[Federal Register Volume 84, Number 46 (Friday, March 8, 2019)]
[Rules and Regulations]
[Pages 8443-8457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04055]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 27

[WT Docket No. 06-150; DA 19-77]


Service Rules for the 698-746, 747-762, and 777-792 Bands

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) describes the process for relicensing 700 MHz spectrum 
that is returned to the Commission's inventory

[[Page 8444]]

as a result of licensees' failure to meet applicable construction 
requirements. The document begins with the ``keep-what-you-serve'' 
(KWYS) rules applicable to failing licensees and ends with the specific 
rules and requirements for licensees that acquire unserved areas 
through the relicensing process, including through auction where 
necessary.

DATES: Effective April 8, 2019.

FOR FURTHER INFORMATION CONTACT: Melissa Conway, 
[email protected], of the Wireless Telecommunications Bureau, 
Mobility Division, (202) 418-2887.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
document in WT Docket No. 06-150, FCC 19-77, released on February 12, 
2019. The complete text of the document is available for viewing via 
the Commission's ECFS website by entering the docket number, WT Docket 
No. 06-150. The complete text of the document is also available for 
public inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time 
(ET) Monday through Thursday or from 8:00 a.m. to 11:30 a.m. ET on 
Fridays in the FCC Reference Information Center, 445 12th Street SW, 
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-
488-5563.
    The Commission will send a copy of the document 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).

Synopsis

I. Background

    1. For certain spectrum blocks in the 700 MHz band, licensees that 
fail to meet the Commission's construction benchmarks keep the areas of 
the license that they serve, and the remaining unserved areas are 
returned to the Commission's inventory for relicensing. This approach 
provides other parties with opportunities to acquire spectrum that is 
not adequately built out and to serve communities that might otherwise 
not receive service.
    2. This document describes the process for relicensing unserved 
areas, beginning with the ``keep-what-you-serve'' (KWYS) rules 
applicable to failing licensees, and ending with the specific rules and 
requirements for licensees that acquire unserved areas through the 
relicensing process, including through auction where necessary. This 
document is not inclusive of all relevant requirements and restrictions 
applicable to operations in this band, and it is the responsibility of 
applicants and licensees to remain current with all Commission rules 
and with all public notices pertaining to the 700 MHz band, the KWYS 
rules, and the relicensing process. The Commission also offers maps or 
examples in certain instances for illustrative purposes only; these are 
not meant to exhaustively cover all rule requirements or describe the 
only permissible scenarios.
    3. In 2007, the Commission, in the 700 MHz Second Report and Order 
(72 FR 48814, Aug. 24, 2007), set forth rules governing certain 
wireless licenses in the 700 MHz band that, among other things, 
established interim and end-of-term construction benchmarks and status 
reporting requirements.\1\ In 2013, the Commission released the 
Interoperability Report and Order (78 FR 66298, Nov. 5, 2013), which 
extended the interim construction deadline for Lower 700 MHz A and B 
Block licensees and removed the interim construction deadline for 
certain A Block licensees adjacent to Channel 51 operations.\2\ For E 
Block licensees, the Commission also extended the interim and end-of-
term deadlines and permitted a showing of population coverage, rather 
than geographic coverage. For licensees that fail to meet the 
applicable interim benchmark, the rules specify that the license term 
will be accelerated by two years for Lower A and B Block and Upper C 
Block licenses, and by one year for Lower E Block licenses. Most 
licensees in these blocks were auctioned in Auction 73 and have the 
respective construction requirements and deadlines listed in the 
document.
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    \1\ See generally Service Rules for 698-746, 747-762, and 777-
792 MHz Bands et al., Second Report and Order, 22 FCC Rcd 15289 
(2007) (700 MHz Second Report and Order).
    \2\ See Promoting Interoperability in the 700 MHz Commercial 
Spectrum, Report and Order and Order of Proposed Modification, 28 
FCC Rcd 15122, 15151-52, paragraph 65 (2013) (Interoperability 
Report and Order).
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    4. The Commission's rules require that licensees subject to the 
end-of-term deadline must file construction notifications, including 
coverage maps and supporting documentation, demonstrating that the 
licensee has met the end-of-term coverage requirement. Under the KWYS 
rules applicable to these blocks, if a licensee fails to meet its end-
of-term construction deadline, its authorization to operate will 
terminate automatically without Commission action for those geographic 
areas of its license authorization in which the licensee is not 
providing service on the date of the end-of-term deadline, and those 
areas will become available for reassignment by the Commission. The 
Commission delegated authority to the Wireless Telecommunications 
Bureau (Bureau) to establish by public notice the process by which 
licenses will become available for relicensing under these rules.
    5. On August 28, 2017, the Bureau released the 700 MHz Relicensing 
Comment PN (82 FR 42263, Sept. 7, 2017), which described the foregoing 
rules and policies set forth in the 700 MHz Second Report and Order and 
other relevant Commission rules and sought comment on the Bureau's 
proposed approach to the remaining elements of the KWYS and relicensing 
process.\3\ The Bureau sought comment on several aspects of its 
proposed approach: (a) The process of identifying a failing licensee's 
service area and the resulting unserved areas to be returned to the 
Commission's inventory for relicensing; (b) rules and procedures for 
the administration of the two-phased relicensing process; and (c) the 
appropriate requirements and restrictions to be applied to relicensed 
areas. Interested parties, including mobile wireless providers and 
trade associations, submitted three comments and five reply comments in 
response to the 700 MHz Relicensing Comment PN.
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    \3\ See generally Wireless Telecommunications Bureau Seeks 
Comment on Process for Relicensing 700 MHz Spectrum Unserved Areas, 
DA 17-810, Public Notice, 2017 WL 3725816 (WTB, rel. Aug. 28, 2017) 
(700 MHz Relicensing Comment PN); see also generally 700 MHz Second 
Report and Order.
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II. KWYS Rules and Process

A. Construction Notifications

    6. Licensees must file a construction notification with the 
Commission no later than 15 days after the relevant end-of-term 
construction deadline, regardless of whether they have met the 
construction requirements. Licensees that have satisfied the 
construction requirement must continue to comply with the specific 
construction notification filing requirements the Bureau has previously 
provided by this public notice. Licensees that fail to satisfy the 
construction requirement must file their construction notification 
according to the specifications for KWYS, discussed below.
    7. In the 700 MHz Second Report and Order, the Commission delegated 
responsibility to the Bureau for establishing the specifications for 
filing maps and other documents (e.g., file format and appropriate 
data) needed to determine a licensee's service area. The Bureau 
previously outlined the specific construction notifications required by 
the Commission's rules in a series of public notices. The Bureau places

[[Page 8445]]

construction notifications on public notice and reviews each 
notification and any related comments before making a determination 
regarding the notification. Interested parties are permitted to file 
comments, which must be filed no later than 30 days after the public 
notice release date.
    8. After examining the construction notifications and public 
comments, the Bureau will determine whether each licensee has made a 
sufficient showing to satisfy the end-of-term construction benchmark 
and retain its entire license. The Bureau may return the filing and ask 
the licensee to amend the notification with additional or different 
information as it deems necessary, e.g., description of service, 
description of technology, or link budgets. Alternatively, if a 
licensee files a notification admitting failure, but does not conform 
to the specifications required for the KWYS process, the Bureau will 
return the filing and ask the licensee to amend it with the 
requirements described herein. If a licensee files a request for an 
extension of time or a waiver of the construction deadline and the 
Bureau denies the request, the Bureau will instruct the licensee to 
file a construction notification, either demonstrating compliance with 
the construction benchmark as of the end-of-term construction deadline 
or admitting failure. Licensees that fail to meet the end-of-term 
construction benchmark--whether they admit failure or are deemed by the 
Bureau to have failed following review of the construction 
notification--are subject to the KWYS rules and must file their 
construction notification according to the specifications for KWYS 
described below.

B. Automatic Termination

    9. The Commission implements its long-standing auto-termination 
process here, in combination with the additional filing procedures 
established below to address the failure of a licensee to make required 
filings. If a licensee does not file either a request for extension of 
time before the construction deadline or the required construction 
notification within 15 days after the construction deadline (as 
required by Sec.  1.946 of the Commission's rules), the Commission 
presumes that the license has not been constructed or the coverage 
requirement has not been met. As a result, the Bureau places such 
licenses in ``Termination Pending'' status and lists the license on the 
Weekly Termination Pending Public Notice. The Bureau also notifies the 
licensee by letter that, if it has met its construction requirement, it 
has 30 days from the date of that public notice to file a petition for 
reconsideration showing that it timely met the construction deadline. 
If the licensee does not file a petition for reconsideration within the 
30-day reconsideration period showing timely construction, the Bureau 
updates its licensing records in the Commission's Universal Licensing 
System (ULS) to show the license as ``Terminated,'' effective as of the 
construction deadline. The license is also listed on a weekly public 
notice reflecting its status as changed to Terminated. This process 
will be applied to 700 MHz KWYS licenses. As applied to such licenses, 
failure to file either the required construction notification or a 
timely petition for reconsideration will result in automatic 
termination of the entire license, regardless of whether a licensee 
provides service in its license area such that it might otherwise 
retain that portion of the license under the KWYS rules. The Commission 
anticipates that this approach will ensure time to confirm that areas 
are only classified as unserved where the licensee is actually failing 
to provide service required by the Commission's rules, while avoiding 
unnecessary delays to the relicensing process.
    10. In contrast, one commenter asks the Bureau to find that if 
licensees fail to file the required construction notifications, the 
entire license will terminate and become available for relicensing. 
This commenter also asks the Bureau to require licensees that seek to 
challenge the Bureau's evaluation of their performance demonstration to 
submit a map identifying the unserved areas pursuant to the Bureau's 
evaluation, and it suggests that a licensee's failure to do so should 
result in termination of the license. The commenter argues that, 
without these requirements, licensees could thwart the relicensing 
process, ``which is dependent on a clear understanding of the 
geographic boundaries for served areas.'' The Commission declines to 
implement this specific request to automatically terminate a license if 
the licensee fails to file the required construction notification so 
that the license is available for relicensing because it finds that the 
Commission's long-standing auto-termination process, in combination 
with the additional filing procedures established in this public 
notice, will adequately address the failure of a licensee to make 
required filings. The Commission agrees that the prompt commencement of 
the relicensing process depends on having licensees that fail to 
satisfy their construction requirements make the required KWYS filings, 
as it is these filings that will enable the Bureau to identify the 
unserved areas available for relicensing.

C. Required KWYS Filing

    11. In the 700 MHz Relicensing Comment PN, the Commission noted 
that licensees that fail to meet the construction requirement--whether 
they admit failure or are found by the Bureau to have failed following 
review of the construction notification--are subject to the KWYS rules. 
Accordingly, they will be required to file an electronic coverage map 
that demarcates the geographic portion of the licensed area that the 
licensee will retain and the geographic area that will be returned to 
the Commission for reassignment. Licensees admitting failure must file 
their construction notification at the end-of-term construction 
deadline according to the specifications for KWYS described below. If a 
licensee claims to have met the construction benchmark, but the Bureau 
deems the licensee to have failed after review of the construction 
notification, the licensee will be asked to amend its initial 
construction notification filing to comply with the KWYS 
specifications.
1. Service Area
    12. In the 700 MHz Relicensing Comment PN, the Commission proposed 
a process whereby licensees would demonstrate the ``served'' areas of 
their license by submitting a shapefile showing a smooth enclosed 40 
dB[mu]V/m field strength contour \4\ of existing facilities by the end-
of-term deadline. The portion of the license market covered by the 
smooth contour would be deemed ``served'' for purposes of the KWYS rule 
and become the reduced licensed area that the licensee ``keeps.'' 
Noting the requirement that licensees not exceed 40 dB[mu]V/m field 
strength at the license boundary, as well as the Commission's 
observations of existing services in the 700 MHz band, the Commission 
anticipated the 40 dB[mu]V/m field strength smooth contour would be the 
most suitable means of determining licensees' service areas. However, 
because some licensees might provide service at lower field strength 
such that the 40 dB[mu]V/m smooth contour would result in a reduced 
licensed area that might be substantially smaller than the licensee's 
actual service area, the Commission proposed an alternative

[[Page 8446]]

option for licensees. Under the alternative option, if the 40 dB[mu]V/m 
smooth contour would result in a reduced licensed area that is at least 
25% smaller than the licensee's actual service area, the licensee could 
demonstrate the service area using a lower dB[mu]V/m field strength 
smooth contour.
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    \4\ A smooth contour is a closed, non-overlapping polygon. Here, 
the smooth contour would be a closed, non-overlapping polygon 
reflecting the signal area at 40 dB[mu]V/m field strength.
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    13. In response to the Commission's proposal, one commenter argues 
that the 40 dB[mu]V/m field strength smooth contour will not accurately 
represent coverage provided by 700 MHz licensees, will penalize 
licensees providing service at lower field strengths, and will create 
unnecessarily duplicative coverage filings. Instead, this commenter 
suggests that the Commission allow licensees to ``provide a coverage 
showing that is based on real-world service to the public and not be 
bound to a particular metric or technology in doing so.'' Three 
additional commenters expressed general support of this position.
    14. Because allowing licensees to tailor their demonstrations to 
the services they provide more accurately represents their service 
areas, the Commission agrees with these commenters' suggested 
modification of its proposal. Accordingly, licensees will be required 
to identify their service area based on the methodology the licensee 
deems to best represent the areas of coverage in which it provides 
service.\5\ Licensees must file service area demonstrations that 
reflect the signal level that the licensee has previously represented 
as service to its customers (e.g., in advertised coverage materials) 
and the Bureau (e.g., in construction notifications), and licensees 
should be prepared to defend the methodology used. The Commission also 
reminds licensees that the service area demonstration will ultimately 
establish the licensees' revised license boundary; at the boundary, 
licensees will be required to comply with the 40 dB[mu]V/m field 
strength limit for 700 MHz licensees set forth in the Commission's 
rules. Geographic areas to be made available for relicensing must 
include a contiguous area of at least 50 square miles, and areas 
smaller than that will be retained by the licensee. Licensees should 
include and identify such areas in the maps representing their service 
area. As with all other 700 MHz construction notifications, licensees 
are required to submit shapefiles, PDF maps, and technical narratives 
supporting their coverage demonstrations. As demonstrated in Figure 1 
below, a licensee's shapefile map reflecting their service area must 
clearly reflect the market boundary and the areas served, and identify 
the unserved areas less than 50 square miles that the licensee is 
retaining.
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    \5\ Smooth contour methodology is permissible but not required. 
The Commission observes, however, that if a licensee's coverage 
demonstration contains a large number of non-contiguous, small areas 
(e.g., the scattering of green dots in Figure 1), the revised 
license will have a large number of license boundaries--one around 
each non-contiguous area. At each of these boundaries, the licensee 
must observe the 40 dB[mu]V/m field strength limit. Given that 
compliance with the field strength limit along a large number of 
these non-contiguous boundaries may be difficult to achieve, such 
licensees may want to opt for a smooth contour methodology, or other 
methodology that minimizes non-contiguous boundaries yet accurately 
depicts areas of coverage in which they provide service.
[GRAPHIC] [TIFF OMITTED] TR08MR19.001

    15. One commenter asks the Bureau to consider a ``county-based 
approach,'' under which licensees that serve over 50% of the geography 
of a county would retain the entire county; licensees that cover 50% or 
less of a county, in contrast, would have their license area reduced so 
as to no longer include that county. This commenter argues that this 
approach would make spectrum available for relicensing in a more 
efficient manner and that, since most license authorizations are based 
on county boundaries, county-based areas would conform more easily to 
the boundaries of licensees' other spectrum assets. It further argues 
that allowing licensees to define license areas would be burdensome and 
could lead to inaccurate results. Three other commenters opposing the 
county-based

[[Page 8447]]

approach argue that it runs counter to the purpose of the KWYS rules, 
as it would require licensees serving up to 50% of a county to cease 
providing service in those areas, while allowing other licensees to 
retain an entire county even where there were unserved areas in the 
county, thus leaving potentially large portions of unserved areas 
unavailable for relicensing.
    16. The Commission rejects the county-based approach. Implementing 
this approach would require a rule change, which is beyond the scope of 
the authority delegated to the Bureau in the 700 MHz Second Report and 
Order. It also would be contrary to the underlying purpose of the KWYS 
rules. In other words, rather than fulfilling the purpose of the rules 
to allow failing licensees to keep the areas that they serve and make 
any unserved areas available for relicensing, a county-based 
determination of coverage would terminate the authorizations of certain 
licensees in areas where they actually are providing service, while 
allowing other licensees to retain up to half a county of unserved 
area.
2. Bureau Review
    17. As noted above, the Commission will allow licensees to 
demonstrate coverage based on their actual service in each geographic 
license area. A licensee must submit a coverage showing that reflects 
its actual service to the public, based on the methodology it deems to 
best represent the areas in which the public receives its actual 
service.
    18. As the Commission also stated above, demonstrations of service 
area should reflect the signal level that the licensee has previously 
represented as service to its customers (e.g., in advertised coverage 
materials) and the Bureau (e.g., in construction notifications), and 
licensees should be prepared to defend the methodology used. The 
Commission cautions licensees that the Bureau will look critically at 
demonstrations that deviate from the metrics used in the licensee's 
interim construction notification or represented to its customers, 
especially showings that materially reduce the signal level at the 
boundary such that the demonstration might artificially inflate the 
licensee's service area.
    19. While the Commission recognizes that license boundaries will 
not be uniform (see Figure 1),\6\ it warns licensees against including 
areas where no real service is provided that are merely figments of 
topography (e.g., areas of high elevation distanced from and not part 
of areas where actual service is provided). Even though the reduced 
license boundaries will be non-uniform, applicants participating in the 
relicensing process can apply for adjacent unserved areas and take 
advantage of the flexibility in the Commission's power and secondary 
markets rules to coordinate and cooperate with neighboring licensees.
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    \6\ The maps and service area demonstrations presented in the 
Figures of this document are for illustrative purposes only. Any 
such maps or demonstrations contained in a given application must 
accurately reflect the unique characteristics of each applicant's 
specific demonstration or request.
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    20. The Commission again reminds licensees that have not met their 
construction and service requirements that the service area 
demonstration, if approved, ultimately will establish the licensees' 
new license boundary. At the boundary, licensees will be required to 
comply with the 40 dB[micro]V/m field strength limit for 700 MHz 
licensees set forth in the Commission's rules. Licensees must file 
demonstrations of service area using map and file formats similar to 
those required for construction notifications.
    21. For these licensees, following the 30-day public notice period 
and after review of each KWYS filing and any related comments, if the 
Bureau agrees with the licensee's depiction of areas to be retained, it 
will accept the licensee's construction notification. The Bureau will 
also update ULS using the licensee's service area demonstration to 
reflect the reduced license area. The remaining portion of the original 
license market will be deemed unserved area and will return to the 
Commission's inventory for relicensing.
    22. The Commission notes that the Bureau will have the opportunity 
to assess the success of this approach when it is implemented for the 
first group of licenses subject to KWYS. The Commission will monitor 
the results of the finalized process described above and will consider 
adjusting the methodology for future iterations of KWYS should the 
current approach prove to be cumbersome, inefficient, or ineffective.

D. Identifying Unserved Areas

    23. Information about the available unserved areas will be publicly 
available. The Bureau will use the shapefiles submitted by failing 
licensees to determine the unserved areas of each market. The Bureau 
will then compile those unserved portions together as areas that will 
be available for relicensing and will provide instructions on how to 
access that information by public notice. The Bureau will provide 
applicants with access to a publicly available map displaying the areas 
available for relicensing, which they can view, download, and use to 
determine the areas for which they may wish to seek a license. The 
public notice announcing the unserved areas available for relicensing 
will also provide further instructions and specific dates for the 
commencement of the relicensing process. In setting these dates, the 
Bureau will provide at least 60 days before the commencement of 
relicensing to enable potential applicants to conduct all manner of due 
diligence, including evaluating sites and technical requirements, e.g., 
site acquisition or lease, existing infrastructure, neighboring 
operations, and network and backhaul needs. These inquiries are 
particularly important, given the requirements of licensees described 
in Section IIV.

III. Phased Relicensing Process

    24. Pursuant to the Commission's rules, relicensing of unserved 
areas will occur through a two-phase application process, beginning 
with a 30-day Phase 1 filing window, followed by a Phase 2 rolling 
window for applications. Applications for available unserved areas must 
be filed via ULS, and applicants must submit a shapefile describing the 
areas for which they seek a license.

A. Applications

    25. In the interest of administrative clarity and functionality, 
the Commission proposed to limit the shapefiles attached to 
applications for unserved areas to include a single shape covering one 
contiguous area; if an applicant sought non-contiguous areas to be 
authorized under the same license, the Commission proposed requiring 
that the shapes be within a single market boundary.\7\ The Commission 
also proposed that, if an applicant files for non-contiguous shapes in 
a single application, grant of the application would result in a single 
license and a single buildout requirement that would be applied to all 
shapes as a whole. Consequently, failure to meet the buildout 
requirement with respect to one non-contiguous shape would result in 
the imposition of the penalty for buildout failure on all shapes 
covered by the license.
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    \7\ For example, a non-contiguous shapefile for A-Block areas 
must be contained within one Economic Area (EA); a non-contiguous 
shapefile for B-Block areas must be contained within one Cellular 
Market Area (CMA).
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    26. Only one commenter addressed the Commission's proposals 
concerning the processing of applications. It requests that applicants 
be permitted to list all the unserved areas for which

[[Page 8448]]

they seek a license within a single application to avoid the need to 
file multiple applications for each unserved area. Second, ``rather 
than relying only on a map to indicate areas available for relicensing, 
this commenter suggests that the Bureau also provide a `drop-down list' 
of unserved areas that an interested party may select from when 
submitting its application.'' One other commenter supported both 
suggested changes in its reply.
    27. Consistent with the Commission's initial proposal, licenses 
issued through the relicensing process may cover unserved area that 
crosses market boundaries, as long as the license area is a single 
contiguous shape; if an applicant seeks a single license for multiple 
non-contiguous areas, those non-contiguous areas must fall within a 
single FCC-defined market boundary for the appropriate channel block. 
The Commission will modify the ULS system, however, so that applicants 
may file requests for multiple licenses within a single application 
form.\8\ Under this process, the number of shapefiles uploaded within a 
single application form will dictate the number of licenses that will 
be issued, if the application is granted. For example, if an applicant 
wishes to apply for multiple areas to be authorized under separate 
licenses, it may do so within a single application form by uploading 
separate shapefiles, each covering the area(s) for which it seeks an 
individual license. Grant of the application will result in separate 
licenses being issued for the area(s) covered by each shapefile and 
separate buildout requirements for each license. If an applicant seeks 
to apply for multiple non-contiguous areas within a single market 
boundary to be authorized under a single license, it may do so by 
uploading to its application a single shapefile that includes each of 
those areas. Grant of the application will result in a single license 
and a single buildout requirement, which will apply to all the non-
contiguous areas as a whole. A request for such a license could be 
combined in the same application form with requests for other 
licenses--whether covering another set of non-contiguous areas within a 
single market boundary, or covering one contiguous area--in which case 
each additional shapefile uploaded to the application form would result 
in an additional license.
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    \8\ ULS purpose code NE (New). This functionality will not apply 
to license modifications--ULS purpose code MD (Modification)--as 
applications to expand into unserved areas adjacent to an existing 
license require separate processing through an individual license 
modification application.
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    28. While the Commission is taking several steps to make the 
relicensing process efficient and easy to use, it rejects the suggested 
``drop-down list'' of available unserved areas. In the 700 MHz 
relicensing context, available unserved areas will be determined based 
on the non-uniform, potentially scattered service areas of failing 
licensees, which will be constantly changing as unserved areas are 
returned to the Commission's inventory. Moreover, applicants are free 
to apply to serve as much or as little available unserved area as they 
choose. Instead, the Commission provides greater flexibility for 
applicants to choose whatever portions of available unserved areas they 
wish to serve at that time rather than limiting applicant's choices to 
a pre-defined ``drop-down list.'' Therefore, the Commission will allow 
applicants to select from the available unserved areas by uploading a 
shapefile covering the area(s) for which they seek a license.
    29. Parties must file applications for available unserved areas via 
ULS by submitting a shapefile describing the area for which they seek a 
license. Applicants can download the publicly available map displaying 
the available unserved areas and use the file to create the shapefiles 
to be included in their application. Acceptable shapefiles include all 
GIS Map File types, including XML, KML, KMZ, and Shape(zip). Subject to 
the restrictions of Phase 1 and other relicensing rules described 
below, applicants may apply for any sized area or number of available 
areas they choose. For instance, while only unserved areas that are at 
least 50 square miles will be returned to the Commission for 
relicensing, there is no minimum size requirement for applications to 
license available unserved areas. Given the stringent construction 
benchmarks for relicensed areas and the penalty for failure, described 
in Section IIV, it is particularly important that potential 
participants in the relicensing process perform due diligence to 
determine the areas to which they will be able to provide service, 
including inquiries about site acquisition or lease, existing 
infrastructure, neighboring operations, and network and backhaul needs. 
Applicants should only apply for portions of available unserved areas 
that accurately reflect their predicted service area based on precise 
engineering and projected signal propagation specific to the area.
    30. As with other processes for the licensing of spectrum, at the 
application stage applicants will not be required to, and should not, 
file any technical specifications of the services they intend to 
provide. If an applicant submits any technical specifications or other 
information not required in the application, the Bureau will not review 
such information, and the Bureau's acceptance of an application that 
includes such information is not an acceptance of those technical 
specifications. Such filings with technical specifications of the 
service provided will be reviewed when the licensee files its 
notification of construction, as discussed in Section IIV.
    31. All applications for available unserved areas found acceptable 
for filing (including the shapefile) will be placed on public notice, 
and the applications will be available for public review and comment. 
Because the shapefile contains the primary substantive information for 
which public notice is provided, i.e., details about the scope of the 
requested license area sufficient to determine whether the license 
application is mutually exclusive with another application, we do not 
anticipate a likely scenario in which confidential treatment of a 
shapefile would be warranted.
    32. Form of Application. Applicants will file an application for 
either one or more new licenses or to modify an existing license. To 
file an application for a new license for available unserved area, 
applicants will select the ULS purpose code NE (New). Alternatively, 
modifications may be used where an applicant is an existing 700 MHz 
licensee of area adjacent to available unserved areas and wishes to 
expand the existing license area to contiguously cover a portion of 
that adjacent unserved area in the same frequency band. Licensees 
wishing to modify an existing license in such a manner will select the 
ULS purpose code MD (Modification). While unserved areas acquired as a 
new license will have a ten-year license term, the effect of requesting 
a modification of an existing license would be to include the same 
expiration date as the original license being modified. However, please 
note that the same construction requirements will apply, regardless of 
whether the area is acquired as a new license or a license 
modification.
    33. Permissible Area(s) under Single License. A license issued 
through the relicensing process may cover unserved area that crosses 
market boundaries, as long as the license area is a single contiguous 
shape. If an applicant seeks a single license for multiple non-
contiguous areas, those non-contiguous areas must fall within a single 
market boundary (see Figure 2). With the

[[Page 8449]]

exception of applicants filing license modifications during the first 
round of relicensing,\9\ if a licensee wishes to modify an existing 
license to add available unserved area(s), it may do so as long as the 
area(s) are adjacent to the area of the existing license (see Figure 
2).
---------------------------------------------------------------------------

    \9\ Due to pending changes to ULS necessary for the processing 
of such applications, applicants during the first round of 
relicensing (i.e., relicensing of unserved areas returned to the 
Commission's inventory as a result of failure to satisfy the June 
13, 2017 construction deadline) will not have the ability to modify 
an existing license to add available unserved areas in an adjacent 
market. However, the Commission anticipates that the necessary 
system changes will be completed in time to process such 
applications during the next round of relicensing unserved areas 
resulting from any failures in 2019 or thereafter.
[GRAPHIC] [TIFF OMITTED] TR08MR19.002

    34. In Figure 2 above, the areas labeled as A through H represent 
unserved areas in various adjacent Cellular Market Areas (CMAs). An 
applicant could file for F, H, and D to be authorized under a single 
license, even though those areas cross multiple CMA boundaries, because 
they are all contiguous with each other. An applicant could also file 
for B, C, D, and E to be authorized under a single license, even though 
the areas are non-contiguous, because the non-contiguous areas fall 
within the same CMA. An applicant could not, however, apply for A and B 
to be authorized under a single license, because the areas are non-
contiguous and are in different CMAs. Multiple licenses would be 
required to offer service in these areas.
    35. Now suppose that in Figure 2 above, the area marked H 
represents an existing license for the entire market area of CMA089, 
which is adjacent to market areas containing the available unserved 
areas labeled A through G. If the licensee in CMA089 wanted to modify 
its license to add available unserved areas, it could do so with areas 
C, D, E, F, and G, because they are all contiguous to the existing 
license. However, the licensee in CMA089 could not modify its license 
to add areas A or B, because they are not contiguous to the existing 
license and are not within the same market area as the existing 
license. Provision of service in areas A or B would require a new 
license.
    36. Applying for Multiple Licenses on a Single Application Form. 
Applicants seeking new licenses will have the flexibility to file 
requests for multiple licenses on a single application form. Under this 
process, the number of shapefiles uploaded within a single application 
form will dictate the number of licenses that will be issued if the 
application is granted. For example, if an applicant wishes to apply 
for multiple contiguous or non-contiguous areas to be authorized under 
separate licenses, it may do so within a single application form by 
uploading separate shapefiles, each covering the areas for which it 
seeks an individual license; grant of the application would result in 
separate licenses for the areas covered by each shapefile and an 
individual buildout requirement for each license. If an applicant seeks 
to apply for multiple non-contiguous areas to be authorized under a 
single license, it may do so (as long as the areas are within a single 
market boundary) by uploading to its application a single shapefile 
that includes all of those areas. Grant of the application would result 
in a single license and a single buildout requirement would apply to 
all shapes as a whole. A request for such a license could be combined 
on the same application form with requests for other licenses--whether 
covering another set of non-contiguous areas within a single market 
boundary or covering one contiguous area--in which case each additional 
shapefile uploaded to the application form would result in an 
additional license. This functionality will not apply to license 
modifications, however, because applications to expand into unserved 
areas adjacent to an existing license require processing through an 
individual license modification application.
    37. Error Codes. When an applicant uploads a shapefile in an 
application for

[[Page 8450]]

unserved area that does not conform to the requirements for shapefile 
filing format, the system will display an error code. The table in 
Figure 3 below provides an explanation of each error code and how it 
can be resolved.

                          Figure 3--Error Codes
------------------------------------------------------------------------
            Error code                  Description of error/solution
------------------------------------------------------------------------
Invalid Spectrum..................  The radio frequency data attribute
                                     does not match the selected radio
                                     service code or is not in the
                                     proper form. For example, the
                                     frequencies listed for the Lower B
                                     Block should appear as:
                                     000704.00000000-000710.00000000,
                                     000734.00000000-000740.00000000.
Invalid Market....................  (For Modifications Only) The Market
                                     Area Code listed in the shapefile
                                     data attributes does not match the
                                     Market Area Code for the license
                                     being modified.
Invalid Channel Block.............  (For Modifications Only) The channel
                                     block reflected in the shapefile
                                     data attributes does not match the
                                     channel block of the license being
                                     modified.
Missing Shapefile Attribute.......  The shapefile does not include all
                                     the required data attributes.
Please Upload at least one 700 MHz  No shapefile has been uploaded.
 Relicensed Area Shapefile.
Invalid Radio Service Code........  The radio service code reflected in
                                     the shapefile data attributes does
                                     not match the Radio Service Code
                                     selected by the applicant at the
                                     beginning of the application.
Invalid Channel Block for Radio     The channel block reflected in the
 Service.                            shapefile data attributes does not
                                     match the Radio Service Code
                                     selected by the applicant at the
                                     beginning of the application.
------------------------------------------------------------------------

    38. Ownership Certification. Section 27.14 bars the original 
licensee of available unserved areas, whose authorization to serve that 
area terminated due to failure to meet the end-of-term construction 
benchmark, from applying to relicense that area during Phase 1. The 
section also permanently bars licensees of areas acquired through the 
relicensing process from applying to serve that area at any future date 
if they fail to satisfy the one-year 100% construction requirement.
    39. In order to implement Sec.  27.14(j)'s requirements, the 
Commission proposed to apply the prohibition to any applicant that has 
any interest or ownership in, or any control of, the original licensee 
and to any applicant in which the original licensee has any interest, 
ownership, or control. The Commission sought comment on requiring 
applicants to make certain certifications regarding the applicant's 
relationship to any barred parties in each application for unserved 
area (Ownership Certification).\10\ Alternatively, the Commission 
sought comment on using a standard similar to the one the Commission 
uses in evaluating pro forma transfers of control, which considers both 
de jure and de facto control of the licensee, and the Commission asked 
whether such a standard might be more appropriate than the proposed 
bright-line test for ownership.
---------------------------------------------------------------------------

    \10\ While the Commission did not use the defined term 
``Ownership Certification'' in the 700 MHz Relicensing Comment PN, 
the Commission does here to clarify that the Ownership Certification 
includes all the statements that will be required for applicants to 
certify to in order to determine which applicants are barred, as 
described in this section.
---------------------------------------------------------------------------

    40. All commenters addressing this issue favored the alternate 
proposal, which would apply the bar based on de jure or de facto 
control. One commenter argues that barring parties with any interest in 
a barred party, as proposed, might go too far, and that such a bright-
line rule ``could inadvertently exclude parties that were not in 
control of the initial 700 MHz licensee that failed to provide 
service.'' Instead, this commenter argues that determining ownership 
based on de jure and de facto control will allow the Bureau more 
effectively and precisely to bar the correct parties. Another commenter 
asks the Bureau to ``take an expansive view of this bar,'' and apply 
the bar to any parties that ``have had a management agreement, lease 
arrangement, or similar interests in the licensee.'' \11\
---------------------------------------------------------------------------

    \11\ While the commenter asserts that this ``expansive view'' is 
supported by the factors listed in the Commission's designated 
entity rule, those rules only include present management agreements, 
not past management agreements or past or present lease 
arrangements.
---------------------------------------------------------------------------

    41. The Commission concludes, based on the record, that its 
alternative proposal of using de jure and de facto standards of control 
will best serve its goals of encouraging licensees to satisfy their 
construction requirements while providing others with the opportunity 
to serve areas that remain unconstructed, and ensuring that the 
appropriate entities are barred from filing pursuant to Commission rule 
Sec.  27.14. The Commission's initial proposal was designed to provide 
an easily administered bright-line test to prevent potential gaming of 
the relicensing process. After review of the record, the Commission 
recognizes that such a broad standard may inadvertently exclude 
entities that do not have a significant connection, in terms of 
ownership or control, with the barred licensee to be indicative of the 
applicant's future actions. It is the Commission's predictive judgement 
that using a de jure and de facto standard of control approach strikes 
a balance that will help to promote a larger and more diverse pool of 
applicants--particularly given the Commission's goal of promoting 
prompt provision of service through adoption of a one-year construction 
period for relicensed areas. In light of this balance, the Commission 
does not agree with the commenter suggesting that the existence of 
management agreements or lease arrangements with a barred entity should 
be sufficient to bar an applicant in all cases. However, the Commission 
finds that the fact-specific, case-by-case nature of the de jure and de 
facto control standard will provide the Commission the flexibility to 
consider that nature of various business relationships between parties 
to determine whether a party is barred from filing under Sec.  
27.14.\12\ The Commission therefore makes modifications to its proposed 
Ownership Certification as described below to implement the rule Sec.  
27.14 bar applicable to: (1) Temporarily during Phase 1 to licensees 
that failed to satisfy their initial term construction requirements 
(Original Licensee), and (2) permanently to licensees of relicensed 
area that fail to satisfy the construction requirements (Relicensed 
Area Licensee).
---------------------------------------------------------------------------

    \12\ While lease arrangements and management agreements are 
relevant considerations, they are not per se evidence of de facto 
control. Rather, the existence of such an agreement is one of many 
factors that may together or independently, depending on the factual 
circumstances, create a controlling interest.
---------------------------------------------------------------------------

    42. The Commission defines ``Original Licensee'' or ``Relicensed 
Area Licensee'' to include any entities or individuals that have either 
de jure or

[[Page 8451]]

de facto of the party that failed to satisfy the construction 
requirement, and any entities in which the party that failed to satisfy 
the construction requirement has either de jure or de facto control. A 
would-be applicant will be barred from applying to serve available 
unserved areas if any entity or individual that had or has de jure or 
de facto control of the Original Licensee or Relicensed Area Licensee 
also has de jure or de facto control of the applicant, the applicant 
has either de jure or de facto control of the Original Licensee or 
Relicensed Area Licensee, or if the Original Licensee or Relicensed 
Area Licensee has de jure or de facto control of the applicant.
    43. All applications for available unserved areas filed during both 
phases of relicensing must include as an attachment the Ownership 
Certification provided below. While applicants will not be required to 
file any supporting documentation with respect to the Ownership 
Certification, the Bureau may request such information at its 
discretion.

    Ownership Certification: ``By filing this certification and the 
accompanying application for 700 MHz unserved area, the applicant 
hereby certifies that, pursuant to Section 27.14(j)(1) and (3) of 
the Commission's rules: (1) The applicant is not the Original 
Licensee or Relicensed Area Licensee that is barred from applying to 
serve the area during the current phase of relicensing; (2) the 
applicant does not at the time of filing, and did not at the time of 
the relevant construction deadline, have de jure or de facto control 
over the Original Licensee or Relicensed Area Licensee (including 
any entity or individual that had or has de jure or de facto control 
of such entity) of the unserved area; and (3) the Original Licensee 
or Relicensed Area Licensee of the unserved area does not at the 
time of filing, and did not at the time of the relevant construction 
deadline, have de jure or de facto control of the applicant.'' \13\
---------------------------------------------------------------------------

    \13\ The Commission notes that, while it will require applicants 
to attach the Ownership Certification during both phases of 
relicensing, applicants are only certifying that they are not barred 
during the phase in which they are filing. For example, an applicant 
that would have been barred only during Phase 1 for a particular 
unserved area (i.e., the original licensee of the unserved area or a 
related entity as defined by the certification) is not barred during 
Phase 2 and could make the necessary Ownership Certification stating 
that it is not a barred party.
---------------------------------------------------------------------------

B. Tribal Priority

    44. One commenter asks the Bureau to create a ``Tribal Priority'' 
for the relicensing process. Under its proposal, qualifying Tribal 
entities would notify the Bureau of ``proposed Tribal Lands they wish 
to serve and, after notice and comment, such lands would be removed 
from the areas available for relicensing.'' This commenter asks for 
several amendments to the Commission's part 27 rules to implement its 
proposal. It also asks the Commission to delay the commencement of the 
relicensing process, as well as to modify and extend our construction 
obligations for qualifying Tribal entities.
    45. The Commission did not adopt any type of priority for Tribal 
entities when it established the KWYS rules and relicensing process in 
the 700 MHz Second Report and Order.\14\ Moreover, the Bureau did not 
make any proposals relating to a Tribal Priority in the 700 MHz 
Relicensing Comment PN. Accordingly, the Commission finds these 
requests are beyond the scope of the authority delegated to the Bureau 
in this context and that its comments are outside the scope of the 
public notice seeking comment on specific aspects for implementing that 
process. The Commission therefore takes no substantive action in 
response to those requests, and they will not be considered further in 
connection with the Bureau's implementation of this relicensing 
process.\15\
---------------------------------------------------------------------------

    \14\ The Commission also notes that none of the interested 
parties commenting in that proceeding asked the Commission to 
consider the rule changes necessary to create a Tribal Priority for 
the relicensing process, nor did they file a petition for 
reconsideration of the 700 MHz Second Report and Order.
    \15\ That said, the Commission's declining to take action here 
is without prejudice to any future request the commenter may choose 
to file with the full Commission to initiate further rulemaking 
action in these regards.
---------------------------------------------------------------------------

C. Phase 1 of Relicensing

    46. Filing Window. Relicensing will begin with a 30-day Phase 1 
filing window. At least 60 days before the commencement of the 
relicensing process, the Bureau will issue a public notice announcing 
the available unserved areas and the relevant dates on which the Phase 
1 filing window will start and end. During this Phase 1 filing window, 
the original licensee of available unserved areas, whose authorization 
to serve that area terminated due to failure to meet the end-of-term 
construction benchmark, is barred from applying to relicense that area. 
This Phase 1 bar is specific to each unserved area, and therefore an 
applicant that is barred from applying for one unserved area during 
Phase 1 is not barred from applying for other available areas for which 
it was not the original licensee. All applications received during the 
Phase 1 filing window for a particular unserved area are treated as 
contemporaneous for the purposes of mutual exclusivity. At the end of 
the 30-day Phase 1 filing window, the Bureau will issue a public notice 
listing applications found acceptable for filing during Phase 1, and 
identifying which acceptable applications, if any, are mutually 
exclusive. No further applications that are mutually exclusive of a 
pending Phase 1 application may be filed after the 30-day Phase 1 
filing window has ended, but licensees and third parties may file 
petitions to deny any pending applications within 30 days of the 
release of the public notice listing Phase 1 applications found 
acceptable for filing.
    47. Mutual Exclusivity. Applications will be deemed mutually 
exclusive if they propose areas overlapping with other applications. As 
proposed, this definition of mutually exclusive applications includes 
``daisy chains'' of mutual exclusivity, see Figure 7, which occur when 
two or more applications contain proposed areas that do not directly 
overlap, but are linked together into a chain by the overlapping 
proposals of others. Mutually exclusive applications are subject to 
auction and the Bureau will provide a limited settlement period for the 
applicants to resolve the mutual exclusivity prior to auction. Subject 
to the Greenmail Rule, applicants may resolve mutual exclusivity by 
withdrawing or filing a minor amendment to one or both mutually 
exclusive applications.
    48. Settlement. Pursuant to the Communications Act and the 
Commission's rules, mutually exclusive applications are subject to 
auction. The Commission delegated authority to the Bureau to designate 
a limited settlement period for the applicants to resolve the mutual 
exclusivity prior to auction. In the 700 MHz Relicensing Comment PN, 
the Commission proposed that Phase 1 applicants would be permitted to 
resolve their mutually exclusive applications during a 30-day period 
that follows the close of the Phase 1 filing window.
    49. One commenter asks the Bureau to ``provide additional time for 
settlement discussions following the Phase 1 filing window,'' as the 
30-day Phase 1 public notice period may be insufficient for the parties 
to negotiate and settle their mutually exclusive applications. No other 
parties filed comments in response to this request.
    50. Given the complexity of resolving mutually exclusive 
applications in either Phase 1 or Phase 2,\16\ the

[[Page 8452]]

Commission provides applicants consistency by giving Phase 1 applicants 
the same settlement period that we proposed for Phase 2 applicants. 
Therefore, upon release of the public notice listing the applications 
found acceptable for filing during Phase 1, applicants will have 60 
days to attempt to reach a settlement concerning the mutually exclusive 
applications. Any mutual exclusivity that is not resolved by the end of 
the 60-day period will subject the mutually exclusive applications to 
auction.
---------------------------------------------------------------------------

    \16\ In both Phase 1 and Phase 2, applicants must consider the 
likelihood of success at auction when compared to agreeing to reduce 
coverage in some way. Considerations of reducing coverage include 
meeting consumer demand in particular areas, whether other spectrum 
bands could be used to address these demands, whether sites can be 
economically re-engineered to reduce coverage as needed, etc.
---------------------------------------------------------------------------

    51. Amendments. Amendments to an application are considered either 
major amendments or minor amendments, depending on the circumstance. If 
one or both of the applicants agrees to reduce or ``pull back'' the 
area covered by the application to avoid mutual exclusivity, the change 
is deemed a minor amendment. Minor amendments do not materially alter 
the original applications and do not require a new public notice 
period. Such treatment, however, is not available when a modification 
to an application constitutes a major amendment. If the applicants' 
agreement would require that either application be modified to ``move'' 
the area applied for, such that it would include area that was not part 
of the area specified in the application as originally filed,\17\ such 
a change would be deemed a major amendment. Because major amendments 
constitute new applications for unserved area, major amendments to 
Phase 1 applications after the 30-day Phase 1 filing window has ended 
are not permitted, and the underlying application may be dismissed 
unless the applicant withdraws the major amendment or adjusts the 
filing to represent only a minor amendment. At that point, the 
dismissed applicant could file a new application for a license covering 
the modified area, but such application, because it would be filed 
during Phase 2, would be subject to potential Phase 2 competing 
filings.
BILLING CODE 6712-01-P
---------------------------------------------------------------------------

    \17\ Such a modification could reflect an expansion of the 
originally requested area, or it could be the result of a 
substitution that maintains or reduces the net square mileage 
covered by the original request, but which describes an area that 
includes at least some geographic portion that was not requested in 
the application as originally filed.
[GRAPHIC] [TIFF OMITTED] TR08MR19.003


[[Page 8453]]


[GRAPHIC] [TIFF OMITTED] TR08MR19.004

[GRAPHIC] [TIFF OMITTED] TR08MR19.005

    52. Figure 4 above represents two existing licensees--one in CMA435 
and one in CMA089--that have applied for available unserved areas 
adjacent to both existing licenses, in CMA436. Because the areas 
covered by the applications overlap, the applications are mutually 
exclusive. In Figure 5, the licensee in CMA089 has pulled back its 
application for unserved area to eliminate the overlapping area, 
thereby avoiding mutual exclusivity. Figure 5 reduces the area of the 
application and therefore represents a minor amendment. In contrast, in 
Figure 6, in addition to pulling back its application to eliminate the 
overlapping area, the licensee in CMA089 has also expanded its 
application to include additional available unserved area in CMA436. 
While the amendment in Figure 6 avoids mutual exclusivity, it adds 
unserved area that was not included in the application as originally 
filed, and therefore represents a major amendment. Such major 
amendments, if filed after the 30-day Phase 1 filing window has ended, 
are not permitted; therefore, the underlying application may be 
dismissed unless the applicant withdraws the major amendment or adjusts 
the filing to represent only a minor amendment.

[[Page 8454]]

D. Phase 2 of Relicensing

    53. Following Phase 1, the Bureau will issue a public notice that 
will (1) list applications found acceptable for filing during Phase 1, 
(2) direct interested parties to the publicly available information 
about the available unserved areas, and (3) announce the date on which 
the Bureau will begin accepting Phase 2 applications. The Bureau will 
update the publicly available relicensing map to reflect pending 
applications, licenses that were issued, and areas that remain 
available for relicensing.
    54. During Phase 2, interested applicants, including those that 
were barred during Phase 1, may file applications on a rolling basis 
for available unserved areas that were not licensed during Phase 1 or 
for which there are no pending applications. However, licensees that 
have failed to satisfy the construction requirements for relicensed 
area are permanently barred from applying to serve that area at any 
future date, including during Phase 2. The Bureau will place each 
first-filed Phase 2 application deemed acceptable for filing on public 
notice for 30 days, during which interested applicants may file 
mutually exclusive applications subject to the guidelines in this 
document.
    55. Mutual Exclusivity. As with Phase 1, Phase 2 applications will 
be deemed mutually exclusive if they propose areas overlapping with 
other applications. This definition of mutually exclusive applications 
includes ``daisy chains'' of mutual exclusivity, which occur when two 
or more applications contain proposed areas that do not directly 
overlap but are linked together in a chain by the overlapping 
proposal(s) of other(s), see Figure 7. The date of the public notice of 
the first-filed application in a given unserved area will establish the 
30-day filing period for all subsequent applications that are mutually 
exclusive--whether directly or through a ``daisy chain'' relationship--
with the first-filed application. The Bureau may dismiss any further 
mutually exclusive applications filed after this 30-day filing period, 
unless the applicant amends the application to avoid mutual 
exclusivity. Mutually exclusive applications are subject to auction and 
the Bureau may designate a limited settlement period for the applicants 
to resolve the mutual exclusivity prior to auction. Subject to the 
Greenmail Rule, applicants may resolve mutual exclusivity by 
withdrawing or filing a minor amendment to one or both mutually 
exclusive applications.
[GRAPHIC] [TIFF OMITTED] TR08MR19.006

BILLING CODE 6712-01-C
    56. Figure 7 illustrates how applications that do not directly 
overlap with other applications may nevertheless be considered mutually 
exclusive through a daisy chain. In Figure 7, an applicant files 
Application 1 for available unserved area during Phase 2, which starts 
a 30-day public notice period during which third parties may file 
petitions to deny and applications that are mutually exclusive of 
Application 1. On day 10 of Application 1's public notice period, a 
party files Application 2, which is mutually exclusive of Application 
1. On day 20 of Application 1's public notice period, another party 
files Application 3, which is mutually exclusive of Application 2, but 
not mutually exclusive of Application 1. Applications 1, 2, and 3 
represent a daisy chain of mutual exclusivity and all three applicants 
would be required to reach a settlement to avoid an auction to resolve 
the conflicting applications. Applications 4 and 5 are filed on day 40, 
after the close of Application 1's public notice period. Unless 
Application 4 is amended to avoid mutual exclusivity, Application 4 may 
be dismissed because it is mutually exclusive of Application 1 and was 
filed after the close of Application 1's public notice period. 
Application 5 is mutually exclusive of Application 3 and may be 
dismissed unless amended to avoid mutual exclusivity, because it is 
part of the daisy chain of mutual exclusivity with Application 1 and 
was filed outside of the first-filed application's public notice 
period.
    57. Settlement. As proposed, following a Phase 2 application's 30-
day public notice period, if the Bureau determines there are existing 
applications that are mutually exclusive of the initial application, it 
will issue a public notice identifying the conflicting

[[Page 8455]]

applications and providing the parties with 60 days to resolve the 
mutual exclusivity. Any mutually exclusive applications that are not 
resolved by the end of the 60-day period are subject to auction.
    58. Amendments. As with Phase 1, Phase 2 applicants may withdraw or 
amend their applications to avoid mutual exclusivity. In contrast to 
Phase 1, both major and minor amendments to Phase 2 applications are 
permitted, see Figures 4-6, and such amendments may be filed during the 
first-filed application's public notice period or the period for 
settlement of mutually exclusive applications described below. A major 
amendment to a pending application, however, will require a new public 
notice period during which the applicant would be subject to further 
mutually exclusive applications.

IV. Relicensed Area

A. Construction Requirement

    59. Licensees of 700 MHz licenses acquired through the relicensing 
process will have one year from the date the new license is issued to 
complete construction, provide signal coverage, and offer service over 
100% of the geographic area of the relicensed area. If the licensee 
fails to meet this construction requirement, its license will 
automatically terminate without Commission action and it will be 
ineligible to apply to provide service to that area at any future date. 
Unlike the KWYS rules, which provide that unserved area less than 50 
square miles will be deemed ``served'' for purposes of determining a 
failing licensee's service area, the rules setting forth the 
construction requirements for relicensed area do not contain any 
provision for treating such smaller unserved portions of a licensee's 
service area as ``served.'' Rather, Sec.  27.14(j)(3) states, without 
exception, that the failure of a licensee of relicensed area to 
complete its construction and provide signal coverage and offer service 
over 100% of the geographic area of the new license area will result in 
the automatic termination of the license. Therefore, any portion of the 
relicensed area that remains unserved at the one-year construction 
deadline--even if less than 50 square miles--will result in failure to 
satisfy this requirement and application of the penalty for failure.
1. Modifications
    60. In the 700 MHz Relicensing Comment PN, the Commission proposed 
that licensees would not be permitted to modify the license to reduce 
the licensed area before meeting the one-year construction benchmark, 
as this would effectively avoid the 100% geographic coverage 
requirement by reducing the area they must cover.
    61. One commenter asks the Bureau to apply a de minimis standard to 
reductions in license area before the one-year construction benchmark 
and to permit license modifications as long as the modification does 
not result in a reduction of greater than 10% in the size of the 
licensed area. This commenter asserts that the ``vagaries of RF 
radiation'' make it difficult for a licensee to precisely duplicate its 
predicted coverage. The commenter argues that permitting 10% license 
reductions ``will balance the occasional need of a licensee to reduce 
the size of its coverage area by a de minimis amount to account for 
real world technical impediments against the Bureau's desire to deter 
manipulation of its relicensing process.'' None of the commenting 
parties filed in response to this request.
    62. The Commission rejects this commenter's proposal, as it would 
permit a licensee to construct only 90% of the area originally 
authorized through relicensing without losing the license. Such a 
proposal is inconsistent with the 100% construction requirement that 
the Commission adopted and outside the scope of the Bureau's delegated 
authority. The Commission provided applicants with the flexibility to 
select whatever size of available unserved areas they choose, and 
applicants can take into account the variations in real world signal 
propagation when determining the area they seek to license.
    63. Therefore, as proposed, the Commission will deem any 
modification to reduce the license area of a license acquired through 
the relicensing process as a failure to satisfy the 100% construction 
requirement. Such a failure will result in automatic termination of the 
license and a permanent bar on the licensee, including any entities 
that would be barred as a result of their relationship to the former 
licensee, from applying to serve that area at any future date.
2. Assignments
    64. In the 700 MHz Relicensing Comment PN, we proposed that 
licensees would be permitted to file applications to assign licenses 
acquired through relicensing (including requests to partition and 
disaggregate) only after they have demonstrated that they have met the 
construction benchmark. The Commission observed that, while the Bureau 
believes this procedure for assignment would best promote 
administrative efficiency, we would consider waivers for larger 
assignment transactions on a case-by-case basis.
    65. One commenter objects to the Bureau's proposal to only allow 
assignment applications after a licensee has satisfied its construction 
requirement. It argues that the Bureau should permit such assignments 
``so long as the successor entities are bound by the same 100% coverage 
requirement at the end of the one-year construction deadline.'' None of 
the commenting parties filed in response to this request.
    66. The Commission agrees that this commenter's proposal would 
increase the flexibility of the Commission's proposed approach without 
creating unnecessary mutually exclusive applications filed against 
those of applicants that actually intend to serve those areas. In the 
WRS Renewal Second Report and Order (82 FR 41531, Sept. 1, 2017), the 
Commission adopted a requirement that parties to a partition or 
disaggregation agreement either: (1) Each certify that they will 
independently meet the construction requirements; or (2) agree to share 
the responsibility for satisfying the construction requirements.\18\ 
Under the Commission's construction rules, however, in the case of a 
full assignment, only the assignee, not the assignor, is responsible 
for satisfying the one-year construction benchmark.
---------------------------------------------------------------------------

    \18\ WRS Renewal Second Report and Order, 2017 WL 3381028 at 
*23-28, paragraphs 74 through 89. The WRS Renewal Second Report and 
Order adopted a unified framework for construction, renewal, and 
service continuity rules for flexible-use geographic licenses in the 
Wireless Radio Services. While the rule the Commission adopted to 
address construction obligations resulting from partition and 
disaggregation--47 CFR 1.950--is pending approval from the Office of 
Management and Budget, the Commission anticipates this rule will 
take effect before commencement of the 700 MHz relicensing process.
---------------------------------------------------------------------------

    67. To provide the flexibility sought, while at the same time 
preventing potential gaming of the relicensing process, the Commission 
will permit assignment of relicensed area (including through partition 
or disaggregation) before satisfying the one-year construction 
benchmark subject to two restrictions.
    68. First, the license may not be assigned to any parties that 
would have been barred, given their relationship to the assignor, from 
applying to serve the relicensed area during the phase of relicensing 
in which the assignor acquired it. For example, a party that would have 
been barred from applying during Phase 1 for a particular area could 
not acquire that area through assignment if the current licensee 
acquired it during Phase 1, but that

[[Page 8456]]

same party could acquire it through assignment from a licensee who 
acquired it during Phase 2 (when the party would no longer have been 
barred from applying to serve the area). A party who is permanently 
barred from applying to serve an area due to failure to satisfy the 
construction requirements for relicensed area would be barred from 
acquiring that area through assignment in any case, irrespective of 
whether the current licensee acquired it during Phase 1 or 2.
    69. Second, if the one-year construction benchmark is not satisfied 
with respect to the entire relicensed area, the penalty for failure, 
i.e., automatic termination of the license and a permanent bar from 
serving that area at any future date, will apply to all parties to the 
transaction, including any entities that would be barred as a result of 
their relationship to either party to the transaction, regardless of 
whether the assignment is a full assignment, partition, or 
disaggregation.

    Example 1: A, a licensee of relicensed area, assigns the entire 
license to B. B fails to satisfy the one-year 100% construction 
benchmark. The entire relicensed area, including any portion that B 
is serving, automatically terminates. Both A and B, including any 
entities that would be barred because of their relationship to A or 
B, are permanently barred from applying to serve that area at any 
future date.
    Example 2: A, a licensee of relicensed area, partitions half of 
the license to B. B builds 100% of its half of the license by the 
one-year construction deadline, but A does not. The entire license 
area as originally licensed through the relicensing process, 
including any portion that A or B is serving, terminates 
automatically. Both A and B, including any entities that would be 
barred because of their relationship to A or B, are permanently 
barred from applying to serve the entire area as originally acquired 
through relicensing at any future date.
    Example 3: A, a licensee of relicensed area, disaggregates half 
of its licensed spectrum to B. A and B must either individually or 
collectively offer services that provide combined coverage to 100% 
of the geographic area. Regardless of whether the licensees choose 
to meet the construction benchmark individually or collectively, if 
they fail to provide coverage to 100% of the geographic area as of 
the one-year deadline, both licenses will automatically terminate 
and both A and B, including any entities that would be barred as a 
result of their relationship to A or B, will be permanently barred 
from applying to serve that area at any future date.

    70. By eliminating any potential secondary market for assignments 
to barred parties and holding the assignor, as well as the assignee, 
accountable for failure to satisfy the construction requirement, the 
Commission finds this approach will adequately discourage gaming and 
speculation during the relicensing process. The Commission will require 
assignment applications filed before the one-year construction 
benchmark to include the same Ownership Certification regarding non-
barred status that applicants are required to file when applying for 
available unserved areas in the relicensing process.
3. Cancellation
    71. In the 700 MHz Relicensing Comment PN, the Commission proposed 
to treat any cancellation of a license before meeting the 100% coverage 
requirement as a failure to satisfy the performance obligations. No 
party objected to this proposal. The Commission adopts this proposal, 
based upon the rationale described in the public notice--namely, that 
it provides an incentive for rapid deployment of service on relicensed 
spectrum. Therefore, the Commission will deem the cancellation of a 
license before meeting the one-year construction benchmark as failure 
to satisfy the required performance obligations. Consequently, the 
cancelling licensee, including any entities that would be barred 
because of their relationship to the cancelling licensee, will be 
ineligible to apply to serve any portion of the cancelled license area 
at any future date.

B. Construction Showing

    72. Licensees must demonstrate compliance with the one-year 
construction benchmark by filing a construction notification with the 
Commission no later than 15 days after the relevant deadline 
demonstrating that they have met the construction requirements. To 
implement this requirement, the Commission proposed that, at the one-
year construction deadline, licensees would be required to demonstrate 
that they provide signal coverage and offer service to 100% of the 
geographic area by filing either a 40 dB[micro]V/m smooth contour or an 
alternative smooth contour. No commenters responded directly to this 
proposal. Nonetheless, the Commission adjusts our final approach in 
light of the changes we made above to the required KWYS filing service 
area demonstration.
    73. Accordingly, licensees must demonstrate compliance with the 
100% geographic coverage requirement by filing a service area 
demonstration that reflects their actual service in the license area, 
based on the methodology the licensee deems to best represent the areas 
in which it provides an actual service. The Commission expects that 
licensees will have used due diligence and made necessary inquiries to 
ensure their ability to meet our 100% geographic coverage requirement 
before filing their application for unserved areas. Demonstrations of 
service area should reflect the signal strength that the licensee 
represents to its customers as service, and licensees should be 
prepared to defend the methodology used. The Commission cautions 
licensees that the Bureau will look critically at showings that 
materially reduce the signal level at the boundary such that the 
demonstration might artificially inflate the licensee's coverage area. 
While licensees are permitted to file construction demonstrations that 
reflect the signal levels they deem to represent the services they 
provide, those signal levels may not result in a field strength that 
exceeds 40 dB[micro]V/m at the license boundary, as licensees of 
relicensed area will be bound by the same license boundary field 
strength limit applicable to all 700 MHz licensees. As with the KWYS 
showing, the Commission will require that construction demonstrations 
be filed using the map and filing formats described herein.
    74. The Bureau places construction notifications on public notice 
and reviews each notification and any related comments before making a 
determination regarding the notification. Interested parties are 
permitted to file comments, which must be filed no later than 30 days 
after the public notice release date. After examining the construction 
notifications and public comments, the Bureau determines whether each 
licensee has made a sufficient showing to satisfy the one-year 
construction benchmark and retain its license.
    75. If a licensee does not file either a request for extension of 
time before the construction deadline, or the required construction 
notification within 15 days after the construction deadline, as 
required by Sec.  1.946 of the Commission's rules, the Commission 
presumes that the license has not been constructed, or the coverage 
requirement has not been met. As a result, the Bureau places such 
licenses in ``Termination Pending'' status and lists the license on the 
Weekly Termination Pending Public Notice. The Bureau also notifies the 
licensee by letter that, if it has met its construction requirement, it 
has 30 days from the date of that public notice to file a petition for 
reconsideration showing that it timely met the construction deadline. 
If the licensee does not file a petition for reconsideration within the 
30-day reconsideration period showing timely construction, the Bureau 
updates its licensing records in ULS to show the

[[Page 8457]]

license as ``Terminated,'' effective as of the construction deadline. 
The license is also listed on a weekly public notice reflecting its 
status as changed to Terminated. The former licensee of the terminated 
license, including any entities that would be barred because of their 
relationship to the former licensee, will also be permanently barred 
from applying to serve the terminated license area at any future date.

C. Unserved Relicensed Area

    76. If a licensee of relicensed area fails to satisfy the one-year 
100% construction requirement, the entire relicensed area returns to 
the Commission's inventory for relicensing. Such area would enter 
relicensing via Phase 2 status, as there would be no applicable Phase 1 
bar such that the 30-day Phase 1 filing window is necessary. Except for 
the barred parties and related entities, interested parties are 
permitted to begin filing applications to serve the area on the 30th 
day after the release of the public notice listing the license as 
terminated.

V. Procedural Matters

    77. Regulatory Flexibility Analysis. As required by the Regulatory 
Flexibility Act of 1980 (RFA), the Commission prepared an Initial 
Regulatory Flexibility Analysis (IRFA) in connection with the 700 MHz 
Further Notice \19\ and a Final Regulatory Flexibility Analysis (FRFA) 
in connection with the 700 MHz Second Report and Order.\20\ While no 
commenter directly responded to the IRFA, the FRFA addressed concerns 
about the impact on small business of the KWYS rules. The IRFA and FRFA 
set forth the need for and objectives of the Commission's rules for the 
KWYS rules; the legal basis for those rules, a description and estimate 
of the number of small entities to which the rules apply; a description 
of projected reporting, recordkeeping, and other compliance 
requirements for small entities; steps taken to minimize the 
significant economic impact on small entities and significant 
alternatives considered; and a statement that there are no federal 
rules that may duplicate, overlap, or conflict with the rules. While 
the proposals in the 700 MHz Relicensing Comment PN did not change any 
of those descriptions, the Commission sought comment on whether the 
implementation of our proposals might affect either the IRFA or the 
FRFA. No comments were filed in response to the 700 MHz Relicensing 
Comment PN with respect to potential impacts on the IRFA or the FRFA, 
and the Commission concluded that the implementation of its proposals 
herein has had no further impact beyond that identified in the IRFA and 
FRFA.
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    \19\ Service Rules for 698-746, 747-762, and 777-792 MHz Bands 
et al., Report and Order and Further Notice of Proposed Rulemaking, 
22 FCC Rcd 8064, 8212 (2007) (700 MHz Further Notice).
    \20\ 700 MHz Second Report and Order, 22 FCC Rcd at 15542.
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    78. Paperwork Reduction Act. This document does not contain 
proposed information collection(s) subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. In addition, it does not contain 
any new or modified information collection burden for small business 
concerns with fewer than 25 employees, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).
    79. Congressional Review Act. The Commission will send a copy of 
this Public Notice to Congress and the Government Accountability 
office, pursuant to the Congressional Review Act. See 5 U.S.C. 
801(a)(1)(A).
    80. This document shall become effective thirty (30) days after the 
date of publication in the Federal Register.

VI. Authority

    81. Action taken under delegated authority pursuant to Sec. Sec.  
0.131 and 0.331 of the Commission's rules, 47 CFR 0.131, 0.331, and 
Service Rules for 698-746, 747-762, and 777-792 MHz Bands et al., 
Second Report and Order, 22 FCC Rcd 15289 (2007).

    By the Chief, Mobility Division, Wireless Telecommunications 
Bureau.

Federal Communications Commission.
Katherine Harris,
Deputy Chief, Mobility Division, Wireless Telecommunications Bureau.
[FR Doc. 2019-04055 Filed 3-7-19; 8:45 am]
 BILLING CODE 6712-01-P