[Federal Register Volume 64, Number 121 (Thursday, June 24, 1999)]
[Rules and Regulations]
[Pages 33762-33785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15329]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 22 and 90
[WT Docket No. 96-18; PR Docket No. 93-253; FCC 99-98]
Future Development of Paging Systems
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document concerns rules and policies for the geographic
area licensing of Common Carrier Paging and exclusive 929 MHz Private
Carrier Paging, and competitive bidding procedures for auctioning
mutually exclusive applications for these licenses. This document also
adopts rules concerning the partitioning and disaggregation of paging
licenses, and institutes procedures designed to deter application fraud
on shared paging channels. The intended effect of this action is to
clarify and resolve issues pertaining to the paging service prior to
the Commission's auctions of remaining spectrum within that service.
EFFECTIVE DATES: Effective August 23, 1999.
ADDRESSES: Federal Communications Commission, 445 Twelfth Street, SW,
Washington DC 20554.
FOR FURTHER INFORMATION CONTACT: For non-auction information: Cyndi
Thomas or Todd Slamowitz, Commercial Wireless Division, Wireless
Telecommunications Bureau, at (202) 418-7240. For auction information:
Anne Napoli, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, at (202) 418-0660. TTY (202) 418-7233.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Memorandum Opinion
and Order on Reconsideration and Third Report and Order in WT Docket
No. 96-18 and PR Docket No. 93-253, FCC 99-98, adopted on May 13, 1999,
and released on May 24, 1999. The complete text of this decision is
available for inspection and copying during normal business hours in
the
[[Page 33763]]
FCC Reference Center, 445 Twelfth Street, SW, Room CY-A257, Washington
DC, and also may be purchased from the Commission's copy contractor,
International Transcription Service, (202) 857-3800, 445 Twelfth
Street, SW, Room CY-B400, Washington DC. The complete text is also
available under the file name fcc99098.wp on the Commission's internet
site at http://www.fcc.gov/Bureaus/Wireless/Orders/1999.
Paperwork Reduction Act
The Second R&O and this MO&O and Third R&O contain a revision to an
existing information collection that has been approved by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act, Public
Law No. 104-13 (3060-0697). The Commission, as part of its continuing
effort to reduce paperwork burdens, will invite the general public and
the OMB to comment on this information collection in a separate Federal
Register publication.
Synopsis of Memorandum Opinion and Order on Reconsideration and
Third Report and Order
Memorandum Opinion and Order on Reconsideration
1. The Commission adopts a Memorandum Opinion and Order on
Reconsideration (MO&O) and Third Report and Order (Third R&O) that
responds to petitions for reconsideration or clarification of the
Second Report and Order (Second R&O) and Further Notice of Proposed
Rulemaking (Further Notice) adopted in this proceeding on February 19,
1997. The Second R&O (62 FR 11616, March 12, 1997) established rules to
govern the geographic area licensing of Common Carrier Paging (CCP) and
exclusive 929 MHz Private Carrier Paging (PCP), and procedures for
auctioning mutually exclusive applications for these licenses. In
general, the MO&O affirms the rules adopted in the Second R&O, with
some changes and clarifications, stating the Commission's continuing
belief that the adopted rules will facilitate competition in the
wireless market by encouraging a more diverse array of entities,
including small businesses and rural telephone companies, to offer
paging services to the public. The Further Notice (62 FR 11616, March
12, 1997) sought comment on issues concerning partitioning and
disaggregation of paging licenses, coverage requirements for nationwide
geographic area licensees, and possible revisions to application
procedures for shared channels. The Third R&O modifies the paging rules
to permit partitioning by all nationwide geographic area licensees and
to allow disaggregation by all geographic area licensees; adopts rules
governing the coverage requirements for parties to partitioning or
disaggregation agreements involving non-nationwide geographic area
licenses, and the license term of partitioned or disaggregated
geographic area licenses; permits geographic area licensees to combine
partitioning and disaggregation; and establishes additional mechanisms
to inform consumers of the rules governing paging licenses and the
danger of fraudulent schemes perpetrated by application mills.
Dismissal of Pending Applications
2. The MO&O denies the petitions seeking reconsideration of the
Commission's decision to dismiss all mutually exclusive paging
applications and all paging applications filed after July 31, 1996. In
the Second R&O, the Commission stated that, in light of its decision to
adopt geographic area licensing, it would dismiss all pending mutually
exclusive paging applications, including those filed under the interim
rules adopted in the First R&O (61 FR 21380, May 10, 1996), and all
applications filed after July 31, 1996. On December 14, 1998, the
Commercial Wireless Division of the Wireless Telecommunications Bureau
dismissed these applications pursuant to the Second R&O.1
---------------------------------------------------------------------------
\1\ Revision of Part 22 and Part 90 of the Commission's Rules to
Facilitate Future Development of Paging Systems, Order, WT Docket
No. 96-18, DA 98-2543 (Dec. 14, 1998) (CWD Order).
---------------------------------------------------------------------------
3. The Commission disagrees with petitioners' arguments that the
Commission did not notify the public prior to release of the Second R&O
of its intent to dismiss these applications; that the Commission is
unlawfully applying new rules retroactively; that applicants reasonably
relied on the Commission's prior procedures for processing
applications; and that the only reason for licensing paging spectrum
through competitive bidding is to raise money for the Federal
government. The Commission notes that courts have consistently
recognized that the filing of an application creates no vested right to
continued application of licensing rules that were in effect when the
application was filed, and an application may be dismissed if
substantive standards subsequently change. In this proceeding, the
Commission dismissed pending applications based on its substantive rule
changes establishing geographic area licensing for paging. In light of
the notice the Commission gave of its interest in instituting
geographic area licensing, and of its intent not to process
applications filed after July 31, 1996, the Commission does not believe
that any applicants could have reasonably relied on its processing
applications filed after that date.
4. Moreover, the Commission does not think that carriers that had
previously pending applications will be irreparably harmed by a
decision to proceed to the auction of paging licenses without any
further processing of site-specific applications because such
applications were dismissed without prejudice and these applicants may
therefore file applications to participate in the auctions. The
Commission states that the reasons for adopting competitive bidding
procedures for paging licenses are set forth at length in the Notice of
Proposed Rulemaking (Notice) (61 FR 6199, February 16, 1996) and Second
R&O, and these reasons do not include revenue-raising considerations.
The Commission also notes that it concluded in the Competitive Bidding
Second R&O (59 FR 162981, May 4, 1994) that mutually exclusive initial
paging applications were auctionable under the auction authority
provided the Commission by the 1993 Budget Act. This conclusion is
unchanged by the Balanced Budget Act of 1997, which amended Section
309(j) to expand the Commission's auction authority.
5. Petitioners also assert that dismissal of pending applications
undermines the policy goal of expediting the licensing of paging
spectrum because dismissal will delay the initiation of paging service
in many market areas and will prevent the expansion of networks. The
Commission finds, however, that it was the formidable administrative
burden of processing site-by-site applications, and the substantial
number of mutually exclusive applications that were filed, which
created a backlog of pending applications and caused their processing
to be delayed. The Commission further rejects petitioners' suggestion
to hold an additional auction for the purpose of resolving mutually
exclusive site-by-site licenses, prior to conducting an auction for
geographic areas containing these same sites, because it would be
grossly inefficient.
6. Citing section 309(j)(6)(E) of the Communications Act of 1934,
petitioners contend that the Commission may not proceed to geographic
area licensing without first attempting to avoid mutual exclusivity
through ``engineering solutions, negotiation, threshold qualifications,
service regulations, and other means.'' The Commission has previously
[[Page 33764]]
construed Section 309(j)(6)(E) to mean that it has an obligation to
attempt to avoid mutual exclusivity by the methods prescribed therein
only when it would further the public interest goals of Section
309(j)(3). In the Second R&O, the Commission concluded that the public
interest would be better served by licensing all remaining paging
spectrum through a geographic area licensing scheme than by processing
additional site-specific licenses. The Commission thereby effectively
determined that it would not be in the public interest to implement
other licensing schemes or other processes that avoid mutual
exclusivity, thus fulfilling its obligation under Section 309(j)(6)(E).
7. Several petitions for reconsideration and an application for
review were filed in response to the CWD Order. The parties generally
reiterate the same arguments against dismissing their applications that
were set forth in the petitions for reconsideration filed in response
to the Second R&O. Having already considered these arguments, the
Commission denies the application for review filed by Robert J. and
Laurie F. Keller d/b/a Western Maryland Wireless Company on December
28, 1998, and petitions for reconsideration filed on January 13, 1999,
by: AirTouch Paging, AirTouch Paging of California, AirTouch Paging of
Kentucky, AirTouch Paging of Texas, AirTouch Paging of Virginia, Allcom
Communications, Inc., Arch Capitol District, Inc., Arch Connecticut
Valley, Inc., Arch Southeast Communications, Inc., Becker Beeper, Inc.,
Blasiar, Inc., Electronic Engineering Company, Hello Pager Company,
Paging Systems Management, Inc., PowerPage Inc., Robert Kester et al.,
Satellite Paging, Inc., South Texas Paging, Inc. (Arthur Flemmer), USA
Mobile Communications, Inc. II, Westlink Licensee Corporation, and
Westlink of New Mexico Licensee.
Geographic Areas
8. The Commission grants the petitions that request the Commission
to use Major Economic Areas (MEAs) instead of Major Trading Areas
(MTAs) for geographic licensing of the upper bands (929 and 931 MHz).
When the Commission adopted the Second R&O, it had not established
MEAs, which were first developed by the Commission to define geographic
license areas for the Wireless Communications Service (WCS). Although
MTAs and MEAs are substantially similar, the Commission finds that
geographic area licensing based on MEAs will provide geographic area
licensees with benefits that could not be obtained if the Commission
maintained MTAs as the geographic area for the 929-931 MHz band.
Licensees with paging systems in both the upper bands and the lower
bands (35-36 MHz, 43-44 MHz, 152-159 MHz, and 454-460 MHz), which will
be licensed as EAs, will benefit from the use of MEAs for the upper
bands because MEAs are composed of EAs. The fact that the geographic
borders of MEAs coincide with those of the EAs contained within the
MEAs will enable licensees with both upper and lower band systems to
operate more efficiently. The Commission also finds that adopting MEAs
on the upper bands will enhance competition between the paging systems
on the lower channels and the paging systems on the upper bands because
the paging systems on the lower channels will be able to combine their
EAs to form MEAs. The Commission also acknowledges that licensees will
benefit economically from licensing based on a geographic designation
that is in the public domain.
9. The Commission rejects one petitioner's contention that the
decision to eliminate section 90.496 of the Commission's rules was
arbitrary and capricious and an unlawful retroactive rulemaking without
the opportunity for notice and comment. In the Second R&O, the
Commission eliminated section 90.496 of its rules, which provided for
extended implementation of construction and operations deadlines for
proposed systems on the 929-930 MHz band that qualified for regional or
nationwide channel exclusivity. As explained in the Notice, the
Commission found that extended implementation would be unnecessary
under its geographic area licensing scheme and, in fact, would hinder
geographic area licensing because construction extensions for
incumbents could effectively allow them to occupy an entire geographic
area. The Commission sought comment in the Notice on its proposal to
eliminate extended implementation and to dismiss all ``slow growth''
applications pending at the time an order pursuant to the Notice was
adopted without prejudice to refile under its geographic area licensing
scheme. The Commission affirms removal of section 90.496 of its rules
and clarifies that removal of the rule does not affect the rights
associated with extended implementation authority granted under that
rule as of May 12, 1997, the effective date of the Second R&O. In
addition, any requests pending as of May 12, 1997, are dismissed
without prejudice to obtain licenses under the geographic area
licensing rules.
10. The Commission rejects one petitioner's request to use BTAs for
geographic area licensing in the lower bands, affirming its
determination that EAs are appropriate for geographic area licensing on
the 35-36 MHz, 43-44 MHz, 152-159 MHz, and 454-460 MHz bands. The
petitioner contends that the size of EAs will prevent small and rural
paging companies from participating in the geographic area licensing
auctions; that EAs contain major urban areas as well as rural and
suburban areas, and that small and rural companies are only interested
in the rural and suburban areas of the EA; and that partitioning does
not address the concerns of small and rural companies. Contrary to the
petitioner's arguments, the Commission believes that the size of EA
geographic areas will not prevent paging operators of smaller systems
from participating in geographic area licensing auctions. The
Commission also believes bidding credits will allow small businesses to
compete against larger bidders. Further, small and rural paging
companies will not be prevented from expanding their systems even if
they choose not to participate in the geographic area licensing
auctions, because the Commission will allow geographic area licensees
to partition their service areas and it has no reason to believe that
geographic area licensees will be unwilling to enter into partitioning
agreements. The Commission continues to conclude that EAs, which the
majority of commenters supported, best reflect the geographic area that
the paging licensees on the lower channels seek to serve.
11. The Commission amends section 22.503(b)(3) of the Commission's
rules to include three additional EA-like areas for the U.S.
territories, which the Commission inadvertently omitted in the Second
R&O. The Commission adds the following three EA-like service areas:
Guam and the Northern Mariana Islands (EA 173); Puerto Rico and the
United States Virgin Islands (EA 174); and American Samoa (EA 175).
Highly Encumbered Areas
12. The Commission denies petitions arguing that those incumbent
licensees that have previously satisfied certain coverage requirements
should receive a geographic area license without competitive bidding.
Petitioners advocate granting a market area license to an incumbent
providing coverage to at least 70 percent, two-thirds, or a similar
portion of the market. Petitioners propose a two-step process for
granting market area licenses. First,
[[Page 33765]]
where an incumbent operator certifies that it covers 70 percent of a
market area's population or geographic area, the Commission should
grant a market area license to that incumbent. If multiple incumbents
serving a market on a single frequency together cover 70 percent of the
population or geographic area, those licensees should be permitted
jointly to file an application that demonstrates their joint coverage,
and receive a market area license on that basis. In the second step,
interested parties could file applications for all remaining available
frequencies in each market. Mutually exclusive applications would then
be subject to the Commission's auction rules. Petitioners alternatively
propose to limit eligible bidders to the same channel incumbents
operating within the geographic area or in an area adjacent to the
geographic area license.
13. To support their proposals, petitioners argue, for example,
that, under the Commission's rules adopted in the Second R&O, new
opportunities for greenmail and speculative applications will result in
inflated auction prices, and reliable service will decline because
auctions introduce additional parties for coordination and negotiation
and customers will be unable to receive or obtain services if multiple
providers are using the same channel within a market area. Petitioners
further argue that new entrants will increase the potential for co-
channel interference; ``dead zones'' will occur between the incumbent
and geographic area licensee's service areas; the incumbent's ability
to expand to provide the ``widest area coverage'' will be blocked if a
new entrant wins at auction; new entrants will be encouraged to enter
markets where it would not be economically viable to do so; and
customers will not reap the benefits of competition. In addition,
petitioners state that an applicant is not qualified if it cannot meet
the construction benchmark of covering two-thirds of the population of
an MTA where operating incumbents already meet the coverage
requirements. Petitioners further assert that the Commission's current
rules do not meet its statutory obligation to avoid mutual exclusivity,
while mutual exclusivity could be avoided through ``threshold
qualifications,'' identified in their percent-of-coverage proposals.
14. While the Commission recognizes that some geographic areas are
significantly served by incumbent licensees, it believes that the
market should decide whether an economically viable paging system can
be established in the unserved area of a geographic market. For
instance, a paging provider that primarily serves an adjacent
geographic market may have a strong desire to serve the unserved area
in its neighbor's ``home'' market. In addition, even where only 30
percent of a geographic area is available to a potential new entrant,
the Commission does not believe that it has been shown that the new
entrant cannot establish a viable system that serves the public as well
as the incumbent. Thus, the Commission cannot conclude that an
incumbent licensee is entitled to a geographic area license without
competitive bidding simply because its paging system may cover a
substantial portion of the geographic area. The Commission continues to
believe that open eligibility promotes prompt service to the public by
allocating spectrum to the entity that values it most.
15. The Commission also believes that the benefits of open
eligibility outweigh the risks that speculators and misguided
applicants pose to the competitive bidding process. Indeed, while
speculation can be a problem when licenses are awarded through such
systems as lotteries, the Commission believes that auctions deter
speculation. The Commission has auctioned other highly encumbered
services and has not seen any evidence that speculative applications
have raised bidding prices. Petitioners also have not provided any
evidence that speculative applications have raised bidding prices in
prior auctions.
16. Other issues raised by petitioners are addressed in other
sections of the MO&O. The Commission states that a new entrant will be
able to meet its coverage requirements by providing ``substantial
service'' within the geographic area and geographic area licensees must
provide co-channel protection to all incumbents. Moreover, the
Commission notes that petitioners have not provided any evidence that
the ``border'' issues raised here, including problems related to ``dead
zones,'' are any different from issues that arise under other
circumstances where one licensee is adjacent to another. Finally,
turning to its obligation to attempt to avoid mutual exclusivity when
it is in the public interest, the Commission does not believe that
Congress intended the Commission to interpret the term ``threshold
qualifications'' in Section 309(j)(6)(E) to mean that carriers should
receive licenses for unserved areas without competitive bidding simply
because they already hold certain licenses for other areas in the
vicinity, particularly because the result of such an approach would be
to preclude the dissemination of licenses to new entrants.
Basic Exchange Telecommunications Radio Systems Licensees
17. The Second R&O directs that Basic Exchange Telecommunications
Radio Systems (BETRS) licensed under the Rural Radiotelephone Service
should be subject to geographic area licensing and competitive bidding,
and also allows providers in these services to obtain site licenses on
a secondary basis. It further provides that all existing BETRS
operating on a co-primary basis remain in place and receive full
protection from interference by geographic area licensees. BETRS
licensees may also enter into partitioning agreements with auction
participants and auction winners both before and after the paging
auctions. In the Second R&O, the Commission stated that ``[i]f a
geographic area licensee is concerned that a BETRS facility operating
on secondary sites may cause interference to the geographic area
licensee's existing or planned facilities, the BETRS provider must
discontinue use of the interfering channel no later than six months
after the geographic area licensee notifies the BETRS provider of the
actual or potential interference.'' This policy is codified at section
22.723 of the rules.
18. Several petitioners argue that BETRS is essential to the
Commission's universal service goal of delivering local exchange
service to remote, rural areas and should be licensed on a site-by-
site, co-primary basis with geographic area licensees, and exempt from
competitive bidding procedures. These petitioners contend that
participation in auctions will impair the ability of rural telephone
companies to respond to their customers' needs for local exchange
service in remote rural areas.
19. The Commission declines to adopt rules that permit site-by-site
licensing of BETRS on a co-primary basis with geographic area paging
licensees. The Commission agrees that BETRS provide an important
service, but finds that BETRS do not require exemption from competitive
bidding to ensure continued BETRS service and lower costs to
subscribers. The rules that the Commission adopted in the Second R&O
provide competitive bidding benefits to small businesses that will
enable them to compete more effectively with larger auction
participants. The Commission also believes that BETRS operators will be
able to obtain interests in paging licenses or actual paging licenses
through entering into partitioning arrangements both before and after
the paging auctions. The
[[Page 33766]]
Commission emphasizes that it is committed to promoting service in
rural areas and believes that the rules adopted for BETRS in the Second
R&O will further that goal. If a BETRS operator demonstrates that it
cannot serve a particular need in a rural area under these rules, the
Commission will consider appropriate action to address specific
concerns.
20. Petitioners contend that, contrary to the Commission's
universal service goals, section 22.723 of the Commission's rules will
allow geographic area licensees to terminate BETRS upon any allegation
of harmful co-channel interference, resulting in a loss of
communications services essential to the public in rural areas.
Petitioners argue that the Commission must either retain existing rules
or establish safeguards against allowing geographic area licensees to
``shut down BETRS operations.'' Another petitioner, however, seeks
clarification that section 22.723 confers no right on rural radio
service licensees to continue operations that cause actual interference
to geographic area licenses for six months after receiving notice of
the interference. The Commission affirms its earlier decision to allow
BETRS licensees to obtain site licenses and operate facilities on a
secondary basis. The Commission clarifies that under section 22.723 of
its rules, the geographic area licensee must provide notification to
the BETRS provider that the relevant BETRS facility causes or will
cause interference with the geographic area licensee's service contour
in violation of the Commission's interference rules. Where the BETRS
facility would create interference with a facility the geographic area
licensee is proposing to build, the geographic area licensee may not
provide notification of impermissible interference to the BETRS
provider earlier than six months prior to the date it intends to
initiate operation of the proposed facility. Thus, the geographic area
licensee may not force the BETRS provider to discontinue service before
the geographic area licensee initiates service. Where the BETRS
facility is constructed after the geographic area licensee's facility
is already constructed and the BETRS facility causes interference with
that existing facility, the BETRS operator must discontinue use of the
interfering channel in accordance with the Commission's interference
rules. Where a geographic area licensee plans construction and
initially determines that the BETRS facility would not cause
interference, but after construction determines the BETRS facility is
causing interference, the BETRS operator must discontinue use of its
facility within six months of receiving notification. If a dispute
arises, either party may submit the interference information to the
Commission to resolve the dispute. If the geographic area licensee
provides proper notification to the BETRS provider, no adjustments will
be made to the initial six month period. If the Commission determines
that the notification was improper or inaccurate, the geographic area
licensee, where appropriate, must submit a new, corrected notification
to the BETRS provider. In the latter case, the six month period would
restart.
21. Contrary to petitioners' argument, the Commission has not
exceeded its statutory authority by employing competitive bidding
procedures to issue geographic area paging licenses. Section 309(j) of
the Communications Act, as amended, gives the Commission authority to
issue geographic area paging licenses through competitive bidding.
Petitioners have offered no evidence to support their assertion that
revenue for the federal treasury ``appears to be the real reason for
the Commission's proposal.'' The recovery of a portion of the value of
the public spectrum made available through competitive bidding does not
amount to maximizing revenue, nor is it the Commission's sole
objective.
22. Certain petitioners also argue that the Commission did not
adequately consider adopting ``mandatory partitioning'' of rural areas
of the geographic area license, at no cost to the rural telephone
company, to offset the unwillingness of geographic area licensees to
enter into agreements for the provision of BETRS service. The
Commission affirms its conclusion in the Second R&O that BETRS
licensees may acquire partitioned licenses from other licensees by: (1)
participating in bidding consortia; or (2) acquiring partitioned
licenses from other licensees through private negotiation and agreement
either before or after the auctions. The Commission has no reason to
believe that auction winners will not be willing to enter into
partitioning arrangements. Petitioners themselves argue that winning
geographic area licensees may have no desire or intention to build in
rural areas. If this is true, there appears to be little incentive for
these licensees to demand unreasonable amounts of money for the rural
portion of a license prior to or subsequent to the auction, especially
if the choice is between selling to a willing buyer or leaving the
rural area unserved. Where possible, the Commission encourages market
forces and the business judgment of companies to dictate the formation
of business relationships. The Commission believes voluntary agreements
will be an adequate means of accommodating BETRS licensees seeking
modifications to existing BETRS or wishing to establish new systems,
and that mandatory partitioning is unnecessary.
Spectrum Reversion
23. The Commission reaffirms that where an incumbent permanently
discontinues operations at a given site, as defined by the Commission's
rules, the spectrum automatically reverts to the geographic area
licensee. In the Second R&O, the Commission concluded that spectrum
within a geographic area recovered by the Commission from a non-
geographic area licensee should automatically revert to the geographic
area licensee. The Commission found that granting this right to
geographic area licensees would give them greater flexibility in
managing their spectrum, establish greater consistency with cellular
and PCS rules, and reduce the regulatory burdens on both licensees and
the Commission with respect to future management of the spectrum.
24. One petitioner suggests that the Commission should clarify that
recovered spectrum automatically reverts to the geographic area
licensee in all instances except where an incumbent licensee
discontinues operations in a location wholly encompassed by the
incumbent licensee's valid composite interference contours. The
petitioner argues that the geographic area licensee would not be able
to serve such an area, and that reversion would be contrary to the
Commission's policy of allowing fill-in transmitters anywhere within
the incumbent's outer perimeter interference contour. The Commission
disagrees. As an initial matter, the Commission notes that an
incumbent's valid composite interference contour does not include areas
surrounded by the composite interior contour that is not part of the
interference contours of the incumbent's individual sites. The
Commission further finds that the petitioner has not demonstrated that
a geographic area licensee would be unable to serve areas wholly
surrounded by an incumbent; such service by the geographic area
licensee would be subject to the Commission's interference rules.
Moreover, where an incumbent discontinues service to an area, the
Commission does not believe it serves the public interest to withhold
that area from the geographic area licensee in the hope that the
incumbent may wish to
[[Page 33767]]
resume service sometime in the future. Should an incumbent desire to
serve the reverted area in the future, it is free to reach an agreement
with the geographic area licensee for the partitioning of this area.
This approach is consistent with the Commission's treatment of reverted
spectrum in the 800 MHz SMR service, and it is in the public interest,
as it promotes use of the spectrum.
System-wide Licensing
25. The Commission clarifies certain aspects of its rules regarding
system-wide licensing. In the Second R&O, the Commission allowed all
incumbent paging licensees to either continue operating under existing
authorizations or trade in their site-specific licenses for a single
system-wide license. The Commission stated that such a system-wide
license would be demarcated by the aggregate of the interference
contours around each of the incumbent licensee's contiguous sites
operating on the same channel. The Commission also concluded that
incumbent licensees may add or modify sites within their existing
interference contours without filing site-specific applications, but
may not expand their existing interference contours without the consent
of the geographic area licensee.
26. Although system-wide licenses and site-specific licenses are
identical in terms of operational and technical flexibility, some
licensees may realize administrative benefits from consolidating site-
specific licenses. Petitioners seek clarification of the procedures for
converting site-specific licenses to a system-wide license. In the ULS
Order (63 FR 856163, December 14, 1998), the Commission stated that
conversions from site-specific to system-wide licenses are minor
modifications subject to the Commission's prior approval. Applicants
requesting a system-wide license will be notified by public notice of
the action taken on their request and public notices granting such
requests will indicate the new call sign associated with the system-
wide license. The expiration date of the system-wide license will be
determined by the earliest expiration date of the site-specific
licenses that are consolidated into the system-wide license. Once a
system-wide license is approved, the licensee must submit a timely
renewal application for the system-wide license based on that
expiration date. The Commission emphasizes, however, that the licensee
is solely responsible for filing timely renewal applications for site-
specific licenses included in a system-wide license request until the
request is approved. If the situation arises where a site-specific
renewal application for a site included in a system-wide license
request and the system-wide license request itself are pending at the
same time before the Wireless Telecommunications Bureau, the Bureau may
elect to complete the site-specific license renewal proceeding prior to
making a determination on the system-wide license request. Renewal
applications will be placed on public notice as accepted for filing
pursuant to the Commission's rules. To minimize administrative burdens
on licensees and conserve government resources, the Bureau will use
electronic filing to the greatest extent possible in accepting and
processing these applications.
27. Several petitioners seek clarification of the definition of
``contiguous sites'' for the purpose of determining an incumbent's
``aggregate interference contour.'' Petitioners also urge the
Commission to modify section 22.503(i) to define non-geographic area
incumbent systems according to the composite interference contours of
all authorized transmitters, including valid construction permits,
regardless of the grant date. The Commission has consistently stated
that system-wide licenses are defined by interference contours and it
now clarifies that contiguous sites are defined by overlapping
interference contours, not service contours. The Commission further
clarifies that all authorized site-specific paging licenses and
construction permits are included in a composite interference contour.
The Commission is continuing to process site-specific applications that
were not mutually exclusive and were filed prior to July 31, 1996, and
it will not revoke authorized construction permits before the
construction deadline. In addition, the Commission is continuing to
resolve pending petitions that might result in grants of applications.
The Commission also notes that for purposes of due diligence it intends
to release, prior to auction, a list of site-specific applications and
petitions pending at that time. Accordingly, the Commission amends
section 22.503(i) to clarify that geographic area licensees must
provide co-channel interference protection in accordance with sections
22.537 or 22.567, as appropriate for the channel involved, to all
authorized co-channel facilities of exclusive licensees within the
paging geographic area.
28. Petitioners also contend that system-wide licenses should
include areas where an incumbent's interference contours do not
overlap, but where no other licensee could place a transmitter because
of interference rules. The Commission concludes that a system-wide
license is merely a consolidation of a system's call signs such that
one call sign will be associated with the system-wide license. The
contours of the system-wide license remain as the aggregate of the
contours of the individual sites. The Commission finds that inclusion
of areas that are outside of an incumbent's interference contours
within a system-wide license would be contrary to the Commission's
objective of prohibiting encroachment on the geographic area licensee's
operations. A system-wide license is not intended to expand an
incumbent's system beyond the contours of its individual sites.
Incumbent licensees seeking to expand their contours may participate in
the auction of geographic area licenses, or may seek partitioning
agreements with the geographic area licensee.
29. One petitioner seeks clarification as to whether the
discontinuance of operation of an interior site would jeopardize a
system-wide license. Where a system-wide licensee allows an area within
its system to revert to the geographic area licensee, the system-wide
license shall remain intact; however, the parameters of the system-wide
license shall be amended to the demarcation of the remaining contiguous
interference contours.
30. The Commission will allow licensees to include in system-wide
licenses remote, stand-alone transmitters that are linked to contiguous
systems via control/repeater facilities or by satellites. Including
these remote, stand-alone sites in the system-wide license, however, in
no way expands the licensee's composite interference contours. The
Commission will also permit licensees to maintain separate site-
specific licenses for remote, stand-alone transmitters. The Commission
further finds that an incumbent licensee should be permitted to obtain
multiple system-wide licenses where applicable.
Interference
31. The Commission affirms its earlier decision to use Tables E-1
and E-2 to determine interference contours for both perimeter and
``fill-in'' transmitters. Co-channel interference rules are designed to
protect licensees from interference caused by other licensees operating
facilities on the same channel. Exclusive paging systems are protected
from co-channel interference by a variety of rules that govern
transmitter height and power, distance between transmission stations,
the licensee's protected service area, and the field strength of the
licensee's service and interfering signals. For the CCP channels below
931 MHz, the Commission uses
[[Page 33768]]
mathematical formulas to determine the distance from each transmitting
site to its service and interference contours along the eight cardinal
radials from the transmitter site. To determine service and
interference contours for the 931 MHz channels, the Commission uses two
tables of fixed radii, Tables E-1 and E-2. Prior to adoption of the
Second R&O, for the 929 MHz exclusive channels, the Commission used
geographic separation rules that agreed with the separations that
result from the application of the fixed radii tables for 931 MHz.
Unlike the Commission's CCP rules, at that time, the PCP rules did not
formally define a protected service or interference contour for each
station.
32. In the Notice, the Commission proposed to adopt the eight-
radial contour method and new mathematical formulas, rather than fixed
tables, to determine the service and interference contours for the
exclusive 929 MHz and 931 MHz channels. The commenters addressing this
issue strenuously objected to the Commission's proposal, stating that
the proposed method could require incumbents to reduce coverage or be
required to accept interference from geographic area licensees.
Consequently, the Commission decided not to adopt the proposed
formulas. The Commission did, however, adopt Tables E-1 and E-2 for the
exclusive 929 MHz channels, thus maintaining the status quo for 931 MHz
channels and conforming 929 MHz channels to the current procedures for
931 MHz channels.
33. Several petitioners now request that instead of using Tables E-
1 and E-2, the Commission permit incumbents to employ alternative
formulas to determine the interference contours of ``fill-in''
transmitters. One petitioner suggests using signal strength criteria,
rather than alternative formulas, for determining the interference
contours of ``fill-in'' transmitters. The Commission does not find that
permitting incumbents to use different formulas for ``fill-in''
transmitters will serve the public interest. The record in this
proceeding supports the decision to use Tables E-1 and E-2 to determine
interference and service contours for all 929 MHz and 931 MHz
transmitters. The Commission finds that to permit incumbents to add
sites under alternative formulas depending on the location and power of
each of their transmitters significantly raises the risk of
encroachment on a geographic area licensee's territory. In addition,
the incumbent will have the opportunity to cover any existing gaps in
coverage by either competing for the geographic area license or by
partitioning from the geographic area licensee.
34. The Commission affirms its previous conclusion to require
geographic area licensees to negotiate to resolve interference problems
with adjacent geographic area licensees. In the Second R&O, the
Commission concluded that geographic area licensees should be able to
negotiate mutually acceptable agreements with all adjacent geographic
area licensees if their interfering contours extend into other
geographic areas. The Commission also indicated that adjacent licensees
have a duty to negotiate in good faith with one another regarding co-
channel interference protection. The Commission noted that lack of
adequate service to the public because of failure to negotiate
reasonable solutions with adjacent geographic area licensees could
reflect negatively on licensees seeking renewal.
35. Certain parties now seek clarification of the good faith
negotiation requirement, arguing the standard is vague and invites
litigation. One petitioner further notes that while the cellular
industry has negotiated agreements, paging coordination will be more
difficult because paging carriers operate on only one frequency, while
cellular carriers have many channels with which to negotiate. The
Second R&O adopted the good faith standard to provide flexibility for
licensees to negotiate mutually acceptable agreements. Providing for
adjacent geographic area licensees to negotiate mutually acceptable
agreements should reduce the amount of unserved area that could result
from specifying a minimum distance a geographic area licensee's
transmitter must be from a geographic border. In other services, such
as the Multipoint Distribution Service (MDS), the Commission has
expected licensees to cooperate among themselves to resolve
interference issues before bringing them to the attention of the
Commission. Based on the limited number of interference complaints that
it has been called upon to resolve, the Commission believes this policy
has worked well in the MDS service. Moreover, none of the parties have
proposed a better way to achieve flexibility and the reduction of
unserved areas.
36. The Commission clarifies various issues regarding channel
exclusivity on the 929-930 MHz bands. Prior to 1993, all PCP channels
were assigned on a non-exclusive basis. In 1993, the Commission
established rules allowing PCP carriers in the 929-930 MHz band to
obtain channel exclusivity as local, regional, and nationwide paging
systems on thirty-five of the forty 929 MHz PCP channels. Those
licensees that qualified for exclusivity as a local, regional, or
nationwide system at that time were grandfathered as exclusive
licensees, and required to maintain their existing sharing arrangements
with other licensees, but were protected from the addition of other
licensees on these channels. Thus, no application for a new paging site
would be granted on a channel assigned to an incumbent who qualified
for exclusivity if the applicant proposed a paging facility that did
not comply with the separation standards based on antenna height and
transmitter power of the respective systems. All other incumbent
licensees were grandfathered with respect to their existing systems as
shared licensees, and required to continue to share channels with each
other. The Commission notes that grandfathered licensees could not add
stations to their existing systems in areas where a co-channel licensee
had qualified for exclusivity. Therefore, on these thirty-five 929 MHz
channels, the Commission has: (1) exclusive incumbents: grandfathered
exclusive systems that are exclusive with respect to new licensees, but
share with other grandfathered licensees; (2) non-exclusive incumbents:
grandfathered shared licensees; (3) licensees who failed to construct
enough sites to qualify for exclusivity under the PCP Exclusivity Order
(considered ``secondary'' with respect to licensees with earned
exclusivity); and (4) licensees with earned exclusivity. In the Second
R&O, the Commission concluded that geographic area licensees must
provide co-channel protection to all incumbent licensees.
37. Certain petitioners seek clarification as to whether non-
exclusive 929 MHz licensees operating on the thirty-five exclusive
channels (i.e., categories 2 and 3 in the above paragraph) will receive
the same interference protection as an exclusive licensee. Other
petitioners seek clarification that the Commission did not elevate
incumbent licensees operating on shared channels to exclusive status.
One petitioner specifically argues that section 22.503(i) will require
that nationwide geographic area licensees terminate sharing
arrangements they have with non-exclusive licensees and provide
interference protection to them, while another contends that section
22.503(i) does not require the termination of existing channel sharing
arrangements involving exclusive incumbent licensees and non-exclusive
incumbent licensees. Non-exclusive incumbent licensees on
[[Page 33769]]
the thirty-five exclusive 929 MHz channels will continue to operate
under the same arrangements established with the exclusive incumbent
licensees and other non-exclusive incumbent licensees prior to the
adoption of the Second R&O. The Commission further clarifies that MEA,
EA, and nationwide geographic area licensees will be able to share with
non-exclusive incumbent licensees on a non-interfering shared basis.
The non-exclusive incumbent licensees must cooperate with the
nationwide and geographic area licensees' right to share on a non-
interfering shared basis. Accordingly, the Commission amends section
22.503(i) to clarify that nationwide and geographic area licensees are
afforded the right to share with non-exclusive incumbent licensees on a
non-interfering shared basis. As for shared PCP channels, the
Commission concluded in the Second R&O that licensees on these channels
will not be converted to exclusive status and that these channels will
not be subject to competitive bidding. Therefore, licensees on these
shared channels will continue to share with any future licensees.
38. The Commission declines to grant one petitioner's request to
grant full interference protection to existing control link operations
on the UHF and VHF paired channels originally allocated for mobile
telephone service once the ``auction for the UHF and VHF common carrier
channels'' is completed. The petitioner contends that in reliance on
the Commission's proceeding in CC Docket 87-120, which permitted paging
carriers to use these two-way channels as control links, ``numerous
carriers have configured their paging systems on [the] basis of their
protected use of a VHF or UHF frequency to link their base stations.''
Another petitioner requests clarification as to whether incumbent
mobile telephone service providers operating on the lower paging
frequencies will be protected from interference from geographic area
licensees. Furthermore, the petitioner requests that incumbent mobile
telephone service providers be permitted to obtain additional site
licenses on a secondary basis.
39. The Commission concludes that the petitioner's request to
protect control link operations is unclear and outside the scope of
this proceeding. The Commission's rules do not generally provide
protection from interference to fixed stations and the petitioner's
request would require a rulemaking to develop interference criteria,
which is beyond the scope of this proceeding. In addition, the
petitioner's request is unclear. For example, the petitioner does not
specify whether any protection provided should apply to the mobile
channel used as a control link or the base channel used as a control
link. The Commission therefore denies the request. With respect to the
request for clarification, the Commission reiterates that geographic
area licensees must provide co-channel protection to all incumbent
licensees, including incumbent mobile telephone service providers
operating on the 150 MHz and 450 MHz bands.
40. The Commission will not, however, grant the petitioner's
request that incumbent mobile telephone service providers be permitted
to obtain additional site licenses on a secondary basis. While the
Commission is generally aware that two-way incumbent mobile telephone
service providers serve rural areas in the western part of the country,
the petitioner provides no information at all for determining whether
to permit incumbent mobile telephone service providers to operate
facilities on a secondary basis. The Commission therefore denies the
request.
Shared Channels
41. The Commission affirms its decision to not impose a limit or
``cap'' on the number of licensees for each of the shared channels. In
the Notice, the Commission sought comment on whether to use geographic
area licensing for the shared PCP channels in the 152-158 MHz, 462 MHz,
and 465 MHz bands. Most commenters who responded to this issue in the
Notice were opposed to geographic area licensing for the shared
channels and sought to retain the status quo. In the Second R&O, the
Commission found that the cost and disruption caused by converting
shared channels to exclusive channels and subjecting them to
competitive bidding would outweigh the benefits. The Commission did not
impose a limit or ``cap'' on the number of licensees for each of the
shared channels, as it found that capacity limits of paging channels
are based primarily on use and not the number of licensees. Thus,
``capping'' the number of licensees would not necessarily ensure
efficient spectrum use. The Commission also determined in the Second
R&O that pending the resolution of issues related to consumer fraud
addressed in the Further Notice, it would retain the interim licensing
rules, which limited applications to incumbents seeking to expand their
systems. The Commission did, however, eliminate the 40-mile requirement
for new sites, allowing incumbents to file for new sites at any
location. Finally, noting that it would not grant applications
proposing operations on a commercial basis, the Commission allowed new
applicants to file applications for private, internal-use systems, and
reiterated that Special Emergency Radio Service providers would remain
exempt from the licensing freeze and could continue to file
applications on shared channels.
42. Petitioners oppose granting new applicants licenses for
private, internal-use systems, alleging that allowing new applications
would encourage speculative applications and result in harmful
congestion on the shared PCP channels. As a remedy, petitioners urge
the Commission to retain the interim rules, which limit the filing of
new applications primarily to incumbents. Petitioners further urge the
Commission to limit incumbents' expansion applications to sites that
are within 75 miles of an existing facility, in lieu of the 40-mile
requirement that the Commission has eliminated, to deter incumbents
from filing speculative applications, and ask that the Commission
permit applications from public safety and medical services providers
for shared channels only upon certification that no public safety
channels are available to meet those providers' needs.
43. The Commission does not believe that eliminating the
opportunity for new licensees to establish service on shared channels
serves the public interest because it does not promote efficient use of
spectrum. The Commission does not believe that concerns about
speculation or congestion on shared channels are sufficient at this
time to warrant additional burdens on new applicants. The Commission's
goal is to increase the use of these shared channels, not to unduly
restrict access to them. Therefore, the Commission affirms its previous
decision and declines to impose limits on the number of licensees for
each channel in a particular area. The Commission will take further
action if it finds that the transition of the exclusive channels to
geographic area licensing results in congestion and interference
problems on the shared channels. The Commission also declines to adopt
a certification requirement for public safety providers. Finally, as
described below, the Commission will be removing the interim licensing
rules on all the shared paging channels. Accordingly, the Commission
declines to impose any mileage limitations on expansion applications to
provide service on shared paging channels.
44. One petitioner contends that the Commission should reconsider
its
[[Page 33770]]
decision not to subject the five 929 MHz non-exclusive channels to
competitive bidding. The Commission declines to reconsider this
decision. Petitioner's arguments to include shared channels in
competitive bidding are effectively a request to limit the number of
licensees authorized to operate on shared channels. As previously
stated, the Commission declines to impose limits on the number of
licensees for each channel in a particular area.
45. The Commission also denies another petitioner's request to
adopt specific interference rules for shared frequencies, and provide
shared frequency licensees with some form of exclusivity protection. In
the Second R&O, the Commission found that shared channels are heavily
used by incumbent systems, many of whom have entered into time-sharing
or interconnection agreements to avoid interference with one another.
The Commission believes the imposition of specific interference
requirements at this time could jeopardize the viability of some of
these existing relationships.
Coordination with Canada
46. The Commission clarifies rules regarding coordination
requirements with Canada. The Commission states that it is bound by
international agreement to coordinate with the Canadian government
(Industry Canada) stations using certain frequencies north of Line A or
east of Line C. Incumbent and geographic area licensees on the lower
paging channels must submit a Form 600 (or Form 601) to obtain
authorization to operate stations north of Line A or east of Line C
because the lower paging channels are subject to the Above 30
Megacycles per Second Agreement with Industry Canada. The U.S.-Canada
Interim Coordination Considerations for the Band 929-932 MHz, as
amended, assigns specific 929 and 931 MHz frequencies to the United
States for licensing along certain longitudes above Line A, and assigns
other specific 929 and 931 MHz frequencies to Canada for licensing
along certain longitudes along the U.S.-Canada border. As a result, the
Commission notes that frequency coordination with Canada is not
required for the 929 and 931 MHz frequencies that U.S. licensees are
permitted to use north of Line A pursuant to that agreement. In
addition, the 929 and 931 MHz frequencies assigned to Canada are
unavailable for use by U.S. licensees above Line A as set out in the
agreement. Finally, the Commission is implementing electronic filing
and automated coordination procedures to the extent practical and
allowable under its agreements with Canada.
Power Requirements
47. The Commission clarifies that 929 MHz licensees, with certain
limitations, do not need to file a modification application to increase
the effective radiated power (ERP). Thus, the Commission states that
licensees may modify power levels without filing a modification
application only to the extent that their composite interference
contour, as determined by Table E-2, remains constant or decreases.
Again, the Commission restates that, pursuant to the First R&O, an
incumbent licensee is not permitted to increase its composite
interference contour.
Coverage Requirements
48. The Commission reaffirms coverage requirements for MEA and EA
licensees. In the Second R&O, the Commission concluded that for each
MTA or EA the geographic area licensee must provide coverage to one-
third of the population of the entire area within three years of the
license grant, and to two-thirds of the population of the entire area
within five years of the license grant; or in the alternative, the MTA
or EA licensee may provide substantial service to the geographic
license area within five years of license grant. In addition, the
Commission concluded that failure to meet the coverage requirements
would result in automatic termination of the geographic area license.
The Commission stated that it would reinstate any licenses that were
authorized, constructed, and operating at the time of termination of
the geographic area license.
49. One petitioner advocates requiring the geographic area licensee
to provide coverage to one-third of the market area within one year,
and two-thirds within three years. Other petitioners argue, however,
that small companies will have difficulty meeting these suggested
coverage requirements, especially if they must construct in rugged
areas with low population density to cover two-thirds of the
population. The Commission declines to adopt the proposal. The
Commission believes that its previously adopted coverage requirements
adequately promote prompt service to the public without being unduly
burdensome on licensees that require a reasonable amount of time to
complete construction. The Commission finds that areas which are
currently unserved have remained so in spite of the fact that paging
service has existed for many years and is extremely competitive in some
markets. This finding suggests that providers of service in these areas
may face unusual difficulties. Moreover, the Commission finds that
overly stringent coverage requirements would unfairly favor incumbents
by erecting a formidable barrier to entry.
50. Petitioners argue that the ``substantial service'' alternative
should be eliminated because it will encourage speculation, greenmail
and anticompetitive conduct. However, in some MEAs or EAs, an incumbent
licensee may already serve more than one-third of the population. The
elimination of the substantial service alternative would prevent a
potential co-channel licensee other than the incumbent from bidding in
these markets because the five-year coverage requirement could only be
satisfied by the incumbent. The option of providing a showing of
substantial service allows those MEA and EA licensees who cannot meet
the three-year and five-year coverage requirements because of the
existence of incumbent co-channel licensees to satisfy a construction
requirement. Moreover, the Commission recognizes that the unserved
areas of many MEAs and EAs are rural areas that may be more difficult
to serve than urban areas. The Commission thinks it is in the public
interest to encourage build-out in rural areas by allowing licensees to
make a substantial service showing. Further, the substantial service
option enables licensees to use spectrum flexibly to provide new
services without being concerned that they must meet a specific
percentage of the coverage benchmark or lose their license.
51. Certain petitioners argue that the vagueness of the definition
of ``substantial service'' will result in an abundance of litigation.
One petitioner suggests that substantial service could be defined as
coverage of fifty percent at three years, and seventy-five percent at
five years, of the geographic area that is not served by co-channel
incumbent licensees; and that the Commission could require licensees to
show a specified level of infrastructure investment by the three-year
and five-year deadlines. Another petitioner suggests that the
Commission provide specific examples of what construction levels would
satisfy the substantial service test.
52. The Commission declines to adopt specific coverage requirements
as the sole means of defining ``substantial service.'' As already
noted, the unserved area of an MEA or EA license (i.e., the area not
served by co-channel incumbent licensees at the time the MEA or EA
license is granted) may consist largely of spectrum in rural
[[Page 33771]]
areas. The Commission believes that imposing strict coverage
requirements to define substantial service in the unserved area would
discourage new entrants from attempting to acquire licenses to serve
rural areas. Nonetheless, the Commission finds that establishing an
objective criterion as one means of meeting the substantial service
option in the unserved areas of an MEA or EA would be useful.
Therefore, the Commission will presume that the substantial service
coverage requirement is satisfied if an MEA or EA licensee provides
coverage to two-thirds of the population in the unserved area of the
MEA or EA within five years of license grant.
53. At the same time, the Commission recognizes the need for
flexibility in areas where stringent coverage requirements would
discourage provision of any service. Therefore, the Commission
clarifies that an MEA or EA licensee may be able to satisfy the
substantial service requirement even if it does not provide coverage to
two-thirds of the population in the unserved area within five years of
license grant. The Commission offered guidance to WCS licensees with
regard to factors that it would consider in evaluating whether the
substantial service requirement has been met, and the Commission now
applies this additional guidance to paging licensees. Thus, the
Commission may consider such factors as whether the licensee is
offering a specialized or technologically sophisticated service that
does not require a high level of coverage to be of benefit to
customers, and whether the licensee's operations serve niche markets. A
licensee may also demonstrate that it is providing service to unserved
or underserved areas without meeting a specific percentage, as the
Commission permitted SMR providers in the 800 MHz band to do. Because
the substantial service requirement can be met in a variety of ways,
the Wireless Telecommunications Bureau will review licensees' showings
on a case-by-case basis.
54. Petitioners request clarification as to whether licensees who
fail to meet coverage requirements will be permitted to retain licenses
for those facilities authorized, constructed, and operating at the time
the geographic area license is cancelled, or only those authorized,
constructed, and operating at the time of grant of the geographic area
license. The Commission agrees with the argument that licenses
reinstated after termination of the geographic area license should be
limited to the sites authorized, constructed, and operating at the time
the geographic area license was granted. In other words, the right to
use channels any place in the geographic area will be forfeited, but
any licenses for which individual sites were constructed and operating
prior to the grant of the geographic area license will be reinstated.
The Commission believes that this approach properly balances its
overarching goal of ensuring, to the extent possible, continuous
service to the public and the Commission's policy of discouraging
speculation and spectrum warehousing. Accordingly, the Commission
amends section 22.503(k) to provide that licensees who fail to meet
their coverage requirements will be permitted to retain licenses only
for those facilities authorized, constructed, and operating at the time
the geographic area license was granted. In such instances, incumbent
licensees will have the burden of showing when their facilities were
authorized, constructed, and operating, and they should retain
necessary records of these sites until they have fulfilled their
construction requirements.
Geographic Area Licensing for Nationwide Channels
55. The Commission affirms its decision in the Second R&O to grant
nationwide geographic area licenses without competitive bidding to
those licensees that met the exclusivity criteria established under its
previous rules. The Second R&O awarded nationwide geographic area
licenses on three 931 MHz channels and to the eighteen licensees who
had constructed sufficient stations to obtain nationwide exclusivity on
929 MHz channels under the Commission's rules as of February 8, 1996.
In addition, the Commission granted nationwide geographic area licenses
to four licensees on the 929 MHz band that had sufficient
authorizations, as of February 8, 1996, to qualify for nationwide
exclusivity on a conditional basis, but had not completed build-out at
that time. The Commission also granted nationwide exclusivity to
Nationwide 929.8875 LLC on 929.8875 MHz based on showings that it had
met the criteria for nationwide exclusivity as of February 8, 1996.
56. Certain petitioners argue that the exemption from competitive
bidding for nationwide licensees is arbitrary and capricious because it
results in similarly situated licensees being treated in a disparate
manner. According to petitioners, incumbents that have met their five-
year coverage requirement are similar to nationwide licensees that met
the Commission's previous build-out requirements to qualify for
exclusivity. The Commission does not believe that its decision to
exempt nationwide licensees from competitive bidding discriminates
against other paging systems. This decision merely recognizes licenses
granted prior to this rulemaking proceeding. The exclusivity rules
provided nationwide licensees with the right to continue to build out
anywhere in the country on their designated channels, whereas non-
nationwide paging licensees have been afforded no right to expand their
service area beyond their interference contours. Thus, there are no
areas available for auction on the channels on which nationwide
geographic area licensees operate, while there are available areas on
the channels on which non-nationwide licensees operate.
57. The Commission affirms its decision to deny Mobile
Telecommunications Technologies, Inc. (MTel) a nationwide geographic
area license on the 931.4375 MHz channel. The Commission disagrees with
MTel's argument that denying MTel a nationwide grant on 931.4375 MHz is
inconsistent with the Commission's grant of nationwide geographic area
licenses to paging carriers in the 929 MHz band. The Commission
recognizes that MTel is extensively licensed on 931.4375 MHz with over
800 transmitters in various locations throughout the United States. In
addition, several other 931 MHz channels are extensively licensed by
one carrier. But these 931 MHz channels, including 931.4375 MHz, have
never been designated as nationwide channels. The Commission did not
establish rules for a licensee to earn nationwide exclusivity on the
thirty-seven channels in the 931 MHz band reserved for local and
regional paging, as it did for the thirty-five exclusive 929 MHz
channels, so MTel could not reasonably have expected to be granted
nationwide status.
Competitive Bidding
58. The MO&O declines to adopt proposals regarding various
operational aspects of the paging auctions, including: the sequence of
the auctions (e.g., auctioning the lower band channels prior to the
upper band channels); modification of the hybrid simultaneous/license-
by-license stopping rule adopted in the Second R&O (e.g., replacing it
with a market-by-market or license-by-license stopping rule); and the
information disclosure to bidders during the Paging auctions (e.g.,
whether bidder identities will be announced). The Commission concludes
that, consistent with the Balanced Budget Act of 1997, the Wireless
Telecommunications Bureau
[[Page 33772]]
will seek further comment on these matters during the pre-auction
process. Doing so will allow the Bureau, pursuant to its delegated
authority, to fully consider these matters in the unique context of the
Paging auctions, and will provide adequate notice and opportunity for
comment on auction procedures prior to the commencement of the
auctions.
59. The MO&O declines to require paging auctions participants to
identify on the FCC Form 175 each market for which they wish to bid and
submit an upfront payment for each identified license. The Commission's
current rules allow bidders to apply to bid for all available markets
and submit an upfront payment that corresponds to the maximum number of
bidding units on which a bidder expects to be active in a single round.
The Commission believes that this approach provides bidders the
flexibility to pursue back-up strategies and adequately protects
against insincere bidding.
60. The MO&O rejects a proposal that the Commission modify its bid
withdrawal rule to allow the withdrawal of high bids placed due to
typographical or clerical error. The Commission concludes that recent
modifications to its bid software adequately protect against the
placement of erroneous bids. The MO&O also rejects petitions for
reconsideration of the Commission's decision to apply its general anti-
collusion rule, see 47 CFR 1.2105(c), in the Paging auctions. These
petitions seek safe harbors for business discussions regarding such
topics as mergers/consolidations and intercarrier agreements. The
Commission concludes that sufficient guidance regarding application of
the anti-collusion rule currently is readily available, and that
applicants, not the Commission, are in the best position to determine
whether their conduct or discussions may give rise to a potential
violation of the rule.
61. In response to petitions for clarification of the Commission's
attribution rules and small business definitions, the MO&O clarifies
that personal net worth is not attributable for purposes of determining
eligibility for small business bidding credits, and that controlling
interests in an applicant are not required to hold a minimum amount of
equity. In addition, the MO&O adopts a definition of ``controlling
interest,'' which focuses on the concepts of de jure and de facto
control, to further clarify the application of the attribution rule.
Moreover, the MO&O declines to conclude that intercarrier agreements
among otherwise independent entities do not constitute affiliation
under the Commission's Rules, and explains that such agreements may
rise to the level of affiliation if they meet the criteria set forth in
the affiliation rule, see 47 CFR 22.223(d).
62. Finally, although the MO&O declines to eliminate the
availability of bidding credits for small businesses, it does eliminate
the availability of installment payments for these entities. This
action is consistent with the Commission's prior decision in Part 1
Third R&O and Second Further Notice (63 FR 2315, January 15, 1998), to
eliminate installment payments for all future auctions, including the
Paging auctions. To balance the impact of this action, however, the
MO&O increases the level of bidding credits available to small and very
small businesses respectively from ten percent to twenty-five percent,
and from fifteen percent to thirty-five percent. These amounts are
based on the schedule of bidding credits adopted in the Part 1 Third
R&O and Second Further Notice. Finally, the MO&O further conforms the
paging competitive bidding rules with the Commission's general
competitive bidding rules by allowing winning bidders to make their
final payments within ten business days of the deadline, provided they
also pay a late fee equal to five percent of the amount due. These
actions will allow participants in the Paging auctions to enjoy the
same advantages as bidders in other recent spectrum auctions.
Third Report and Order
63. In the Second R&O, the Commission adopted rules governing
geographic area licensing of paging systems for exclusive channels in
the 35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460 MHz, 929-930 MHz, and
931-932 MHz bands allocated for paging. The Commission adopted
competitive bidding rules for granting mutually exclusive applications,
adopted partitioning for non-nationwide geographic area licenses,
imposed coverage requirements on non-nationwide geographic area
licenses, and awarded nationwide geographic area licenses on the 929
MHz and 931 MHz bands. The Commission concurrently adopted a Further
Notice seeking comment on whether it should adopt coverage requirements
for nationwide geographic area licenses, various rules related to
partitioning and disaggregation by paging licensees, and whether the
Commission should revise the application procedures for shared
channels.
Coverage Requirements for Nationwide Geographic Area Licenses
64. The Commission elects to defer a decision on whether to impose
coverage requirements on nationwide geographic area licensees. As
discussed in the MO&O, the Commission designated three channels in the
931 MHz band for exclusive nationwide use. In 1993, to encourage the
development of wide-area paging systems, the Commission also
implemented exclusive licensing of qualified local, regional, and
nationwide paging systems on thirty-five of the forty 929 MHz channels
licensed, at that time, under Part 90 of its rules. In the Second R&O,
the Commission noted that its existing Part 22 and Part 90 requirements
for construction of nationwide systems were not consistent, and both
sets of requirements differ from the construction and coverage
requirements applicable to nationwide narrowband PCS licenses. As a
result, the Commission sought comment in the Further Notice on whether
to impose minimum coverage requirements for nationwide paging licenses,
and on what the appropriate coverage area should be. The Commission
also sought comment on whether it should auction the entire nationwide
license, or just a portion of the license, if the licensee fails to
meet the coverage requirements.
65. The Commission rejects the constitutional and statutory
arguments commenters make in opposition to coverage requirements. The
Commission also disagrees with several commenters that argue that
nationwide licensees' compliance with existing rules created a
reasonable expectation that they would enjoy exclusivity on a
nationwide basis, and imposing additional coverage requirements would
improperly subject those licensees to retroactive rulemaking. Certain
commenters also argue against nationwide coverage requirements on the
basis that nationwide licensees are not similarly situated with either
MEA/EA paging licensees or narrowband PCS licensees. Commenters that
oppose coverage requirements also oppose any cancellation of nationwide
licenses based on a failure to meet such requirements.
66. While petitioners have not persuaded the Commission that there
are any legal impediments to the adoption of coverage requirements for
nationwide geographic area paging licensees, the Commission concludes
that it is best to defer any decision on this issue until the
Commission resolves similar issues raised in the Narrowband PCS Further
Notice (62 FR 27507, May 20, 1997). Doing so will allow the
[[Page 33773]]
Commission to more fully consider the question of whether regulatory
parity with respect to coverage requirements is appropriate not only
for nationwide and MEA/EA paging licensees, but also for nationwide
paging and narrowband PCS carriers. In the Narrowband PCS Further
Notice, the Commission sought comment on whether to conform its
narrowband PCS coverage rules to its paging rules by allowing
narrowband PCS licensees to meet their performance requirements through
a demonstration of substantial service as an alternative to meeting the
coverage requirements provided under the existing rules. The Commission
further sought comment on whether to conform MTA-based narrowband PCS
coverage requirements to the same requirements adopted for MTA and EA
paging licenses in this proceeding. As a result, commenters in the
Narrowband PCS proceeding have raised the issue of whether narrowband
PCS, nationwide paging, and MTA/EA licensees provide substantially
similar services. The Commission believes that it needs to consider
this issue more carefully and to make a decision on nationwide paging
coverage requirements in conjunction with a decision on narrowband PCS.
Accordingly, the Commission defers resolution of whether to impose
coverage requirements on nationwide paging geographic area licensees to
the Narrowband PCS Further Notice proceeding. If it ultimately
determines that coverage requirements are appropriate for nationwide
paging geographic area licensees, the Commission will decide, at that
time, what the consequence of failing to meet those requirements should
be.
Partitioning and Disaggregation
67. In the Second R&O, the Commission adopted partitioning rules
that permit all MEA and EA paging licensees to partition to any party
eligible to be a paging licensee. In the Further Notice, the Commission
sought comment as to whether nationwide geographic area licensees
should also be permitted to partition their license areas. In the Third
R&O, the Commission adopts rules that permit partitioning of nationwide
geographic area licenses to any eligible party. The Commission agrees
with the commenters that geographic partitioning would be an effective
means of providing nationwide geographic area licensees with the
flexibility to tailor their service offerings to meet market demands
and facilitating greater participation in the paging industry by small
businesses and rural telephone companies. The Commission found that the
overall goal of partitioning--operational flexibility--outweighs any
possible disadvantage of allowing nationwide licensees to receive a
financial windfall though partitioning. Finally, consistent with the
partitioning rules established for MEA and EA licensees, the Commission
will permit partitioning of nationwide geographic area paging licenses
based on any boundaries defined by the parties.
68. Under the rules adopted in the Third R&O, all MEA and EA
licensees may partition at any time after the grant of their geographic
area licenses, and all nationwide geographic area licensees may
partition upon the effective date of this Order. The Commission
established two options for parties to a partitioning agreement
involving an MEA or EA license to satisfy coverage requirements. Under
the first option, both the partitioner and partitionee are individually
responsible for meeting the coverage requirements for their respective
areas. Therefore, partitionees of MEA or EA licenses must provide
coverage to one-third of the population in their partitioned area
within three years of the initial grant of the license, and to two-
thirds of the population in their partitioned area within five years of
the initial grant of the license; or, licensees may provide, in the
alternative, substantial service within five years of the grant of the
MEA or EA license. The Commission states that failure by either party
to meet its coverage requirements will result in the automatic
cancellation of its license without further Commission action.
69. Under the second option, the original licensee may certify at
the time of the partitioning transaction that it has already met, or
will meet, the coverage requirements for the entire geographic area.
The Commission states that only the partitioner's license will be
cancelled if it fails to meet the coverage requirements for the entire
geographic area. The Commission also states that the partitionee will
not be subject to coverage requirements except for those necessary to
obtain renewal. Finally, the Commission states that partitioners whose
licenses are cancelled will retain those sites authorized, constructed,
and operating at the time the geographic area license was granted.
70. The Commission rejects a proposal to eliminate the
``substantial service'' option because the Commission explains that
this option will encourage licensees to build out their systems while
safeguarding the financial investments made by those licensees who are
financially unable to meet specific population coverage requirements.
Thus, the Commission states that the substantial service alternative
will promote service growth while helping licensees to remain
financially viable and retain their licenses.
71. The Commission decided not to impose coverage requirements at
this time on partitionees of a nationwide geographic area license, and
will defer reaching a decision on this issue until it resolves the
question of coverage requirements for nationwide licensees generally.
The Commission believes that it would be inappropriate to subject
entities that obtain partitioned licenses from nationwide geographic
area licensees to coverage requirements when no such requirements have
been established for partitioners. However, the Commission states that
partitionees of nationwide licenses may be subject to coverage
requirements in the future.
72. The Commission determined that partitionees should be
authorized to hold their licenses for the remainder of the
partitioner's original ten-year term. The Commission rejected a
proposal that a partitionee receive a one-year term when any
partitioning transaction occurs within one year of the renewal date of
the original license because, in this instance, the partitioner would
be conferring greater rights than it was awarded under the terms of its
license grant. The Commission also found that a partitionee should be
granted the same renewal expectancy as the partitioner; a Commercial
Mobile Radio Services (CMRS) licensee will be entitled to a renewal
expectancy if it demonstrates that it has provided substantial service
during the license term and has complied with the Commission's rules
and policies and the Communications Act.
73. Although several commenters oppose establishing disaggregation
rules at this time, the Commission will permit MEA, EA, and nationwide
geographic area licensees to engage in disaggregation. The Commission
also will not impose a minimum limit on spectrum disaggregation in the
paging service. The Commission concludes that the market should
determine if paging spectrum is technically and economically feasible
to disaggregate. In addition, the Commission notes that allowing
disaggregation will encourage the further development of paging
equipment capable of operating on less than 25 kHz. The Commission
further concludes that allowing spectrum disaggregation at this time
could potentially expedite the introduction of service to underserved
areas, provide increased flexibility to licensees, and encourage
participation by small businesses in the provision of services.
[[Page 33774]]
The Commission also finds that commenters have not provided sufficient
evidence that interference to adjacent or co-channel licensees is a
substantial risk that should preclude the Commission from allowing
disaggregation of paging spectrum. The Commission finds that its
existing technical rules provide parties with sufficient protection
from interference. The Commission also believes that all qualified
parties should be eligible to disaggregate any geographic area license.
The Commission states that open eligibility to disaggregate spectrum
promotes prompt service to the public by facilitating the assignment of
spectrum to the entity that values it most.
74. The Commission establishes two options for parties to a
disaggregation agreement involving an MEA or EA license to satisfy
coverage requirements. Under the first option, which is the option
proposed in the Further Notice, the parties may agree that either the
disaggregator or the disaggregatee will be responsible for meeting the
coverage requirements for the geographic service area. Under this
option, the disaggregating party certifying responsibility for the
coverage requirements of an MEA or EA license will be required to
provide coverage to one-third of the population of the licensed
geographic area within three years of license grant, and to two-thirds
of the population within five years of license grant; or, in the
alternative, provide substantial service to the geographic area within
five years of license grant. Under the second option, the disaggregator
and disaggregatee may certify that they will share the responsibility
for meeting the coverage requirements for the entire geographic area.
Under this option, both parties jointly will be required to provide
coverage to one-third of the population of the licensed geographic area
within three years of license grant, and to two-thirds of the
population within five years of license grant; or, in the alternative,
provide substantial service to the geographic area within five years of
license grant.
75. The Commission recognizes that if the parties to a
disaggregation agreement select the first option, situations may arise
where a party minimally builds its system but will retain its license
because the other party has met the coverage requirements for the
geographic area. Nonetheless, the Commission believes that it is
appropriate for one party to assume full responsibility for
construction within the shared service area, because service would be
offered to the required percentage of the population on a common
frequency, even if not on the entire spectrum.
76. Under the first option, if the certifying party fails to meet
the coverage requirements for the entire geographic area, that party's
license will be subject to cancellation, but the non-certifying party's
license will not be affected. However, if the parties to a
disaggregation agreement select the second option and jointly fail to
satisfy the coverage requirements for the entire geographic area, both
parties' licenses will be subject to cancellation. The Commission notes
that MEA or EA licensees whose licenses are cancelled will retain those
sites authorized, constructed, and operating at the time the geographic
area license was granted.
77. As the Commission did with respect to the issue of coverage
requirements for partitionees of nationwide geographic area licenses,
it will defer any decision on such requirements for disaggregatees of
nationwide geographic area licenses until the Commission decides the
question of whether to impose coverage requirements on nationwide
geographic area licensees generally. Thus, the Commission notes that
disaggregatees of nationwide licenses may be subject to coverage
requirements in the future.
78. Disaggregatees will be authorized to hold licenses for the
remainder of the disaggregator's original ten-year term. As the
Commission concluded with respect to partitioners, the disaggregator
should not be entitled to confer greater rights than it was awarded
under the initial license grant. The Commission also concludes that a
disaggregatee should be afforded the same renewal expectancy as the
disaggregator. The Commission also concludes that carriers may engage
in combinations of partitioning and disaggregation. As in other
wireless services, the Commission further concludes that in the event
there is a conflict in the application of the partitioning and
disaggregation rules, the partitioning rules should prevail.
Unjust Enrichment Provisions Regarding Partitioning and Disaggregation
79. The Commission concludes that unjust enrichment provisions
adopted in the Part 1 Third R&O and Second Further Notice will apply to
any MEA or EA paging licensee that receives a bidding credit and later
elects to partition or disaggregate its license. Specifically, the
rules adopted in the Part 1 Third R&O and Second Further Notice
indicate that if a licensee seeks to partition any portion of its
geographic area, the amount of the unjust enrichment payment will be
calculated based on the ratio of the population in the partitioned area
to the overall population of the license area. In the event of
disaggregation, the amount of the unjust enrichment payment will be
based upon the ratio of the amount of spectrum disaggregated to the
amount of spectrum held by the disaggregating licensee. When combined
partitioning and disaggregation is proposed, the Commission will,
consistent with its rules for other services, use a combination of both
population of the partitioned area and amount of spectrum disaggregated
to make these pro rata calculations. The Commission does not address
how partitioning and disaggregation will affect installment payments
because, in the MO&O, the Commission eliminated the use of installment
payments for auctioned spectrum in the paging service.
Application Fraud
80. To deter fraud by application mills on the shared channels, the
Commission will add language to the long-form application regarding
construction and coverage requirements, and will disseminate
information regarding its licensing rules and the potential for fraud
through public notices and the Commission's website. The Commission is
currently in the process of modifying FCC Form 601 to include language
near the signature block that warns applicants that the failure of the
licensee to construct may result in cancellation of the license. The
Commission believes this language will be helpful to applicants in all
services and may be of some use in deterring fraud. The Commission also
applauds the measures taken by the Personal Communications Industry
Association (PCIA) (frequency coordinator) to make applicants aware of
the potential for fraud by applications mills.
81. Finally, once the Commission has completed the modification of
FCC Form 601 to include warning language as described above, the
Wireless Telecommunications Bureau will release a public notice that
removes the interim licensing rules for both the lower band shared PCP
channels and the five shared 929 MHz PCP channels. Presently, the
interim paging rules for the shared PCP paging channels permit only
incumbents to file for new sites at any location. The Commission allows
non-incumbents to file applications, but only for private, internal-use
systems. Once the interim licensing rules are removed, non-incumbents
will be permitted to file applications on the shared PCP paging
channels for new sites at any location. The Commission further notes
that while frequency
[[Page 33775]]
coordination is no longer required on the exclusive paging channels,
all applications for new sites filed on the shared PCP paging channels
will continue to require frequency coordination prior to the filing of
these applications with the Commission. Accordingly, the Commission
amends section 90.175(f) to clarify that frequency coordination is only
needed for shared frequencies in the 929-930 MHz band.
Supplemental Final Regulatory Flexibility Analysis
Memorandum Opinion and Order on Reconsideration
82. As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in Appendix A
of the Notice in this proceeding, and a Final Regulatory Flexibility
Analysis (FRFA) was incorporated in Appendix C of the subsequent Second
R&O. As described below, two petitions for reconsideration of the
Second R&O raise an issue concerning the previous FRFA. The MO&O
addresses those reconsideration petitions, among others. This
associated Supplemental Final Regulatory Flexibility Analysis
(Supplemental FRFA) also addresses those petitions and conforms to the
RFA.
I. Need for and Purpose of this Action
83. In the Second R&O, the Commission adopted rules for geographic
area licensing of Common Carrier Paging and exclusive 929 MHz Private
Carrier Paging and procedures for auctioning mutually exclusive
applications for these licenses. The actions taken in this MO&O are in
response to petitions for reconsideration or clarification of the
Second R&O. Throughout this proceeding, the Commission has sought to
promote Congress's goal of regulatory parity for all CMRS, and to
encourage the participation of a wide variety of applicants, including
small businesses, in the paging industry. In addition, the Commission
has sought to establish rules for the paging services that will
streamline the licensing process and provide a flexible operating
environment for licensees, foster competition, and promote the delivery
of service to all areas of the country, including rural areas.
II. Summary of Significant Issues Raised in Response to the Final
Regulatory Flexibility Analysis
84. Priority Communications, Inc.'s (Priority) petition for
reconsideration raises various issues, one of which is in direct
response to the FRFA contained in the Second R&O. Priority states that
the FRFA did not address alternatives to competitive bidding, e.g.,
granting geographic area licenses, without competitive bidding, to
incumbents of highly encumbered areas. The Commission disagrees with
the contention that the Commission failed to consider alternatives to
competitive bidding. In the Second R&O, the Commission considered and
rejected proposals to retain site-by-site licensing for the paging
industry. In rejecting the proposals, the Commission found that
geographic area licensing provides flexibility for licensees and ease
of administration for the Commission, facilitates further build-out of
wide-area systems, and enables paging operators to meet the needs of
their customers more easily. Moreover, the Commission concluded that
geographic area licensing will further the goal of providing carriers
that offer substantially similar services more flexibility to compete,
and will enhance regulatory symmetry between paging and other service
in the CMRS marketplace.
85. The Commission further concluded that it would grant mutually
exclusive applications for geographic area licenses through competitive
bidding even in areas extensively built out by an incumbent licensee.
The Commission specifically considered and rejected proposals to award
geographic area licenses, without competitive bidding, to any incumbent
providing coverage to 70 percent or more of the population or to two-
thirds of the population in the license area. Similarly, the Commission
rejected a proposal not to hold auctions where an incumbent licensee is
serving at least 50 percent of the geographic area or 50 percent of the
population in that market. The Commission also considered and rejected
proposals to award a dispositive preference in the auction to a
licensee that provides service to one-third or greater of the
population, or one-half or greater of the geographic area, or to
restrict competitive bidding to incumbent licensees. In rejecting these
proposals, the Commission concluded that market forces, not regulation,
should determine participation in competitive bidding for geographic
area licenses.
86. In its petition for reconsideration, the National Telephone
Cooperative Association (NTCA) contends that the FRFA failed to address
alternatives that parties suggested in response to the Notice to
minimize the impact of the rule changes adopted in the Second R&O on
small BETRS operators. NTCA specifically contends that the Commission
did not address the investment BETRS operators would be unable to
recover once they were required to terminate operations upon
notification by a geographic area licensee of interference. NTCA
further contends that the Commission did not address the adverse impact
on small BETRS operators resulting from auctions that ``pit them
against paging operations that have no interest in the site licenses
needed for BETRS operations.'' Initially, the Commission notes that
NTCA did not raise these issues in response to the Notice. NTCA has
raised these issues only in response to the Second R&O. The Commission
also disagrees with the contention that the Commission failed to
consider alternatives that would minimize the impact on small BETRS
operators. The Commission specifically found it unnecessary to adopt
the plan that Puerto Rico Telephone proposed, under which (1) BETRS
operators would be given preferential treatment over paging operators
for mutually exclusive applications (on a site-by-site basis), and (2)
the Commission would designate a frequency block for reallocated
frequencies solely for BETRS use. Based on the potentially competitive
environment in local exchange services, the Commission saw no basis for
distinguishing BETRS from other commercial radio services that are
auctionable under Section 309(j) of the Communications Act. Rather, the
Commission determined that BETRS licensees should be required to
participate in competitive bidding for paging licenses. In considering
proposals to continue licensing BETRS facilities on a site-specific
basis, the Commission decided that BETRS licensees could obtain site
licenses on a secondary basis and enter into partitioning agreements
with paging geographic area licensees. With respect to the issue of
stranded costs, the Second R&O does not limit BETRS operators' options
to that of obtaining licenses on a secondary basis. As already
explained, they may also obtain co-primary licenses through
partitioning. Moreover, the Commission has adopted specific procedures
in the MO&O to limit the extent to which BETRS providers will be
required to discontinue operations at secondary sites.
III. Description and Estimate of the Number of Small Entities to
Which the Rules Will Apply
87. The rules adopted in the MO&O will affect all small businesses
that hold or seek to acquire commercial paging
[[Page 33776]]
licenses. As noted, a FRFA was incorporated into the Second R&O. In
that analysis, the Commission described the small businesses that might
be significantly affected at that time by the rules adopted in the
Second R&O. Those entities include existing commercial paging operators
and new entrants into the paging market. To ensure the more meaningful
participation of small business entities in the auctions, the
Commission adopted a two-tiered definition of small businesses in the
Second R&O: (1) an entity that, together with its affiliates and
controlling interests, has average gross revenues for the three
preceding years of not more than $3 million; or (2) an entity that,
together with affiliates and controlling interests, has average gross
revenues for the three preceding years of not more than $15 million.
Because the Small Business Administration (SBA) had not yet approved
this definition, the Commission relied in the FRFA on the SBA's
definition applicable at that time to radiotelephone companies, i.e.,
an entity employing less than 1,500 persons. Given the fact that nearly
all radiotelephone companies had fewer than 1,000 employees, and that
no reasonable estimate of the number of prospective paging licensees
could be made, the Commission assumed, for purposes of the evaluations
and conclusions in the FRFA, that all the auctioned 16,630 geographic
area licenses would be awarded to small entities. In December 1998, the
SBA approved the two-tiered size standards for paging services set
forth in the Second R&O.
88. In the FRFA, the Commission anticipated that approximately
16,630 non-nationwide geographic area licenses will be auctioned. No
party submitting or commenting on the petitions for reconsideration
giving rise to this MO&O commented on the potential number of small
businesses that might participate in the commercial paging auction and
no reasonable estimate can be made. While the Commission is unable to
predict accurately how many paging licensees meeting one of the above
definitions will choose to participate in or be successful at auction,
the Third CMRS Competition Report estimated that, as of January 1998,
there were more than 600 paging companies in the United States. The
Third CMRS Competition Report also indicates that at least ten of the
top twelve publicly held paging companies had average gross revenues in
excess of $15 million for the three years preceding 1998. Data obtained
from publicly available company documents and SEC filings indicate that
this is also true for the three years preceding 1999. While the
Commission expects these ten companies to participate in the paging
auction, the Commission also expects, for the purposes of the
evaluations and conclusions in this Supplemental FRFA, that a number of
geographic area paging licenses will be awarded to small businesses.
IV. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
89. With one exception, this MO&O does not impose additional
recordkeeping or other compliance requirements beyond the requirements
contained in the Second R&O. If an MEA or EA licensee fails to meet its
coverage requirements, that licensee will have the burden of showing
which of its facilities were authorized, constructed, and operating at
the time the geographic area license was granted. MEA and EA licensees
will need to retain necessary records of any such facilities until they
meet the geographic area license coverage requirements.
V. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
90. The previous FRFA stated that the rules adopted for geographic
area licensing will affect the Common Carrier Paging and exclusive 929
MHz Private Carrier Paging services. This Supplemental FRFA concludes
that a number of geographic area commercial paging licenses may be
awarded to small businesses. As described below, the Commission's
actions taken to implement the transition to geographic area licensing
and competitive bidding represent a balancing of various factors.
91. Certain petitioners suggested replacing Rand McNally MTAs with
Major Economic Areas (MEAs) for the 929 MHz and 931 MHz bands.
Considering these requests, the Commission has decided to adopt MEAs
instead of MTAs. Because MEAs are composed of EAs, licensees with
paging systems on both the lower channels and the 929 and 931 MHz
bands, including small businesses, will be able to operate their
systems more efficiently. The MEA designation will also enhance
competition because paging systems on the lower channels, including
small business paging systems, will be able to combine their EAs to
form MEAs. In addition, the Commission considered and rejected a
recommendation to use Basic Trading Areas (BTAs) for geographic area
licensing on the lower paging bands. In rejecting the BTA designation,
the Commission concluded that EAs, which the majority of commenters
supported, best reflect the geographic area that the paging licensees
on the lower channels seek to serve. The Commission also found that the
use of EAs will not prevent paging operators of small systems from
participating in the auction. The Commission noted that bidding credits
will allow small businesses to compete against larger bidders. In
addition, the Commission's partitioning rules will allow entities,
including small businesses, to acquire licenses for areas smaller than
EAs.
92. A number of petitioners have requested that the Commission
reconsider its decision to grant mutually exclusive applications for
geographic area licenses through competitive bidding even in areas
extensively built out by an incumbent licensee. Again balancing various
interests, the Commission has affirmed the use of competitive bidding
to grant mutually exclusive paging applications. The Commission has
rejected the petitioners' request because open eligibility promotes
prompt service to the public by allocating spectrum to the entity that
values it most. The Commission believes that the market should decide
whether an economically viable paging system can be established in the
unserved area of a geographic market. The Commission's decision on this
issue will provide adjacent geographic area licensees and new entrants,
including small businesses, with the opportunity to establish a viable
system that serves the public as well as an incumbent. Moreover, the
Commission sees no reason to give licensees that serve a substantial
portion of a geographic area an advantage over other entities,
including small businesses, that may also value the spectrum in that
particular market.
93. Several petitioners request that the Commission clarify section
22.723 of its rules, which requires Rural Radiotelephone Service (RRS)
licensees, including BETRS operators, to discontinue operations once
the paging geographic area licensee notifies the RRS licensee that its
co-channel secondary facilities may cause interference to the
geographic area licensee's existing or planned facilities. The
petitioners argue that the Commission's rules will allow geographic
area licensees to terminate BETRS upon any allegation of harmful
interference. In response to this concern, the Commission is adopting
new procedures in the MO&O that geographic area licensees must follow
in notifying a BETRS operator that its facility causes or will cause
interference
[[Page 33777]]
with the geographic area licensee's service contour in violation of the
Commission's interference rules. The new procedures limit the
termination of operating BETRS co-channel secondary facilities until
harmful interference would occur.
94. In the Second R&O, the Commission defined a system-wide license
by the aggregate of the interference contours around each of the
incumbent's contiguous sites operating on the same channel. The
Commission also concluded that incumbent licensees may add or modify
sites within their existing interference contours without filing site-
specific applications, but may not expand their existing interference
contours without the consent of the geographic area licensee. Several
petitioners expressed confusion over the Commission's definition of
``contiguous sites'' for the purpose of determining an incumbent's
``aggregate interference contour.'' In addition, one petitioner asked
that the Commission define ``composite interference contours'' to
include all authorized transmitters, including valid construction
permits, regardless of the grant date. Another petitioner requested
that the Commission include remote transmitters within system-wide
licenses, or in the alternative maintain separate licenses for any
stand-alone or remote transmitter. Recognizing these concerns and
balancing various interests as explained more fully in the MO&O, the
Commission has maximized the definition of composite interference
contour to reduce unnecessary regulatory burdens on licensees, reduce
administrative costs on the industry, and thereby benefit consumers. In
this regard, the Commission has clarified that contiguous sites, for
the purpose of defining an incumbent's composite interference contour,
are defined by overlapping interference contours, not service contours.
The Commission further states that all authorized site-specific paging
licenses and construction permits are included in a composite
interference contour. Finally, the Commission has amended section
22.507 to allow system-wide licensees to maintain separate licenses for
any stand-alone or remote transmitters, or to include remote and stand-
alone sites within the system-wide license.
95. On a related matter, petitioners asked the Commission to allow
reversion to the geographic area licensee of spectrum recovered from an
incumbent in all instances except where an incumbent licensee
discontinues operations in a location wholly encompassed by the
incumbent's composite interference contour. In balancing the various
relevant considerations, the Commission concluded that no demonstration
had been made showing that the geographic area licensee would be unable
to serve areas wholly surrounded by an incumbent. Moreover, the
Commission does not believe the public interest would be served by
withholding such areas from the geographic area licensee in hope that
the incumbent will one day resume service to those areas. The
Commission further noted that if incumbents, including small
businesses, wish to serve reverted areas, they may seek to enter into
partitioning agreements with the geographic area licensees. Similarly,
a number of petitioners contended that system-wide licenses should
include areas where an incumbent licensees' interference contours do
not overlap, but where no other licensee could place a transmitter
because of interference rules. The Commission considered and rejected
this proposal, finding that inclusion of areas outside of an
incumbent's interference contours would be contrary to the objective of
prohibiting encroachment on the geographic area licensee's operations.
Incumbents seeking to expand their contours, including small
businesses, may participate in the auction or seek partitioning
agreements with geographic area licensees.
96. In the Second R&O, the Commission elected not to impose a limit
or ``cap'' on the number of licensees that may operate on shared paging
channels. Two petitioners asked the Commission to reconsider that
determination. Again, balancing the options, the Commission reaffirmed
its prior decision. A ``cap'' would not promote efficient use of
spectrum because the capacity limits on paging channels are based
primarily on use and not the number of licensees. The Commission's goal
is to increase the use of these shared channels, not to unduly restrict
access to them. This decision will provide new entrants, including
small businesses, with another opportunity to acquire paging spectrum.
97. In the Second R&O, the Commission also eliminated the Part 90
height and power limitations on 929 MHz stations and increased the
maximum permitted effective radiated power (ERP) to 3,500 watts. Some
petitioners have asked for clarification as to whether incumbent 929
MHz licensees must file a modification application to increase the
current ERP for their base stations up to the maximum permissible. In
response to this request, the Commission has clarified that incumbent
929 MHz licensees need not file a modification application to increase
the ERP for base stations at any location, including exterior base
stations, as long as they do not expand their existing composite
interference contour. This clarification conforms the Commission's
technical requirements for height and power with the general rule that
incumbents need not file applications for internal system changes.
Adopting this rule will minimize burdens on all entities, including
small businesses, that increase the ERP of their base stations.
98. One petitioner advocated that the Commission make its coverage
requirements more stringent by requiring geographic area licensees to
provide coverage to one-third of the market area within one year, and
two-thirds within three years. The Commission considered and rejected
this proposal because it believes that the coverage requirements
adequately promote prompt service to the public without being unduly
burdensome on licensees, including small businesses, that need a
reasonable amount of time to complete construction. Moreover, the
Commission believes that overly stringent coverage requirements
unfairly favor incumbents by erecting formidable barriers to new
entrants, including small businesses. Several petitioners also
requested that the Commission eliminate the ``substantial service''
option for meeting MEA or EA coverage requirements. The Commission
rejected this request because the Commission believes that the
``substantial service'' option will facilitate build-out in rural
areas, encourage licensees to provide new services, and enable new
entrants to satisfy the Commission's coverage requirements in
geographic areas where incumbents are already substantially built out.
The Commission believes that rural service providers as well as new
entrants are likely to include small businesses, and thus retaining the
``substantial service'' option should benefit small businesses. While
the Commission will presume that the ``substantial service'' option is
satisfied if an MEA or EA licensee provides coverage to two-thirds of
the population in unserved areas within five years of license grant,
the Commission declines to adopt specific coverage requirements as the
sole means of defining ``substantial service.'' Giving licensees
flexibility to satisfy the ``substantial service'' option in different
ways should benefit small businesses.
99. In the Part 1 Third R&O and Further Notice, the Commission
suspended the availability of installment payment financing for small
businesses participating in future
[[Page 33778]]
auctions. Consistent with this decision, the MO&O rescinds installment
payment financing for the paging auctions. To balance the impact of
this decision on small businesses, however, the Commission is
increasing the bidding credits available to qualifying entities. The
revised rule conforms to a schedule of bidding credits adopted in the
Part 1 Third R&O and Second Further Notice. Under this rule, an
applicant will qualify for a twenty-five percent (25%) bidding credit
if the average gross revenues for the preceding three years of the
applicant, its affiliates and controlling interests do not exceed $15
million. Similarly, an applicant will qualify for a thirty-five percent
(35%) bidding credit if the average gross revenues for the preceding
three years of the applicant, its affiliates and controlling interests
do not exceed $3 million. As the Commission stated in the Part 1 Third
R&O and Second Further Notice, the Commission believes that these
increased bidding credits will provide small businesses with adequate
opportunities to participate in the paging auctions. Moreover, the
Commission is further conforming the paging competitive bidding rules
to the Part 1 rules by allowing winning bidders to make their final
payments within ten (10) business days after the payment deadline,
provided that they also pay a late fee of five (5) percent of the
amount due. As the Commission stated in the Part 1 Third R&O and Second
Further Notice, it believes that this additional ten-day period
provides winning bidders with adequate time to adjust for any last-
minute problems in arranging financing and making final payment.
VI. Report to Congress
100. The Commission will send a copy of the MO&O, including this
Supplemental FRFA, in a report to Congress pursuant to the Small
Business Regulatory Enforcement Fairness Act of 1996. In addition, the
Commission will send a copy of the MO&O, including this Supplemental
FRFA, to the Chief Counsel for Advocacy of the Small Business
Association. A copy of the MO&O and Supplemental FRFA (or summaries
thereof) will also be published in the Federal Register.
Final Regulatory Flexibility Analysis
Third Report and Order
101. As required by the Regulatory Flexibility Act (RFA), an
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in
Appendix D of the Second R&O and Further Notice in this proceeding. The
Commission sought written public comment on the proposals in that
Further Notice, including comment on the IRFA. As described below, no
commenter raised an issue concerning the IRFA. The Commission's Final
Regulatory Flexibility Analysis in this Third R&O conforms to the RFA.
I. Need for and Purpose of this Action
102. In the Second R&O, the Commission adopted coverage
requirements for and decided to allow partitioning by non-nationwide
geographic area licensees, including small businesses. In the Further
Notice, the Commission sought comment on whether to adopt coverage
requirements for nationwide geographic area licenses, whether to allow
partitioning by nationwide geographic area licensees, whether to permit
disaggregation of paging licenses, and whether to revise the
application procedures for shared channels. In the Third R&O, the
Commission concludes that it is best to defer any decision on coverage
requirements for nationwide geographic area licenses until similar
issues raised in the Narrowband PCS Further Notice of Proposed
Rulemaking are resolved. The Commission further modifies the paging
rules to permit partitioning by all nationwide geographic area
licensees and to allow disaggregation by all MEA, EA, and nationwide
geographic area licensees. The Third R&O also adopts rules governing
the coverage requirements for parties to partitioning or disaggregation
agreements involving MEA or EA licenses, and the license term of
partitioned or disaggregated MEA, EA, and nationwide geographic area
licenses. Further, the Third R&O permits MEA, EA, and nationwide
geographic area licensees to combine partitioning and disaggregation.
These partitioning and disaggregation rules will allow entities in
addition to the initial geographic area licensees, including small
businesses, to participate in providing paging services. Indeed,
partitioning and disaggregation should be well suited to small
businesses that do not wish to acquire an entire geographic area
license. Finally, the Third R&O establishes additional mechanisms to
inform consumers of the rules governing paging licenses and the danger
of fraudulent schemes perpetrated by application mills. These
mechanisms should help to reduce application fraud and protect
consumers.
II. Summary of Issues Raised in Response to the Initial Regulatory
Flexibility Analysis
103. None of the commenters submitted comments specifically in
response to the IRFA. The Commission has, however, taken small business
concerns into account in the Third R&O, as discussed in Sections V and
VI of the FRFA.
III. Description and Estimate of the Number of Small Entities to
Which the Rules Will Apply
104. The rules adopted in the Third R&O will affect small
businesses that hold or seek to acquire commercial paging licenses.
These entities include small business nationwide geographic area
licensees that decide to partition or disaggregate, small businesses
that obtain MEA or EA licenses through auction and subsequently decide
to partition or disaggregate, and small businesses that may acquire
partitioned and/or disaggregated MEA, EA, or nationwide geographic area
licenses. To ensure the more meaningful participation of small business
entities in the auctions, the Commission adopted a two-tiered
definition of small businesses in the Second R&O: (1) An entity that,
together with affiliates and controlling interests, has average gross
revenues for the three preceding years of not more than $3 million; or
(2) an entity that, together with affiliates and controlling interests,
has average gross revenues for the three preceding years of not more
than $15 million. In December 1998, the Small Business Association
approved the two-tiered size standards for paging services set forth in
the Second R&O.
MEA and EA Licenses
105. In the Final Regulatory Flexibility Analysis incorporated in
Appendix C of the Second R&O, the Commission anticipated that
approximately 16,630 non-nationwide geographic area licenses will be
auctioned. No parties, however, commented in response to the Further
Notice on the number of small businesses that might elect to use the
proposed partitioning and disaggregation rules and no reasonable
estimate can be made. While the Commission is unable to predict
accurately how many paging licensees meeting one of the above
definitions will participate in or be successful at auction, the Third
CMRS Competition Report estimated that, as of January 1998, there were
more than 600 paging companies in the United States. The Third CMRS
Competition Report also
[[Page 33779]]
indicates that at least ten of the top twelve publicly held paging
companies had average gross revenues in excess of $15 million for the
three years preceding 1998. The Commission expects that these ten
companies will participate in the paging auction and may employ the
partitioning or disaggregation rules. The Commission also expects, for
purposes of the evaluations and conclusions in this Final Regulatory
Flexibility Analysis, that a number of paging licenses will be awarded
to small businesses, and at least some of those small business
licensees will likely also take advantage of the partitioning and
disaggregation rules. The Commission is unable to predict accurately
the number of small businesses that may choose to acquire partitioned
or disaggregated MEA or EA licenses. The Commission expects, however,
for purposes of the evaluations and conclusions in this Final
Regulatory Flexibility Analysis, that entities meeting one of the above
definitions will use partitioning and disaggregation as a means to
obtain a paging license from an MEA or EA licensee at a cost lower than
the cost of the license for the entire MEA or EA.
Nationwide Geographic Area Licenses
106. The partitioning and disaggregation rules pertaining to
nationwide geographic area licenses adopted in the Third R&O will
affect the 26 licensees holding nationwide geographic area licenses to
the extent they choose to partition or disaggregate, as well as any
entity that enters into a partitioning or disaggregation agreement with
a nationwide geographic area licensee. No parties, however, commented
on the number of small business nationwide geographic area licensees
that might elect to partition or disaggregate their licenses and no
reasonable estimate can be made. While the Commission is unable to
state accurately how many nationwide geographic area licensees meet one
of the above small business definitions, the Third CMRS Competition
Report indicates that at least eight of the top twelve publicly held
paging companies hold nationwide geographic area licenses and had
average gross revenues in excess of $15 million for the three years
preceding 1998. The Commission expects at least some of these eight
companies to employ the partitioning or disaggregation rules, and also
expects, for the purposes of evaluations and conclusions in this Final
Regulatory Flexibility Analysis, that nationwide geographic area
licensees meeting one of the above definitions may use the partitioning
or disaggregation rules. No parties commented on the number of small
businesses that may choose to acquire partitioned or disaggregated
licenses from nationwide geographic area licensees and, again, no
reasonable estimate can be made. While the Commission is unable to
predict accurately the number of small businesses that may choose to
acquire partitioned or disaggregated licenses from nationwide
geographic area licensees, the Commission expects, for purposes of the
evaluations and conclusions in the Final Regulatory Flexibility
Analysis, that entities meeting one of the above small business
definitions will use partitioning and disaggregation as a means to
obtain a paging license from a nationwide geographic area licensee.
Fraud on Shared Paging Channels
107. The additional mechanisms established to inform consumers of
the paging rules and the potential for paging application fraud on the
shared channels will not affect small businesses seeking to acquire a
license on a shared paging channel, except that small businesses
interested in investing in shared channel licenses will be more
informed of the potential for fraud.
IV. Summary of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
108. The rules adopted in the Third R&O impose reporting and
recordkeeping requirements on small businesses, as well as others,
seeking to obtain or transfer licenses through partitioning and
disaggregation. The information requirements would be used to determine
whether the proposed partitionee or disaggregatee is an entity
qualified to obtain a partitioned license or disaggregated spectrum.
This information will be a one-time filing by any applicant requesting
such a license. The information can be submitted on FCC Form 490 or
Form 603 for Part 22 paging services until July 1, 1999. Part 22
applicants must file electronically in the Universal Licensing System
(ULS) on Form 603 on or after July 1, 1999. The Commission estimates
that the average burden on the applicant is three hours for the
information necessary to complete these forms. The Commission estimates
that seventy-five percent of the respondents, which may include small
businesses, will contract out the burden of responding. The Commission
estimates that it will take approximately 30 minutes to coordinate
information with those contractors. The remaining twenty-five percent
of respondents, which may include small businesses, are estimated to
employ in-house staff to provide the information. Applicants filing
electronically, including small businesses, will not incur any per
minute on-line charge. The Commission estimates that applicants
contracting out the information would use an attorney or engineer
(average of $200 per hour) to prepare the information.
V. Steps Taken to Minimize Burdens on Small Entities
109. The rules adopted in the Third R&O are designed to implement
Congress' goal of giving small businesses, as well as other entities,
the opportunity to participate in the provision of spectrum-based
services. The rules are also consistent with the Communications Act's
mandate to identify and eliminate market entry barriers for
entrepreneurs and small businesses in the provision and ownership of
telecommunications services.
Partitioning and Disaggregation
110. Partitioning of nationwide geographic area licenses and
disaggregation of MEA, EA, and nationwide geographic area licenses will
facilitate market entry by parties that may lack the financial
resources to participate in auctions, including small businesses.
Partitioning and disaggregation are expected to enable small businesses
to obtain licenses for areas smaller than MEA, EA, and nationwide
areas, or smaller amounts of spectrum, at costs they will be able to
afford. Allowing for the partitioning and disaggregation of MEA and EA
licenses prior to fulfillment of construction requirements by the
initial licensees will facilitate the immediate entry of new
competitors, including small businesses, into the paging market.
Finally, the Commission's decision to allow parties to partitioning or
disaggregation agreements of MEA and EA licenses to choose between two
options to meet the coverage requirements will provide small businesses
with more flexibility in managing their resources.
Fraud on Shared Paging Channels
111. As stated above, the additional mechanisms established to
deter paging application fraud on the shared channels are not expected
to have an impact on any small business or other entity applying for a
paging license on a shared channel. The changes are intended to protect
consumers from application fraud. Small businesses interested in
investing in shared channel licenses, however, will be more informed of
the potential for fraud.
[[Page 33780]]
VI. Significant Alternatives Considered
112. The Commission considered and rejected the following
alternative proposals concerning partitioning, disaggregation, coverage
requirements for parties to partitioning and disaggregation agreements,
and license terms.
Partitioning
113. The Commission declined to adopt Paging Network, Inc.'s
(PageNet) proposal that partitioning should be allowed only after the
initial geographic area licensee has met the build-out requirements for
the entire geographic area, and that partitioning before a geographic
area licensee meets its construction requirements should be allowed
only on a waiver basis where good cause is shown. PageNet's concern was
that the ability to partition may encourage bidders in the auction to
engage in unlawful contact with other bidders, particularly if the
market is highly contested, and that geographic area licensees may seek
to avoid the cancellation of their licenses by partitioning to a
``straw man'' when they fail to meet the Commission's coverage
requirements. The Commission found, however, that there was no evidence
that ``sham'' arrangements between geographic area licensees and other
parties to avoid construction requirements are likely to occur in the
paging service or have already taken place in other services. The
Commission also determined that any unlawful activity between bidders
concerning partitioning falls within its anti-collusion rules. Finally,
allowing parties to partition spectrum immediately after license grant
will facilitate the entry of new competitors to the paging market, many
of whom will be small businesses seeking to acquire a smaller service
area or smaller amount of paging spectrum at a reduced cost.
Disaggregation
114. A number of petitioners opposed the Commission's proposal to
allow MEA, EA, and nationwide geographic area licensees to
disaggregate, contending that disaggregation of paging spectrum is
neither technically nor practically feasible. Small Business in
Telecommunications (SBT) proposes that disaggregation should be limited
only to small businesses during the original licensee's construction
period. In considering and rejecting the petitioners' arguments, the
Commission concluded that the market should determine whether it is
technically or economically feasible to disaggregate spectrum. The
Commission further concluded that all qualified parties should be
eligible to disaggregate any geographic area license because open
eligibility to disaggregate spectrum promotes prompt service to the
public by facilitating the assignment of spectrum to the entity that
values it most. The Commission found that allowing spectrum
disaggregation at this time could potentially expedite the introduction
of service to underserved areas, provide increased flexibility to
licensees, and encourage participation by small businesses in the
provision of services.
Coverage Requirements
115. The Commission declined to adopt Metrocall, Inc.'s proposal
that geographic area licensees' coverage benchmarks should be based on
the entire geographic area, including the partitioned area, to prevent
the geographic area licensee from using partitioning to circumvent
coverage requirements. As stated previously, the Commission found that
there was no evidence that ``sham'' arrangements between geographic
area licensees and other parties to avoid construction requirements are
likely to occur in the paging service or have already taken place in
other services. The Commission also declined to adopt PCIA's proposal
that the partitioner should be responsible for build-out in the
partitioned area if the partitionee fails to build out, and that the
entire license should be cancelled if build-out in the partitioned area
is not completed by either the partitionee or the partitioner. The
decision not to place the ultimate responsibility for the partitionee's
coverage requirements on the partitioner, as well as the decision to
provide parties to partitioning agreements with two options for meeting
the coverage requirements, is expected to encourage more partitioning
agreements, including agreements involving small businesses. The
resulting benefits will be the same for disaggregation arrangements.
116. Finally, the Commission declined to adopt commenters' proposal
to eliminate the ``substantial service'' option as it applies to
coverage requirements in the partitioning and disaggregation context.
The Commission found that maintaining the ``substantial service''
option will encourage licensees to build out their systems while
safeguarding the financial investments made by those licensees who are
financially unable to meet specific population coverage requirements.
Thus, the Commission found that the substantial service alternative
will promote service growth while helping licensees to remain
financially viable and retain their licenses. Retaining the
``substantial service'' option will also allow small businesses
flexibility in meeting their coverage requirements.
License Term
117. The Commission declines to adopt SBT's proposal that when an
area is partitioned within one year of the renewal date of the original
ten-year license term, the partitionee should receive the license for a
one-year term. The Commission found that adopting this proposal would
result in the partitioner conferring greater rights than it was awarded
under the original terms of its license grant.
VII. Report to Congress
118. The Commission shall send a copy of the Third R&O, including
this Final Regulatory Flexibility Analysis, in a report to Congress
pursuant to the Small Business Regulatory Enforcement Fairness Act of
1996. In addition, the Commission will send a copy of the Third R&O,
including this Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Association. A copy of the
Third R&O and Final Regulatory Flexibility Analysis (or summaries
thereof) will also be published in the Federal Register.
Ordering Clauses
119. Authority for issuance of this Memorandum Opinion and Order on
Reconsideration and Third Report and Order is contained in Sections
4(i), 303(r), 309(j), 332, and 405 of the Communications Act of 1934,
as amended, 47 U.S.C. 154(i), 303(r), 309(j), 332, and 405.
120. Accordingly, it is ordered that the petitions for
reconsideration or clarification listed in Appendix A are granted to
the extent provided herein and otherwise are denied; and that the
Petition for Partial Reconsideration of PSWF Corporation filed April
11, 1997, is to the extent provided herein dismissed as moot. This
action is taken pursuant to Sections 4(i), 303(r), 309(j), 332, and 405
of the Communications Act of 1934, as amended, 47 U.S.C. 154(i),
303(r), 309(j), 332, and 405, and Section 1.429(i) of the Commission's
rules, 47 CFR 1.429(i).
121. It is further ordered that the petitions for reconsideration
and application for review of the CWD Order listed in footnote 51 are
denied. This action is taken pursuant to Sections 4(i), 303(r), 309(j),
332, and 405 of the Communications Act of 1934, as amended, 47 U.S.C.
154(i), 303(r), 309(j), 332, and 405, and Sections
[[Page 33781]]
1.429(i) and 1.115 of the Commission's rules, 47 CFR 1.429(i), 1.115.
122. It is further ordered that the Commission's rules are amended
as set forth in Appendix B. It is further ordered that the provisions
of this Memorandum Opinion and Order on Reconsideration and Third
Report and Order and the Commission's rules, as amended in Appendix B,
shall become effective 60 days after publication of this Memorandum
Opinion and Order on Reconsideration and Third Report and Order in the
Federal Register.
123. It is further ordered that a Public Notice will be issued by
the Wireless Telecommunications Bureau following the adoption of this
Memorandum Opinion and Order on Reconsideration and Third Report and
Order that will remove the interim licensing rules on the shared PCP
channels from the Commission's rules.
124. it is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
Memorandum Opinion and Order on Reconsideration and Third Report and
Order, including the Supplemental Final Regulatory Flexibility Analysis
and Final Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
List of Subjects
47 CFR Part 22
Public mobile services.
47 CFR Part 90
Private land mobile radio services.
Rule Changes
For the reasons stated in the preamble, parts 22 and 90 of title 47
of the Code of Federal Regulations is amended as follows:
PART 22--PUBLIC MOBILE SERVICES
1. The authority citation for Part 22 continues to read as follows:
Authority: Sections 4, 303, 309 and 332, 48 Stat. 1066, 1082, as
amended; 47 U.S.C. 154, 303, 309 and 332, unless otherwise noted.
2. Section 22.213 is added to read as follows:
Sec. 22.213 Long-form application (FCC Form 601).
Each successful bidder for a paging geographic area authorization
must submit a ``long-form'' application (Form 601) within ten (10)
business days after being notified by Public Notice that it is the
winning bidder. Applications for paging geographic area authorizations
on FCC Form 601 must be submitted in accordance with Sec. 1.2107 and
Sec. 1.2112 of this chapter, all applicable procedures set forth in the
rules in this part, and any applicable Public Notices that the FCC may
issue in connection with an auction. After an auction, the FCC will not
accept long-form applications for paging geographic area authorizations
from anyone other than the auction winners and parties seeking
partitioned authorizations pursuant to agreements with auction winners
under Sec. 22.221 of this part.
3. Section 22.215 is amended by revising paragraph (a) to read as
follows:
Sec. 22.215 Authorization, grant, denial, default, and
disqualification.
(a) Each winning bidder will be required to pay the full balance of
its winning bid no later than ten (10) business days following the
release date of a Public Notice establishing the payment deadline. If a
winning bidder fails to pay the balance of its winning bids in a lump
sum by the applicable deadline as specified by the Commission, it will
be allowed to make payment no later than ten (10) business days after
the payment deadline, provided that it also pays a late fee equal to
five (5) percent of the amount due. When a winning bidder fails to pay
the balance of its winning bid by the late payment deadline, it is
considered to be in default on its authorization(s) and subject to the
applicable default payments. Authorizations will be awarded upon the
full and timely payment of winning bids and any applicable late fees.
* * * * *
4. Section 22.217 is amended by revising paragraph (a) and adding
paragraph (b)(4) to read as follows:
Sec. 22.217 Bidding credits for small businesses.
(a) A winning bidder that qualifies as a small business or a
consortium of small businesses as defined in Sec. 22.223(b)(1)(i) of
this part may use a bidding credit of thirty-five (35) percent to lower
the cost of its winning bid. A winning bidder that qualifies as a small
business or a consortium of small businesses as defined in
Sec. 22.223(b)(1)(ii) of this part may use a bidding credit of twenty-
five (25) percent to lower the cost of its winning bid.
(b) * * *
(4) If a small business that utilizes a bidding credit under this
section partitions its authorization or disaggregates its spectrum to
an entity not meeting the eligibility standards for the same bidding
credit, the partitioning or disaggregating licensee will be subject to
the provisions concerning unjust enrichment as set forth in
Sec. 1.2111(e) (2) and (3) of this chapter.
Sec. 22.219 [Removed]
5. Section 22.219 is removed.
6. Section 22.221 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 22.221 Eligibility for partitioned licenses.
* * * * *
(b) Each party to an agreement to partition the authorization must
file a long-form application (FCC Form 601) for its respective,
mutually agreed-upon geographic area together with the application for
the remainder of the MEA or EA filed by the auction winner.
(c) If the partitioned authorization is being applied for as a
partial assignment of the MEA or EA authorization following grant of
the initial authorization, request for authorization for partial
assignment of an authorization shall be made pursuant to Sec. 1.948 of
this part.
7. Section 22.223 is amended by revising paragraphs (b)(1)(i),
(b)(1)(ii) and (b)(2) and adding paragraphs (b)(4) and (e) to read as
follows:
Sec. 22.223 Definitions concerning competitive bidding process.
* * * * *
(b) * * *
(1) * * *
(i) Together with its affiliates and controlling interests has
average gross revenues that are not more than $3 million for the
preceding three years; or
(ii) Together with its affiliates and controlling interests has
average gross revenues that are not more than $15 million for the
preceding three years.
(2) For purposes of determining whether an entity meets either the
$3 million or $15 million average annual gross revenues size standard
set forth in paragraph (b)(1) of this section, the gross revenues of
the entity, its affiliates, and controlling interests shall be
considered on a cumulative basis and aggregated.
(3) * * *
(4) Applicants without identifiable controlling interests. Where an
applicant (or licensee) cannot identify controlling interests under the
standards set forth in this section, the gross revenues of all interest
holders in the applicant, and their affiliates, will be attributable.
* * * * *
(e) Controlling interest. (1) For purposes of this section,
controlling interest includes individuals or entities with de jure and
de facto control of the applicant. De jure control is greater than 50
percent of the voting stock of a corporation, or in the case of a
[[Page 33782]]
partnership, the general partner. De facto control is determined on a
case-by-case basis. An entity must disclose its equity interest and
demonstrate at least the following indicia of control to establish that
it retains de facto control of the applicant:
(i) The entity constitutes or appoints more than 50 percent of the
board of directors or management committee;
(ii) The entity has authority to appoint, promote, demote, and fire
senior executives that control the day-to-day activities of the
licensee; and
(iii) The entity plays an integral role in management decisions.
(2) Calculation of certain interests. (i) Ownership interests shall
be calculated on a fully diluted basis; all agreements such as
warrants, stock options and convertible debentures will generally be
treated as if the rights thereunder already have been fully exercised.
(ii) Partnership and other ownership interests and any stock
interest equity, or outstanding stock, or outstanding voting stock
shall be attributed as specified below.
(iii) Stock interests held in trust shall be attributed to any
person who holds or shares the power to vote such stock, to any person
who has the sole power to sell such stock, and, to any person who has
the right to revoke the trust at will or to replace the trustee at
will. If the trustee has a familial, personal, or extra-trust business
relationship to the grantor or the beneficiary, the grantor or
beneficiary, as appropriate, will be attributed with the stock
interests held in trust.
(iv) Non-voting stock shall be attributed as an interest in the
issuing entity.
(v) Limited partnership interests shall be attributed to limited
partners and shall be calculated according to both the percentage of
equity paid in and the percentage of distribution of profits and
losses.
(vi) Officers and directors of an entity shall be considered to
have an attributable interest in the entity. The officers and directors
of an entity that controls a licensee or applicant shall be considered
to have an attributable interest in the licensee or applicant.
(vii) Ownership interests that are held indirectly by any party
through one or more intervening corporations will be determined by
successive multiplication of the ownership percentages for each link in
the vertical ownership chain and application of the relevant
attribution benchmark to the resulting product, except that if the
ownership percentage for an interest in any link in the chain exceeds
50 percent or represents actual control, it shall be treated as if it
were a 100 percent interest.
(viii) Any person who manages the operations of an applicant or
licensee pursuant to a management agreement shall be considered to have
an attributable interest in such applicant or licensee if such person
or its affiliate pursuant to paragraph (d) of this section has
authority to make decisions or otherwise engage in practices or
activities that determine, or significantly influence,
(A) The nature or types of services offered by such an applicant or
licensee;
(B) The terms upon which such services are offered; or
(C) The prices charged for such services.
(ix) Any licensee or its affiliate who enters into a joint
marketing arrangement with an applicant or licensee, or its affiliate,
shall be considered to have an attributable interest, if such applicant
or licensee, or its affiliate, has authority to make decisions or
otherwise engage in practices or activities that determine, or
significantly influence,
(A) The nature or types of services offered by such an applicant or
licensee;
(B) The terms upon which such services are offered; or
(C) The prices charged for such services.
8. Section 22.225 is amended by revising paragraphs (a)(1), (b)(1)
and (e) to read as follows:
Sec. 22.225 Certifications, disclosures, records maintenance and
audits.
(a) * * *
(1) The identity of the applicant's controlling interests and
affiliates, and, if a consortium of small businesses, the members of
the joint venture; and
* * * * *
(b) * * *
(1) Disclose separately and in the aggregate the gross revenues,
computed in accordance with Sec. 22.223, for each of the following: the
applicant, the applicant's affiliates, the applicant's controlling
interests, and, if a consortium of small businesses, the members of the
joint venture;
* * * * *
(e) Definitions. The terms affiliate, small business, consortium of
small businesses, gross revenues, and controlling interest used in this
section are defined in Sec. 22.223.
9. Section 22.503 is amended by revising paragraphs (b)(2), (b)(3),
(h), (i), and (k)(1) and (k)(2) to read as follows:
Sec. 22.503 Paging geographic area authorizations.
* * * * *
(b) * * *
(2) Major Economic Areas (MEAs) and Economic Areas (EAs) are
defined below. EAs are defined by the Department of Commerce, Bureau of
Economic Analysis. See Final Redefinition of the MEA Economic Areas, 60
FR 13114 (March 10, 1995). MEAs are based on EAs. In addition to the
Department of Commerce's 172 EAs, the FCC shall separately license Guam
and the Northern Mariana Islands, Puerto Rico and the United States
Virgin Islands, and American Samoa, which have been assigned FCC-
created EA numbers 173-175, respectively, and MEA numbers 49-51,
respectively.
(3) The 51 MEAs are composed of one or more EAs as defined in the
following table:
------------------------------------------------------------------------
MEAs EAs
------------------------------------------------------------------------
1 (Boston)................... 1-3.
2 (New York City)............ 4-7, 10.
3 (Buffalo).................. 8.
4 (Philadelphia)............. 11-12.
5 (Washington)............... 13-14.
6 (Richmond)................. 15-17, 20.
7 (Charlotte-Greensboro- 18-19, 21-26, 41-42, 46.
Greenville-Raleigh).
8 (Atlanta).................. 27-28, 37-40, 43.
9 (Jacksonville)............. 29, 35.
10 (Tampa-St. Petersburg- 30, 33-34.
Orlando).
11 (Miami)................... 31-32.
12 (Pittsburgh).............. 9, 52-53.
13 (Cincinnati-Dayton)....... 48-50.
14 (Columbus)................ 51.
[[Page 33783]]
15 (Cleveland)............... 54-55.
16 (Detroit)................. 56-58, 61-62.
17 (Milwaukee)............... 59-60, 63, 104-105, 108.
18 (Chicago)................. 64-66, 68, 97, 101.
19 (Indianapolis)............ 67.
20 (Minneapolis-St. Paul).... 106-107, 109-114, 116.
21 (Des Moines-Quad Cities).. 100, 102-103, 117.
22 (Knoxville)............... 44-45.
23 (Louisville-Lexington- 47, 69-70, 72.
Evansville).
24 (Birmingham).............. 36, 74, 78-79.
25 (Nashville)............... 71.
26 (Memphis-Jackson)......... 73, 75-77.
27 (New Orleans-Baton Rouge). 80-85.
28 (Little Rock)............. 90-92, 95.
29 (Kansas City)............. 93, 99, 123.
30 (St. Louis)............... 94, 96, 98.
31 (Houston)................. 86-87, 131.
32 (Dallas-Fort Worth)....... 88-89, 127-130, 135, 137-138.
33 (Denver).................. 115, 140-143.
34 (Omaha)................... 118-121.
35 (Wichita)................. 122.
36 (Tulsa)................... 124.
37 (Oklahoma City)........... 125-126.
38 (San Antonio)............. 132-134.
39 (El Paso-Albuquerque)..... 136, 139, 155-157.
40 (Phoenix)................. 154, 158-159.
41 (Spokane-Billings)........ 144-147, 168.
42 (Salt Lake City).......... 148-150, 152.
43 (San Francisco-Oakland-San 151, 162-165.
Jose).
44 (Los Angeles-San Diego)... 153, 160-161.
45 (Portland)................ 166-167.
46 (Seattle)................. 169-170.
47 (Alaska).................. 171.
48 (Hawaii).................. 172.
49 (Guam and the Northern 173.
Mariana Islands).
50 (Puerto Rico and U.S. 174.
Virgin Islands).
51 (American Samoa).......... 175.
------------------------------------------------------------------------
* * * * *
(h) Adjacent geographic area coordination required. Before
constructing a facility for which the interfering contour (as defined
in Sec. 22.537 or Sec. 22.567 of this part, as appropriate for the
channel involved) would extend into another paging geographic area, a
paging geographic area licensee must obtain the consent of the relevant
co-channel paging geographic area licensee, if any, into whose area the
interfering contour would extend. Licensees are expected to cooperate
fully and in good faith attempt to resolve potential interference
problems before bringing matters to the FCC. In the event that there is
no co-channel paging geographic area licensee from whom to obtain
consent in the area into which the interfering contour would extend,
the facility may be constructed and operated subject to the condition
that, at such time as the FCC issues a paging geographic area
authorization for that adjacent geographic area, either consent must be
obtained or the facility modified or eliminated such that the
interfering contour no longer extends into the adjacent geographic
area.
(i) Protection of existing service. All facilities constructed and
operated pursuant to a paging geographic area authorization must
provide co-channel interference protection in accordance with
Sec. 22.537 or Sec. 22.567, as appropriate for the channel involved, to
all authorized co-channel facilities of exclusive licensees within the
paging geographic area. Non-exclusive licensees on the thirty-five
exclusive 929 MHz channels are not entitled to exclusive status, and
will continue to operate under the sharing arrangements established
with the exclusive licensees and other non-exclusive licensees that
were in effect prior to February 19, 1997. MEA, EA, and nationwide
geographic area licensees have the right to share with non-exclusive
licensees on the thirty-five exclusive 929 MHz channels on a non-
interfering basis.
* * * * *
(k) Coverage requirements. Failure by an MEA or EA licensee to meet
either the coverage requirements in paragraphs (k)(1) and (k)(2) of
this section, or alternatively, the substantial service requirement in
paragraph (k)(3) of this section, will result in automatic termination
of authorizations for those facilities that were not authorized,
constructed, and operating at the time the geographic area
authorization was granted. MEA and EA licensees have the burden of
showing when their facilities were authorized, constructed, and
operating, and should retain necessary records of these sites until
coverage requirements are fulfilled. For the purpose of this paragraph,
to ``cover'' area means to include geographic area within the composite
of the service contour(s) determined by the methods of Secs. 22.537 or
22.567 as appropriate for the particular channel involved. Licensees
may determine the population of geographic areas included within their
service contours using either the 1990 census or the 2000 census, but
not both.
(1) No later than three years after the initial grant of an MEA or
EA geographic area authorization, the licensee must construct or
otherwise acquire and operate sufficient facilities to cover one third
of the population in the paging geographic area. The licensee
[[Page 33784]]
must notify the FCC at the end of the three-year period pursuant to
Sec. 1.946 of this chapter, either that it has satisfied this
requirement or that it plans to satisfy the alternative requirement to
provide substantial service in accordance with paragraph (k)(3) of this
section.
(2) No later than five years after the initial grant of an MEA or
EA geographic area authorization, the licensee must construct or
otherwise acquire and operate sufficient facilities to cover two thirds
of the population in the paging geographic area. The licensee must
notify the FCC at the end of the five year period pursuant to
Sec. 1.946 of this chapter, either that it has satisfied this
requirement or that it has satisfied the alternative requirement to
provide substantial service in accordance with paragraph (k)(3) of this
section.
* * * * *
10. Section 22.507 is amended by revising paragraph (c) to read as
follows:
Sec. 22.507 Number of transmitters per station.
* * * * *
(c) Consolidation of separate stations. The FCC may consolidate
site-specific contiguous authorizations upon request (FCC Form 601) of
the licensee, if appropriate under paragraph (a) of this section.
Paging licensees may include remote, stand-alone transmitters under the
single system-wide authorization, if the remote, stand-alone
transmitter is linked to the system via a control/repeater facility or
by satellite. Including a remote, stand-alone transmitter in a system-
wide authorization does not alter the limitations provided under
Sec. 22.503(f) on entities other than the paging geographic area
licensee. In the alternative, paging licensees may maintain separate
site-specific authorizations for stand-alone or remote transmitters.
The earliest expiration date of the authorizations that make up the
single system-wide authorization will determine the expiration date for
the system-wide authorization. Licensees must file timely renewal
applications for site-specific authorizations included in a single
system-wide authorization request until the request is approved.
Renewal of the system-wide authorization will be subject to Sec. 1.949
of this chapter.
Sec. 22.509 [Amended]
11. Paragraph (c) of Sec. 22.509 is removed.
12. Section 22.513 is added to read as follows:
Sec. 22.513 Partitioning and disaggregation.
MEA and EA licensees may apply to partition their authorized
geographic service area or disaggregate their authorized spectrum at
any time following grant of their geographic area authorizations.
Nationwide geographic area licensees may apply to partition their
authorized geographic service area or disaggregate their authorized
spectrum at any time as of August 23, 1999.
(a) Application required. Parties seeking approval for partitioning
and/or disaggregation shall apply for partial assignment of a license
pursuant to Sec. 1.948 of this chapter.
(b) Partitioning. In the case of partitioning, requests for
authorization for partial assignment of a license must include, as
attachments, a description of the partitioned service area and a
calculation of the population of the partitioned service area and the
authorized geographic service area. The partitioned service area shall
be defined by 120 sets of geographic coordinates at points at every 3
degrees azimuth from a point within the partitioned service area along
the partitioned service area boundary unless either an FCC-recognized
service area is used (e.g., MEA or EA) or county lines are followed.
The geographical coordinates must be specified in degrees, minutes, and
seconds to the nearest second latitude and longitude, and must be based
upon the 1983 North American Datum (NAD83). In the case where FCC-
recognized service areas or county lines are used, applicants need only
list the specific area(s) through use of FCC designations or county
names that constitute the partitioned area.
(c) Disaggregation. Spectrum may be disaggregated in any amount.
(d) Combined partitioning and disaggregation. Licensees may apply
for partial assignment of authorizations that propose combinations of
partitioning and disaggregation.
(e) License term. The license term for a partitioned license area
and for disaggregated spectrum shall be the remainder of the original
licensee's license term as provided for in Sec. 1.955 of this chapter.
(f) Coverage requirements for partitioning. (1) Parties to a
partitioning agreement must satisfy at least one of the following
requirements:
(i) The partitionee must satisfy the applicable coverage
requirements set forth in Sec. 22.503(k)(1), (2) and (3) for the
partitioned license area; or
(ii) The original licensee must meet the coverage requirements set
forth in Sec. 22.503(k)(1), (2) and (3) for the entire geographic area.
In this case, the partitionee must meet only the requirements for
renewal of its authorization for the partitioned license area.
(2) Parties seeking authority to partition must submit with their
partial assignment application a certification signed by both parties
stating which of the above options they select.
(3) Partitionees must submit supporting documents showing
compliance with their coverage requirements as set forth in
Sec. 22.503(k)(1), (2) and (3).
(4) Failure by any partitionee to meet its coverage requirements
will result in automatic cancellation of the partitioned authorization
without further Commission action.
(g) Coverage requirements for disaggregation.
(1) Parties to a disaggregation agreement must satisfy at least one
of the following requirements:
(i) Either the disaggregator or disaggregatee must satisfy the
coverage requirements set forth in Sec. 22.503 (k)(1), (2) and (3) for
the entire license area; or
(ii) Parties must agree to share responsibility for meeting the
coverage requirements set forth in Sec. 22.503 (k)(1), (2) and (3) for
the entire license area.
(2) Parties seeking authority to disaggregate must submit with
their partial assignment application a certification signed by both
parties stating which of the above requirements they meet.
(3) Disaggregatees must submit supporting documents showing
compliance with their coverage requirements as set forth in Sec. 22.503
(k)(1), (2) and (3).
(4) Parties that accept responsibility for meeting the coverage
requirements and later fail to do so will be subject to automatic
license cancellation without further Commission action.
13. Section 22.531 is amended by revising paragraph (f) to read as
follows:
Sec. 22.531 Channels for paging operation.
* * * * *
(f) For the purpose of issuing paging geographic authorizations,
the paging geographic areas used for UHF channels are the MEAs, and the
paging geographic areas used for the low and high VHF channels are the
EAs (see Sec. 22.503(b)).
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
14. Section 90.175 is amended by revising paragraph (f) to read as
follows:
Sec. 90.175 Frequency coordination requirements.
* * * * *
[[Page 33785]]
(f) For frequencies in the 929-930 MHz band listed in paragraph (b)
of Sec. 90.494: A statement is required from the coordinator
recommending the most appropriate frequency.
* * * * *
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-15329 Filed 6-23-99; 8:45 am]
BILLING CODE 6712-01-P
