated with the rule.

B. Scope and Requirements of the Data Roaming Rule

    27. As discussed above, the Commission concludes that the public 
interest would be served by adopting a data roaming rule. The 
Commission will require that facilities-based providers of commercial 
mobile data services offer data roaming arrangements to other such 
providers on commercially reasonable terms and conditions, subject to 
certain limitations specified below. The Commission determines that the 
data roaming rule the Commission adopts should apply to all facilities-
based providers of commercial mobile data services. In establishing 
this rule, the Commission seeks to balance various competing interests, 
and the Commission finds that it is appropriate to specify certain 
grounds on which, under the rule adopted today, providers of commercial 
mobile data services can reasonably refuse to offer a data roaming 
arrangement. The Commission also clarifies that under the data roaming 
rule adopted herein, providers of commercial mobile data roaming 
services are permitted to negotiate commercially reasonable measures to 
safeguard quality of service against network congestion that may result 
from roaming traffic or to prevent harm to their networks. The 
Commission discusses the rule and limitations and the standard of 
commercial reasonableness in more detail below.
    28. Covered Entities. Consistent with the comments addressing the 
scope of covered entities, the Commission determines that the data 
roaming requirement should apply to all facilities-based providers of 
commercial mobile data services. For purposes of data roaming, the 
Commission defines a ``commercial mobile data service'' as any mobile 
data service that is not interconnected with the public switched 
network but is (1) provided for profit; and (2) available to the public 
or to such classes of eligible users as to be effectively available to 
the public. The scope of the current roaming obligation in Section 
20.12 covers the CMRS providers' provision of mobile voice and data 
services that are interconnected with the public switched network, as 
well as their provision of text messaging and push-to-talk services. 
The rule adopted herein will complement the current roaming obligation 
in Section 20.12 and cover mobile services that fall outside the scope 
of that obligation. Under the Commission's decision today, as long as a 
provider provides mobile data services that are for profit and 
available to the public or to such classes of eligible users as to be 
effectively available to the public, it will be covered by the rule 
adopted herein regardless of whether the provider also provides any 
CMRS and without regard to the mobile technology it is utilizing to 
provide services. Thus, the scope includes MSS/ATC providers that offer 
commercial mobile data services that meet these requirements. In 
addition, the data roaming rule adopted herein covers all facilities-
based providers of commercial mobile data services, including those 
constructing network facilities to offer service on a wholesale basis. 
Further, providers of commercial mobile data services are covered 
without regard to the devices used to access or receive their services. 
This approach is supported by those parties in the record that 
commented on this issue, will help to achieve technological neutrality 
in the data roaming obligation, and will ensure that the rule the 
Commission adopts is adequate in the face of rapid changes in 
commercial mobile technology and the commercial mobile ecosystem 
overall.
    29. Application of the Commercial Mobile Data Roaming Rule. The 
rule the Commission adopts today requires all facilities-based 
providers of commercial mobile data services to offer data roaming 
arrangements to other such providers on commercially reasonable terms 
and conditions. As noted above, the Commission concludes that this rule 
serves the public interest by promoting connectivity for and nationwide 
access to mobile data services and by promoting investment in and 
deployment of mobile broadband networks, among other benefits. When a 
request for data roaming negotiations is made, as a part of the duty of 
providers to offer data roaming arrangements on commercially reasonable 
terms and conditions, a would-be host provider has a duty to respond 
promptly to the request and avoid actions that unduly delay or 
stonewall the course of negotiations regarding that request. The 
Commission will determine whether the terms and conditions of a 
proffered data roaming arrangement are commercially reasonable on a 
case-by-case basis, taking into consideration the totality of the 
circumstances.
    30. The duty to offer data roaming arrangements on commercially 
reasonable terms and conditions is

[[Page 26204]]

subject to certain limitations. In particular: (1) Providers may 
negotiate the terms of their roaming arrangements on an individualized 
basis; (2) it is reasonable for a provider not to offer a data roaming 
arrangement to a requesting provider that is not technologically 
compatible; (3) it is reasonable for a provider not to offer a data 
roaming arrangement where it is not technically feasible to provide 
roaming for the particular data service for which roaming is requested 
and any changes to the host provider's network necessary to accommodate 
roaming for such data service are not economically reasonable; and (4) 
it is reasonable for a provider to condition the effectiveness of a 
data roaming arrangement on the requesting provider's provision of 
mobile data service to its own subscribers using a generation of 
wireless technology comparable to the technology on which the 
requesting provider seeks to roam.
    31. The Commission concludes that it serves the public interest to 
include these limitations in recognition of the particular technical 
and policy issues that arise with respect to the provision of data 
services. As discussed above, the Commission recognizes that the 
commercial mobile broadband data marketplace, particularly 4G 
deployment, is still in a critical early stage. It encompasses many 
different services offered in conjunction with many different devices 
employing wide-ranging technologies and exacting varying network 
demands. In light of that continuing evolution, the Commission finds 
that the scope the Commission establishes for the roaming rule is 
sufficiently flexible to apply to a wide range of ever changing 
technologies and commercial contexts, and should afford parties 
negotiating commercial mobile data services roaming agreements a solid 
framework within which to arrange their negotiations and ultimately 
reach agreement on commercially reasonable terms. Below, the Commission 
further discusses and clarifies each of these limitations in turn.
    32. First, providers may negotiate the terms of their roaming 
arrangements on an individualized basis. In other words, providers may 
offer data roaming arrangements on commercially reasonable terms and 
conditions tailored to individualized circumstances without having to 
hold themselves out to serve all comers indiscriminately on the same or 
standardized terms. Conduct that unreasonably restrains trade, however, 
is not commercially reasonable. As discussed below, the Commission may 
consider a range of individualized factors in addressing disputes over 
the commercial reasonableness of the terms and conditions of the 
proffered data roaming arrangements. Giving providers flexibility to 
negotiate the terms of their roaming arrangements on an individualized 
basis ensures that the data roaming rule best serves the Commission's 
public interest goals discussed herein, and the boundaries of the rule 
are narrowly tailored to execute the Commission's spectrum management 
duties under the Act.
    33. Second, it is commercially reasonable for providers not to 
offer a data roaming arrangement to a requesting provider that is not 
technologically compatible. The Commission clarifies, however, that 
technological compatibility does not necessarily require the same air 
interface in the network infrastructure of the two providers. 
Technological compatibility can be achieved by using mobile equipment 
that can communicate with the host provider's network. For example, 
requesting providers that operate on different bands or technologies 
than the host might achieve technological compatibility by providing 
subscribers with multi-band and multi-mode user devices.
    34. Even if providers are technologically compatible, however, 
roaming for a particular service may not be feasible for other 
technical reasons. Accordingly, it is also commercially reasonable for 
a provider to refuse to enter into a data roaming arrangement for a 
particular data service where it is not technically feasible to provide 
roaming for such service and where any changes to its network that are 
necessary to accommodate such data roaming are economically 
unreasonable. With regard to these grounds for reasonably refusing to 
enter into a roaming arrangement, the Commission disagrees with 
commenters that they are too vague or would be too open to 
interpretation by providers seeking to delay or deny roaming access. As 
noted above, identical conditions already apply to requests for push-
to-talk and text-messaging roaming arrangements. Further, the 
Commission finds that these grounds will offer parties negotiating 
roaming agreements reasonable flexibility to negotiate terms without, 
for example, unduly hampering a host provider with the burden of either 
adopting technologies which it has not already adopted in order to 
accommodate the requesting provider's technology or undertaking 
economically unreasonable changes to its network.
    35. Finally, the Commission provides that it is commercially 
reasonable for a provider to condition the effectiveness of a roaming 
arrangement on the requesting provider's provision of mobile data 
service using a generation of wireless technology comparable to the 
technology on which the requesting provider seeks to roam. The 
Commission notes that as with technological compatibility, this does 
not mean that the requesting provider must have exactly the same air 
interface as the host provider. Rather, this focuses on capabilities, 
including data rates, of the generation of mobile wireless technology 
that is being used to provide services to subscribers. Permitting a 
service provider to condition the effectiveness of a roaming 
arrangement in this circumstance provides additional incentives for the 
requesting provider to invest in and upgrade its network to offer 
advanced services to its subscribers and ensures that the requesting 
provider is not merely reselling the host provider's services. This 
limitation prevents providers, for example, from only building a 2G 
network, providing their customers with 3G capable handsets, and then 
relying on roaming arrangements to provide nationwide 3G coverage, and 
thus reasonably addresses concerns raised by AT&T. To prevent undue 
delay in negotiations, the Commission clarifies that a host provider 
may not decline to enter into a roaming agreement with a requesting 
provider on the grounds that the requesting provider is not actually 
providing service at the time of the request for negotiations, but may 
tie the effectiveness of the agreement to the requesting provider 
offering the underlying service to its subscribers with a generation of 
wireless technology comparable to the technology on which it would 
roam. The Commission finds that incorporating this limitation as part 
of the scope of the data roaming rule is in the public interest and 
critical to ensuring facilities are deployed, helping to alleviate 
concerns about providers merely reselling commercial mobile data 
services on other networks. While the Commission agrees that providers 
have many different legitimate business and technological reasons for 
rolling out services in certain markets and not in others, the 
Commission finds that requiring, at a minimum, the underlying service 
to be offered by the requesting provider with a generation of wireless 
technology comparable to the technology on which it seeks to roam best 
balances competing interests of affording data roaming while also 
encouraging facilities-based service.

[[Page 26205]]

    36. This limitation is also consistent with the Commission's 
previous roaming decisions where the Commission has consistently 
limited roaming obligations to provisioning of certain services on 
technologically compatible networks. The limitation on covered services 
coupled with the technologically compatible networks requirement was 
sufficient to ensure that the generations of wireless technologies used 
were comparable. The commercial mobile data services marketplace, 
however, encompasses a broad array of generations of wireless 
technology and many different applications--many of which may require 
different technical considerations and offer different data speeds. 
Some of these also may be more competitively attractive than others. 
The Commission seeks to encourage facilities-based offerings of 
advanced mobile data services by providers and usage of data roaming 
arrangements to supplement such offerings. Accordingly, it serves the 
public interest to focus on capabilities, including data rates, of the 
generation of mobile wireless technology that is being used to provide 
services to subscribers.
    37. The Commission declines to adopt certain other requirements 
proposed by AT&T, which suggests that, in order to preserve the proper 
incentives for investment, the Commission establish an ``equal 
network'' rule that would limit data roaming to only providers that use 
the same radio technologies and air interfaces and that have 
substantial networks of their own. For the reasons discussed above, the 
Commission concludes, contrary to AT&T's argument, that providers will 
not have heightened incentives under the rule adopted here to scale 
back their own deployments and ``free-ride'' on the superior 
investments of others.
    38. The Commission finds it is unnecessary to adopt a requirement 
of identical interfaces. The Commission requires that the air 
interfaces be comparable in terms of capabilities, which should achieve 
the same benefits as a requirement of identical interfaces while 
providing greater technological flexibility in the rule. Further, the 
Commission agrees with Leap and RCA that adopting a ``substantial 
network'' requirement could be problematic. An inability to negotiate a 
roaming arrangement before making a substantial build out could deter 
new entrants and small, rural, and mid-sized providers from investing 
in broadband at the exact time such investment is sorely needed. The 
Commission are concerned that a ``substantial network'' requirement 
could hamper or dampen facilities-based build-out in rural areas by 
unduly limiting the role of roaming in network buildout. The Commission 
also disagrees with AT&T that, absent this requirement, providers will 
have heightened incentives to scale back their own deployments and 
``free-ride'' on the superior investments of others. As discussed 
above, the relatively high price of roaming compared to providing 
facilities-based service will often be sufficient to counterbalance the 
incentive to scale back deployments in favor of relying on another 
provider's network. Further, although the Commission does not find that 
lack of ``substantial'' networks deployments is categorically a 
commercially reasonable ground for declining to enter into a roaming 
arrangement, the Commission may consider the extent and nature of 
providers' build-out as one of the relevant factors in determining 
whether the proposed terms and conditions of a particular data roaming 
arrangement are commercially reasonable.
    39. Reasonable safeguards against congestion. With respect to any 
issues concerning network capacity, network integrity, or network 
security, the Commission notes that under the rule that the Commission 
is adopting providers of commercial mobile data services are free to 
negotiate commercially reasonable measures to safeguard quality of 
service against network congestion that may result from roaming traffic 
or to prevent harm to their networks. The Commission expects any 
measures, methods, or practices to manage the roaming traffic to be 
part of the roaming terms and conditions offered by the host providers 
in their roaming arrangements given that once providers enter into a 
data roaming arrangement, the arrangement will govern the terms under 
which roaming is provided. Any issues arising in connection with the 
negotiation of these measures will be resolved in accordance with the 
dispute resolution procedures the Commission adopts in this Order. The 
Commission notes that reasonable measures to safeguard against network 
congestion from roaming traffic are supported by a number of 
commenters, and are already a feature of many commercially negotiated 
roaming arrangements. The Commission cautions, however, that host 
providers may not engage in stonewalling behavior or refuse to 
negotiate because of concerns over the impact of roaming traffic on 
network congestion.
    40. The Commission declines to further detail the specific measures 
that may be adopted to safeguard subscriber quality of service, as 
proposed by AT&T. As discussed herein, the commercial mobile data 
services marketplace encompasses an array of generations of wireless 
technology and many different services--many of which may require 
different technical considerations in resolving network congestion. 
Providers should have significant flexibility to negotiate safeguards 
subject to commercial reasonableness, and a dispute over the 
reasonableness of any particular measure can be addressed under the 
dispute resolution procedures, on a case-by-case basis based on the 
totality of circumstances. The Commission does not agree with AT&T that 
its approach will lead to ``constant second-guessing'' by the 
Commission.
    41. The Commission also declines to specify, as suggested by 
Clearwire, that data roaming be limited to ``best efforts access'' to 
the host provider's network. The Commission does not see the benefit in 
prohibiting parties from negotiating other access terms in their 
roaming arrangement.
    42. Host providers of commercial mobile data roaming services also 
are authorized to negotiate commercially reasonable measures to ensure 
that data roaming does not compromise the security and integrity of 
their networks. The Commission is aware of the risks network operators 
face from harmful devices on their networks and note that the 
Commission has previously considered the need for providers to protect 
their networks when it adopted open platform provisions for the 700 MHz 
Band C Block. It would also be appropriate for providers of commercial 
mobile data roaming service to take reasonable measures to ensure that 
network performance will not be significantly degraded.
    43. We emphasize again that we intend to closely monitor further 
development of the commercial mobile broadband data marketplace and 
stand ready to take additional action if necessary to help ensure that 
our goals in this proceeding are achieved.

C. Legal Authority

    44. The Commission finds that the Commission has the authority to 
require facilities-based providers of commercial mobile data services 
to offer data roaming arrangements to other such providers on 
commercially reasonable terms and conditions. As discussed above, the 
Commission finds that the rule the Commission adopts today serves the 
public interest by promoting connectivity for, and nationwide access 
to, mobile broadband. By promoting consumer access to advanced wireless 
services, the data roaming rule will

[[Page 26206]]

enhance the unique social and economic benefits that a mobile service 
provides. The data roaming rule will also serve the public interest by 
promoting competition and investment in and deployment of mobile 
broadband services. Broadband deployment is a key priority for the 
Commission, and the deployment of mobile data networks will be 
essential to achieve the goal of making broadband connectivity 
available everywhere in the United States. As noted earlier, mobile 
broadband networks, particularly ``fourth-generation'' networks, are 
still at an early stage of deployment. Both nationwide and non-
nationwide providers have obtained licenses, including AWS and 700 MHz 
spectrum licenses, which will be used to provide innovative wireless 
data services to consumers. The Commission finds that the availability 
of data roaming will help ensure the viability of new data network 
deployments and promote the development of competitive service 
offerings for the benefit of consumers.
    45. The Commission's authority under Title III allows it to adopt 
requirements to serve these public interest objectives. Spectrum is a 
public resource, and Title III of the Act provides the Commission with 
broad authority to manage spectrum, including allocating and assigning 
radio spectrum for spectrum based services and modifying spectrum usage 
conditions in the public interest. The Commission is charged with 
maintaining control ``over all the channels of radio transmission'' in 
the United States. Section 301 states that ``[i]t is the purpose of 
this Act, among other things, to maintain the control of the United 
States over all the channels of radio transmission; and to provide for 
the use of such channels, but not the ownership thereof, by persons for 
limited periods of time, under licenses granted by Federal authority, 
and no such license shall be construed to create any right, beyond the 
terms, conditions, and periods of the license.'' The issuance of a 
Commission license does not convey any ownership or property interests 
in the spectrum and does not provide the licensee with any rights that 
can override the Commission's proper exercise of its regulatory power 
over the spectrum. Section 316 authorizes the Commission to adopt new 
conditions on existing licenses if it determines that such action 
``will promote the public interest, convenience, and necessity.'' 
Further, the Commission may utilize its rulemaking powers to modify 
licenses when a new policy is based upon the general characteristics of 
an industry. Section 303 provides the Commission with authority to 
establish operational obligations for licensees that further the goals 
and requirements of the Act if the obligations are in the ``public 
convenience, interest, or necessity'' and not inconsistent with other 
provisions of law. Section 303 also authorizes the Commission, subject 
to what the ``public interest, convenience, or necessity requires,'' to 
``[p]rescribe the nature of the service to be rendered by each class of 
licensed stations and each station within any class.''
    46. The Commission finds that these provisions establish its 
authority to adopt rules facilitating roaming with respect to 
commercial mobile data services. Specifically, the Commission finds 
that it is within its authority to manage spectrum and to impose 
conditions on licensees where necessary to promote the public interest, 
convenience, and necessity to adopt data roaming rules. As discussed 
above, the Commission finds that the data roaming rule the Commission 
adopts today serves the public interest by facilitating consumer access 
to ubiquitous mobile broadband service. As more and more consumers use 
mobile devices to access a wide array of both personal and business 
services, they have become more reliant on their devices. These 
consumers expect to be able to have access to the full range of 
services available on their devices wherever they go. By promoting 
connectivity for, and ubiquitous access to, mobile broadband, the rule 
the Commission adopts today supports consumer expectations and helps 
ensure that consumers are able to fully utilize and benefit from the 
availability of wireless broadband data services.
    47. As discussed earlier, the data roaming rule the Commission 
adopts today also supports the Commission's goal of encouraging 
investment and innovation and the efficient use of spectrum. The 
Commission agrees with commenters that adopting a data roaming rule 
will encourage service providers to invest in and upgrade their 
networks to be able to compete with other providers and control their 
costs. By encouraging build-out and deployment of advanced data 
services, the rule the Commission adopts today helps ensure that 
spectrum is being put to its best and most efficient use. Data roaming 
also furthers the goals under Section 706(a) and (b) of the 
Telecommunications Act of 1996, including encouraging new deployment of 
advanced services to all Americans by promoting competition and by 
removing barriers to infrastructure investment, including the barriers 
to new entrants. The Commission estimated that more than 10 million 
Americans live in rural census blocks with two or fewer mobile service 
providers. Data roaming will encourage service providers to invest in 
and upgrade their networks and to deploy advanced mobile services 
ubiquitously, including in rural areas.
    48. The Commission disagrees with AT&T and Verizon Wireless's 
argument that the Commission lacks authority to impose data roaming 
rules because data roaming is a private mobile radio service, as 
defined in section 332 of the Act and thus any common carrier 
regulation of data roaming is prohibited under the terms of the 
statute. Section 332(c)(2) provides that ``a person engaged in the 
provision of a service that is a private mobile service shall not * * * 
be treated as a common carrier for any purpose * * *'' AT&T and Verizon 
Wireless argue that Section 332(c)(2) prohibits the Commission from 
imposing any roaming obligation for provisioning of commercial mobile 
data services that do not interconnect with the public switched 
networks because non-interconnected commercial mobile data services are 
not CMRS but private mobile radio service (PMRS). AT&T argues that 
roaming obligations clearly amount to common carrier obligations and 
that, under the Supreme Court's decision in FCC v. Midwest Video 
Corporation (Midwest Video II), such regulations are prohibited. In 
Midwest Video II, the Supreme Court found that obligations requiring 
cable television systems to allocate channels for educational, 
government, public, and leased access users had ``relegated cable 
systems, pro tanto, to common-carrier status.'' The Court noted that 
the rules required operators to make these channels available on a 
first-come non-discriminatory basis, prohibited cable operators from 
influencing the content of access programming, and also put limits on 
charges for access. The Court found that this ``common carrier status'' 
violated the Act's prohibition against deeming broadcasters to be 
common carriers, because at the time, cable regulations rested on the 
FCC's authority to regulate broadcasting. AT&T argues that requiring 
carriers to offer data roaming ``on reasonable request, on reasonable 
terms and rates, and free from unreasonable discrimination'' would 
similarly treat such providers as common carriers in violation of the 
prohibition against common carrier treatment in the definition of 
``private mobile service.''
    49. Contrary to the arguments of AT&T and Verizon Wireless, to 
adopt a data roaming rule as discussed herein, the Commission does not 
need to

[[Page 26207]]

determine that a mobile service should be classified as CMRS. Section 
332 does not bar the Commission from establishing spectrum usage 
conditions based upon its Title III authority. As discussed above, 
Title III generally provides the Commission with authority to regulate 
``radio communications'' and ``transmission of energy by radio.'' Among 
other provisions, Title III gives the Commission the authority to 
classify radio stations. It also establishes the basic licensing scheme 
for radio stations, allowing the Commission to grant, revoke, or modify 
licenses. The Commission has imposed operating conditions on licensees 
regardless of the type of service they provide.
    50. In this Order, the Commission imposes an obligation with 
limitations on facilities-based providers of commercial mobile data 
services to offer data roaming arrangements to other facilities-based 
providers of commercial mobile data services on an individualized case-
by-case basis, subject to a standard of commercial reasonableness as 
well as certain specified limitations set forth herein. Imposing such a 
requirement is consistent with the Commission's authority to impose 
certain operating conditions on any spectrum authorization holders, 
including private mobile radio licensees, if it serves the public 
interest. The data roaming rule will complement the current roaming 
rules applicable to interconnected services, improve efficiency of 
spectrum use, encourage competition and increase sharing opportunities 
between private mobile services and other services. In particular, the 
Commission finds that the rule the Commission adopts today is 
consistent with the requirements of sections 332(a)(2)-(4) of the Act. 
Sections 332(a)(2)-(4) provide that, in managing the spectrum made 
available for use by private mobile services, the Commission shall 
consider whether its actions will: improve the efficiency of spectrum 
use and reduce the regulatory burden upon spectrum users, based upon 
sound engineering principles, user operational requirements, and 
marketplace demands; encourage competition and provide services to the 
largest feasible number of users; or increase interservice sharing 
opportunities between private mobile services and other services. The 
Commission finds that, by promoting competition, investment, and new 
entry while facilitating consumer access to ubiquitous mobile broadband 
service, the rule the Commission adopts today will serve these 
objectives.
    51. The Commission also finds that the data roaming rules we adopt 
do not amount to treating mobile data service providers as ``common 
carriers'' under the Act. As AT&T and Verizon Wireless recognize, a 
``sine qua non'' of common carrier treatment is ``the undertaking to 
carry for all people indifferently. The extent of the obligation the 
Commission imposes today is to offer, in certain circumstances, 
individually negotiated data roaming arrangements with commercially 
reasonable terms and conditions. The rule the Commission adopts will 
allow individualized service agreements and will not require providers 
to serve all comers indifferently on the same terms and conditions. 
Providers can negotiate different terms and conditions on an 
individualized basis, including prices, with different parties. The 
commercial reasonableness of terms offered to a particular provider may 
depend on numerous individualized factors, including the level of 
competitive harm in a given market and the benefits to consumers; the 
extent and nature of the requesting provider's build-out; whether the 
requesting provider is seeking roaming for an area where it is already 
providing facilities-based service; and the impact of granting the 
request on the incentives for either provider to invest in facilities 
and coverage, services, and service quality. In addition, providers may 
reasonably choose not to offer a roaming arrangement to a requesting 
provider that is not technologically compatible or refuse to enter into 
a roaming arrangement where it is not technically feasible to provide 
roaming for the service for which it is requested. A provider is not 
required to make changes to its network that are economically 
unreasonable, and it is reasonable for a provider to condition the 
effectiveness of a roaming arrangement on the requesting provider's 
provision of mobile data service to its own subscribers using a 
generation of wireless technology comparable to the technology on which 
the requesting provider seeks to roam. Providers of commercial mobile 
data services also are free to negotiate commercially reasonable 
measures to safeguard quality of service against network congestion 
that may result from roaming traffic or to prevent harm to their 
networks. In addition, the rule the Commission adopts does not impose 
any form of common carriage rate regulation or obligation on providers 
of mobile data services to publicly disclose the rates, terms, and 
conditions of their roaming agreements. Under the agreements to which 
negotiations may lead, providers will have flexibility with regard to 
roaming charges, subject to a general requirement of commercial 
reasonableness. Further, actual provisioning of data roaming under 
those arrangements and any practices in connection with such 
arrangements will be subject to individually negotiated contractual 
provisions, unlike a common carrier obligation under Sections 201 and 
202 of the Act which covers all charges and practices in connection 
with such services. In view of these boundaries, the Commission finds 
that the rule the Commission adopts today to execute its spectrum 
management duties under the Act does not subject a spectrum-based 
commercial mobile data service provider to Title II nor does it treat 
these providers as common carriers with respect to their regulatory 
status and obligations.
    52. Imposition of the Data Roaming Rule under Title III does not 
amount to Regulatory Taking. Verizon Wireless argues that imposing data 
roaming obligations amounts to a physical and regulatory taking. 
Verizon Wireless claims that data roaming is a physical taking of 
wireless carriers' property rights in their network infrastructure by 
authorizing third parties to occupy the physical space available on 
carrier networks at will. Verizon Wireless also claims that data 
roaming would constitute a regulatory taking because it would interfere 
with licensees' reasonable expectations not to have common carrier 
regulations imposed on information services. The Commission disagrees. 
Under Section 304 of the Communications Act, the issuance of an FCC 
license does not provide the licensee with any rights that can override 
the Commission's proper exercise of its regulatory power over the 
spectrum: ``[n]o station license shall be granted by the Commission 
until the applicant therefore shall have waived any claim to the use of 
any particular frequency or of the electromagnetic spectrum as against 
the regulatory power of the United States because of the previous use 
of the same, whether by license or otherwise.'' Further, under the data 
roaming rule, the host provider will be compensated for service it 
provides consistent with the commercially reasonable terms it 
negotiates in the roaming agreement. There can be no taking if that 
compensation is ``just.'' It does not appear to be possible that 
compensation could be ``unjust'' if it is commercially reasonable. 
Commercially reasonable terms may also include measures that allow the 
host provider to safeguard the quality of service and allow measures to

[[Page 26208]]

prevent harm to the host provider's network.
    53. Commission's Title II Authority. Several commenters argue that 
data roaming is a telecommunications service under Title II. MetroPCS, 
for example, asserts that the transmission service provided by a third-
party wireless roaming carrier (the Roaming Partner) to facilitate data 
roaming is only telecommunications and that the transmission provided 
by the Roaming Partner is functionally equivalent to the 
telecommunications services provided for voice roaming. MetroPCS 
asserts that ``the separate, severable, non-integrated transmission 
service provided by a third-party wireless Roaming Partner is properly 
viewed as purely a transmission service that qualifies under long-
standing Commission precedent as `telecommunications' and as a 
`telecommunications service.' '' Leap argues that the Commission can 
act pursuant to its Title II authority, stating that ``the Commission 
could define data roaming as a telecommunications service because 
during data roaming, the host carrier is providing pure data 
transmission to another carrier.'' The Commission finds that the 
Commission need not decide whether data roaming services provisioned in 
this manner are or are not telecommunications services. In any case, 
the Commission imposes the data roaming rule described herein based on 
its authority under Title III.

D. Dispute Resolution

    54. To the extent that a complaint proceeding is an appropriate 
procedural vehicle to resolve a particular dispute arising out of the 
negotiation of a data roaming arrangement, the Commission finds that it 
is in the public interest to establish a complaint process similar to 
the complaint process available under the current roaming obligations. 
Specifically, to ensure consistent Commission processes for resolving 
all voice and data roaming disputes where a complaint is the 
appropriate procedural vehicle, the Commission will use the procedural 
complaint processes established in the Commission's Part 1, Subpart E 
rules for data roaming to the extent discussed herein. Disputes will be 
resolved based on the totality of the circumstances. The remedy of 
damages will not be available for data roaming complaints.
    55. Parties may file a formal or informal complaint under the 
Commission's Part I, Subpart E rules or file a petition for declaratory 
ruling under Section 1.2 of the Commission's rules to resolve any 
disputes arising out of the data roaming rule adopted herein. These 
procedural mechanisms are currently available for resolving voice 
roaming disputes, and the Commission finds that it is in the public 
interest to ensure a consistent Commission process for resolving both 
voice and data roaming complaints. Moreover, some roaming disputes will 
involve both data and voice and are likely to have factual issues 
common to both types of roaming. The approach the Commission is taking 
allows, but does not require, a party to bring a single proceeding to 
address such a dispute, rather than having to bifurcate the matter and 
initiate two separate proceedings under two different sets of 
procedures. This, in turn, will be more efficient for the parties 
involved, as well as for the Commission, and should result in faster 
resolution of such disputes.
    56. With respect to remedies, the Commission excludes provisions 
applicable to damages in this context. The Commission notes that the 
remedy of damages after hearing on a complaint is specifically provided 
for in Section 209 of the Communications Act and applicable to claims 
arising out of Section 208 complaints. This means that if a complaint 
alleges violations with respect to both voice and data roaming, damages 
potentially are available as a remedy for only the portion of the 
complaint that deals with roaming obligations arising out of Sections 
201, 202, and 208 of the Act.
    57. When roaming-related complaints or petitions for declaratory 
ruling are filed, the Commission intends to address them expeditiously. 
Further, the Commission notes that the Accelerated Docket procedures, 
including pre-complaint mediation, will be available to data roaming 
complaints. Several commenters requested use of the Commission's 
Accelerated Docket procedures to resolve all roaming complaints. 
Although all roaming complaints will not automatically be placed on the 
Accelerated Docket, an affected provider can seek consideration of its 
complaint under the Commission's Accelerated Docket rules and 
procedures where appropriate.
    58. The Commission notes that the duty to offer data roaming 
arrangements on commercially reasonable terms and conditions will allow 
greater flexibility and variation in terms and conditions, as parties 
will negotiate their rights and obligations under the agreements. The 
Commission expects providers to include any material practices 
regarding provisioning of roaming in the agreement (e.g., any practice 
to manage roaming traffic in times of congestion) because many disputes 
arising out of provisioning of roaming will be subject to the roaming 
contract provisions and generally applicable laws. To provide parties 
with additional certainty regarding rights and obligations and to 
facilitate timely resolution of disputes, the Commission provides the 
following clarifications and guidance.
    59. During ongoing negotiations, parties can seek Commission 
dispute resolution--including a determination whether the host provider 
has met its duty. The Commission will consider claims regarding the 
commercial reasonableness of the negotiations, providers' conduct, and 
the terms and conditions of the proffered data roaming arrangement. 
With respect to claims regarding the commercial reasonableness of the 
proffered terms and conditions, including prices, the Commission staff 
may, in resolving such claims, require both parties to provide to the 
Commission their best and final offers (final offers) that were 
presented during the negotiation. For example, if negotiations fail to 
produce a mutually acceptable set of terms and conditions, including 
rates, the Commission staff may require parties to submit on a 
confidential basis their final offers, including price, in the form of 
a proposed data roaming contract. These submissions would enable 
Commission staff, if it so chose, to resolve a particular roaming 
dispute in which a violation of Commission rules is found by ordering 
the parties to enter into a data roaming agreement pursuant to the 
terms of the complainant's commercially reasonable final offer or to 
otherwise rely on the submitted offers in determining an appropriate 
remedy. In cases where no violation of Commission rules is found, the 
complainant would be free, but not obligated, to enter into a roaming 
agreement on the proffered terms of the would-be host. The Commission 
staff also could order the parties to resume negotiations. The 
Commission staff's determination of the appropriate steps in resolving 
a particular dispute would depend in part of an assessment of the 
actions of both the host provider and the requesting provider.
    60. With respect to disputes filed before reaching an agreement 
regarding the commercial reasonableness of a would-be host provider's 
proffered terms and conditions, the Commission finds that it is in the 
public interest to provide a possible avenue for the requesting 
provider to obtain data roaming service on an interim basis during the 
pendency of the dispute. Accordingly, in a case where a requesting 
provider disputes the commercial reasonableness of a roaming 
arrangement offered by a would-be host and none of the limitations is

[[Page 26209]]

applicable, the Commission staff may, if requested and in appropriate 
circumstances, order the host provider to provide data roaming on its 
proffered terms, during the pendency of the dispute, subject to 
possible true-up once the roaming agreement is in place. Similarly, if 
the Commission staff chooses to require submission of final offers as 
discussed above, in appropriate circumstances the Commission staff 
could order the host provider to provide data roaming in accordance 
with its final offer, subject to possible true-up. The ability to 
obtain data roaming service on an interim basis during the pendency of 
the dispute would enable the requesting provider's subscribers to 
obtain data roaming coverage without undue delay while the Commission 
staff considers the dispute. Alternatively, the parties may agree prior 
to the filing of the dispute to an interim roaming arrangement that 
will govern during the pendency of the dispute. Further, in the event a 
would-be host provider violates its duty by actions that unduly delay 
or stonewall the course of negotiations, the Commission stands ready to 
move expeditiously with fines, forfeitures, and other appropriate 
remedies, which should reduce any incentives to delay data roaming 
negotiations.
    61. After the parties have entered into a data roaming agreement, 
the terms of the agreement generally will govern the data roaming 
rights and obligations of the parties, and disputes relating to 
performance, validity, or interpretation of the agreement will be 
subject to review in court under the relevant contract law, with 
certain exceptions. For instance, parties may bring before the 
Commission a claim that a host provider's conduct during negotiations 
violated the federal duty to offer a data roaming arrangement with 
commercially reasonable terms and conditions. In addition, the 
requesting provider may show that a host provider engaged in undue 
delay, or negotiated without any intent to perform. Further, the 
Commission provides that a requesting provider could file a complaint 
or petition for declaratory ruling regarding the commercial 
reasonableness of the agreed terms and conditions to the extent such 
claims are based on new information that the requesting provider 
reasonably did not know prior to signing the agreement. Because the 
standard of commercial reasonableness is one that we expect to 
accommodate a variety of terms and conditions in data roaming, and to 
discourage frivolous claims regarding the reasonableness of the terms 
and conditions in a signed agreement, the Commission will presume in 
such cases that the terms of a signed agreement meet the reasonableness 
standard and will require a party challenging the reasonableness of any 
term in the agreement to rebut that presumption.
    62. The Commission further clarifies that the Enforcement Bureau 
has delegated authority to resolve complaints arising out of the data 
roaming rule. The Commission notes that the Wireless Telecommunications 
Bureau has delegated authority to resolve other disputes with respect 
to the data roaming rule adopted herein. The Commission also notes that 
whether or not the appropriate procedural vehicle is a complaint under 
Section 20.12(e) or a petition for declaratory ruling under Section 1.2 
may vary depending on the circumstances of each case. If a dispute 
arises regarding data roaming, parties are encouraged to contact 
Commission staff for procedural guidance and for negotiations using the 
Commission's informal dispute resolution processes.
    63. Some commenters propose other measures for resolving data 
roaming disputes or roaming disputes in general, such as mandatory 
mediation or arbitration. Although the Commission is not adopting any 
such mandatory processes, the Commission notes that providers are free 
to negotiate and mutually agree to other processes, such as third party 
mediation or arbitration, as a means to resolve the roaming dispute.
    64. A few commenters propose that the Commission adopts a time 
limit for roaming negotiations to limit the opportunity for host 
carriers to delay in negotiating roaming agreements. The Commission 
declines to adopt a specific time limit because some data roaming 
negotiations may be more complex or fact-intensive than others and are 
likely to require more time. A single time limit for all negotiations 
would not be appropriate in such cases. As part of the requirement to 
offer a data roaming arrangement, the Commission expects parties to 
proceed with such negotiations in a timely manner and to avoid 
stonewalling behavior or undue delays. If a provider involved in a data 
roaming negotiation believes that another provider is delaying the 
negotiation unduly, it may ask the Commission to set a time limit for 
that particular negotiation. The Commission will consider such requests 
on a case-by-case basis.
    65. Determination of Commercial Reasonableness. The Commission will 
assess whether a particular data roaming offering includes commercially 
reasonable terms and conditions or whether a provider's conduct during 
negotiations, including its refusal to offer data roaming, is 
commercially reasonable, on a case-by-case basis, taking into 
consideration the totality of the circumstances. As discussed above, 
providers can negotiate different terms and conditions, including 
prices, with different parties, where differences in terms and 
conditions reasonably reflect actual differences in particular cases. 
Further, providers of commercial mobile data services can negotiate 
commercially reasonable measures to safeguard quality of service 
against network congestion that may result from data roaming traffic or 
to prevent harm to their networks. Conduct that unreasonably restrains 
trade, however, is not commercially reasonable.
    66. In the interconnected services context, the Commission listed 
factors it will take into account in resolving roaming disputes that 
are brought before it. Some parties have asked the Commission to use 
these factors, or others, in resolving disputes that arise with respect 
to data roaming. These factors relate to public interest benefits and 
costs of a data roaming arrangement offered in a particular case, 
including the impact on investment, competition, and consumer welfare 
and whether a particular data roaming offering is commercially 
reasonable. The Commission finds it is therefore appropriate to take 
them into account, as listed below, and to the extent relevant in the 
data roaming context. The Commission emphasizes that each case will be 
decided based on the totality of the circumstances. With that in mind, 
the Commission clarifies that, to guide it in determining the 
reasonableness of the negotiations, providers' conduct, and the terms 
and conditions of the proffered data roaming arrangements, including 
the prices, the Commission may consider the following factors, as well 
as others:
     Whether the host provider has responded to the request for 
negotiation, whether it has engaged in a persistent pattern of 
stonewalling behavior, and the length of time since the initial 
request;
     Whether the terms and conditions offered by the host 
provider are so unreasonable as to be tantamount to a refusal to offer 
a data roaming arrangement;
     Whether the parties have any roaming arrangements with 
each other, including roaming for interconnected services such as 
voice, and the terms of such arrangements;
     Whether the providers involved have had previous data 
roaming arrangements with similar terms;

[[Page 26210]]

     The level of competitive harm in a given market and the 
benefits to consumers;
     The extent and nature of providers' build-out;
     Significant economic factors, such as whether building 
another network in the geographic area may be economically infeasible 
or unrealistic, and the impact of any ``head-start'' advantages;
     Whether the requesting provider is seeking data roaming 
for an area where it is already providing facilities-based service;
     The impact of the terms and conditions on the incentives 
for either provider to invest in facilities and coverage, services, and 
service quality;
     Whether there are other options for securing a data 
roaming arrangement in the areas subject to negotiations and whether 
alternative data roaming partners are available;
     Events or circumstances beyond either provider's control 
that impact either the provision of data roaming or the need for data 
roaming in the proposed area(s) of coverage;
     The propagation characteristics of the spectrum licensed 
to the providers;
     Whether a host provider's decision not to offer a data 
roaming arrangement is reasonably based on the fact that the providers 
are not technologically compatible;
     Whether a host provider's decision not to enter into a 
roaming arrangement is reasonably based on the fact that roaming is not 
technically feasible for the service for which it is requested;
     Whether a host provider's decision not to enter into a 
roaming arrangement is reasonably based on the fact that changes to the 
host network necessary to accommodate the request are not economically 
reasonable;
     Whether a host provider's decision not to make a roaming 
arrangement effective was reasonably based on the fact that the 
requesting provider's provision of mobile data service to its own 
subscribers has not been done with a generation of wireless technology 
comparable to the technology on which the requesting provider seeks to 
roam;
     Other special or extenuating circumstances.
    67. The Commission emphasizes that these factors are not exclusive 
or exhaustive and that providers may argue that the Commission should 
consider other relevant factors in determining the commercial 
reasonableness of the negotiations, providers' conduct, and the terms 
and conditions of the proffered data roaming arrangements, including 
the prices. In addition, in making this determination the Commission 
also will consider all relevant precedents and decisions by the 
Commission.

E. Other Issues

    68. Advertising. In the Second Further Notice, the Commission 
sought comment on whether it should ``clarify that a carrier that 
obtains automatic roaming from another carrier does not have a right to 
advertise that it offers its subscribers roaming on a particular host 
carrier's network absent a voluntary agreement of the host carrier'' 
and whether such measure would help to ``prevent free riding on the 
value of the host carrier's brand name recognition and service quality 
reputation.'' The Commission now clarifies that it does not intend the 
rule it adopts today to be construed as permitting a provider that 
obtains roaming from another provider to use the trade name of a host 
provider when it advertises extended coverage due to roaming, unless 
the parties to the roaming agreement agree otherwise. Although Cellular 
South argues any such restrictions are not necessary or appropriate, 
the Commission agrees with AT&T that providers can make significant 
capital and marketing investments with respect to differentiating the 
quality and brand image of their networks from competitors. Also, the 
Commission is concerned that construing the rule the Commission adopts 
as allowing a roaming provider to engage in unauthorized use of a 
competitor's brand name recognition and/or service quality reputation 
as a means of differentiating the roaming provider's own service may 
indeed encourage the use of roaming as de facto resale. The Commission 
has previously stated with regard to automatic roaming for voice and 
data services for CMRS providers that ``automatic roaming obligations 
can not be used as a backdoor way to create de facto mandatory resale 
obligations or virtual reseller networks.'' As requested, the 
Commission also further clarifies that the Commission does not intend 
the data roaming rule it establishes in this order to disturb any 
provider's existing right, under applicable law, to advertise the 
geographic reach of their services, as extended by roaming agreements, 
and to use data roaming to expand their advertised service area, where 
under applicable law there is no unauthorized use of a competitor's 
brand name and/or image associated with such advertising.
    69. Spectrum Sharing. In the Second Further Notice, the Commission 
sought comment on what other actions might be appropriate to address 
spectrum capacity needs that may arise out of data roaming or to help 
ensure that spectrum is utilized to the fullest extent possible, 
including, for example, whether facilitating spectrum sharing 
arrangements between a host provider and a requesting provider would be 
helpful or appropriate. After review of the record, the Commission 
finds there is an insufficient basis to make a determination on 
spectrum sharing in the context of data roaming services at this time. 
The one comment addressing the issue does so briefly in a footnote and 
provides no detail on how such a requirement would be implemented. 
Given the very limited record on this option, the Commission finds that 
requiring spectrum sharing arrangements as a condition for commercial 
mobile data services roaming arrangements is not warranted at this 
time.

III. Procedural Matters

A. Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (the ``RFA''),\1\ an Initial Regulatory Flexibility Analysis 
(IRFA) was incorporated in the Order on Reconsideration and Second 
Further Notice of Proposed Rulemaking in WT Docket No. 05-265.\2\ The 
Commission sought written public comment on the proposals in the Second 
Further Notice, including comment on the IRFA. The comments received 
are discussed below. This present Final Regulatory Flexibility Analysis 
(FRFA) conforms to the RFA.\3\
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    \1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 857 (1996).
    \2\ Reexamination of Roaming Obligations of Commercial Mobile 
Radio Service Providers and Other Providers of Mobile Data Services, 
WT Docket No. 05-265, Order on Reconsideration and Second Further 
Notice of Proposed Rulemaking, 25 FCC Rcd 4181 (2010).
    \3\ See 5 U.S.C. 604.
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1. Need for, and Objectives of, the Proposed Rules
    2. In the Second Further Notice that the Commission adopted in 
conjunction with the Order on Reconsideration in 2010, the Commission 
sought to refresh and further develop the record by requesting 
additional comment on whether to extend roaming obligations to mobile 
data services, including mobile broadband Internet access, that are 
provided without interconnection to the public switched telephone 
network.\4\ The objective of the rule

[[Page 26211]]

adopted is to require providers of commercial mobile data services to 
offer data roaming arrangements on commercially reasonable terms and 
conditions, pursuant to the Commission's authority under the 
Communications Act. In addition, the Commission also clarifies that 
providers of commercial mobile data roaming services are permitted to 
negotiate commercially reasonable measures to safeguard quality of 
service against network congestion that may result from roaming traffic 
or to prevent harm to their networks.
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    \4\ The Commission had received several proposals concerning 
data roaming in response to the Further Notice, including a request 
by SpectrumCo that the Commission reconsider its decision to limit 
the automatic roaming obligation only to services that use the 
public switched network. See Second Further Notice, 25 FCC Rcd at 
4212-13 ] 63. The Commission noted that issues in SpectrumCo's 
petition for reconsideration were being addressed in the Second 
Further Notice. Id. at 4185 ] 9.
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    3. This rule will apply to all facilities-based providers of 
commercial mobile data services regardless of whether these entities 
are also providers of commercial mobile radio service (CMRS).\5\ For 
purposes of data roaming, the Commission defines a ``commercial mobile 
data service'' as any mobile data service that is not interconnected 
with the public switched network but is (1) provided for profit; and 
(2) available to the public or to such classes of eligible users as to 
be effectively available to the public.
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    \5\ For purposes of this proceeding, ``commercial mobile data 
service'' is defined as any mobile data service that is not 
interconnected with the public switched network but is (1) provided 
for profit; and (2) available to the public or to such classes of 
eligible users as to be effectively available to the public. 47 CFR 
20.12. The current roaming obligation in Section 20.12 applies to 
CMRS carriers' provision of mobile voice and data services that are 
interconnected with the public switched network, as well as their 
provision of text messaging and push-to-talk services. The data 
roaming rule adopted herein will cover mobile services that fall 
outside the scope of the current automatic roaming obligation if 
provided for profit; and available to the public or to such classes 
of eligible users as to be effectively available to the public.
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    4. Below, the Commission describes the duty of providers of 
commercial mobile data services to offer data roaming arrangements on 
commercially reasonable terms and conditions subject to certain 
limitations. When a request for data roaming negotiations is made, as a 
part of the duty of providers to offer data roaming arrangements on 
commercially reasonable terms and conditions, a would-be host provider 
has a duty to respond promptly to the request and avoid actions that 
unduly delay or stonewall the course of negotiations regarding that 
request. The Commission will determine whether the terms and conditions 
of a proffered data roaming arrangement are commercially reasonable on 
a case-by-case basis, taking into consideration the totality of the 
circumstances. The duty to offer data roaming arrangements on 
commercially reasonable terms and conditions is subject to certain 
limitations. In particular: (1) Providers may negotiate the terms of 
their roaming arrangements on an individualized basis; (2) it is 
reasonable for a provider not to offer a data roaming arrangement to a 
requesting provider that is not technologically compatible; (3) it is 
reasonable for a provider not to offer a data roaming arrangement where 
it is not technically feasible to provide roaming for the particular 
data service for which roaming is requested and any changes to the host 
provider's network necessary to accommodate roaming for such data 
service are not economically reasonable; and (4) it is reasonable for a 
provider to condition the effectiveness of a data roaming arrangement 
on the requesting provider's provision of mobile data service to its 
own subscribers using a generation of wireless technology comparable to 
the technology on which the requesting provider seeks to roam.\6\
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    \6\ In other words, a provider offering service only through, 
for example, a 1xRTT or GPRS/EDGE network, would not be able to rely 
on the data roaming obligation for this service to obtain roaming on 
a later generation EV-DO or UMTS/HSPA network until it starts 
offering the later generation service.
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2. Legal Basis
    5. The authority for the actions taken in this Second Report and 
Order is contained in Sections 1, 4(i), 4(j), 301, 303, 304, 309, 316, 
and 332 of the Communications Act of 1934, as amended, and Section 706 
of the Telecommunications Act of 1996, as amended, 47 U.S.C. 151, 
154(i), 154(j), 301, 303, 304, 309, 316, 332, and 1302.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    6. 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 governmental 
jurisdiction.'' \7\ In addition, the term ``small business'' has the 
same meaning as the term ``small business concern'' under the Small 
Business Act.\8\ 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).\9\
---------------------------------------------------------------------------

    \7\ 5 U.S.C. 601(6).
    \8\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \9\ 15 U.S.C. 632.
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    7. In the following paragraphs, the Commission further describes 
and estimates the number of small entity licensees that may be affected 
by the rules the Commission proposes in this Second Report and Order. 
This rule will apply to all facilities-based providers of commercial 
mobile data services regardless of whether these entities are also 
providers of commercial mobile radio service (CMRS).
    8. This FRFA analyzes the number of small entities affected on a 
service-by-service basis. When identifying small entities that could be 
affected by the Commission's new rules, this FRFA provides information 
that describes auction results, including the number of small entities 
that were winning bidders. However, the number of winning bidders that 
qualify as small businesses at the close of an auction does not 
necessarily reflect the total number of small entities currently in a 
particular service. The Commission does not generally require that 
licensees later provide business size information, except in the 
context of an assignment or a transfer of control application that 
involves unjust enrichment issues.
    9. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category.\10\ Prior to that time, such firms 
were within the now-superseded categories of ``Paging'' and ``Cellular 
and Other Wireless Telecommunications.'' \11\ Under the present and 
prior categories, the SBA has deemed a wireless business to be small if 
it has 1,500 or fewer employees.\12\ For the category of

[[Page 26212]]

Wireless Telecommunications, Carriers (except Satellite), Census data 
for 2007, which supersede data contained in the 2002 Census, show that 
there were 1,383 firms that operated that year.\13\ Of those 1,383, 
1,368 had fewer than 100 employees, and 15 firms had more than 100 
employees. Thus under this category and the associated small business 
size standard, the majority of firms can be considered small. 
Similarly, according to Commission data, 413 carriers reported that 
they were engaged in the provision of wireless telephony, including 
cellular service, Personal Communications Service (PCS), and 
Specialized Mobile Radio (SMR) Telephony services.\14\ Of these, an 
estimated 261 have 1,500 or fewer employees and 152 have more than 
1,500 employees.\15\ Consequently, the Commission estimates that 
approximately half or more of these firms can be considered small. 
Thus, using available data, we estimate that the majority of wireless 
firms can be considered small.
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    \10\ U.S. Census Bureau, 2007 NAICS Definitions, ``Wireless 
Communications Carriers (Except Satellite), NAICS code 517210''; 
http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
    \11\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211 
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S. 
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other 
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
    \12\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS).
    \13\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
    \14\ See Trends in Telephone Service at Table 5.3.
    \15\ See id.
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    10. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission initially defined a ``small 
business'' for C- and F-Block licenses as an entity that has average 
gross revenues of $40 million or less in the three previous calendar 
years.\16\ For F-Block licenses, an additional small business size 
standard for ``very small business'' was added and is defined as an 
entity that, together with its affiliates, has average gross revenues 
of not more than $15 million for the preceding three calendar 
years.\17\ These small business size standards, in the context of 
broadband PCS auctions, have been approved by the SBA.\18\ No small 
businesses within the SBA-approved small business size standards bid 
successfully for licenses in Blocks A and B. There were 90 winning 
bidders that claimed small business status in the first two C-Block 
auctions. A total of 93 bidders that claimed small business status won 
approximately 40 percent of the 1,479 licenses in the first auction for 
the D, E, and F Blocks.\19\ On April 15, 1999, the Commission completed 
the re-auction of 347 C-, D-, E-, and F-Block licenses in Auction No. 
22.\20\ Of the 57 winning bidders in that auction, 48 claimed small 
business status and won 277 licenses.
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    \16\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap; Amendment of the Commission's Cellular/
PCS Cross-Ownership Rule; WT Docket No. 96-59, GN Docket No. 90-314, 
Report and Order, 11 FCC Rcd 7824, 7850-52, paras. 57-60 (1996) 
(``PCS Report and Order''); see also 47 CFR 24.720(b).
    \17\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
    \18\ See Alvarez Letter 1998.
    \19\ See Broadband PCS, D, E and F Block Auction Closes, Public 
Notice, Doc. No. 89838 (rel. Jan. 14, 1997).
    \20\ See C, D, E, and F Block Broadband PCS Auction Closes, 
Public Notice, 14 FCC Rcd 6688 (WTB 1999). Before Auction No. 22, 
the Commission established a very small standard for the C Block to 
match the standard used for F Block. Amendment of the Commission's 
Rules Regarding Installment Payment Financing for Personal 
Communications Services (PCS) Licensees, WT Docket No. 97-82, Fourth 
Report and Order, 13 FCC Rcd 15743, 15768, para. 46 (1998).
---------------------------------------------------------------------------

    11. On January 26, 2001, the Commission completed the auction of 
422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35 
winning bidders in that auction, 29 claimed small business status.\21\ 
Subsequent events concerning Auction 35, including judicial and agency 
determinations, resulted in a total of 163 C and F Block licenses being 
available for grant. On February 15, 2005, the Commission completed an 
auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of 
the 24 winning bidders in that auction, 16 claimed small business 
status and won 156 licenses.\22\ On May 21, 2007, the Commission 
completed an auction of 33 licenses in the A, C, and F Blocks in 
Auction No. 71.\23\ Of the 12 winning bidders in that auction, five 
claimed small business status and won 18 licenses.\24\ On August 20, 
2008, the Commission completed the auction of 20 C-, D-, E-, and F-
Block Broadband PCS licenses in Auction No. 78.\25\ Of the eight 
winning bidders for Broadband PCS licenses in that auction, six claimed 
small business status and won 14 licenses.\26\
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    \21\ See C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced, Public Notice, 16 FCC Rcd 2339 (2001).
    \22\ See Broadband PCS Spectrum Auction Closes; Winning Bidders 
Announced for Auction No. 58, Public Notice, 20 FCC Rcd 3703 (2005).
    \23\ See Auction of Broadband PCS Spectrum Licenses Closes; 
Winning Bidders Announced for Auction No. 71, Public Notice, 22 FCC 
Rcd 9247 (2007).
    \24\ Id.
    \25\ See Auction of AWS-1 and Broadband PCS Licenses Closes; 
Winning Bidders Announced for Auction 78, Public Notice, 23 FCC Rcd 
12749 (WTB 2008).
    \26\ Id.
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    12. Narrowband Personal Communications Service. In 1994, the 
Commission conducted an auction for Narrowband PCS licenses. A second 
auction was also conducted later in 1994. For purposes of the first two 
Narrowband PCS auctions, ``small businesses'' were entities with 
average gross revenues for the prior three calendar years of $40 
million or less.\27\ Through these auctions, the Commission awarded a 
total of 41 licenses, 11 of which were obtained by four small 
businesses.\28\ To ensure meaningful participation by small business 
entities in future auctions, the Commission adopted a two-tiered small 
business size standard in the Narrowband PCS Second Report and 
Order.\29\ A ``small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $40 million.\30\ A ``very 
small business'' is an entity that, together with affiliates and 
controlling interests, has average gross revenues for the three 
preceding years of not more than $15 million.\31\ The SBA has approved 
these small business size standards.\32\ A third auction was conducted 
in 2001. Here, five bidders won 317 (Metropolitan Trading Areas and 
nationwide) licenses.\33\ Three of these claimed status as a small or 
very small entity and won 311 licenses.
---------------------------------------------------------------------------

    \27\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding Narrowband PCS, Third Memorandum Opinion 
and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175, 
196 ] 46 (1994).
    \28\ See ``Announcing the High Bidders in the Auction of ten 
Nationwide Narrowband PCS Licenses, Winning Bids Total 
$617,006,674,'' Public Notice, PNWL 94-004 (rel. Aug. 2, 1994); 
``Announcing the High Bidders in the Auction of 30 Regional 
Narrowband PCS Licenses; Winning Bids Total $490,901,787,'' Public 
Notice, PNWL 94-27 (rel. Nov. 9, 1994).
    \29\ Amendment of the Commission's Rules to Establish New 
Personal Communications Services, Narrowband PCS, Second Report and 
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd 
10456, 10476 ] 40 (2000).
    \30\ Id.
    \31\ Id.
    \32\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
    \33\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16 
FCC Rcd 18663 (WTB 2001).
---------------------------------------------------------------------------

    13. Specialized Mobile Radio. The Commission awards ``small 
entity'' bidding credits in auctions for Specialized Mobile Radio (SMR) 
geographic area licenses in the 800 MHz and 900 MHz bands to firms that 
had revenues of no more than $15 million in each of the three previous 
calendar

[[Page 26213]]

years.\34\ The Commission awards ``very small entity'' bidding credits 
to firms that had revenues of no more than $3 million in each of the 
three previous calendar years.\35\ The SBA has approved these small 
business size standards for the 900 MHz Service.\36\ The Commission has 
held auctions for geographic area licenses in the 800 MHz and 900 MHz 
bands. The 900 MHz SMR was completed in 1996. Sixty bidders claiming 
that they qualified as small businesses under the $15 million size 
standard won 263 geographic area licenses in the 900 MHz SMR band. The 
800 MHz SMR auction for the upper 200 channels was conducted in 1997. 
Ten bidders claiming that they qualified as small businesses under the 
$15 million size standard won 38 geographic area licenses for the upper 
200 channels in the 800 MHz SMR band.\37\ A second auction for the 800 
MHz band was conducted in 2002 and included 23 BEA licenses. One bidder 
claiming small business status won five licenses.\38\
---------------------------------------------------------------------------

    \34\ 47 CFR 90.814(b)(1).
    \35\ Id.
    \36\ See Letter to Thomas Sugrue, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
August 10, 1999.
    \37\ See ``Correction to Public Notice DA 96-586 `FCC Announces 
Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz 
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB 
1996).
    \38\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    14. The auction of the 1,050 800 MHz SMR geographic area licenses 
for the General Category channels was conducted in 2000. Eleven bidders 
won 108 geographic area licenses for the General Category channels in 
the 800 MHz SMR band qualified as small businesses under the $15 
million size standard.\39\ In an auction completed in 2000, a total of 
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz 
SMR service were awarded.\40\ Of the 22 winning bidders, 19 claimed 
``small business'' status and won 129 licenses. Thus, combining all 
three auctions, 40 winning bidders for geographic licenses in the 800 
MHz SMR band claimed status as small business.
---------------------------------------------------------------------------

    \39\ See ``800 MHz Specialized Mobile Radio (SMR) Service 
General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction 
Closes; Winning Bidders Announced,'' Public Notice, 15 FCC Rcd 17162 
(2000).
    \40\ See, ``800 MHz SMR Service Lower 80 Channels Auction 
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736 
(2000).
---------------------------------------------------------------------------

    15. In addition, there are numerous incumbent site-by-site SMR 
licensees and licensees with extended implementation authorizations in 
the 800 and 900 MHz bands. The Commission does not know how many firms 
provide 800 MHz or 900 MHz geographic area SMR pursuant to extended 
implementation authorizations, nor how many of these providers have 
annual revenues of no more than $15 million. One firm has over $15 
million in revenues. In addition, the Commission does not know how many 
of these firms have 1500 or fewer employees.\41\ The Commission 
assumes, for purposes of this analysis, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that small business size standard is approved by the SBA.
---------------------------------------------------------------------------

    \41\ See generally 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    16. AWS Services (1710-1755 MHz and 2110-2155 MHz bands (AWS-1); 
1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands 
(AWS-2); 2155-2175 MHz band (AWS-3)). For the AWS-1 bands, the 
Commission has defined 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.\42\ In 2006, the Commission conducted its first auction of 
AWS-1 licenses.\43\ In that initial AWS-1 auction, 31 winning bidders 
identified themselves as very small businesses.\44\ Twenty-six of the 
winning bidders identified themselves as small businesses.\45\ In a 
subsequent 2008 auction, the Commission offered 35 AWS-1 licenses.\46\ 
Four winning bidders identified themselves as very small businesses, 
and three of the winning bidders identified themselves as a small 
business.\47\ For AWS-2 and AWS-3, although the Commission does not 
know for certain which entities are likely to apply for these 
frequencies, the Commission notes that the AWS-1 bands are comparable 
to those used for cellular service and personal communications service. 
The Commission has not yet adopted size standards for the AWS-2 or AWS-
3 bands but has proposed to treat both AWS-2 and AWS-3 similarly to 
broadband PCS service and AWS-1 service due to the comparable capital 
requirements and other factors, such as issues involved in relocating 
incumbents and developing markets, technologies, and services.\48\
---------------------------------------------------------------------------

    \42\ See Service Rules for Advanced Wireless Services in the 1.7 
GHz and 2.1 GHz Bands, Report and Order, 18 FCC Rcd 25,162, App. B 
(2003), modified by Service Rules for Advanced Wireless Services In 
the 1.7 GHz and 2.1 GHz Bands, Order on Reconsideration, 20 FCC Rcd 
14,058, App. C (2005).
    \43\ See ``Auction of Advanced Wireless Services Licenses 
Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction No. 
66,'' AU Docket No. 06-30, Public Notice, 21 FCC Rcd 4562 (2006) 
(``Auction 66 Procedures Public Notice'').
    \44\ See ``Auction of Advanced Wireless Services Licenses 
Closes; Winning Bidders Announced for Auction No. 66,'' Public 
Notice, 21 FCC Rcd 10,521 (2006) (``Auction 66 Closing Public 
Notice'').
    \45\ See id.
    \46\ See AWS-1 and Broadband PCS Procedures Public Notice, 23 
FCC Rcd at 7499. Auction 78 also included an auction of broadband 
PCS licenses.
    \47\ See ``Auction of AWS-1 and Broadband PCS Licenses Closes, 
Winning Bidders Announced for Auction 78, Down Payments Due 
September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008, 
Final Payments Due September 23, 2008, Ten-Day Petition to Deny 
Period,'' Public Notice, 23 FCC Rcd 12,749 (2008).
    \48\ Service Rules for Advanced Wireless Services in the 1915-
1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz Bands et 
al., Notice of Proposed Rulemaking, 19 FCC Rcd 19,263, App. B 
(2005); Service Rules for Advanced Wireless Services in the 2155-
2175 MHz Band, Notice of Proposed Rulemaking, 22 FCC Rcd 17,035, 
App. (2007); Service Rules for Advanced Wireless Services in the 
2155-2175 MHz Band, Further Notice of Proposed Rulemaking, 23 FCC 
Rcd 9859, App. B (2008).
---------------------------------------------------------------------------

    17. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\49\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (``BETRS'').\50\ In the 
present context, the Commission will use the SBA's small business size 
standard applicable to Wireless Telecommunications Carriers (except 
Satellite), i.e., an entity employing no more than 1,500 persons.\51\ 
There are approximately 1,000 licensees in the Rural Radiotelephone 
Service, and the Commission estimates that there are 1,000 or fewer 
small entity licensees in the Rural Radiotelephone Service that may be 
affected by the rules and policies adopted herein.
---------------------------------------------------------------------------

    \49\ The service is defined in Sec.  22.99 of the Commission's 
Rules, 47 CFR 22.99.
    \50\ BETRS is defined in Sec. Sec.  22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \51\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    18. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses in the 2305-2320 MHz and 2345-2360 MHz bands. The Commission 
defined ``small business'' for the wireless communications services 
(WCS) auction as an entity with average gross revenues of $40 million 
for each of the three preceding years, and a ``very small business'' as 
an entity with average gross revenues of $15 million for each of the

[[Page 26214]]

three preceding years.\52\ The SBA has approved these definitions.\53\ 
The Commission auctioned geographic area licenses in the WCS service. 
In the auction, which commenced on April 15, 1997 and closed on April 
25, 1997, there were seven bidders that won 31 licenses that qualified 
as very small business entities, and one bidder that won one license 
that qualified as a small business entity.
---------------------------------------------------------------------------

    \52\ Amendment of the Commission's Rules to Establish Part 27, 
the Wireless Communications Service (WCS), Report and Order, 12 FCC 
Rcd 10785, 10879 ] 194 (1997).
    \53\ See Letter to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, from Aida Alvarez, Administrator, Small 
Business Administration, dated December 2, 1998.
---------------------------------------------------------------------------

    19. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
small business size standard for small entities specifically applicable 
to such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, the Commission applies the 
small business size standard under the SBA rules applicable. The SBA 
has deemed a wireless business to be small if it has 1,500 or fewer 
employees.\54\ For this service, the SBA uses the category of Wireless 
Telecommunications Carriers (except Satellite). Census data for 2007, 
which supersede data contained in the 2002 Census, show that there were 
1,383 firms that operated that year.\55\ Of those 1,383, 1,368 had 
fewer than 100 employees, and 15 firms had more than 100 employees. 
Thus under this category and the associated small business size 
standard, the majority of firms can be considered small.
---------------------------------------------------------------------------

    \54\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS).
    \55\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
---------------------------------------------------------------------------

    20. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service, and is subject to spectrum auctions. In the 220 MHz 
Third Report and Order, the Commission adopted a small business size 
standard for defining ``small'' and ``very small'' businesses for 
purposes of determining their eligibility for special provisions such 
as bidding credits and installment payments.\56\ This small business 
standard indicates that a ``small business'' is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $15 million for the preceding three 
years.\57\ A ``very small business'' is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that do not exceed $3 million for the preceding three 
years.\58\ The SBA has approved these small size standards.\59\ 
Auctions of Phase II licenses commenced on and closed in 1998.\60\ In 
the first auction, 908 licenses were auctioned in three different-sized 
geographic areas: Three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold.\61\ Thirty-nine small businesses won 
373 licenses in the first 220 MHz auction. A second auction included 
225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.\62\ A third auction 
included four licenses: 2 BEA licenses and 2 EAG licenses in the 220 
MHz Service. No small or very small business won any of these 
licenses.\63\ In 2007, the Commission conducted a fourth auction of the 
220 MHz licenses.\64\ Bidding credits were offered to small businesses. 
A bidder with attributed average annual gross revenues that exceeded $3 
million and did not exceed $15 million for the preceding three years 
(``small business'') received a 25 percent discount on its winning bid. 
A bidder with attributed average annual gross revenues that did not 
exceed $3 million for the preceding three years received a 35 percent 
discount on its winning bid (``very small business''). Auction 72, 
which offered 94 Phase II 220 MHz Service licenses, concluded in 
2007.\65\ In this auction, five winning bidders won a total of 76 
licenses. Two winning bidders identified themselves as very small 
businesses won 56 of the 76 licenses. One of the winning bidders that 
identified themselves as a small business won 5 of the 76 licenses won.
---------------------------------------------------------------------------

    \56\ Amendment of Part 90 of the Commission's Rules to Provide 
For the Use of the 220-222 MHz Band by the Private Land Mobile Radio 
Service, Third Report and Order, 12 FCC Rcd 10943, 11068-70 ]] 291-
295 (1997).
    \57\ Id. at 11068 ] 291.
    \58\ Id.
    \59\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, Federal Communications Commission, from 
Aida Alvarez, Administrator, Small Business Administration, dated 
January 6, 1998 (Alvarez to Phythyon Letter 1998).
    \60\ See generally ``220 MHz Service Auction Closes,'' Public 
Notice, 14 FCC Rcd 605 (WTB 1998).
    \61\ See ``FCC Announces It is Prepared to Grant 654 Phase II 
220 MHz Licenses After Final Payment is Made,'' Public Notice, 14 
FCC Rcd 1085 (WTB 1999).
    \62\ See ``Phase II 220 MHz Service Spectrum Auction Closes,'' 
Public Notice, 14 FCC Rcd 11218 (WTB 1999).
    \63\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
    \64\ See ``Auction of Phase II 220 MHz Service Spectrum 
Scheduled for June 20, 2007, Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction 72, 
Public Notice, 22 FCC Rcd 3404 (2007).
    \65\ See ``Auction of Phase II 220 MHz Service Spectrum Licenses 
Closes, Winning Bidders Announced for Auction 72, Down Payments due 
July 18, 2007, FCC Forms 601 and 602 due July 18, 2007, Final 
Payments due August 1, 2007, Ten-Day Petition to Deny Period, Public 
Notice, 22 FCC Rcd 11573 (2007).
---------------------------------------------------------------------------

    21. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
the Commission adopted size standards for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments.\66\ A small business in this service is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $40 million for the preceding three 
years.\67\ Additionally, a ``very small business'' is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $15 million for the preceding 
three years.\68\ SBA approval of these definitions is not required.\69\ 
In 2000, the Commission

[[Page 26215]]

conducted an auction of 52 Major Economic Area (``MEA'') licenses.\70\ 
Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. 
Five of these bidders were small businesses that won a total of 26 
licenses. A second auction of 700 MHz Guard Band licenses commenced and 
closed in 2001. All eight of the licenses auctioned were sold to three 
bidders. One of these bidders was a small business that won a total of 
two licenses.\71\
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    \66\ Service Rules for the 746-764 MHz Bands, and Revisions to 
Part 27 of the Commission's Rules, Second Report and Order, 15 FCC 
Rcd 5299 (2000). Service rules were amended in 2007, but no changes 
were made to small business size categories. See Service Rules for 
the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, 
Revision of the Commission's Rules to Ensure Compatibility with 
Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102, 
Section 68.4(a) of the Commission's Rules Governing Hearing Aid-
Compatible Telephones, WT Docket No. 01-309, Biennial Regulatory 
Review--Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and 
Harmonize Various Rules Affecting Wireless Radio Services, WT Docket 
03-264, Former Nextel Communications, Inc. Upper 700 MHz Guard Band 
Licenses and Revisions to Part 27 of the Commission's Rules, WT 
Docket No. 06-169, Implementing a Nationwide, Broadband, 
Interoperable Public Safety Network in the 700 MHz Band, PS Docket 
No. 06-229, Development of Operational, Technical and Spectrum 
Requirements for Meeting Federal, State and Local Public Safety 
Communications Requirements Through the Year 2010, WT Docket No. 96-
86, Report and Order and Further Notice of Proposed Rulemaking, 22 
FCC Rcd 8064 (2007).
    \67\ Id. at 5343 ] 108.
    \68\ Id.
    \69\ Id. at 5343 ] 108 n.246 (for the 746-764 MHz and 776-704 
MHz bands, the Commission is exempt from 15 U.S.C. 632, which 
requires Federal agencies to obtain Small Business Administration 
approval before adopting small business size standards).
    \70\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
    \71\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

    22. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and 
Order, the Commission revised its rules regarding Upper 700 MHz 
licenses.\72\ On January 24, 2008, the Commission commenced Auction 73 
in which several licenses in the Upper 700 MHz band were available for 
licensing: 12 Regional Economic Area Grouping licenses in the C Block, 
and one nationwide license in the D Block.\73\ The auction concluded on 
March 18, 2008, with 3 winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) and winning five 
licenses.
---------------------------------------------------------------------------

    \72\ 700 MHz Second Report and Order, 22 FCC Rcd 15289.
    \73\ See Auction of 700 MHz Band Licenses Closes, Public Notice, 
23 FCC Rcd 4572 (WTB 2008).
---------------------------------------------------------------------------

    23. Lower 700 MHz Band Licenses. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits.\74\ The Commission defined a ``small business'' as an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues not exceeding $40 million for the preceding 
three years.\75\ A ``very small business'' is defined as an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues that are not more than $15 million for the 
preceding three years.\76\ Additionally, the lower 700 MHz Service had 
a third category of small business status for Metropolitan/Rural 
Service Area (MSA/RSA) licenses--``entrepreneur''--which is defined as 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues that are not more than $3 
million for the preceding three years.\77\ The SBA approved these small 
size standards.\78\ An auction of 740 licenses (one license in each of 
the 734 MSAs/RSAs and one license in each of the six Economic Area 
Groupings (EAGs)) was conducted in 2002. Of the 740 licenses available 
for auction, 484 licenses were won by 102 winning bidders. Seventy-two 
of the winning bidders claimed small business, very small business or 
entrepreneur status and won licenses.\79\ A second auction commenced on 
May 28, 2003, closed on June 13, 2003, and included 256 licenses.\80\ 
Seventeen winning bidders claimed small or very small business status, 
and nine winning bidders claimed entrepreneur status.\81\ In 2005, the 
Commission completed an auction of 5 licenses in the Lower 700 MHz 
band. All three winning bidders claimed small business status.
---------------------------------------------------------------------------

    \74\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002) (``Channels 52-59 Report and Order'').
    \75\ See id., 17 FCC Rcd at 1087-88 ] 172.
    \76\ See id.
    \77\ See id., 17 FCC Rcd at 1088 ] 173.
    \78\ See Alvarez Letter 1998.
    \79\ See Lower 700 MHz Band Auction Closes, Public Notice, 17 
FCC Rcd 17,272 (2002).
    \80\ See Lower 700 MHz Band Auction Closes, Public Notice, 18 
FCC Rcd 11,873 (2003).
    \81\ See id.
---------------------------------------------------------------------------

    24. In 2007, the Commission reexamined its rules governing the 700 
MHz band in the 700 MHz Second Report and Order.\82\ An auction of A, B 
and E block 700 MHz licenses was held in 2008.\83\ Twenty winning 
bidders claimed small business status (those with attributable average 
annual gross revenues that exceed $15 million and do not exceed $40 
million for the preceding three years). Thirty three winning bidders 
claimed very small business status (those with attributable average 
annual gross revenues that do not exceed $15 million for the preceding 
three years).
---------------------------------------------------------------------------

    \82\ 700 MHz Second Report and Order, Second Report and Order, 
22 FCC Rcd 15,289, 15,359 n.434 (2007).
    \83\ See Auction of 700 MHz Band Licenses Closes, Public Notice, 
23 FCC Rcd 4572 (2008).
---------------------------------------------------------------------------

    25. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite).\84\ Under the SBA small business size standard, a business 
is small if it has 1,500 or fewer employees.\85\ According to Trends in 
Telephone Service data, 413 carriers reported that they were engaged in 
wireless telephony.\86\ Of these, an estimated 261 have 1,500 or fewer 
employees and 152 have more than 1,500 employees.\87\ Therefore, more 
than half of these entities can be considered small.
---------------------------------------------------------------------------

    \84\ 13 CFR 121.201, NAICS code 517210.
    \85\ Id.
    \86\ Trends in Telephone Service, tbl. 5.3.
    \87\ Id.
---------------------------------------------------------------------------

    26. Air-Ground Radiotelephone Service. The Commission has 
previously used the SBA's small business definition applicable to 
Wireless Telecommunications Carriers (except Satellite), i.e., an 
entity employing no more than 1,500 persons.\88\ There are 
approximately 100 licensees in the Air-Ground Radiotelephone Service, 
and under that definition, the Commission estimates that almost all of 
them qualify as small entities under the SBA definition. For purposes 
of assigning Air-Ground Radiotelephone Service licenses through 
competitive bidding, the Commission has defined ``small business'' as 
an entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the preceding three years not 
exceeding $40 million.\89\ A ``very small business'' is defined as an 
entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the preceding three years not 
exceeding $15 million.\90\ These definitions were approved by the 
SBA.\91\ In 2006, the Commission completed an auction of nationwide 
commercial Air-Ground Radiotelephone Service licenses in the 800 MHz 
band (Auction 65). Later in 2006, the auction closed with two winning 
bidders winning two Air-Ground Radiotelephone Services licenses. 
Neither of the winning bidders claimed small business status.
---------------------------------------------------------------------------

    \88\ 13 CFR 121.201, NAICS codes 517210.
    \89\ Amendment of Part 22 of the Commission's Rules to Benefit 
the Consumers of Air-Ground Telecommunications Services, Biennial 
Regulatory Review--Amendment of Parts 1, 22, and 90 of the 
Commission's Rules, Amendment of Parts 1 and 22 of the Commission's 
Rules to Adopt Competitive Bidding Rules for Commercial and General 
Aviation Air-Ground Radiotelephone Service, WT Docket Nos. 03-103, 
05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd 
19663, 19677-83 ]] 28-42 (2005).
    \90\ Id.
    \91\ See Letter from Hector V. Barreto, Administrator, SBA, to 
Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access 
Division, Wireless Telecommunications Bureau, FCC (filed Sept. 19, 
2005).
---------------------------------------------------------------------------

    27. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size

[[Page 26216]]

standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category Wireless Telecommunications Carriers 
(except satellite),'' which is 1,500 or fewer employees.\92\ Census 
data for 2007, which supersede data contained in the 2002 Census, show 
that there were 1,383 firms that operated that year.\93\ Of those 
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 
100 employees. Thus under this category and the associated small 
business size standard, the majority of firms can be considered small. 
Additionally, the Commission notes that most applicants for 
recreational licenses in this category of wireless service are 
individuals. Approximately 581,000 ship station licensees and 131,000 
aircraft station licensees operate domestically and are not subject to 
the radio carriage requirements of any statute or treaty. For purposes 
of our evaluations in this analysis, the Commission estimates that 
there are up to approximately 712,000 licensees that are small 
businesses (or individuals) under the SBA standard. In addition, 
between December 3, 1998 and December 14, 1998, the Commission held an 
auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz 
(ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For 
purposes of the auction, the Commission defined a ``small'' business as 
an entity that, together with controlling interests and affiliates, has 
average gross revenues for the preceding three years not to exceed $15 
million dollars. In addition, a ``very small'' business is one that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $3 million 
dollars.\94\ There are approximately 10,672 licensees in the Marine 
Coast Service, and the Commission estimates that almost all of them 
qualify as ``small'' businesses under the above special small business 
size standards
---------------------------------------------------------------------------

    \92\ 13 CFR 121.201, NAICS code 517210.
    \93\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
    \94\ Amendment of the Commission's Rules Concerning Maritime 
Communications, PR Docket No. 92-257, Third Report and Order and 
Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

    28. Fixed Microwave Services. Microwave services include common 
carrier,\95\ private-operational fixed,\96\ and broadcast auxiliary 
radio services.\97\ They also include the Local Multipoint Distribution 
Service (LMDS),\98\ the Digital Electronic Message Service (DEMS),\99\ 
and the 24 GHz Service,\100\ where licensees can choose between common 
carrier and non-common carrier status.\101\ The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of the IRFA, the Commission will use the SBA's definition 
applicable to Wireless Telecommunications Carriers (except satellite)--
i.e., an entity with no more than 1,500 persons is considered 
small.\102\ For the category of Wireless Telecommunications Carriers 
(except Satellite), Census data for 2007, which supersede data 
contained in the 2002 Census, show that there were 1,383 firms that 
operated that year.\103\ Of those 1,383, 1,368 had fewer than 100 
employees, and 15 firms had more than 100 employees. Thus under this 
category and the associated small business size standard, the majority 
of firms can be considered small. The Commission notes that the number 
of firms does not necessarily track the number of licensees. The 
Commission estimates that virtually all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition.
---------------------------------------------------------------------------

    \95\ See 47 CFR Part 101, Subparts C and I.
    \96\ See 47 CFR Part 101, Subparts C and H.
    \97\ Auxiliary Microwave Service is governed by Part 74 of Title 
47 of the Commission's Rules. See 47 CFR Part 74. Available to 
licensees of broadcast stations and to broadcast and cable network 
entities, broadcast auxiliary microwave stations are used for 
relaying broadcast television signals from the studio to the 
transmitter, or between two points such as a main studio and an 
auxiliary studio. The service also includes mobile TV pickups, which 
relay signals from a remote location back to the studio.
    \98\ See 47 CFR Part 101, Subpart L.
    \99\ See 47 CFR Part 101, Subpart G.
    \100\ See id.
    \101\ See 47 CFR 101.533, 101.1017.
    \102\ 13 CFR 121.201, NAICS code 517210.
    \103\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
---------------------------------------------------------------------------

    29. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video 
telecommunications.\104\ In the 1998 and 1999 LMDS auctions,\105\ the 
Commission defined a small business as an entity that has annual 
average gross revenues of less than $40 million in the previous three 
calendar years.\106\ Moreover, the Commission added an additional 
classification for a ``very small business,'' which was defined as an 
entity that had annual average gross revenues of less than $15 million 
in the previous three calendar years.\107\ These definitions of ``small 
business'' and ``very small business'' in the context of the LMDS 
auctions have been approved by the SBA.\108\ In the first LMDS auction, 
104 bidders won 864 licenses. Of the 104 auction winners, 93 claimed 
status as small or very small businesses. In the LMDS re-auction, 40 
bidders won 161 licenses. Based on this information, the Commission 
believes that the number of small LMDS licenses will include the 93 
winning bidders in the first auction and the 40 winning bidders in the 
re-auction, for a total of 133 small entity LMDS providers as defined 
by the SBA and the Commission's auction rules.
---------------------------------------------------------------------------

    \104\ See Local Multipoint Distribution Service, Second Report 
and Order, 12 FCC Rcd 12545 (1997).
    \105\ The Commission has held two LMDS auctions: Auction 17 and 
Auction 23. Auction No. 17, the first LMDS auction, began on 
February 18, 1998, and closed on March 25, 1998. (104 bidders won 
864 licenses.) Auction No. 23, the LMDS re-auction, began on April 
27, 1999, and closed on May 12, 1999. (40 bidders won 161 licenses.)
    \106\ See LMDS Order, 12 FCC Rcd at 12545.
    \107\ Id.
    \108\ See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA 
(January 6, 1998).
---------------------------------------------------------------------------

    30. Offshore Radiotelephone Service. This service operates on 
several UHF television broadcast channels that are not used for 
television broadcasting in the coastal areas of states bordering the 
Gulf of Mexico.\109\ There are presently approximately 55 licensees in 
this service. The Commission is unable to estimate at this time the 
number of licensees that would qualify as small under the SBA's small 
business size standard for the category of Wireless Telecommunications 
Carriers (except Satellite). Under that standard \110\ a business is 
small if it has 1,500 or fewer employees.\111\ Census data for 2007, 
which supersede data contained in the 2002 Census, show that there were 
1,383 firms that operated that year.\112\ Of those 1,383, 1,368 had 
fewer than 100 employees, and 15 firms had more than 100 employees. 
Thus under this category and the associated small business size 
standard, the majority of firms can be considered small.
---------------------------------------------------------------------------

    \109\ This service is governed by Subpart I of Part 22 of the 
Commission's Rules. See 47 CFR 22.1001-22.1037.
    \110\ 13 CFR 121.201, NAICS code 517210.
    \111\ Id.
    \112\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
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    31. 39 GHz Service. The Commission created a special small business 
size

[[Page 26217]]

standard for 39 GHz licenses--an entity that has average gross revenues 
of $40 million or less in the three previous calendar years.\113\ An 
additional size standard for ``very small business'' is: an entity 
that, together with affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\114\ The SBA 
has approved these small business size standards.\115\ The auction of 
the 2,173 39 GHz licenses began and closed in 2000. The 18 bidders who 
claimed small business status won 849 licenses.
---------------------------------------------------------------------------

    \113\ See Amendment of the Commission's Rules Regarding the 
37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report 
and Order, 63 FR 6079 (Feb. 6, 1998).
    \114\ Id.
    \115\ See Letter to Kathleen O'Brien Ham, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, FCC, 
from Aida Alvarez, Administrator, SBA (Feb. 4, 1998).
---------------------------------------------------------------------------

    32. 218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 594 Metropolitan 
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by 
entities qualifying as a small business. For that auction, the small 
business size standard was an entity that, together with its 
affiliates, has no more than a $6 million net worth and, after federal 
income taxes (excluding any carry over losses), has no more than $2 
million in annual profits each year for the previous two years.\116\ In 
the 218-219 MHz Report and Order and Memorandum Opinion and Order, the 
Commission established a small business size standard for a ``small 
business'' as an entity that, together with its affiliates and persons 
or entities that hold interests in such an entity and their affiliates, 
has average annual gross revenues not to exceed $15 million for the 
preceding three years.\117\ A ``very small business'' is defined as an 
entity that, together with its affiliates and persons or entities that 
hold interests in such an entity and its affiliates, has average annual 
gross revenues not to exceed $3 million for the preceding three 
years.\118\ The SBA has approved of these definitions.\119\ These size 
standards will be used in future auctions of 218-219 MHz spectrum.
---------------------------------------------------------------------------

    \116\ Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, PP Docket No. 93-253, Fourth Report and 
Order, 9 FCC Rcd 2330 (1994).
    \117\ Amendment of Part 95 of the Commission's Rules to Provide 
Regulatory Flexibility in the 218-219 MHz Service, WT Docket No. 98-
169, Report and Order and Memorandum Opinion and Order, 15 FCC Rcd 
1497 (1999).
    \118\ Id.
    \119\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------

    33. Incumbent 24 GHz Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band, 
and applicants who wish to provide services in the 24 GHz band. For 
this service, the Commission uses the SBA small business size standard 
for the category ``Wireless Telecommunications Carriers (except 
satellite),'' which is 1,500 or fewer employees.\120\ To gauge small 
business prevalence for these cable services we must, however, use the 
most current census data. Census data for 2007, which supersede data 
contained in the 2002 Census, show that there were 1,383 firms that 
operated that year.\121\ Of those 1,383, 1,368 had fewer than 100 
employees, and 15 firms had more than 100 employees. Thus under this 
category and the associated small business size standard, the majority 
of firms can be considered small. The Commission notes that the Census' 
use of the classifications ``firms'' does not track the number of 
``licenses''. The Commission believes that there are only two licensees 
in the 24 GHz band that were relocated from the 18 GHz band, Teligent 
\122\ and TRW, Inc. It is the Commission's understanding that Teligent 
and its related companies have less than 1,500 employees, though this 
may change in the future. TRW is not a small entity. Thus, only one 
incumbent licensee in the 24 GHz band is a small business entity.
---------------------------------------------------------------------------

    \120\ 13 CFR 121.201, NAICS code 517210.
    \121\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007 
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
    \122\ Teligent acquired the DEMS licenses of FirstMark, the only 
licensee other than TRW in the 24 GHz band whose license has been 
modified to require relocation to the 24 GHz band.
---------------------------------------------------------------------------

    34. Future 24 GHz Licensees. With respect to new applicants in the 
24 GHz band, the small business size standard for ``small business'' is 
an entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the three preceding years not in 
excess of $15 million.\123\ ``Very small business'' in the 24 GHz band 
is an entity that, together with controlling interests and affiliates, 
has average gross revenues not exceeding $3 million for the preceding 
three years.\124\ The SBA has approved these small business size 
standards.\125\ These size standards will apply to the future auction, 
if held.
---------------------------------------------------------------------------

    \123\ Amendments to Parts 1, 2, 87 and 101 of the Commission's 
Rules to License Fixed Services at 24 GHz, WT Docket No. 99-327, 
Report and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); see 
also 47 CFR 101.538(a)(2).
    \124\ Amendments to Parts 1, 2, 87 and 101 of the Commission's 
Rules to License Fixed Services at 24 GHz, WT Docket No. 99-327, 
Report and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); see 
also 47 CFR 101.538(a)(1).
    \125\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
FCC, from Gary M. Jackson, Assistant Administrator, SBA (July 28, 
2000).
---------------------------------------------------------------------------

    35. 1670-1675 MHz Services. This service can be used for fixed and 
mobile uses, except aeronautical mobile.\126\ An auction for one 
license in the 1670-1675 MHz band was conducted in 2003. The winning 
bidder was not a small entity.
---------------------------------------------------------------------------

    \126\ 47 CFR 2.106; see generally 47 CFR 27.1-.70.
---------------------------------------------------------------------------

    36. 3650-3700 MHz Band. In March 2005, the Commission released a 
Report and Order and Memorandum Opinion and Order that provides for 
nationwide, non-exclusive licensing of terrestrial operations, 
utilizing contention-based technologies, in the 3650 MHz band (i.e., 
3650-3700 MHz).\127\ As of April 2010, more than 1270 licenses have 
been granted and more than 7433 sites have been registered. The 
Commission has not developed a definition of small entities applicable 
to 3650-3700 MHz band nationwide, non-exclusive licensees. However, the 
Commission estimates that the majority of these licensees are Internet 
Access Service Providers (ISPs) and that most of those licensees are 
small businesses.
---------------------------------------------------------------------------

    \127\ The service is defined in section 90.1301 et seq. of the 
Commission's Rules, 47 CFR 90.1301 et seq.
---------------------------------------------------------------------------

    37. Internet Service Providers. The 2007 Economic Census places 
these firms, whose services might include voice over Internet protocol 
(VoIP), in either of two categories, depending on whether the service 
is provided over the provider's own telecommunications facilities 
(e.g., cable and DSL ISPs), or over client-supplied telecommunications 
connections (e.g., dial-up ISPs). The former are within the category of 
Wired Telecommunications Carriers,\128\ which has an SBA small business 
size standard of 1,500 or fewer employees.\129\ These are also labeled 
``broadband.'' The latter are within the category of All Other 
Telecommunications,\130\ which has a size standard of annual receipts 
of $25 million or less.\131\ These are labeled non-broadband.
---------------------------------------------------------------------------

    \128\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \129\ 13 CFR 121.201, NAICS code 517110.
    \130\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All 
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
    \131\ 13 CFR 121.201, NAICS code 517919 (updated for inflation 
in 2008).
---------------------------------------------------------------------------

    38. The most current Economic Census data for all such firms are 
2007 data, which are detailed specifically for

[[Page 26218]]

ISPs within the categories above. For the first category, the data show 
that 396 firms operated for the entire year, of which 159 had nine or 
fewer employees.\132\ For the second category, the data show that 1,682 
firms operated for the entire year.\133\ Of those, 1,675 had annual 
receipts below $25 million per year, and an additional two had receipts 
of between $25 million and $49,999,999. Consequently, the Commission 
estimates that the majority of ISP firms are small entities.
---------------------------------------------------------------------------

    \132\ U.S. Census Bureau, 2007 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size,'' NAICS code 5171103 
(released Nov. 19, 2010) (employment size). The data show only two 
categories within the whole: the categories for 1-4 employees and 
for 5-9 employees.
    \133\ U.S. Census Bureau, 2007 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size,'' NAICS code 5179191 
(released Nov. 19, 2010) (receipts size).
---------------------------------------------------------------------------

    39. Satellite Telecommunications Providers. Two economic census 
categories address the satellite industry. The first category has a 
small business size standard of $15 million or less in average annual 
receipts, under SBA rules.\134\ The second has a size standard of $25 
million or less in annual receipts.\135\
---------------------------------------------------------------------------

    \134\ 13 CFR 121.201, NAICS code 517410.
    \135\ 13 CFR 121.201, NAICS code 517919.
---------------------------------------------------------------------------

    40. The category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing telecommunications 
services to other establishments in the telecommunications and 
broadcasting industries by forwarding and receiving communications 
signals via a system of satellites or reselling satellite 
telecommunications.'' \136\ Census Bureau data for 2007 show that 512 
Satellite Telecommunications firms that operated for that entire 
year.\137\ Of this total, 464 firms had annual receipts of under $10 
million, and 18 firms had receipts of $10 million to $24,999,999.\138\ 
Consequently, the Commission estimates that the majority of Satellite 
Telecommunications firms are small entities that might be affected by 
its action.
---------------------------------------------------------------------------

    \136\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410 
Satellite Telecommunications.''
    \137\ See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
    \138\  http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
---------------------------------------------------------------------------

    41. The second category, i.e. ``All Other Telecommunications'' 
comprises ``establishments primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing Internet services or voice over Internet 
protocol (VoIP) services via client-supplied telecommunications 
connections are also included in this industry.'' \139\ For this 
category, Census Bureau data for 2007 show that there were a total of 
2,383 firms that operated for the entire year.\140\ Of this total, 
2,347 firms had annual receipts of under $25 million and 12 firms had 
annual receipts of $25 million to $49,999,999.\141\ Consequently, the 
Commission estimates that the majority of All Other Telecommunications 
firms are small entities that might be affected by its action.
---------------------------------------------------------------------------

    \139\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517919&search=2007%20NAICS%20Search.
    \140\ U.S. Cens http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
    \141\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
---------------------------------------------------------------------------

    42. Part 15 Device Manufacturers. The Commission has not developed 
a definition of small applicable to unlicensed communications devices 
manufacturers. Therefore the Commission will utilize the SBA definition 
applicable to Radio and Television Broadcasting and Wireless 
Communications Equipment Manufacturing. The Census Bureau defines this 
category as follows: This industry comprises establishments primarily 
engaged in manufacturing radio and television broadcast and wireless 
equipment. Examples of products made by these establishments are: 
transmitting and receiving antennas, cable television equipment, GPS 
equipment, pagers, cellular phones, mobile communications equipment, 
and radio and television studio and broadcasting equipment.'' \142\ The 
SBA has developed a small business size standard for Radio and 
Television Broadcasting and Wireless Communications Equipment 
Manufacturing, which is all firms having 750 or fewer employees.\143\ 
The U.S. Census data for 2007 indicate that in that year there were 939 
active establishments, of which 912 had less than 500 hundred employees 
and of which 27 had 500 employees or more.\144\ Accordingly, the 
Commission concludes that the majority of businesses in this category 
were small.
---------------------------------------------------------------------------

    \142\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=334220&search=2007%20NAICS%20Search.
    \143\ NAICS Code 334220, 13 CFR 121.201(Effective August 8, 2008 
to November 4, 2011).
    \144\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334220.
---------------------------------------------------------------------------

    43. Telephone Apparatus Manufacturing. This industry comprises 
establishments primarily engaged in manufacturing wire telephone and 
data communications equipment. These products may be standalone or 
board-level components of a larger system. Examples of products made by 
these establishments are central office switching equipment, cordless 
telephones (except cellular), PBX equipment, telephones, telephone 
answering machines, LAN modems, multi-user modems, and other data 
communications equipment, such as bridges, routers, and gateways.\145\ 
The SBA has developed a small business size standard for Telephone 
Apparatus Manufacturing, which is all such firms having fewer than 
1,000 employees.\146\ U.S. Census data for 2007 indicate that there 
were 398 establishments that were operational during that year. Of that 
398, 393 had less than 100 employees and 5 had 1,000 employees or 
more.\147\ Accordingly, the Commission concludes that the majority of 
businesses in this category were small.
---------------------------------------------------------------------------

    \145\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
    \146\ NAICS CODE 334210, 13 CFR 121.201(Effective August 8, 2008 
to November 4, 2011).
    \147\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334210.
---------------------------------------------------------------------------

    44. Other Communications Equipment Manufacturing. This industry 
comprises establishments primarily engaged in manufacturing 
communications equipment (except telephone apparatus, and radio and 
television broadcast, and wireless communications equipment).\148\ The 
SBA has developed a small business size standard for Other 
Communications Equipment Manufacturing, which is all such firms having 
fewer than 750 employees.\149\ U.S. Census data for 2007 indicate that 
there were 452 establishments that were operational in this category of 
manufacturing during that year. Of that 452, 452 had fewer than 1,000 
employees. None had more than 100 employees.\150\ Accordingly, the

[[Page 26219]]

Commission concludes that all of the businesses in this category were 
small.
---------------------------------------------------------------------------

    \148\ http://www.census.gov/naics/2007/def/ND334290.HTM.
    \149\ NAICS CODE 334290, 13 CFR 121.201(Effective August 8, 2008 
to November 4, 2011).
    \150\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334290.
---------------------------------------------------------------------------

4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    45. The compliance requirement is that facilities-based providers 
of commercial mobile data services are required to offer data roaming 
arrangements to other such providers on commercially reasonable terms 
and conditions.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered
    46. The RFA requires an agency to describe any significant 
alternatives that it has considered in developing its 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.\151\
---------------------------------------------------------------------------

    \151\ See 5 U.S.C. 603(c).
---------------------------------------------------------------------------

    47. The adoption of a data roaming rule will benefit small 
providers in many ways. The record in this proceeding shows that, among 
other things, many small providers have had difficulty negotiating data 
roaming agreements with nationwide providers on commercially reasonable 
terms. The data roaming rule will benefit small providers by helping 
them to maintain their ability to compete with the major national 
providers, and ensuring that consumers of such small providers have 
access to data services when they travel outside of their provider's 
network coverage. Additionally, the data roaming will help to encourage 
investment by ensuring that small providers wanting to invest in their 
networks or expand their coverage into new areas can offer subscribers 
a competitive level of coverage during the early period of investment 
and buildout.
    48. With respect to data roaming disputes, the Commission 
establishes a complaint process similar to the complaint process 
available under the current roaming obligations for interconnected 
voice and data services. Under the dispute resolution procedures 
established, providers, including small providers, may file a complaint 
or file a petition for declaratory ruling to resolve any disputes 
arising out of the data roaming rule adopted. Additionally, although 
all data roaming complaints will not automatically be placed on the 
Accelerated Docket, an affected small provider can seek consideration 
of its complaint under the Commission's Accelerated Docket rules and 
procedures where appropriate. Furthermore, during ongoing negotiations 
for data roaming, parties (including small providers) can seek 
Commission dispute resolution for claims such as, for example, those 
regarding the commercial reasonableness of the negotiations, providers' 
conduct, and the terms and conditions of the proffered data roaming 
arrangement. With respect to claims regarding the commercial 
reasonableness of the proffered terms and conditions, including prices, 
the Commission staff may, in resolving such claims, require both 
parties to provide to the Commission their best and final offers (final 
offers). This dispute resolution mechanism offers small providers an 
avenue to have disputes resolved in the event the parties are not able 
to agree on terms.
    49. In light of the benefits described above that small providers 
will likely receive as a result of the adoption of the data roaming 
rule, and the extensive and uniform record support from small providers 
for a data roaming rule consistent with the Commission's approach, the 
Commission does not address any significant alternatives considered in 
developing that approach.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    50. None.

B. Final Paperwork Reduction Act Analysis

    70. This document contains modified information collection 
requirements 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 Section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies are invited to comment on 
the modified information collection requirements contained in this 
proceeding. In addition, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission seeks specific comment on how the Commission might ``further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.''
    71. In this present document, the Commission has assessed the 
effects of using the procedural complaint processes established in the 
Commission's Part 1, Subpart E rules, including applicable filing and 
discovery procedures, to govern the process for data roaming 
complaints, and find that this will ensure that voice and data roaming 
complaints are resolved under a consistent Commission process, which 
will reduce the regulatory burden of understanding and using these 
processes, and will allow a party to bring a single proceeding to 
address a roaming dispute that involves both voice and data services. 
This will, in turn, be more efficient for providers and result in 
faster resolution of such disputes.

C. Congressional Review Act

    72. The Commission will send a copy of this Second Report and Order 
to Congress and the Government Accountability Office, pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

D. Accessible Formats

    73. To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an e-mail to [email protected] or call the Consumer & Governmental 
Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY).

IV. Ordering Clauses

    74. Accordingly, it is ordered, pursuant to the authority contained 
in Sections 1, 4(i), 4(j), 301, 303, 304, 309, 316, and 332 of the 
Communications Act of 1934, as amended, and Section 706 of the 
Telecommunications Act of 1996, as amended, 47 U.S.C. 151, 154(i), 
154(j), 301, 303, 304, 309, 316, 332, and 1302, that this second report 
and order in WT Docket No. 05-265 is hereby adopted.
    75. It is further ordered that Parts 0 and 20 of the Commission's 
rules, 47 CFR Parts 0 and 20, are Amended as set forth in Appendix A, 
and such rule amendments shall be effective 30 days after the date of 
publication of the text thereof in the Federal Register, except for 
Sec.  20.12(e)(2), which contains an information collection that is 
subject to OMB approval.
    76. It is further ordered that Sec.  20.12(e)(2) and the 
information collection contained in this Second Report and Order will 
become effective following approval by the Office of Management and 
Budget. The Commission will publish a document at

[[Page 26220]]

a later date establishing the effective date.
    77. It is further ordered that, pursuant to Section 5(c) of the 
Communications Act of 1934, as amended, 47 U.S.C. 155(c), the 
Enforcement Bureau and the Wireless Telecommunications Bureau are 
granted delegated authority to resolve any disputes arising out of the 
data roaming rule, as set forth in this second report and order and the 
rules in Appendix A.
    78. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this second report and order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    79. It is further ordered that the Commission shall send a copy of 
this second report and order in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 0

    Organization and functions (Government agencies).

47 CFR Part 20

    Communications common carriers.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 0 and 20 as follows:

PART 0--COMMISSION ORGANIZATION

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

    Authority:  Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.


0
2. Amend Sec.  0.111 by revising paragraph (a)(11) introductory text 
(note remains unchanged) to read as follows:


Sec.  0.111  Functions of Bureau.

    (a) * * *
    (11) Resolves other complaints against Title III licensees and 
permittees, including complaints under Sec.  20.12(e) of this chapter.
* * * * *

PART 20--COMMERCIAL MOBILE SERVICES

0
3. The authority citation for part 20 is revised to read as follows:

    Authority:  47 U.S.C. 154, 160, 201, 251-254, 301, 303, 316, and 
332 unless otherwise noted. Section 20.12 is also issued under 47 
U.S.C. 1302.


0
4. Revise the heading to part 20 to read as set forth above.

0
5. Amend Sec.  20.3 by adding the definition ``commercial mobile data 
service'' in alphabetical order to read as follows:


Sec.  20.3  Definitions.

* * * * *
    Commercial mobile data service. (1) Any mobile data service that is 
not interconnected with the public switched network and is:
    (i) Provided for profit; and
    (ii) Available to the public or to such classes of eligible users 
as to be effectively available to the public.
    (2) Commercial mobile data service includes services provided by 
Mobile Satellite Services and Ancillary Terrestrial Component providers 
to the extent the services provided meet this definition.
* * * * *

0
6. Amend Sec.  20.12 by adding paragraphs (a)(3) and (e) to read as 
follows:


Sec.  20.12  Resale and roaming.

    (a) * * *
    (3) Scope of Offering Roaming Arrangements for Commercial Mobile 
Data Services. Paragraph (e) of this section is applicable to all 
facilities-based providers of commercial mobile data services.
* * * * *
    (e) Offering Roaming Arrangements for Commercial Mobile Data 
Services. (1) A facilities-based provider of commercial mobile data 
services is required to offer roaming arrangements to other such 
providers on commercially reasonable terms and conditions, subject to 
the following limitations:
    (i) Providers may negotiate the terms of their roaming arrangements 
on an individualized basis;
    (ii) It is reasonable for a provider not to offer a data roaming 
arrangement to a requesting provider that is not technologically 
compatible;
    (iii) It is reasonable for a provider not to offer a data roaming 
arrangement where it is not technically feasible to provide roaming for 
the particular data service for which roaming is requested and any 
changes to the host provider's network necessary to accommodate roaming 
for such data service are not economically reasonable;
    (iv) It is reasonable for a provider to condition the effectiveness 
of a roaming arrangement on the requesting provider's provision of 
mobile data service to its own subscribers using a generation of 
wireless technology comparable to the technology on which the 
requesting provider seeks to roam.
    (2) A party alleging a violation of this section may file a formal 
or informal complaint pursuant to the procedures in Sec. Sec.  1.716 
through 1.718, 1.720, 1.721, and 1.723 through 1.735 of this chapter, 
which sections are incorporated herein. For purposes of Sec.  20.12(e), 
references to a ``carrier'' or ``common carrier'' in the formal and 
informal complaint procedures incorporated herein will mean a provider 
of commercial mobile data services. The Commission will resolve such 
disputes on a case-by-case basis, taking into consideration the 
totality of the circumstances presented in each case. The remedy of 
damages shall not be available in connection with any complaint 
alleging a violation of this section. Whether the appropriate 
procedural vehicle for a dispute is a complaint under this paragraph or 
a petition for declaratory ruling under Sec.  1.2 of this chapter may 
vary depending on the circumstances of each case.

[FR Doc. 2011-10223 Filed 5-5-11; 8:45 am]
BILLING CODE 6712-01-P