[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Rules and Regulations]
[Pages 46211-46214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23187]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 90
[PR No. 89-552; FCC 97-225]
Use of the 220-222 MHz Band by the Private Land Mobile Radio
Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this Fourth Report and Order, the Commission repeals the
``40-mile rule'' for all nationwide and non-nationwide Phase I 220 MHz
Service licensees. The 40-mile rule provides that no Phase I 220 MHz
licensee may be authorized to operate a station in a particular service
category within 40 miles of an existing system authorized to that
licensee in the same category unless ``the licensee can demonstrate
that the additional system is justified on the basis of its
communications requirements.'' This action is needed because the 40-
mile rule no longer serves its original purpose and repeal of the rule
is expected to promote competition among all commercial mobile radio
service providers.
EFFECTIVE DATE: October 2, 1997.
FOR FURTHER INFORMATION CONTACT: Eli Johnson, 202-418-1310.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Fourth Report and
Order in PR Docket No. 89-552, FCC 97-225, adopted June 23, 1997, and
released August 25, 1997. The complete text of the Fourth Report and
Order is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, N.W.,
Washington, D.C., and also may be purchased from the
[[Page 46212]]
Commission's copy contractor, International Transcription Service, Inc.
at (202) 857-3800, 1231 20th Street, N.W., Washington, D.C. 20036.
Synopsis of the Fourth Report and Order
1. By this Fourth Report and Order, the Commission repeals the
``40-mile rule'' contained in Section 90.739(a) of the Commission's
Rules for all nationwide and non-nationwide Phase 1 220 MHz Service
licensees. The Commission finds that, in light of the changes to the
220 MHz Service adopted in the Third Report and Order in this
proceeding (62 FR 16004, April 3, 1997) the 40-mile rule is unnecessary
and no longer serves its original purpose of preventing the warehousing
of spectrum.
2. The 40-mile rule currently provides that no Phase I 220 MHz
licensee may be authorized to operate a station in a particular service
category within 40 miles of an existing system authorized to that
licensee in the same category unless ``the licensee can demonstrate
that the additional system is justified on the basis of its
communications requirements (47 CFR Sec. 90.739(a)).'' The Commission
adopted the 40-mile rule in a 1991 Report and Order (56 FR 19598, April
29, 1991). At that time, 220 MHz licenses were awarded on a first-come,
first-served basis with mutually exclusive applications filed on the
same day assigned through a random selection process. Thus, the 40-mile
rule was intended to prevent licensees from acquiring more spectrum
than they needed within a particular geographic area and then
warehousing that spectrum for possible future use.
3. The Third Report and Order in this proceeding adopted a new
licensing scheme for the 220-222 MHz band. Instead of being assigned on
a first-come, first-served basis, in the future 220 MHz licenses will
be initially awarded through competitive bidding based on Commission
designated channel blocks and geographical areas. The only way to
acquire a 220 MHz Service license, therefore, will be to purchase it
through an auction or to acquire it through transfer or assignment from
another licensee. In either case, 220 MHz Service licenses will be
assigned to entities that have shown their willingness to pay market
value for the licenses. Thus, the Third Report and Order did not limit
the number of licenses that may be acquired by one entity, and the
Commission allows licensees to place stations anywhere within a
licensee's geographically licensed area. On April 5, 1996, the SMR
Advisory Group, L.C. (SMR Group) filed ex parte comments in the 220 MHz
proceeding, urging the Commission to eliminate the 40-mile rule with
respect to all existing and future 220 MHz licensees.
4. The Commission agrees with SMR Group that we should eliminate
the 40-mile rule for all Phase I 220 MHz Service licensees. We conclude
that, as applicable to Phase I licensees, the 40-mile rule represents
an unnecessary regulatory burden. We believe that effective use of the
spectrum can be achieved by relying on market conditions to control
whether a licensee acquires a 220 MHz Service license because of
current demand for more spectrum or an anticipated need for additional
spectrum. Our decision to repeal the 40-mile rule applies to all Phase
I 220 MHz licensees, including non-commercial entities, licensees
providing commercial services, and 220 MHz public safety licensees.
Final Regulatory Flexibility Analysis
5. As required by Section 603 of the Regulatory Flexibility Act of
1980, 5 U.S.C. Sec. 603 (RFA), an Initial Regulatory Flexibility
Analysis (IRFA) was incorporated in the Third Notice of Proposed
Rulemaking (60 FR 46564, September 7, 1995) in this proceeding that
considers the impact on small entities of the proposed changes being
contemplated for the 220 MHz Service. The Commission sought written
public comments on the proposals contained in that Notice of Proposed
Rulemaking, including the IRFA. The Secretary sent a copy of that
Notice of Proposed Rulemaking, including the IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration in accordance with
Section 603(a) of the RFA.
6. As required by the RFA, the Commission has prepared a Final
Regulatory Flexibility Analysis (FRFA). The Secretary shall send a copy
of the FRFA, along with the Fourth Report and Order, to the Chief
Counsel for Advocacy of the Small Business Administration in accordance
with Section 603(a) of the RFA. The FRFA is set forth below:
7. Purpose of Rule Change: Repeal of the 40-mile rule for Phase I
220 MHz licensees will allow for a more efficient use of the 220 MHz
Service. It also eliminates unnecessary regulatory burdens on existing
220 MHz licensees, enhances the competitive potential of 220 MHz
Service in the mobile marketplace, and the development of spectrally
efficient technologies. This decision will promote economic opportunity
and ensure that new and innovative technologies are readily accessible
to the American people.
8. Summary of Issues Raised by the Public Comments in Response to
the IRFA: The commenters did not raise any issues specifically with
respect to the IRFA. We have, however, considered the economic impact
of our decision to repeal the 40-mile rule for Phase I licensees who
are small entities by considering the comments that were submitted by
small businesses on the Commission's proposal. Eliminating the 40-mile
rule for Phase I licensees reduces regulatory burden for all Phase I
licensees, including small businesses. This conclusion is supported by
the fact that all of the comments that were received on the
Commission's proposal supported repeal of the rule.
9. Description and Estimate of the Small Entities Involved: For the
purposes of this Fourth Report and Order, the RFA defines a ``small
business'' to be the same as a ``small business concern'' under the
Small Business Act, 15 U.S.C. Sec. 632, unless the Commission has
developed one or more definitions that are appropriate to its
activities.1 Under the Small Business Act, a ``small
business concern'' is one that: (1) is independently owned and
operated; (2) is not dominant in its field of operation; and (3) meets
any additional criteria established by the Small Business
Administration (SBA).2
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\1\ See 5 U.S.C. Sec. 601(3) (incorporating by reference the
definition of ``small business concern'' in 5 U.S.C. Sec. 632).
\2\ 15 U.S.C. Sec. 632.
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10. There are approximately 2,800 Phase I 220 MHz licensees, many
of whom may be small entities, and at least six equipment manufactures,
three of whom may be small businesses, that are subject to the
elimination of the 40-mile rule for Phase I licensees.
11. The Commission has not developed a definition of small entities
applicable to 220 MHz Phase I licensees, or equipment manufacturers for
purposes of this FRFA, and since the RFA amendments were not in effect
until the record in this proceeding was closed, the Commission did not
request information regarding the number of small businesses that are
associated with the 220 MHz Service. To estimate the number of Phase I
licensees and the number of 220 MHz equipment manufacturers that are
small businesses we shall use the relevant definitions provided by the
Small Business Administration (SBA).
12. There are approximately 2,800 non-nationwide Phase I licensees
and 4 nationwide licensees currently authorized to operate in the 220
MHz band. To estimate the number of such entities that are small
businesses, we
[[Page 46213]]
apply the definition of a small entity under SBA rules applicable to
radiotelephone companies. This definition provides that a small entity
is a radiotelephone company employing fewer than 1,500
persons.3 However, the size data provided by the SBA do not
allow us to make a meaningful estimate of the number of 220 MHz
providers that are small entities because they combine all
radiotelephone companies with 500 or more employees.4 We
therefore use the 1992 Census of Transportation, Communications, and
Utilities, conducted by the Bureau of the Census, which is the most
recent information available. Data from the Bureau of the Census' 1992
study indicate that only 12 out of a total 1,178 radiotelephone firms
which operated during 1992 had 1,000 or more employees--and these may
or may not be small entities, depending on whether they employed more
or less than 1,500 employees.5 But 1,166 radiotelephone
firms had fewer than 1,000 employees and therefore, under the SBA
definition, are small entities. However, we do not know how many of
these 1,166 firms are likely to be involved in the 220 MHz Service.
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\3\ 13 CFR Sec. 121.201, Standard Industrial Classification
(SIC) Code 4812.
\4\ U.S. Small Business Administration 1992 Economic Census
Employment Report, Bureau of the Census, U.S. Department of
Commerce, Table 3, SIC Code 4812 (radiotelephone communications
industry data adopted by the SBA Office of Advocacy).
\5\ U.S. Bureau of the Census, U.S. Department of Commerce, 1992
Census of Transportation, Communications, and Utilities, UC92-S-1,
Subject Series, Establishment and Firm Size, Table 5, Employment
Size of Firms; 1992, SIC Code 4812 (issued May 1995).
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13. We anticipate that at least six radio equipment manufacturers
will be affected by our decision in this proceeding. According to the
SBA's regulations, a radio and television broadcasting and
communications equipment manufacturer must have 750 or fewer employees
in order to qualify as a small business concern.6 Census
Bureau data indicate that there are 858 U.S. firms that manufacture
radio and television broadcasting and communications equipment, and
that 778 of these firms have fewer than 750 employees and would
therefore be classified as small entities.7 We do not have
information that indicates how many of the six radio equipment
manufacturers associated with this proceeding are among these 778
firms. However, because three of these manufacturers (Motorola,
Ericsson and E.F. Johnson) are major, nationwide radio equipment
manufacturers, we conclude that these manufacturers would not qualify
as small business.
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\6\ 13 CFR Sec. 121.201, (SIC) Code 3663.
\7\ U.S. Dept. of Commerce, 1992 Census of Transportation,
Communications and Utilities (issued May 1995), SIC category 3663.
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14. Summary of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements: By repealing the 40-mile rule for all Phase I
220 MHz licensees, the Commission reduces reporting, recordkeeping and
compliance requirements. These licensees will no longer have to file a
waiver request with the Commission in order to operate two systems in
the same service category that are less than 40 miles apart. The
Commission has found the 40-mile rule to no longer serve the public
interest and by repealing this rule the Commission reduces unnecessary
regulatory burden.
15. Significant Alternatives and Steps Taken by Agency to Minimize
the Significant Economic Impact on a Substantial Number of Small
Entities Consistent With Stated Objects: The Commission's chief
objectives in adopting the Fourth Report and Order are to ensure a
regulatory plan for the 220 MHz Service that will allow for the
efficient licensing and use of the service, to eliminate unnecessary
regulatory burdens, to enhance the competitive potential of the 220 MHz
Service in the mobile services marketplace, to provide a wide variety
of radio services to the public, and to continue to provide a home for
the development of spectrally efficient technologies. The action taken
in the Fourth Report and Order achieves these objectives by repealing a
Commission regulation that had previously been adopted. The elimination
of the 40-mile rule for Phase I licensees demonstrates the Commission's
commitment to continually review its regulations and eliminate rules
that are outdated.
16. The Commission received seven sets of comments on its tentative
conclusion to repeal the 40-mile rule for Phase I licensees. All the
comments support the elimination of the 40-mile rule for Phase I
licensees. Five of the comments were submitted by what are mostly
likely small businesses.
17. In its comments, ComTech Communications, Inc. urges the
Commission to repeal the 40-mile rule. ComTech argues that the rule is
inconsistent with the Commission's 45 MHz CMRS spectrum cap, that
regulatory parity requires the elimination of the rule and elimination
of the rule will reduce administrative costs for Phase I licensees.
18. Likewise, Securicor Radiocoms Ltd. urges the Commission to
eliminate the 40-mile rule. Securicor argues that by eliminating the
rule Phase I 220 MHz licensees can expand the availability and the
diversity of their service offerings. In addition, Securicor states
that elimination of the rule will permit Phase I 220 MHz licensees to
realize the benefits of economies of scale and will enhance the ability
of 220 MHz licensees to expand and participate in Phase II auctions.
Securicor also argues that the 40-mile rule has outlived its
usefulness.
19. Incom Communications Corporation and Narrowband Network Systems
argue that the 40-mile rule no longer serves a legitimate purpose and
regulatory parity requires the elimination of the rule. Roamer One,
Inc. concurs that the 40-mile rule no longer serves a valid regulatory
purpose and requests that the Commission eliminate the rule on an
expedited basis. E.F. Johnson Company, Inc. fully supports the
elimination of the rule.
20. American Mobile Telecommunications Association, Inc (AMTA)
states that it strongly supports the Commission's conclusion to
eliminate the 40-mile rule. AMTA argues that retaining the 40-mile rule
is inconsistent with the Commission's rules governing other CMRS
services and is inconsistent with the Commission's move toward flexible
regulation.
21. The Commission's decision to repeal the 40-mile rule for all
Phase I 220 MHz licensees, therefore, is supported by the comments it
received on its proposal.
22. Report to Congress: The Commission shall send a copy of this
FRFA, along with this Fourth Report and Order, in a report to Congress
pursuant to 5 U.S.C. Sec. 801(a)(1)(A). A copy of this FRFA will also
be published in the Federal Register.
Ordering Clauses
23. Authority for issuance of this Fourth Report and Order is
contained in Sections 4(i), 303(r), 309(j), and 332 of the
Communications Act of 1934, 47 U.S.C. Secs. 154(i), 303(r), 309(j),
332.
24. Accordingly, it is ordered that Sec. 90.739 of the Commission's
Rules, 47 CFR Sec. 90.739, is amended as set forth below, effective
October 2, 1997.
25. It is further ordered that the Secretary shall send a copy of
this Fourth Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration in accordance with Section 603(a) of the
Regulatory Flexibility Act, Public Law 96-354, 94 Stat. 1164, 5 U.S.C.
Sec. 601 et seq. (1980).
[[Page 46214]]
List of Subjects in 47 CFR Part 90
Business and industry, Radio.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 90 of title 47 of the Code of Federal Regulations is amended
as follows:
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
1. The authority citation for Part 90 continues to read as follows:
Authority; Secs. 4, 251-2, 303, 309, and 332, 48 Stat. 1066, 1082,
as amended; 47 U.S.C. 154, 251-2, 303, 309 and 332, unless otherwise
noted.
2. Section 90.739 is revised to read as follows:
Sec. 90.739 Number of systems authorized in a geographical area.
There is no limit on the number of licenses that may be authorized
to a single licensee.
[FR Doc. 97-23187 Filed 8-29-97; 8:45 am]
BILLING CODE 6712-01-P
