[Federal Register Volume 61, Number 114 (Wednesday, June 12, 1996)]
[Rules and Regulations]
[Pages 29679-29695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14138]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 15, 22, 24, and 101
[WT Docket No. 95-157; RM-8643; FCC 96-196]
Microwave Facilities Operating in 1850-1990 MHz (2GHz) Band;
Relocation Costs Sharing
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: By this First Report and Order, the Commission changes and
clarifies certain aspects of the microwave relocation rules adopted in
our Emerging Technologies proceeding, ET Docket No. 92-9. The
Commission also adopts a plan for sharing the costs of relocating
microwave facilities currently operating in the 1850 to 1990 MHz (``2
GHz'') band, which has been allocated for use by broadband Personal
Communications Services (``PCS''). The Commission's plan establishes a
mechanism whereby PCS licensees that incur costs to relocate microwave
links receive reimbursement for a portion of those costs from other PCS
licensees that also benefit from the resulting spectrum clearance. The
Commission conditions the cost-sharing plan, however, on selection of
one or more entities or organizations to administer the plan.
EFFECTIVE DATES: Sections 15.307 and 22.602 are effective August 12,
1996.
[[Page 29680]]
Sections 24.5, 24.237, 24.238, 24.239, 24.241, 24.243, 24.245, 24.247,
24.249, 24.251 and 24.253 will become effective August 12, 1996, and
will become applicable on the date that the Wireless Telecommunications
Bureau selects a clearinghouse to administer the cost-sharing plan. The
Commission will publish a document announcing the selection of the
clearinghouse at a later date. Sections 101.3, 101.69, 101.71, 101.73,
101.75, 101.77, 101.79, 101.81, and 101.147 will become effective
August 1, 1996.
FOR FURTHER INFORMATION CONTACT: Michael Hamra (202) 418-0620, Wireless
Telecommunications Bureau.
SUPPLEMENTARY INFORMATION: This is a synopsis of the First Report and
Order, adopted April 24, 1996 and released April 30, 1996. For
information regarding the proposed plan for sharing the costs of
microwave relocation, see Amendment to the Commission's Rules Regarding
a Plan for Sharing the Costs of Microwave Relocation, Notice of
Proposed Rule Making, WT Docket No. 95-157, 60 FR 55529 (November 1,
1995) (``Cost-Sharing Notice''). Part 101 will become effective August
1, 1996. See 61 FR 26670 (May 28, 1996). The complete text of this
First Report and Order is available for inspection and copying during
normal business hours in the FCC Reference Center, Room 230, 1919 M
Street, N.W., Washington, D.C., and also may be purchased from the
Commission's copy contractor, International Transcription Service, at
(202) 857-3800, 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.
I. Background
1. In the First Report and Order and Third Notice of Proposed Rule
Making in ET Docket No. 92-9, 57 FR 49020 (October 29, 1992) the
Commission reallocated the 1850-1990, 2110-2150, and 2160-2200 MHz
bands from private and common carrier fixed microwave services to
emerging technology services. The Commission also established
procedures for 2 GHz microwave incumbents to be relocated to available
frequencies in higher bands or to other media, by encouraging
incumbents to negotiate voluntary relocation agreements with emerging
technology licensees or manufacturers of unlicensed devices when
frequencies used by the incumbent are needed to implement the emerging
technology. The First Report and Order stated that, should negotiations
fail, the emerging technology licensee could request involuntary
relocation of the incumbent, provided that the emerging technology
service provider pays the cost of relocating the incumbent to a
comparable facility. In the Commission's Third Report and Order in ET
Docket No. 92-9, 58 FR 46547 (September 2, 1993) as modified on
reconsideration by the Memorandum Opinion and Order, 59 FR 19642 (April
25, 1994) the Commission established additional details of the
transition plan to enable emerging technology providers to relocate
incumbent facilities. The relocation process consists of two
negotiation periods that must expire before an emerging technology
licensee may request involuntary relocation. The first is a fixed two-
year period for voluntary negotiations--three years for public safety
incumbents, e.g., police, fire, and emergency medical--commencing with
the Commission's acceptance of applications for emerging technology
services, during which the emerging technology providers and microwave
licensees may negotiate any mutually acceptable relocation agreement.
Negotiations are strictly voluntary. If no agreement is reached, the
emerging technology licensee may initiate a one-year mandatory
negotiation period--or two-year mandatory period if the incumbent is a
public safety licensee--during which the parties are required to
negotiate in good faith.
2. Should the parties fail to reach an agreement during the
mandatory negotiation period, the emerging technology provider may
request involuntary relocation of the existing facility. Involuntary
relocation requires that the emerging technology provider (1) guarantee
payment of all costs of relocating the incumbent to a comparable
facility; (2) complete all activities necessary for placing the new
facilities into operation, including engineering and frequency
coordination; and (3) build and test the new microwave (or alternative)
system. Once comparable facilities are made available to the incumbent
microwave operator, the Commission will amend the 2 GHz license of the
incumbent to secondary status. After relocation, the microwave
incumbent is entitled to a one-year trial period to determine whether
the facilities are indeed comparable, and if they are not, the emerging
technology licensee must remedy the defects or pay to relocate the
incumbent back to its former or an equivalent 2 GHz frequency.
3. Under these procedures, it is possible for a relocation
agreement between a PCS licensee and a microwave incumbent to have
spectrum-clearing benefits for other PCS licensees as well. First, some
microwave spectrum blocks overlap with one or more PCS blocks, because
the spectrum in the 1850-1990 MHz band was assigned differently in the
two services. Second, incumbents' receivers may be susceptible to
adjacent or co-channel interference from PCS licensees in more than one
PCS spectrum block. For example, a microwave link located partially in
Block A, partially in Block D, and adjacent to Block B, may cause
interference to or receive interference from PCS licensees that are
licensed in each of those blocks. Third, because most 2 GHz microwave
licensees operate multi-link systems, PCS licensees may be asked to
relocate links that do not directly encumber their own spectrum or
service area in order to obtain the microwave incumbent's voluntary
consent to relocate. Finally, the Unlicensed PCS Ad Hoc Committee for 2
GHz Microwave Transition and Management Inc. (``UTAM''), the frequency
coordinator for the PCS spectrum designated for unlicensed devices,
expects that some licensed PCS providers will have to relocate links in
the unlicensed band that are paired with links in licensed PCS
spectrum. The Commission has designated UTAM to coordinate relocation
in the 1910-1930 MHz band, which has been reallocated for unlicensed
PCS devices. Once the 1910-1930 MHz band is clear, or there is little
risk of interference to the remaining incumbents, and UTAM has
recovered its relocation costs, UTAM's role will end and it will be
dissolved.
4. Because the Commission is licensing PCS providers at different
times and multiple PCS licensees may benefit from the relocation of a
microwave system or even a single link, the first PCS licensee in the
market potentially bears a disproportionate share of relocation costs.
Subsequent PCS licensees to enter the market may therefore obtain a
windfall. As a result of this potential ``free rider'' problem, the
first PCS licensee in the market might not relocate a link or might
delay its deployment of PCS if it believes that another PCS licensee
will relocate the link first, thus paying for some or all of the
relocation costs. In addition, unless cost-sharing is adopted, PCS
licensees might not engage in relocation that is cost-effective if
viewed from an industry-wide perspective. For example, a link that
encumbers two PCS blocks might not be moved if the cost is greater than
the benefit to any single licensee, even though the joint benefit
received by two or more licensees exceeds the cost of relocating the
link.
5. In 1994, PCIA proposed a cost-sharing plan to alleviate the free
rider problem, which the Commission found to be attractive in theory
but dismissed
[[Page 29681]]
as underdeveloped. On May 5, 1995, Pacific Bell (``PacBell'') filed a
Petition for Rulemaking. In its petition, PacBell proposed a detailed
cost-sharing plan in which PCS licensees on all blocks, licensed and
unlicensed, would share in the cost of relocating microwave stations.
On May 16, 1995, the Commission requested comment on PacBell's
proposal. Most parties that commented on PacBell's Petition for
Rulemaking supported the cost-sharing concept, although the comments
reflected some differences regarding the details of the proposal. On
October 12, 1995, the Commission adopted a Notice of Proposed Rule
Making, 60 FR 55529 (November 1, 1995) which sought comment on a
modified version of the plan proposed by PacBell.
6. The Commission released and adopted, with this First Report and
Order, a Further Notice of Proposed Rule Making, 61 FR 24470 (May 15,
1996).
II. First Report and Order
7. In the Cost-Sharing Notice, the Commission proposed a number of
changes and clarifications to the microwave relocation rules adopted in
the Emerging Technologies docket. The Commission suggested that
additional guidance with respect to certain aspects of its rules would
facilitate negotiations, reduce disputes, and expedite deployment of
PCS. As explained below, the Commission adopts many of the changes and
clarifications the Commission proposed, along with some suggestions
made by commenters. By adopting these rule changes and clarifications,
as well as the cost-sharing plan discussed in Section B, infra, the
Commission intends to expedite the clearing of the 2 GHz band and the
introduction of PCS to the public, while protecting the rights of
incumbents. The Commission seeks to promote an efficient and equitable
relocation process, which minimizes transaction costs and maximizes
benefits for all parties, including incumbents, PCS licensees, and the
public.
A. Microwave Relocation Rules
1. Voluntary Negotiations
8. The Commission agrees with commenters who argue that the public
interest would not be served by changing the rules regarding the
voluntary period for the A and B blocks at this time. First, the A and
B block licensees who are now negotiating with incumbents were on
notice of the voluntary period when they bid for their licenses, and
they presumably have factored the length of the period and the
potential cost of relocation into their bids. They have offered no
persuasive justification to shorten the period now. Second, the
Commission notes that many voluntary agreements have already been
reached or are now being negotiated between A and B block licensees and
incumbents. The Commission is concerned that altering the voluntary
period could inadvertently delay the deployment of PCS, because
negotiations are likely to be interrupted while parties reassess their
bargaining positions. Nevertheless, the Commission agrees with PCS
licensees that changing the negotiation period for blocks other than
the A and B blocks may not raise the same concerns, because
negotiations in these blocks have not commenced.
9. Whether or not the negotiation periods are changed, the
Commission also agrees with PCS licensees that additional information
about the value of an incumbent's system, the estimated amount of time
it would take to relocate the incumbent, and the anticipated cost of
relocation may help facilitate negotiations during the voluntary
period, as the Commission suggested in the Cost-Sharing Notice.
Therefore, the Commission will require that, if the parties have not
reached an agreement within one year after the commencement of the
voluntary period, the incumbent must allow the PCS licensee, if the PCS
licensee so chooses, to gain access to the microwave facilities to be
relocated so that an independent third party can examine the
incumbent's 2 GHz system and prepare an estimate of the cost and the
time needed to relocate the incumbent to comparable facilities. The PCS
licensee must pay for any such cost estimate. Because the one-year
anniversary of the commencement of the voluntary period for A and B
block licensees has already passed, this requirement shall become
effective for the A and B block on the effective date of the rules
adopted in this proceeding. The Commission disagrees with incumbents
that a cost estimate paid for by the PCS licensee changes the nature of
the voluntary period, because participation in negotiations remains
voluntary.
10. Finally, although the Commission is not altering the basic
structure or length of the voluntary period for A and B block PCS
licensees, the Commission emphasizes that its rules provide incentives
for voluntary agreements. The Commission has stated in the past that
PCS licensees may choose to offer incumbents premiums to relocate
quickly. ``Premiums'' could include: replacing the analog facilities
with digital facilities, paying all of the incumbent's transactions
costs, or relocating an entire system as opposed to just the
interfering links. These incentives are available only to microwave
incumbents who consent to relocation by negotiation. By contrast, PCS
licensees are not obligated to pay for such premiums during an
involuntary relocation, which is discussed in Section IV(A)(3), infra.
2. Mandatory Negotiations
11. As the comments on this issue demonstrate, the question of
whether parties are negotiating in good faith typically requires
consideration of all the facts and circumstances underlying the
negotiations, and thus is likely to depend on the specific facts in
each case. The Commission is concerned that creating a presumption that
a party is acting in good or bad faith, as proposed in the Cost-Sharing
Notice, may slow down resolution of disputes by prompting parties to
bring claims of bad faith to the Commission prematurely rather than
focusing on resolving the underlying disputes through the negotiation
process. For these reasons, the Commission declines to adopt its
proposal creating a presumption that a party who declines an offer of
comparable facilities is acting in bad faith. Instead, the Commission
concludes that good faith should be evaluated on a case-by-case basis
under basic principles of contract law. Nevertheless, the Commission
agrees with those commenters who suggest that guidance with respect to
the factors the Commission will consider if a dispute arises over good
faith would be helpful.
12. First, the Commission believes that good faith requires each
party to provide information to the other that is reasonably necessary
to facilitate the relocation process. For example, upon request by a
PCS licensee, the Commission expects incumbents to allow inspection of
their facilities by the PCS licensee and to provide any other
information that the PCS licensee needs in order to evaluate the cost
of relocating the incumbent to comparable facilities. Second, when
evaluating claims that a party has not negotiated in good faith, the
Commission will consider, inter alia, the following factors: (1)
whether the PCS licensee has made a bona fide offer to relocate the
incumbent to comparable facilities; (2) if the microwave incumbent has
demanded a premium, the type of premium requested (e.g., whether the
premium is directly related to relocation, such as system-wide
relocations and analog-to-digital conversions, versus other types of
[[Page 29682]]
premiums) and whether the value of the premium as compared to the cost
of providing comparable facilities is disproportionate (i.e., whether
there is a lack of proportion or relation between the two); (3) what
steps the parties have taken to determine the actual cost of relocation
to comparable facilities; and (4) whether either party has withheld
information requested by the other party that is necessary to estimate
relocation costs or to facilitate the relocation process.
13. To ensure that parties do not bring frivolous bad faith claims,
the Commission will also require any party alleging a violation of the
Commission's good faith requirement to provide an independent estimate
of the relocation costs of the facilities in question. Independent
estimates must include a specification for the comparable facility and
a statement of the costs associated with providing that facility to the
incumbent licensee. These cost estimates are similar to the cost
estimates that the Commission requires if a dispute arises over
comparable facilities during the involuntary relocation period. The
Commission believes that requiring such estimates will assist them in
determining whether the parties are negotiating in good faith. Finally,
the Commission agrees with those commenters who argue that penalties
for failure to negotiate in good faith should be imposed on a case-by-
case basis. The Commission emphasizes, however, that they intend to use
the full realm of enforcement mechanisms available to them in order to
ensure that licensees bargain in good faith.
3. Involuntary Relocation
14. If no agreement is reached during either the voluntary or
mandatory negotiation period, a PCS licensee may initiate involuntary
relocation procedures. Under involuntary relocation, the incumbent is
required to relocate, provided that the PCS licensee meets the
conditions under the Commission's rules for making the incumbent whole,
such as providing the incumbent with comparable facilities.
a. Comparable Facilities
15. The Commission concludes that the factors they have
identified--communications throughput, system reliability, and
operating costs--will be the three factors used to determine when a
facility is comparable. As the Commission stated in the Cost-Sharing
Notice, the Commission believes that providing guidance with respect to
the term comparable facilities will facilitate negotiations and reduce
disputes. The record in this proceeding also supports adoption of the
factors the Commission has identified. Each factor is discussed in more
detail below.
16. Communication Throughput. The Commission defines communications
throughput as the amount of information transferred within the system
in a given amount of time. For analog systems the throughput is
measured by the number of voice channels, and for digital systems it is
measured in bits per second (``bps''). Therefore, if analog facilities
are being replaced by analog facilities, the PCS licensee will be
required to provide the incumbent with an equivalent number of 4 kHz
voice channels. If an existing digital system is being replaced by
digital facilities, the PCS licensee will be required to provide the
incumbent with equivalent data loading bps in order for the system to
be considered comparable. The Commission agrees with commenters that
the more difficult issue will be determining equivalent throughput when
analog equipment is being replaced with digital equipment, which can be
like comparing ``apples with oranges.'' If disputes arise, the
Commission will determine on a case-by-case basis whether comparable
throughput has been achieved. For guidance, the Commission plans to
refer to other parts of its rules where analog-digital comparisons have
been made, such as the minimum channel loading requirements for fixed
point-to-point microwave systems in Section 21.710(d).
17. The Commission also concludes that, during involuntary
relocation, PCS licensees will only be required to provide incumbents
with enough throughput to satisfy their needs at the time of
relocation, rather than to match the overall capacity of the system, as
some microwave incumbents suggest. For example, the Commission will not
require that a 2 GHz incumbent with 5 MHz of bandwidth be relocated to
a 5 MHz bandwidth, 6 GHz location when its current needs only justify a
1.25 MHz bandwidth system. If a dispute arises, the Commission will
determine what an incumbent's needs are by looking at actual system use
rather than total capacity at the time of relocation. The Commission
expressly adopted channelization plans for the 6 GHz band with
bandwidth requirements ranging from 400 kHz to 30 MHz to increase the
efficiency of use by point-to-point microwave operations. Although the
Commission recognizes that this policy may affect an incumbent's
ability to increase its capacity over time, the Commission agrees with
PCS licensees that the public interest would not be served if spectrum
is automatically held in reserve for all incumbents with the
expectation that some may require additional capacity in the future.
The Commission's goal is to foster efficient use of the spectrum, which
would be thwarted if all incumbents are relocated to systems with
capacity that exceeds their current needs. Also, limiting spectrum to
current needs serves the public interest, because the Commission
believes that it will promote the development of spectrum-efficient
technology capable of increasing capacity without increasing bandwidth.
18. Reliability. The Commission defines system reliability as the
degree to which information is transferred accurately within the
system. As stated in the Cost-Sharing Notice, the reliability of a
system is a function of equipment failures (e.g., transmitters, feed
lines, antennas, receivers, battery back-up power, etc.), the
availability of the frequency channel due to propagation characteristic
(e.g., frequency, terrain, atmospheric conditions, radio-frequency
noise, etc.), and equipment sensitivity. The Commission defines
comparable reliability as that equal to the overall reliability of the
incumbent system, and the Commission will not require the system
designer to build the radio link portion of the system to a higher
reliability than that of the other components of the system. For
example, if an incumbent system had a radio link reliability of 99.9999
percent, but an overall reliability of only 99.999 percent because of
limited battery back-up power, the Commission requires that the new
system have a radio link reliability of 99.999 percent to be considered
comparable. For digital data systems this would be measured by the
percent of time the bit error rate (``BER'') exceeds a desired value,
and for analog or digital voice transmissions this would be measured by
the percent of time that audio signal quality met an established
threshold. Under this approach, for a replacement digital system to be
comparable, the data rate throughput must be equal to or greater than
that of the incumbent system with an equal or greater reliability. If
an analog voice system is replaced with a digital voice system the
resulting frequency response, harmonic distortion, signal-to-noise
ratio, and reliability would be the factors considered. The Commission
declines to adopt AUE's request that the Commission include a ``system
age'' component that takes into account how the age of a given system
can affect system reliability, because the
[[Page 29683]]
Commission does not have enough information to determine how age will
affect a given system. Moreover, the Commission believes that older
equipment of high quality may be as reliable as newer equipment of low
quality.
19. Operating Costs. The Commission defines operating costs as the
cost to operate and maintain the microwave system. These costs fall
into several categories. First, the incumbent must be compensated for
any increased recurring costs associated with the replacement
facilities (e.g., additional rental payments, increased utility fees).
Although the Commission originally proposed that recurring costs should
be limited to a ten-year license term, the Commission is persuaded by
PCS licensees that a five-year time period--which is the length of a
microwave license in the 1850-1990 MHz band--is a more appropriate time
frame, because it strikes an appropriate balance between the burden
placed on PCS licensees who must relocate many incumbents, and the
burden placed on incumbents that are being forced to relocate.
Furthermore, the Commission believes that the five-year time period is
not unfair to incumbents because, by five years from now, many
incumbents would have been forced to bear some of these costs
themselves--such as increased rents--if they had not already been
relocated by PCS licensees. Moreover, the Commission is also persuaded
that a five-year time period provides incumbents with sufficient time
for budget planning and resource allocation to meet such expenses once
the five-year period expires. Finally, the Commission concludes that a
PCS licensee is permitted but not required to satisfy its obligation by
making a lump-sum payment based on present value using current interest
rates, as suggested by some incumbents.
20. Second, increased maintenance costs must be taken into
consideration when determining whether operating costs are comparable.
As several commenters point out, maintenance costs associated with
analog systems are frequently higher than the costs for equivalent
digital systems, because manufacturers are producing mostly digital
equipment and analog replacement parts can be difficult to find. The
Commission declines to adopt API's suggestion that ``serviceability''--
which would require that access to those elements essential to
restoration of service be equal to or greater than the original
system--should be adopted as a fourth element, however, because the
Commission believes that the ease of servicing the equipment will
affect repair costs, which will be factored into operating costs.
Furthermore, the Commission agrees with incumbents that, in some
instances, the operating costs of 6 GHz analog equipment might be so
high that analog replacement facilities would not qualify as
comparable. On the other hand, if an available analog replacement
system would provide equivalent technical capability without increasing
the incumbent's operating costs or sacrificing any of the other factors
the Commission has identified, the Commission agrees with PCS licensees
that such an analog system would be acceptable. In sum, the
Commission's goal is to ensure that incumbents are no worse off than
they would be if relocation were not required, not to guarantee
incumbents superior systems at the expense of PCS licensees.
21. Trade Offs. The Commission also concludes that comparable
replacement facilities may not be provided by trading off any of the
system parameters discussed above. Thus, the Commission agrees with
incumbents that PCS licensees should not be permitted to compromise on
one aspect of comparability, such as system reliability, by
compensating with another factor, such as increased throughput. Based
on the record in this proceeding, the Commission believes that the
factors the Commission has identified are central to the concept of
comparability, and therefore the replacement system provided to an
incumbent during an involuntary relocation must be at least equivalent
to the incumbent's existing system with respect to system reliability,
throughput, and operating costs. However, other aspects of the system
(e.g., bandwidth) do not have to be equivalent to the incumbent's
original 2 GHz system. As PCS licensees point out, it might be possible
to achieve comparability with respect to the three main factors, even
though all of the features on the replacement equipment are not
identical to those of the original system. Other media, such as land
lines, would also be acceptable, provided that comparability is
achieved.
22. Depreciation. In the Cost-Sharing Notice, the Commission also
sought comment on whether and how depreciation of equipment and
facilities should be taken into account, and whether it would be
appropriate for a PCS licensee to compensate an incumbent only for the
depreciated value of the old equipment. Some PCS licensees contend that
depreciation should be taken into account during the mandatory period
as a means of encouraging incumbents to accept offers during the
voluntary period. The Commission is persuaded by incumbents, however,
that compensation for the depreciated value of old equipment would not
enable them to construct a comparable replacement system without
imposing costs on the incumbent, which would be inconsistent with the
Commission's relocation rules. The Commission therefore concludes that
the depreciated value of old equipment should not be a factor when
determining comparability.
b. Relocating Individual Links
23. The Commission affirms its decision in the 1994 Memorandum
Opinion and Order that PCS licensees are obligated to pay to relocate
incumbents to comparable facilities only with respect to the specific
microwave links for which their systems pose an interference problem.
Thus, the Commission clarifies that PCS licensees are not under an
obligation to move an incumbent's entire system at once, unless all of
the links in the incumbent's system would be subject to interference by
the PCS licensee. Although system-wide relocations may be preferable
and less disruptive to the incumbent, the Commission concludes that it
would be inappropriate to increase a PCS licensee's monetary
obligation, e.g., by requiring it to pay to relocate links that it
never intended to move, after the licenses have already been auctioned.
In fact, several commenters--particularly those bidding in the C block
auction--have stated in their comments that they are intentionally
designing their systems in such a way that existing links will not have
to be relocated. Moreover, incumbents are not harmed by this policy
because, as PCS licensees point out, many incumbents already operate
networks that consist of both 2 GHz and 6 GHz links or a combination of
digital and analog technology. Furthermore, the Commission's rules
protect microwave operations by requiring PCS licensees to provide
incumbents with a seamless transition from their old facilities to the
replacement facilities. Thus, if providing a seamless transition
requires it, PCS licensees must relocate additional links or pay for
additional costs associated with integrating the new links into the old
system, such as employing a different modulation technique to preserve
the system's overall integrity. If problems arise, the PCS licensee is
required under the Commission's rules to remedy the situation.
24. To ease the burden on incumbents, the Commission has adopted a
cost-sharing plan to promote
[[Page 29684]]
the relocation of all links in a system at the same time. By enabling
PCS licensees to collect reimbursement from subsequent licensees that
benefit from the relocation, the Commission believes that its cost-
sharing plan will promote a larger number of system-wide relocations.
c. Transaction Expenses
25. The Commission concludes that incumbents should be reimbursed
only for legitimate and prudent transaction expenses that are directly
attributable to an involuntary relocation, subject to a cap of two
percent of the ``hard'' costs involved (e.g., equipment, new towers,
site acquisition). Although the Commission proposed in the Cost-Sharing
Notice that PCS licensees should not be required to reimburse
incumbents for any ``extraneous'' expenses, such as fees for attorneys
and consultants, the Commission is persuaded by commenters that some
reimbursement for outside assistance is necessary, because not all
incumbents have expertise in these fields within their organizations.
The Commission concludes that PCS licensees are not required to pay
incumbents for internal resources devoted to the relocation process,
however, because such expenses are difficult to determine and would be
too hard for a PCS licensee to verify. Moreover, the benefits
incumbents receive as a result of relocation, such as superior
equipment, are likely to outweigh any internal costs they incur.
26. To prevent abuses, PCS licensees will not be required to
reimburse incumbents for transaction costs that exceed two percent of
the hard costs associated with an involuntary relocation. Rather than
adopt a cap on the dollar amount that can be spent on transaction
expenses, the Commission believes that a percentage of the total hard
costs, as suggested by Cox & Smith, is more appropriate. Therefore, if
complicated and costly actions, such as land acquisition, are required
to accomplish relocation, the permissible amount of reimbursement for
transaction costs would be higher. The Commission also believes that a
two-percent cap is reasonable and strikes a fair balance between the
concerns of PCS licensees and microwave incumbents. The Commission
derived two percent from CIPCO's suggested cap of $5,000 per link,
which is two-percent of $250,000--the amount the Commission has
determined to be the average cost of relocating a link. Furthermore,
PCS licensees will not be required to pay for transaction costs
incurred by incumbents during the voluntary or mandatory negotiation
periods once an involuntary relocation is initiated, nor will they be
required to pay for fees that cannot be legitimately tied to the
provision of comparable facilities, such as consultant fees for
determining how much of a premium payment PCS licensees would be
willing to pay. The Commission agrees with PCS licensees that they
should not have to reimburse incumbents for such fees, because it would
encourage incumbents to view the relocation process as a business
opportunity. Furthermore, requiring PCS licensees to pay such fees does
not serve the public interest, because added expenses are likely to be
passed on to the public in the form of increased PCS subscriber fees.
d. Twelve-Month Trial Period
27. As a preliminary matter, the Commission clarifies that the
twelve-month trial period is only automatic if an involuntary
relocation occurs. Therefore, if the parties decide that a trial period
should be established for relocations that occur during the voluntary
and mandatory period, they must provide for such a period in the
relocation contract.
28. Because our proposed clarifications to the twelve-month trial
period received broad record support, the Commission adopts the
following clarifications to Section 94.59(e) of our rules:
(1) The trial period will commence on the date that the incumbent
begins full operation (as opposed to testing) on the replacement link;
and
(2) An incumbent's right to a twelve-month trial period resides
with the incumbent as a function of the Commission's relocation rules,
regardless of whether the incumbent has previously surrendered its
license. If, however, a microwave licensee has retained its 2 GHz
authorization during the trial period, it is required to return the
license to the Commission at the conclusion of that period.
In Commission's initial rule, 47 CFR Sec. 94.59(c), the Commission
stated that they would convert the microwave incumbent to secondary
status after the replacement system is built and the microwave
incumbent has been provided with a reasonable amount of time to
determine comparability. The Commission sees no reason, however, for
the incumbent to retain its 2 GHz license once it has been relocated.
The Commission declines to adopt the suggestion that the Commission's
twelve-month trial period should be extended or begin again if a
problem arises. The Commission concludes that incumbents are adequately
protected without such an extension because, by the end of the twelve-
month period, the Commission's rules require that they be operating on
facilities that are comparable. If at the end of the twelve months the
PCS licensee has still failed to meet this requirement, it must
relocate the incumbent back to its former or equivalent 2 GHz
frequencies. Thus, the expiration of the twelve-month period does not
leave the incumbent without further recourse.
29. As a related matter, the Commission clarifies that, even after
the PCS licensee has initiated the involuntary relocation process, a
mutually acceptable agreement will still be permissible. If the parties
do sign an agreement specifying their own terms, the Commission will
treat the agreement in the same manner as the Commission treats
agreements that are consummated during the voluntary and mandatory
periods, and the parties will be bound by contract rather than our
rules. The Commission agrees with commenters that neither incumbents
nor PCS licensees are harmed by such a policy, because neither party is
obligated to enter into such an agreement. If the agreement falls
through, however, the incumbent will be subject to involuntary
relocation.
30. Finally, the Commission declines to reduce the trial period to
one month as suggested by PCS licensees. The Commission agrees with
incumbents that twelve months is an appropriate time period, because it
gives the incumbent the opportunity to ensure that the facilities
function properly during changes in climate and vegetation. The
Commission also takes this opportunity to clarify that PCS licensees
are not required to leave the incumbent's former 2 GHz spectrum vacant
during the twelve-month trial period. The Commission agrees with PCIA
that requiring PCS licensees to hold this spectrum in reserve would
delay the deployment of PCS for at least one year, which does not serve
the public interest. The Commission also clarifies that, if the
microwave incumbent demonstrates that the new facilities are not
comparable to the former facilities, the PCS licensee must remedy the
defects or pay to relocate the microwave licensee to one of the
following: its former or equivalent 2 GHz channels, another comparable
frequency band, a land-line system, or any other facility that
qualifies as comparable.
[[Page 29685]]
e. Request for Clarification of Involuntary Relocation Procedures
31. The Commission believes that AT&T Wireless, et al., have raised
legitimate issues regarding the procedures for implementing involuntary
relocation at the conclusion of the mandatory negotiation period. The
issues raised in their letter, however, were not included in the Cost-
Sharing Notice, nor were they raised in any of the regularly filed
comments or reply comments in this proceeding. Because of the relative
lateness of the parties' ex parte filing and the lack of opportunity
for other parties to comment, the Commission declines to address these
issues at this time. Nevertheless, the Commission encourages the
parties to the April 15 letter or any other interested parties to file
a petition for rulemaking on the issues raised in the letter.
4. Public Safety Certification
32. The Commission agrees with PCS licensees that certification is
necessary to ensure that only those public safety incumbents meriting
special status are allowed the advantages of extended negotiation
periods. The Commission also agrees with incumbents, however, that
self-certification is appropriate, because self-certification will not
burden public agencies with time-consuming reporting requirements. The
Commission declines to adopt the suggestion made by AT&T that all
public safety incumbents should be required to apply to the Commission
for certification, because such a requirement would be administratively
burdensome for the Commission and could delay negotiations.
Furthermore, the Commission believes that PacBell's concerns about
biased public agencies are overstated, because the Commission does not
believe public agencies will be inclined to falsify the certification.
33. The Commission concludes that, in order for a public safety
licensee to qualify for extended negotiation periods under the
Commission's rules, the department head responsible for system
oversight must certify to the PCS licensee requesting relocation that:
(1) The agency is a licensee in the Police Radio, Fire Radio,
Emergency Medical, Special Emergency Radio Services, or that it is a
licensee of other Part 94 facilities licensed on a primary basis under
the eligibility requirements of Part 90, Subparts B and C; and
(2) the majority of communications carried on the facilities at
issue involve safety of life and property.
A public safety licensee must provide certification within 30 days
of a request from a PCS licensee or the PCS licensee may presume that
special treatment is inapplicable to the incumbent. If an incumbent
falsely certifies to a PCS licensee that it qualifies for the extended
time periods, the incumbent will be in violation of the Commission's
rules and subject to appropriate penalties. Such an incumbent would
also immediately become subject to the non-public safety time periods.
5. Dispute Resolution
34. Because relocations that occur pursuant to agreements arrived
at during the voluntary and mandatory period are relocations pursuant
to private contracts, the Commission anticipates that parties will
pursue common law contract remedies if a dispute arises. Thus, if
parties do not agree to use alternative dispute resolution techniques,
the Commission expects that they will file suit in a court of competent
jurisdiction.
35. To the extent that disputes arise over violation of the
Commission's rules (e.g., the good faith requirement, involuntary
relocation procedures), the Commission has stated that parties are
encouraged to use ADR techniques. Commenters agree that resolution of
such disputes entirely by the Commission's adjudication processes would
be time consuming and costly to all parties. Therefore, the Commission
continues to encourage parties to employ ADR techniques when disputes
arise.
6. Ten Year Sunset
36. As the Commission stated in the Cost-Sharing Notice, the
Commission continues to believe that an emerging technology licensee's
obligation to relocate 2 GHz microwave incumbents should not continue
indefinitely; however, the Commission is also persuaded by incumbents
that immediate conversion to secondary status in the year 2005 may not
be necessary, especially with respect to rural links that would not
interfere with any PCS systems. To strike a fair balance between these
competing interests, the Commission concludes that 2 GHz microwave
incumbents will retain primary status unless and until an emerging
technology licensee requires use of the spectrum, but that the emerging
technology licensee will not be obligated to pay relocation costs after
the relocation rules sunset, i.e., ten years after the voluntary period
begins for the first emerging technology licensees in the service
(which is April 4, 2005, for PCS licensees and unlicensed PCS). Once
the relocation rules sunset, an emerging technology licensee may
require the incumbent to either cease operations or pay to relocate
itself to alternate facilities, provided that the emerging technology
licensee intends to turn on a system within interference range of the
incumbent, as determined by TIA Bulletin 10-F or any standard successor
thereto. Notification must be in writing, and the emerging technology
licensee must provide the incumbent with no less than six months to
vacate the spectrum. Emerging technology licensees may provide notice
prior to the date that the relocation rules sunset, but may not turn on
their systems until after that date. After the six-month notice period
has expired, the incumbent will be required to turn its 2 GHz license
back into the Commission, unless the parties have entered into an
agreement which allows the incumbent to continue to operate on a
mutually agreed upon basis. The Commission concludes that their
decision promotes spectrum efficiency, because it allows microwave
incumbents to continue to operate in the 2 GHz band until their
spectrum is needed by an emerging technology licensee.
37. The Commission believes that a sunset date for the Commission's
microwave relocation rules serves the public interest, because it
provides certainty to the process and prevents the emerging technology
licensee from being required to pay for relocation expenses
indefinitely. Moreover, the Commission agrees with commenters that ten
years provides incumbents with sufficient time (1) to negotiate a
relocation agreement or (2) to plan for relocation themselves. In fact,
well over ten years will have passed since the Commission first
announced our intention to reallocate 2 GHz spectrum to foster the
introduction of emerging technologies services in 1992. In other
services, the Commission has provided incumbents with even less time to
complete relocation. For example, private operational fixed microwave
stations in the 12 GHz band received only five years to relocate their
facilities before they became secondary to the Direct Broadcast
Satellite (``DBS'') Service.
38. The Commission also believes that adopting a sunset date is
important, because it will provide 2 GHz microwave incumbents with an
incentive to relocate to other bands when it comes time to change or
replace their equipment. At the current time, the Commission's
licensing records indicate that most 2 GHz microwave incumbents use
analog equipment. APCO contends that operating 2 GHz analog microwave
systems is becoming infeasible, because analog systems are
[[Page 29686]]
now outdated and replacement parts will soon be difficult, if not
impossible, to find. APCO also states that most incumbents have long-
term plans to replace their analog systems with digital systems once
the useful life of current equipment has expired and/or adequate
funding has been found. As BellSouth points out, by the time the sunset
date arrives, much of the microwave equipment operating today at 2 GHz
is likely to be either fully amortized or in need of replacement. The
Commission believes that informing 2 GHz incumbents that they will have
to cover their own relocation expenses after ten years will encourage
incumbents to relocate to another band when they replace existing
equipment. By contrast, if emerging technology licensees are required
to pay to relocate incumbents regardless of when the relocation occurs,
incumbents will have little incentive to make such a transition to an
alternate band voluntarily. For similar reasons, the Commission rejects
the argument by incumbents that PCS licensees should be required to
make relocation offers prior to the sunset date to all incumbents
located within their market area. Again, incumbents would have no
incentive to change out their own systems voluntarily if they knew that
PCS licensees would be required to cover the expenses for them at a
later date. Furthermore, even if the Commission had not reallocated the
spectrum, these incumbents would have had to plan ahead for repair
costs, replacement equipment, and infrastructure improvement. Given
that most incumbents will incur significant expenses in any event when
they replace their analog system with digital equipment, the Commission
believes that providing an incentive to incumbents to relocate
voluntarily at the same time they purchase new equipment serves the
public interest. In sum, the Commission believes that the benefits of
imposing a sunset date outweigh the burdens, if any, that such a date
may impose.
39. Finally, the Commission believes that six months is a
reasonable amount of time for most incumbents to relocate their
facilities, especially because they will have been on notice for ten
years that they might be requested to move. Nevertheless, the
Commission acknowledges that special circumstances might warrant an
extension of the six-month period in some instances to enable the
incumbent to complete relocation activities. If the incumbent is unable
to move or cannot complete relocation in time, the Commission
encourages the parties to negotiate a mutually acceptable solution. In
the event that the parties cannot agree on a schedule or an alternative
arrangement, the Commission will entertain extension requests on a
case-by-case basis. However, the Commission intends to grant such
extensions only if the incumbent can demonstrate that: (1) it cannot
relocate within the six-month period (e.g., because no alternative
spectrum or other reasonable option is available), and (2) the public
interest would be harmed if the incumbent is forced to terminate
operations (e.g., if public safety communications services would be
disrupted).
B. Cost-Sharing Plan
1. Overview
40. The Commission adopts its proposed plan with a few
modifications suggested by commenters. The Commission believes that
cost-sharing serves the public interest because (1) it will distribute
relocation costs more equitably among PCS licensees, and (2) it will
promote the relocation of entire microwave systems at once, which will
benefit microwave incumbents. The Commission also believes that cost-
sharing will accelerate the relocation process for the PCS band as a
whole, thus promoting more rapid deployment of service to the public.
Furthermore, the Commission concludes that the benefits of cost-sharing
outweigh the costs that may be incurred by licensees who become subject
to reimbursement obligations. Under the plan, these licensees will be
required to pay reimbursement obligations only when they have
benefitted from the spectrum-clearing efforts of another party.
Moreover, as discussed in greater detail below, the Commission is
adopting limits on reimbursement to ensure that licensees subject to
the plan do not bear a disproportionate cost. The Commission concludes
that these provisions amply protect the interests of such licensees.
41. Under the Commission's cost-sharing plan, a PCS licensee
obtains reimbursement rights for a particular link on the date that it
signs a relocation agreement with the microwave incumbent operating on
the link at issue. Within ten business days of the date the agreement
is signed, the PCS licensee submits documentation of the agreement to a
non-profit clearinghouse, which will be selected by the Wireless
Telecommunications Bureau (``Bureau''). If the clearinghouse has not
yet been selected, the PCS relocator will be responsible for submitting
documentation of a relocation agreement within ten business days of the
date that the Bureau announces that the clearinghouse has been
established and has begun operation.
42. Prior to commencing commercial operation, each PCS licensee is
required to send a prior coordination notification (``PCN'') to all
existing users in the area. At the same time, each PCS licensee shall
file a copy of the PCN with the clearinghouse. The clearinghouse will
then apply an objective test to determine whether the proposed base
station would have posed an interference problem to the relocated link.
If the test shows that the proposed base station is close enough to
have posed an interference problem, the clearinghouse will notify the
subsequent licensee that it is required to reimburse the PCS relocator
under the cost-sharing formula for a portion of the expenses the
relocator incurred to move the link. UTAM will be required to reimburse
PCS relocators who relocate microwave links that were operating in the
unlicensed PCS band.
43. The clearinghouse will determine the amount that the subsequent
PCS licensee must pay the relocator through the use of a cost-sharing
formula. The formula takes into consideration such factors as the
actual amount paid to relocate the link and the number of PCS licensees
that would have interfered with the link. All calculations will be done
on a per-link basis. The reimbursement amount also decreases over time
to reflect the fact that the initial PCS relocator has received the
benefit of being first to market, and to ensure that the PCS relocator
pays the largest amount, which the Commission believes will provide an
incentive to the relocator to limit relocation expenses. As an
additional protection for later-entrants, the Commission has imposed a
cap of $250,000 per link, with an additional $150,000 if a new or
modified tower is required, on the amount that a PCS relocator may
recoup for the relocation of each individual microwave link. PCS
relocators are entitled to full reimbursement, up to the cap, for
relocating non-interfering links fully outside their market area or
licensed frequency band. Also, costs that are incurred prior to the
selection of a clearinghouse will be reimbursable after a clearinghouse
is established.
44. Once a PCS licensee receives written notification from the
clearinghouse of its reimbursement obligation, it must pay the entire
amount owed within thirty calendar days, with the exception of those
small businesses that qualify for installment payments under the
Commission's auction rules. UTAM will be required to
[[Page 29687]]
reimburse a PCS relocator once a county is cleared of enough microwave
links to enable unlicensed PCS devices to operate. Because UTAM
receives its funding in small increments over an extended period of
time, UTAM will be permitted to satisfy its reimbursement obligation by
making quarterly installment payments to the PCS relocator over a
period of five years, at an interest rate of prime plus three percent.
45. The cost-sharing plan will sunset for all PCS licensees ten
years after the date that voluntary negotiations commenced for A and B
block licensees, on April 4, 2005. However, the sunset date will not
eliminate the existing obligations of PCS licensees that are paying
their portion of relocation costs on an installment basis. Those
licensees must continue their payments until the obligation is
satisfied. Finally, while the Commission concludes that the cost-
sharing plan is in the public interest, the Commission is conditioning
its adoption of these rules on approval of an entity or organization to
administer the plan. Once an administrator is selected, the cost-
sharing rules will take effect.
46. Participation in Cost-Sharing Plan. By this Report and Order,
the Commission mandates that all PCS licensees benefitting from
spectrum clearance by other PCS licensees must contribute to such
relocation costs. As the Commission emphasized in the Cost-Sharing
Notice, however, PCS licensees remain free to negotiate alternative
cost-sharing terms. The Commission also agrees with commenters that
allowing PCS licensees to enter into such private agreements serves the
public interest, because it adds flexibility to the cost-sharing
process and may enable such parties to save both time and the
administrative expense of seeking reimbursement from a clearinghouse.
The Commission therefore concludes that licensees are not required to
participate in the Commission's cost-sharing plan if they enter into
alternative cost-sharing agreements. The Commission also agrees with
commenters that all parties to a separate agreement will still be
liable under the cost-sharing plan to other PCS licensees that incur
relocation expenses. Finally, the Commission concludes that parties to
a private cost-sharing agreement may also seek reimbursement through
the clearinghouse from PCS licensees that are not parties to the
agreement.
2. Dispute Resolution Under the Cost-Sharing Plan
47. The Commission agrees with those commenters who argue that
disputes arising out of the cost-sharing plan, such as disputes over
the amount of reimbursement required, should be brought to the
clearinghouse first for resolution. At the time the dispute is brought
to the clearinghouse, the parties will be required to submit
appropriate documentation, e.g., an independent appraisal of the
equipment expenses at issue, to support their position. To the extent
that disputes cannot be resolved by the clearinghouse, the Commission
encourages parties to use expedited ADR procedures, such as binding
arbitration, mediation, or other ADR techniques. At this time, the
Commission does not designate a specific penalty for failure to comply
with cost-sharing requirements; however, the Commission emphasizes that
they intend to use the full realm of enforcement mechanisms available
to them in order to ensure that reimbursement obligations are
satisfied.
3. Administration of the Cost-Sharing Plan
48. The Commission agrees with those commenters who suggest that
the clearinghouse administrator should be selected through an open
process. The Commission also believes it is essential for the plan to
be administered by industry to the fullest extent possible. Therefore,
before the Commission implements the plan, the Commission will seek
specific proposals from parties who wish to act as administrator and
will request public comment on any such proposals.
49. The Commission delegates to the Wireless Bureau the authority
to select one or more entities to create and administer a neutral, not-
for-profit clearinghouse. Selection shall be based on criteria
established by the Bureau. The Bureau shall publicly announce the
criteria and solicit proposals from qualified parties. Once such
proposals have been received, and an opportunity has elapsed for public
comment on them, the Bureau shall make its selection. When the Bureau
selects an administrator, it shall announce the effective date of the
cost-sharing rules.
C. Licensing Issues
50. As of the effective date of the new rules, the Commission will
grant pending and newly filed applications for all major modifications
and all extensions to existing 2 GHz microwave systems on a secondary
basis. The Commission will grant primary status for the following
limited number of technical changes: decreases in power, minor changes
in antenna height, minor location changes (up to two seconds), any data
correction which does not involve a change in the location of an
existing facility, reductions in authorized bandwidths, minor changes
in structure heights, changes in ground elevation (but preserving
centerline height), and changes in equipment. All other modifications
will be permitted on a secondary basis, unless (1) the incumbent
affirmatively justifies primary status, and (2) the incumbent
establishes that the modification would not add to the relocation costs
of PCS licensees. The Commission declines to adopt the suggestion made
by PCS licensees that no modifications should be allowed even on a
secondary basis, because some incumbents might not need to relocate for
several years, and they should be permitted to make modifications to
their systems during that time period. The Commission also disagrees
with incumbents that the Commission's licensing policy should be
expanded, because the Commission believes that limiting primary site
grants is necessary to protect the interests of PCS licensees. In sum,
the Commission believes that granting secondary site authorizations
serves the public interest, because it balances existing licensees'
need to expand their systems with the goal of minimizing the number of
microwave links that PCS licensees must relocate.
51. Furthermore, the Commission clarifies that secondary operations
may not cause interference to operations authorized on a primary basis,
and they are not protected from interference from primary operations.
Thus, an incumbent operating under a secondary authorization must cease
operations if it poses an interference problem to a PCS licensee.
However, prior to commencing operations, PCS licensees are obligated to
provide all incumbents that are operating within interference range,
regardless of whether an incumbent is operating under a primary or a
secondary site authorization, with thirty days notice that they will be
commencing operations in the vicinity. Finally, PCS licensees are under
no obligation to pay to relocate secondary links that exist within
their market area and frequency block.
D. Application to Other Emerging Technology Licensees
52. The Commission agrees with AT&T that the cost-sharing plan and
rule clarifications adopted in this proceeding should apply to all
emerging technology services, including those
[[Page 29688]]
services in the 2110-2150 and 2160-2200 GHz band that have not yet been
licensed, because the microwave relocation rules already apply to all
emerging technology services. For the same reasons that these changes
will facilitate the deployment of PCS, the Commission believes these
changes will also facilitate the deployment of other emerging
technology services. For example, these changes and clarifications will
provide additional guidance and help to accelerate negotiations between
the parties. However, as new services develop, the Commission may
review its relocation rules and make modifications to these rules where
appropriate. In addition, while the Commission concludes that cost-
sharing should apply to all emerging technology services, the
Commission does not adopt specific cost-sharing rules for new services
at this time, but will develop such rules in future proceedings.
III. Conclusion
53. The Commission believes that the rules adopted in this Report
and Order will promote the public policy goals set forth by Congress.
The cost-sharing formula adopted herein will facilitate the rapid
relocation of microwave facilities operating in the 2 GHz band, and
will allow PCS licensees to offer service to the public in an
expeditious manner.
IV. Procedural Matters
A. Regulatory Flexibility Act
As required by Section 603 of the Regulatory Flexibility Act, an
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the
Notice of Proposed Rule Making in WT Docket No. 95-157, RM-8643. The
Commission has prepared a Regulatory Flexibility Analysis of the
expected impact on small entities of the proposals suggested in this
document. Written comments were requested. The Commission's final
analysis is as follows:
Need for and purpose of the action: This rulemaking proceeding has
implemented Congress' goal of encouraging emerging technologies and
bringing innovative commercial wireless services to the public in an
efficient manner. The cost-sharing plan will promote the efficient
relocation of microwave licensees by encouraging PCS licensees to
relocate entire microwave systems rather than individual microwave
links. A cost-sharing plan is necessary to enhance the speed of
relocation and provide an incentive to PCS licensees to negotiate
system-wide relocation agreements with microwave incumbents. This
action will result in faster deployment of PCS and delivery of service
to the public. The Commission has also clarified some terminology
regarding certain aspects of the Commission's rules for microwave
relocation contained in the Commission's Emerging Technologies
proceeding, Docket No. 92-9.
Issues raised in response to the IRFA: The American Public Power
Association (``APPA'') states that conversion of 2 GHz microwave
systems to secondary status in the year 2005 would have a particularly
severe impact on the limited budgets of small, non-profit public
utility systems.
Significant alternatives considered and rejected: Although the
Commission has decided not to convert microwave incumbents to secondary
status automatically as the Commission proposed in the Cost-Sharing
Notice, microwave incumbents will be required to pay for their own
relocation costs after the sunset date. The Commission has considered
the impact of the ten year sunset date, and the Commission has
determined that the benefits of imposing a sunset date outweigh the
burdens such a date may impose on these incumbents. For further
discussion, see Section IV(A)(6), supra.
B. Paperwork Reduction Act
This First Report and Order contains either a proposed or modified
information collection. The Commission, as part of its continuing
effort to reduce paperwork burdens, invites the general public and the
Office of Management and Budget (OMB) to comment on the information
collections contained in this First Report and Order, as required by
the Paperwork Reduction Act of 1995, Public Law 104-13. Comments should
address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
Further Information. For additional information concerning the
information collections contained in this Report and Order, contact
Dorothy Conway at (202) 418-0217, or via the Internet at
dconway@fcc.gov.
Supplementary Information:
Title: Amendment of the Commission's Rules Regarding a Plan for
Sharing the Costs of Microwave Relocation, First Report and Order.
Type of Review: Revision to existing collection.
Respondents: Personal Communications Service licensees that
relocate existing microwave operators, subsequent Personal
Communications Service applicants potentially benefitted by such
relocation, and incumbent microwave operators.
Number of Respondents: Approximately 2,000.
Estimated Time Per Response: One hour to compose, type and mail the
information to the requesting party.
Total Annual Burden: Approximately 2,000 hours.
Estimated Costs Per Respondent: Assuming that respondent uses one
attorney at $200/hour to compose, type and mail the information to the
requesting party, respondents' costs are estimated at approximately
$200 per one-time response.
Needs and Uses. The Commission recently adopted a First Report and
Order regarding a plan for sharing the costs of relocating microwave
facilities currently operating in the 1850 to 1990 MHz (2 GHz) band,
which has been allocated for use by broadband Personal Communications
Services (PCS). Amendment of the Commission's Rules Regarding a Plan
for Sharing the Costs of Microwave Relocation, First Report and Order,
adopted April 25, 1996. The First Report and Order establishes a
mechanism whereby PCS licensees that incur costs to relocate microwave
links would receive reimbursement for a portion of those costs from
other PCS licensees that also benefit from the resulting clearance of
the spectrum.
The First Report and Order concludes, inter alia, that in order for
a public safety licensee to qualify for extended negotiation periods
under the Commission's Rules, the department head responsible for
system oversight must certify to the PCS licensee requesting relocation
that:
(1) the agency is a licensee in the Police Radio, Fire Radio,
Emergency Medical, Special Emergency Radio Services, or that it is a
licensee of other Part 94 facilities licensed on a primary basis under
the eligibility requirements of Part 90, Subparts B and C; and
(2) the majority of communications carried on the facilities at
issue involve safety of life and property.
A public safety licensee must provide certification within 30 days
of a request from a PCS licensee, or the PCS licensee may presume that
special treatment is inapplicable to the incumbent.
[[Page 29689]]
In addition, the First Report and Order concludes that good faith
negotiation between parties involved in microwave relocation requires
each party to provide information to the other that is reasonably
necessary to facilitate the relocation process. For example, upon
request by a PCS licensee, the Commission expects incumbents to provide
any information that the PCS licensee needs in order to evaluate the
cost of relocating the incumbent to comparable facilities.
The legal authority for this proposed information collection
includes 47 U.S.C. Sections 154(i), 303(c), 303(f), 303(g), 303(r) and
332. The information collection would not affect any FCC Forms. The
proposed collection would increase minimally the burden on public
safety licensees seeking to qualify for an extended negotiation period
by requiring such a licensee to self-certify to the PCS licensee
requesting relocation that it is indeed a public safety licensee, and
by requiring that licensees share information in good faith.
C. Ex Parte Rules--Non-Restricted Proceeding
This is a non-restricted notice and comment rulemaking proceeding.
Ex parte presentations are permitted except during the Sunshine Agenda
period, provided they are disclosed as provided in Commission rules.
D. Authority
Authority for issuance of this Report and Order is contained in the
Communications Act, Sections 4(i), 7, 303(c), 303(f), 303(g), 303(r),
and 332, 47 U.S.C. Secs. 154(i), 157, 303(c), 303(f), 303(g), 303(r),
332, as amended.
E. Ordering Clauses
Accordingly, it is ordered that Section 15.307 is amended as set
forth below and will become effective August 12, 1996.
It is further ordered that Section 22.602 is amended as set forth
below and will become effective August 12, 1996.
It is further ordered that Sections 24.5, 24.237, 24.239. 24.241,
24.243, 24.245, 24.247, 24.249, 24.251, 24.251 and 24.253 are amended
as set forth below.
It is further ordered that the cost-sharing plan is conditioned on
approval by the Wireless Telecommunications Bureau of an entity (or
entities) to administer the plan, as described in Section IV(B)(3),
supra.
It is further ordered that Part 24 rule changes will become
applicable on the date that the Wireless Telecommunications Bureau
selects a clearinghouse to administer the cost-sharing plan. The
Commission will issue a public announcement after the selection has
been made.
It is further ordered that Sections 101.3, 101.67, 101.69, 101.71,
101.73, 101.75, 101.77, 101.79, 101.81 and 101.147, the new Part 101
(effective August 1, 1996) of the Commission's rules are amended as set
forth below and will become effective August 1, 1996.
It is further ordered that rules requiring Paperwork Reduction Act
approval shall become effective upon approval by the Office of
Management and Budget pursuant to the Paperwork Reduction Act of 1995,
Public Law No. 104-13;
It is further ordered that, as of the effective dates of the rules
listed herein, the Commission will only grant primary status to
applications for minor modifications that would not add to the
relocation costs of PCS licensees, as described in Section IV(C) supra.
It is further ordered that, as of the effective dates of the rules
listed herein, the Commission will grant applications for major
modifications and extensions to existing 2 GHz microwave systems only
on a secondary basis, as described in Section IV(C) supra.
It is further ordered that the Regulatory Flexibility Analysis, as
required by Section 604 of the Regulatory Flexibility Act, and as set
forth in Section VII(A) is adopted.
It is further ordered that the Secretary shall send a copy of this
First Report and Order to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects
47 CFR Part 15
Radio.
47 CFR Part 22
Radio.
47 CFR Part 24
Personal communications services.
47 CFR Part 101
Fixed microwave services.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Parts 15, 22, 24 and 101 of Chapter I of Title 47 of the Code of
Federal Regulations are amended as follows:
PART 15--RADIO FREQUENCY DEVICES
1. The authority citation for Part 15 is revised to read as
follows:
Authority: 47 U.S.C. 154, 302, 303, 304, 307 and 544A.
2. Section 15.307 is amended by revising paragraphs (a), (f) and
(g) to read as follows:
Sec. 15.307 Coordination with fixed microwave service.
(a) UTAM, Inc. is designated to coordinate and manage the
transition of the 1910-1930 MHz band from the Private Operational-Fixed
Microwave Service (OFS) operating under Part 101 of this chapter to
unlicensed PCS operations,
* * * * *
(f) At such time as the Commission deems that the need for
coordination between unlicensed PCS operations and existing Part 101
Private Operational-Fixed Microwave Services ceases to exist, the
disabling mechanism required by paragraph (e) of this section will no
longer be required.
(g) Operations under the provisions of this subpart are required to
protect systems in the Private Operational-Fixed Microwave Service
operating within the 1850-1990 MHz band until the dates and conditions
specified in Secs. 101.69 through 101.73 of this chapter for
termination of primary status. Interference protection is not required
for Part 101 stations in this band licensed on a secondary basis.
* * * * *
PART 22--PUBLIC MOBILE SERVICES
3. The authority citation for Part 22 is revised to read as
follows:
Authority: 47 U.S.C. 154, 303, unless otherwise noted.
4. Section 22.602 is revised to read as follows:
Sec. 22.602 Transition of the 2110-2130 and 2160-2180 MHz channels to
emerging technologies.
The microwave channels listed in Sec. 22.591 have been allocated
for use by emerging technologies (ET) services. No new systems will be
authorized under this part. The rules in this section provide for a
transition period during which existing Paging and Radiotelephone
Service (PARS) licensees using these channels may relocate operations
to other media or to other fixed channels, including those in other
microwave bands. For PARS licensees relocating operations to other
microwave bands, authorization must be obtained under Part 101 of this
chapter.
[[Page 29690]]
(a) Licensees proposing to implement ET services may negotiate with
PARS licensees authorized to use these channels, for the purpose of
agreeing to terms under which the PARS licensees would--
(1) Relocate their operations to other fixed microwave bands or
other media, or alternatively,
(2) Accept a sharing arrangement with the ET licensee that may
result in an otherwise impermissible level of interference to the PARS
operations.
(b) PARS operations on these channels will continue to be co-
primary with other users of this spectrum until two years after the FCC
commences acceptance of applications for ET services, and until one
year after an ET licensee initiates negotiations for relocation of the
fixed microwave licensee's operations.
(c) Voluntary Negotiations. During the two year voluntary
negotiation period, negotiations are strictly voluntary and are not
defined by any parameters. However, if the parties have not reached an
agreement within one year after the commencement of the voluntary
period, the PARS licensee must allow the ET licensee (if it so chooses)
to gain access to the existing facilities to be relocated so that an
independent third party can examine the PARS licensee's 2 GHz system
and prepare an estimate of the cost and the time needed to relocate the
PARS licensee to comparable facilities. The ET licensee must pay for
any such estimate.
(d) Mandatory Negotiations. If a relocation agreement is not
reached during the two year voluntary period, the ET licensee may
initiate a mandatory negotiation period. This mandatory period is
triggered at the option of the ET licensee, but ET licensees may not
invoke their right to mandatory negotiation until the voluntary
negotiation period has expired. Once mandatory negotiations have begun,
a PARS licensee may not refuse to negotiate and all parties are
required to negotiate in good faith. Good faith requires each party to
provide information to the other that is reasonably necessary to
facilitate the relocation process. In evaluating claims that a party
has not negotiated in good faith, the FCC will consider, inter alia,
the following factors:
(1) Whether the ET licensee has made a bona fide offer to relocate
the PARS licensee to comparable facilities in accordance with Section
101.75(b) of this chapter;
(2) If the PARS licensee has demanded a premium, the type of
premium requested (e.g., whether the premium is directly related to
relocation, such as system-wide relocations and analog-to-digital
conversions, versus other types of premiums), and whether the value of
the premium as compared to the cost of providing comparable facilities
is disproportionate (i.e., whether there is a lack of proportion or
relation between the two);
(3) What steps the parties have taken to determine the actual cost
of relocation to comparable facilities;
(4) Whether either party has withheld information requested by the
other party that is necessary to estimate relocation costs or to
facilitate the relocation process. Any party alleging a violation of
our good faith requirement must attach an independent estimate of the
relocation costs in question to any documentation filed with the
Commission in support of its claim. An independent cost estimate must
include a specification for the comparable facility and a statement of
the costs associated with providing that facility to the incumbent
licensee.
(e) Involuntary period. After the periods specified in paragraph
(b) of this section have expired, ET licensees may initiate involuntary
relocation procedures under the Commission's rules. ET licensees are
obligated to pay to relocate only the specific microwave links to which
their systems pose an interference problem. Under involuntary
relocation, a PARS licensee is required to relocate, provided that:
(1) The ET applicant, provider, licensee or representative
guarantees payment of relocation costs, including all engineering,
equipment, site and FCC fees, as well as any legitimate and prudent
transaction expenses incurred by the PARS licensee that are directly
attributable to an involuntary relocation, subject to a cap of two
percent of the hard costs involved. Hard costs are defined as the
actual costs associated with providing a replacement system, such as
equipment and engineering expenses. ET licensees are not required to
pay PARS licensees for internal resources devoted to the relocation
process. ET licensees are not required to pay for transaction costs
incurred by PARS licensees during the voluntary or mandatory periods
once the involuntary period is initiated or for fees that cannot be
legitimately tied to the provision of comparable facilities;
(2) The ET applicant, provider, licensee or representative
completes all activities necessary for implementing the replacement
facilities, including engineering and cost analysis of the relocation
procedure and, if radio facilities are involved, identifying and
obtaining, on the incumbents behalf, new channels and frequency
coordination; and,
(3) The ET applicant, provider, licensee or representative builds
the replacement system and tests it for comparability with the existing
2 GHz system.
(f) Comparable Facilities. The replacement system provided to an
incumbent during an involuntary relocation must be at least equivalent
to the existing PARS system with respect to the following three
factors:
(1) Throughput. Communications throughput is the amount of
information transferred within a system in a given amount of time. If
analog facilities are being replaced with analog, the ET licensee is
required to provide the PARS licensee with an equivalent number of 4
kHz voice channels. If digital facilities are being replaced with
digital, the ET licensee must provide the PARS licensee with equivalent
data loading bits per second (bps). ET licensees must provide PARS
licensees with enough throughput to satisfy the PARS licensee's system
use at the time of relocation, not match the total capacity of the PARS
system.
(2) Reliability. System reliability is the degree to which
information is transferred accurately within a system. ET licensees
must provide PARS licensees with reliability equal to the overall
reliability of their system. For digital data systems, reliability is
measured by the percent of time the bit error rate (BER) exceeds a
desired value, and for analog or digital voice transmissions, it is
measured by the percent of time that audio signal quality meets an
established threshold. If an analog voice system is replaced with a
digital voice system, only the resulting frequency response, harmonic
distortion, signal-to-noise ratio and its reliability will be
considered in determining comparable reliability.
(3) Operating Costs. Operating costs are the cost to operate and
maintain the PARS system. ET licensees must compensate PARS licensees
for any increased recurring costs associated with the replacement
facilities (e.g. additional rental payments, increased utility fees)
for five years after relocation. ET licensees may satisfy this
obligation by making a lump-sum payment based on present value using
current interest rates. Additionally, the maintenance costs to the PARS
licensee must be equivalent to the 2 GHz system in order for the
replacement system to be considered comparable.
(g) The PARS licensee is not required to relocate until the
alternative facilities are available to it for a reasonable time to
make adjustments, determine
[[Page 29691]]
comparability, and ensure a seamless handoff.
(h) The Commission's Twelve-Month Trial Period. If, within one year
after the relocation to new facilities, the PARS licensee demonstrates
that the new facilities are not comparable to the former facilities,
the ET applicant, provider, licensee or representative must remedy the
defects or pay to relocate the PARS licensee to one of the following:
its former or equivalent 2 GHz channels, another comparable frequency
band, a land-line system, or any other facility that satisfies the
requirements specified in paragraph (f) of this section. This trial
period commences on the date that the PARS licensee begins full
operation of the replacement link. If the PARS licensee has retained
its 2 GHz authorization during the trial period, it must return the
license to the Commission at the end of the twelve months.
(i) After April 25, 1996, all major modifications and extensions to
existing PARS systems operating on channels in the 2110-2130 and 2160-
2180 MHz bands will be authorized on a secondary basis to future ET
operations. All other modifications will render the modified PARS
license secondary to future ET operations unless the incumbent
affirmatively justifies primary status and the incumbent PARS licensee
establishes that the modification would not add to the relocation costs
of ET licensees. Incumbent PARS licensees will maintain primary status
for the following technical changes:
(1) Decreases in power;
(2) Minor changes (increases or decreases) in antenna height;
(3) Minor location changes (up to two seconds);
(4) Any data correction which does not involve a change in the
location of an existing facility;
(5) Reductions in authorized bandwidth;
(6) Minor changes (increases or decreases) in structure height;
(7) Changes (increases or decreases) in ground elevation that do
not affect centerline height;
(8) Minor equipment changes.
(j) Sunset. PARS licensees will maintain primary status in the
2110-2130 and 2160-2180 MHz bands unless and until an ET licensee
requires use of the spectrum. ET licensees are not required to pay
relocation costs after the relocation rules sunset (i.e. ten years
after the voluntary period begins for the first ET licensees in the
service). Once the relocation rules sunset, an ET licensee may require
the incumbent to cease operations, provided that the ET licensee
intends to turn on a system within interference range of the incumbent,
as determined by TIA Bulletin 10-F or any standard successor. ET
licensee notification to the affected PARS licensee must be in writing
and must provide the incumbent with no less than six months to vacate
the spectrum. After the six-month notice period has expired, the PARS
licensee must turn its license back into the Commission, unless the
parties have entered into an agreement which allows the PARS licensee
to continue to operate on a mutually agreed upon basis. If the parties
cannot agree on a schedule or an alternative arrangement, requests for
extension will be accepted and reviewed on a case-by-case basis. The
Commission will grant such extensions only if the incumbent can
demonstrate that:
(1) It cannot relocate within the six-month period (e.g., because
no alternative spectrum or other reasonable option is available), and;
(2) The public interest would be harmed if the incumbent is forced
to terminate operations (e.g., if public safety communications services
would be disrupted).
PART 24--PERSONAL COMMUNICATIONS SERVICES
5. The authority citation for Part 24 is revised to read as
follows:
Authority: 47 U.S.C. 154, 301, 302, 303, 309 and 332.
6. Section 24.5 is amended by adding the definitions for ``PCS
Relocator'' and ``UTAM'' in alphabetical order to read as follows:
Sec. 24.5 Definitions.
* * * * *
PCS Relocator. A PCS entity that pays to relocate a fixed microwave
link from its existing 2 GHz facility to other media or other fixed
channels.
UTAM. The Unlicensed PCS Ad Hoc Committee for 2 GHz Microwave
Transition and Management, which coordinates relocation in the 1910-
1930 MHz band.
* * * * *
7. Section 24.237 is amended by revising paragraph (c) to read as
follows:
Sec. 24.237 Interference protection.
* * * * *
(c) In all other respects, coordination procedures are to follow
the requirements of Sec. 101.103(d) of this chapter to the extent that
these requirements are not inconsistent with those specified in this
part.
* * * * *
8. Subpart E is amended by adding a new heading following Section
24.238 to read as follows:
Policies Governing Microwave Relocation From the 1850-1990 MHz Band
9. A new Section 24.239 is added to Subpart E to read as follows:
Sec. 24.239 Cost-sharing requirements for Broadband PCS.
Frequencies in the 1850-1990 MHz band listed in Sec. 101.147(c) of
this chapter have been allocated for use by PCS. In accordance with
procedures specified in Secs. 101.69 through 101.81 of this chapter,
PCS entities (both licensed and unlicensed) are required to relocate
the existing Fixed Microwave Services (FMS) licensees in these bands if
interference to the existing FMS operations would occur. All PCS
entities who benefit from spectrum clearance by other PCS entities must
contribute to such relocation costs. PCS entities may satisfy this
requirement by entering into private cost-sharing agreements or
agreeing to terms other than those specified in Sec. 24.243. However,
PCS entities are required to reimburse other PCS entities that incur
relocation costs and are not parties to the alternative agreement. In
addition, parties to a private cost-sharing agreement may seek
reimbursement through the clearinghouse (as discussed in Sec. 24.241)
from PCS entities that are not parties to the agreement. The cost-
sharing plan is in effect during all phases of microwave relocation
specified in Sec. 101.69 of this chapter.
10. A new Section 24.241 is added to Subpart E to read as follows:
Sec. 24.241 Administration of the Cost-Sharing Plan.
The Wireless Telecommunications Bureau, under delegated authority,
will select an entity to operate as a neutral, not-for-profit
clearinghouse. This clearinghouse will administer the cost-sharing plan
by, inter alia, maintaining all of the cost and payment records related
to the relocation of each link and determining the cost-sharing
obligation of subsequent PCS entities. The cost-sharing rules will not
take effect until an administrator is selected.
11. A new Section 24.243 is added to Subpart E to read as follows:
[[Page 29692]]
Sec. 24.243 The Cost-Sharing Formula.
A PCS relocator who relocates an interfering microwave link, i.e.,
one that is in all or part of its market area and in all or part of its
frequency band, is entitled to pro rata reimbursement based on the
following formula:
[GRAPHIC] [TIFF OMITTED] TR12JN96.001
(a) RN equals the amount of reimbursement.
(b) C equals the actual cost of relocating the link. Actual
relocation costs include, but are not limited to, such items as: radio
terminal equipment (TX and/or RX--antenna, necessary feed lines, MUX/
Modems); towers and/or modifications; back-up power equipment;
monitoring or control equipment; engineering costs (design/path
survey); installation; systems testing; FCC filing costs; site
acquisition and civil works; zoning costs; training; disposal of old
equipment; test equipment (vendor required); spare equipment; project
management; prior coordination notification under Sec. 101.103(d) of
this chapter; required antenna upgrades for interference control; power
plant upgrade (if required); electrical grounding systems; Heating
Ventilation and Air Conditioning (HVAC) (if required); alternate
transport equipment; and leased facilities. C also includes incumbent
transaction expenses that are directly attributable to the relocation,
subject to a cap of two percent of the ``hard'' costs involved. C may
not exceed $250,000 per link, with an additional $150,000 permitted if
a new or modified tower is required.
(c) N equals the number of PCS entities that would have interfered
with the link. For the PCS relocator, N = 1. For the next PCS entity
that would have interfered with the link, N=2, and so on.
(d) TM equals the number of months that have elapsed between
the month the PCS relocator obtains reimbursement rights and the month
that the clearinghouse notifies a later-entrant of its reimbursement
obligation. A PCS relocator obtains reimbursement rights on the date
that it signs a relocation agreement with a microwave incumbent.
12. A new Section 24.245 is added to Subpart E to read as follows:
Sec. 24.245 Reimbursement under the Cost-Sharing Plan.
(a) Registration of Reimbursement Rights. To obtain reimbursement,
a PCS relocator must submit documentation of the relocation agreement
to the clearinghouse within ten business days of the date a relocation
agreement is signed with an incumbent. If the clearinghouse has not yet
been selected, the PCS relocator will be responsible for submitting
documentation of the relocation agreement within ten business days of
the date that the Wireless Telecommunications Bureau issues a public
notice announcing that the clearinghouse has been established and has
begun operation.
(b) Documentation of Expenses. Once relocation occurs, the PCS
relocator must submit documentation itemizing the amount spent for
items listed in Sec. 24.243(b). The PCS relocator must identify the
particular link associated with appropriate expenses (i.e., costs may
not be averaged over numerous links). If a PCS relocator pays a
microwave incumbent a monetary sum to relocate its own facilities, the
PCS relocator must estimate the costs associated with relocating the
incumbent by itemizing the anticipated cost for items listed in
Sec. 24.243(b). If the sum paid to the incumbent cannot be accounted
for, the remaining amount is not eligible for reimbursement. A PCS
relocator may submit receipts or other documentation to the
clearinghouse for all relocation expenses incurred since April 5, 1995.
(c) Full Reimbursement. A PCS relocator who relocates a microwave
link that is either fully outside its market area or its licensed
frequency band may seek full reimbursement through the clearinghouse of
compensable costs, up to the reimbursement cap as defined in
Sec. 24.243(b). Such reimbursement will not be subject to depreciation
under the cost-sharing formula.
13. A new Section 24.247 is added to Subpart E to read as follows:
Sec. 24.247 Triggering a Reimbursement Obligation.
(a) Licensed PCS. The clearinghouse will apply the following test
to determine if a PCS entity preparing to initiate operations must pay
a PCS relocator in accordance with the formula detailed in Sec. 24.243:
(1) All or part of the relocated microwave link was initially co-
channel with the licensed PCS band(s) of the subsequent PCS entity;
(2) A PCS relocator has paid the relocation costs of the microwave
incumbent; and
(3) The subsequent PCS entity is preparing to turn on a fixed base
station at commercial power and the fixed base station is located
within a rectangle (Proximity Threshold) described as follows:
(i) The length of the rectangle shall be x where x is a line
extending through both nodes of the microwave link to a distance of 48
kilometers (30 miles) beyond each node. The width of the rectangle
shall be y where y is a line perpendicular to x and extending for a
distance of 24 kilometers (15 miles) on both sides of x. Thus, the
rectangle is represented as follows:
BILLING CODE 6712-01-P
[GRAPHIC] [TIFF OMITTED] TR12JN96.002
BILLING CODE 6712-01-C
[[Page 29693]]
(ii) If the application of the Proximity Threshold test indicates
that a reimbursement obligation exists, the clearinghouse will
calculate the reimbursement amount in accordance with the cost-sharing
formula and notify the subsequent PCS entity of the total amount of its
reimbursement obligation.
(b) Unlicensed PCS. UTAM's reimbursement obligation is triggered
either:
(1) When a county is cleared of microwave links in the unlicensed
allocation, and UTAM invokes a Zone 1 power cap as a result of third
party relocation activities; or
(2) A county is cleared of microwave links in the unlicensed
allocation and UTAM reclassifies a Zone 2 county to Zone 1 status.
14. A new Section 24.249 is added to Subpart E to read as follows:
Sec. 24.249 Payment Issues.
(a) Timing. On the day that a PCS entity files its prior
coordination notice (PCN) in accordance with Sec. 101.103(d) of this
chapter, it must file a copy of the PCN with the clearinghouse. The
clearinghouse will determine if any reimbursement obligation exists and
notify the PCS entity in writing of its repayment obligation, if any.
When the PCS entity receives a written copy of such obligation, it must
pay directly to the PCS relocator the amount owed within thirty days,
with the exception of those businesses that qualify for installment
payments. A business that qualifies for an installment payment plan
must make its first installment payment within thirty days of notice
from the clearinghouse. UTAM's first payment will be due thirty days
after its reimbursement obligation is triggered as described in
Sec. 24.247(b).
(b) Eligibility for Installment Payments. PCS licensees that are
allowed to pay for their licenses in installments under our designated
entity rules will have identical payment options available to them with
respect to payments under the cost-sharing plan. The specific terms of
the installment payment mechanism, including the treatment of principal
and interest, are the same as those applicable to the licensee's
installment auction payments. If, for any reason, the entity eligible
for installment payments is no longer eligible for such installment
payments on its license, that entity is no longer eligible for
installment payments under the cost-sharing plan. UTAM may make
quarterly payments over a five-year period with an interest rate of
prime plus 2.5 percent. UTAM may also negotiate separate repayment
arrangements with other parties.
15. A new Section 24.251 is added to Subpart E to read as follows:
Sec. 24.251 Dispute Resolution Under the Cost-Sharing Plan.
Disputes arising out of the cost-sharing plan, such as disputes
over the amount of reimbursement required, must be brought, in the
first instance, to the clearinghouse for resolution. To the extent that
disputes cannot be resolved by the clearinghouse, parties are
encouraged to use expedited ADR procedures, such as binding
arbitration, mediation, or other ADR techniques.
16. A new Section 24.253 is added to Subpart E to read as follows:
Sec. 24.253 Termination of Cost-Sharing Obligations.
The cost-sharing plan will sunset for all PCS entities on April 4,
2005, which is ten years after the date that voluntary negotiations
commenced for A and B block PCS entities. Those PCS entities that are
paying their portion of relocation costs on an installment basis must
continue the payments until the obligation is satisfied.
PART 101--FIXED MICROWAVE SERVICES
17. The authority citation for Part 101 is revised to read as
follows:
Authority: 47 U.S.C. 154, 303.
18. Section 101.3 is amended by adding the definition for
``Secondary Operations'' in alphabetical order to read as follows:
Sec. 101.3 Definitions.
* * * * *
Secondary Operations. Radio communications which may not cause
interference to operations authorized on a primary basis and which are
not protected from interference from these primary operations.
* * * * *
19. Subpart B is amended by adding a new heading following Section
101.67 to read as follows:
Policies Governing Microwave Relocation From the 1850-1990 and
2110-2200 MHZ Bands
20. Section 101.69 is revised to read as follows:
Sec. 101.69 Transition of the 1850-1990 and 2110-2200 MHz bands from
the Fixed Microwave Services to Personal Communications Services and
emerging technologies.
Fixed Microwave Services (FMS) frequencies in the 1850-1990 and
2110-2200 MHz bands listed in Secs. 101.147 (c), (d) and (e) have been
allocated for use by emerging technology (ET) services, including
Personal Communications Services (PCS). The rules in this section
provide for a transition period during which ET licensees may relocate
existing FMS licensees using these frequencies to other media or other
fixed channels, including those in other microwave bands.
(a) ET licensees may negotiate with FMS licensees authorized to use
frequencies in the 1850-1990 and 2110-2200 MHz bands, for the purpose
of agreeing to terms under which the FMS licensees would--
(1) Relocate their operations to other fixed microwave bands or
other media; or alternatively
(2) Accept a sharing arrangement with the ET licensee that may
result in an otherwise impermissible level of interference to the FMS
operations.
(b) FMS operations in the 1850-1990 and 2110-2200 MHz bands, with
the exception of public safety facilities defined in Sec. 101.77, will
continue to be co-primary with other users of this spectrum until two
years after the FCC commences acceptance of applications for ET
services (voluntary negotiation period), and until one year after an ET
licensee initiates negotiations for relocation of the fixed microwave
licensee's operations (mandatory negotiation period). In the 1910-1930
MHz band allocated for unlicensed PCS, FMS operations will continue to
be co-primary until one year after UTAM, Inc. initiates negotiations
for relocation of the fixed microwave licensee's operations. Public
safety facilities defined in Sec. 101.77 will continue to be co-primary
in these bands until three years after the Commission commences
acceptance of applications for an emerging technology service
(voluntary negotiation period), and until two years after an emerging
technology service licensee or an emerging technology unlicensed
equipment supplier or representative initiates negotiations for
relocation of the fixed microwave licensee's operations (mandatory
negotiation period). If no agreement is reached during either the
voluntary or mandatory negotiation periods, an ET licensee may initiate
involuntary relocation procedures. Under involuntary relocation, the
incumbent is required to relocate, provided that the ET licensee meets
the conditions of Sec. 101.75.
21. A new Section 101.71 is added to Subpart B to read as follows:
[[Page 29694]]
Sec. 101.71 Voluntary Negotiations.
During the two or three year voluntary negotiation period,
negotiations are strictly voluntary and are not defined by any
parameters. However, if the parties have not reached an agreement
within one year after the commencement of the voluntary period, the FMS
licensee must allow the ET licensee (if it so chooses) to gain access
to the existing facilities to be relocated so that an independent third
party can examine the FMS licensee's 2 GHz system and prepare an
estimate of the cost and the time needed to relocate the FMS licensee
to comparable facilities. The ET licensee must pay for any such
estimate.
22. A new Section 101.73 is added to Subpart B to read as follows:
Sec. 101.73 Mandatory Negotiations.
(a) If a relocation agreement is not reached during the two or
three year voluntary period, the ET licensee may initiate a mandatory
negotiation period. This mandatory period is triggered at the option of
the ET licensee, but ET licensees may not invoke their right to
mandatory negotiation until the voluntary negotiation period has
expired.
(b) Once mandatory negotiations have begun, an FMS licensee may not
refuse to negotiate and all parties are required to negotiate in good
faith. Good faith requires each party to provide information to the
other that is reasonably necessary to facilitate the relocation
process. In evaluating claims that a party has not negotiated in good
faith, the FCC will consider, inter alia, the following factors:
(1) Whether the ET licensee has made a bona fide offer to relocate
the FMS licensee to comparable facilities in accordance with Section
101.75(b);
(2) If the FMS licensee has demanded a premium, the type of premium
requested (e.g., whether the premium is directly related to relocation,
such as system-wide relocations and analog-to-digital conversions,
versus other types of premiums), and whether the value of the premium
as compared to the cost of providing comparable facilities is
disproportionate (i.e., whether there is a lack of proportion or
relation between the two);
(3) What steps the parties have taken to determine the actual cost
of relocation to comparable facilities;
(4) Whether either party has withheld information requested by the
other party that is necessary to estimate relocation costs or to
facilitate the relocation process.
(c) Any party alleging a violation of our good faith requirement
must attach an independent estimate of the relocation costs in question
to any documentation filed with the Commission in support of its claim.
An independent cost estimate must include a specification for the
comparable facility and a statement of the costs associated with
providing that facility to the incumbent licensee.
23. A new Section 101.75 is added to Subpart B to read as follows:
Sec. 101.75 Involuntary Relocation Procedures.
(a) If no agreement is reached during either the voluntary or
mandatory negotiation period, an ET licensee may initiate involuntary
relocation procedures under the Commission's rules. ET licensees are
obligated to pay to relocate only the specific microwave links to which
their systems pose an interference problem. Under involuntary
relocation, the FMS licensee is required to relocate, provided that the
ET licensee:
(1) Guarantees payment of relocation costs, including all
engineering, equipment, site and FCC fees, as well as any legitimate
and prudent transaction expenses incurred by the FMS licensee that are
directly attributable to an involuntary relocation, subject to a cap of
two percent of the hard costs involved. Hard costs are defined as the
actual costs associated with providing a replacement system, such as
equipment and engineering expenses. ET licensees are not required to
pay FMS licensees for internal resources devoted to the relocation
process. ET licensees are not required to pay for transaction costs
incurred by FMS licensees during the voluntary or mandatory periods
once the involuntary period is initiated, or for fees that cannot be
legitimately tied to the provision of comparable facilities;
(2) Completes all activities necessary for implementing the
replacement facilities, including engineering and cost analysis of the
relocation procedure and, if radio facilities are used, identifying and
obtaining, on the incumbents' behalf, new microwave frequencies and
frequency coordination; and
(3) Builds the replacement system and tests it for comparability
with the existing 2 GHz system.
(b) Comparable Facilities. The replacement system provided to an
incumbent during an involuntary relocation must be at least equivalent
to the existing FMS system with respect to the following three factors:
(1) Throughput. Communications throughput is the amount of
information transferred within a system in a given amount of time. If
analog facilities are being replaced with analog, the ET licensee is
required to provide the FMS licensee with an equivalent number of 4 kHz
voice channels. If digital facilities are being replaced with digital,
the ET licensee must provide the FMS licensee with equivalent data
loading bits per second (bps). ET licensees must provide FMS licensees
with enough throughput to satisfy the FMS licensee's system use at the
time of relocation, not match the total capacity of the FMS system.
(2) Reliability. System reliability is the degree to which
information is transferred accurately within a system. ET licensees
must provide FMS licensees with reliability equal to the overall
reliability of their system. For digital data systems, reliability is
measured by the percent of time the bit error rate (BER) exceeds a
desired value, and for analog or digital voice transmissions, it is
measured by the percent of time that audio signal quality meets an
established threshold. If an analog voice system is replaced with a
digital voice system, only the resulting frequency response, harmonic
distortion, signal-to-noise ratio and its reliability will be
considered in determining comparable reliability.
(3) Operating Costs. Operating costs are the cost to operate and
maintain the FMS system. ET licensees must compensate FMS licensees for
any increased recurring costs associated with the replacement
facilities (e.g., additional rental payments, increased utility fees)
for five years after relocation. ET licensees may satisfy this
obligation by making a lump-sum payment based on present value using
current interest rates. Additionally, the maintenance costs to the FMS
licensee must be equivalent to the 2 GHz system in order for the
replacement system to be considered comparable.
(c) The FMS licensee is not required to relocate until the
alternative facilities are available to it for a reasonable time to
make adjustments, determine comparability, and ensure a seamless
handoff.
(d) Twelve-Month Trial Period. If, within one year after the
relocation to new facilities, the FMS licensee demonstrates that the
new facilities are not comparable to the former facilities, the ET
licensee must remedy the defects or pay to relocate the microwave
licensee to one of the following: its former or equivalent 2 GHz
channels, another comparable frequency band, a land-line system, or any
other facility that satisfies the requirements specified in paragraph
(b) of this section. This trial period commences on the date that the
FMS licensee begins full operation of the replacement link. If the FMS
licensee has retained its 2 GHz
[[Page 29695]]
authorization during the trial period, it must return the license to
the Commission at the end of the twelve months.
24. A new Section 101.77 is added to Subpart B to read as follows:
Sec. 101.77 Public Safety Licensees in the 1850-1990 and 2110-2200 MHz
bands.
(a) Public safety facilities are subject to the three-year
voluntary and two-year mandatory negotiation period. In order for
public safety licensees to qualify for extended negotiation periods,
the department head responsible for system oversight must certify to
the ET licensee requesting relocation that:
(1) The agency is a licensee in the Police Radio, Fire Radio,
Emergency Medical, Special Emergency Radio Services, or that it is a
licensee of other Part 101 facilities licensed on a primary basis under
the eligibility requirements of Part 90, Subparts B and C of this
chapter; and
(2) The majority of communications carried on the facilities at
issue involve safety of life and property.
(b) A public safety licensee must provide certification within
thirty (30) days of a request from a ET licensee, or the ET licensee
may presume that special treatment is inapplicable. If a public safety
licensee falsely certifies to an ET licensee that it qualifies for the
extended time periods, this licensee will be in violation of the
Commission's rules and will subject to appropriate penalties, as well
as immediately subject to the non-public safety time periods.
25. A new Section 101.79 is added to Subpart B to read as follows:
Sec. 101.79 Sunset provisions for licensees in the 1850-1990 and 2110-
2200 MHz bands.
(a) FMS licensees will maintain primary status in the 1850-1990 and
2110-2200 MHz bands unless and until an ET licensee requires use of the
spectrum. ET licensees are not required to pay relocation costs after
the relocation rules sunset (i.e. ten years after the voluntary period
begins for the first ET licensees in the service). Once the relocation
rules sunset, an ET licensee may require the incumbent to cease
operations, provided that the ET licensee intends to turn on a system
within interference range of the incumbent, as determined by TIA
Bulletin 10-F or any standard successor. ET licensee notification to
the affected FMS licensee must be in writing and must provide the
incumbent with no less than six months to vacate the spectrum. After
the six-month notice period has expired, the FMS licensee must turn its
license back into the Commission, unless the parties have entered into
an agreement which allows the FMS licensee to continue to operate on a
mutually agreed upon basis.
(b) If the parties cannot agree on a schedule or an alternative
arrangement, requests for extension will be accepted and reviewed on a
case-by-case basis. The Commission will grant such extensions only if
the incumbent can demonstrate that:
(1) It cannot relocate within the six-month period (e.g., because
no alternative spectrum or other reasonable option is available), and;
(2) The public interest would be harmed if the incumbent is forced
to terminate operations (e.g., if public safety communications services
would be disrupted).
26. A new Section 101.81 is added to Subpart B to read as follows:
Sec. 101.81 Future licensing in the 1850-1990 and 2110-2200 MHz bands.
After April 25, 1996, all major modifications and extensions to
existing FMS systems in the 1850-1990 and 2110-2200 MHz bands will be
authorized on a secondary basis to ET systems. All other modifications
will render the modified FMS license secondary to ET operations, unless
the incumbent affirmatively justifies primary status and the incumbent
FMS licensee establishes that the modification would not add to the
relocation costs of ET licensees. Incumbent FMS licensees will maintain
primary status for the following technical changes:
(a) Decreases in power;
(b) Minor changes (increases or decreases) in antenna height;
(c) Minor location changes (up to two seconds);
(d) Any data correction which does not involve a change in the
location of an existing facility;
(e) Reductions in authorized bandwidth;
(f) Minor changes (increases or decreases) in structure height;
(g) Changes (increases or decreases) in ground elevation that do
not affect centerline height;
(h) Minor equipment changes.
27. Section 101.147 is amended by adding references to note 20 in
the entries for frequency ranges 1,850-1,990, 2,130-2,150, 2,150-2,160
and 2,180-2,200 MHz and revising note 20 to read as follows:
Sec. 101.147 Frequency assignments.
(a) * * *
1,850-1,990 MHz (20)
* * * * *
2,130-2,150 MHz (20) (22)
2,150-2,160 MHz (20), (22)
* * * * *
2,180-2,200 MHz (20), (22)
* * * * *
Notes
* * * * *
(20) New facilities in these bands will be licensed only on a
secondary basis. Facilities licensed or applied for before January
16, 1992, are permitted to make modifications and minor extensions
in accordance with Sec. 101.77 and still retain primary status.
* * * * *
(22) Frequencies in these bands are for the exclusive use of
Private Operational Fixed Point-to-Point Microwave Service (Part
101).
[FR Doc. 96-14138 Filed 6-11-96; 8:45 am]
BILLING CODE 6712-01-P
