[Federal Register Volume 64, Number 212 (Wednesday, November 3, 1999)]
[Rules and Regulations]
[Pages 59656-59663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27874]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1, 20, and 95
[FCC 99-239; WT Docket No. 98-169]
218-219 MHz Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document modifies the regulations governing the licensing
of the 218-219 MHz Service to maximize the efficient and effective use
of the 218-219 MHz band. The Commission amends the rules to redesignate
the 218-219 MHz Service from a strictly private radio service to a
service that can be used in common carrier and private operations,
extend the license term to ten years, adopt a ``substantial service''
analysis to replace the three-and five-year construction benchmarks,
and permit partitioning and disaggregation of spectrum. Additionally,
the Commission addresses the constitutional issues raised by Graceba
Total Communications, Inc. that are before the Commission on remand
from the D.C. Circuit Court of Appeals, together with similar issues
raised by other commenters in the proceeding.
DATES: Effective January 3, 2000.
ADDRESSES: Federal Communications Commission, 445 12th Street, S.W.,
Room 4-C207, Washington, D.C. 20554. A copy of any comments on the
information collection contained herein should be submitted to Judy
Boley, Federal Communications Commission, 445 12th Street, S.W., Room
1-C804, Washington, D.C. 20554 or via the Internet to jboley@fcc.gov;
and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street,
N.W., Washington, D.C. 20503 or via the Internet to fain_t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Jamison Prime, Shellie Blakeney or
Nick Kolovos of the Policy and Rules Branch, Public Safety and Private
Wireless Division, Wireless Telecommunications Bureau, (202) 418-0680.
For further information concerning the information collection contained
in the Report and Order and Memorandum Opinion and Order, contact Judy
Boley at (202) 418-0215 or via the Internet to jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order and Memorandum Opinion and Order in WT Docket No. 98-169, FCC
99-239, adopted September 7, 1999, and released September 10, 1999. The
full text of the Report and Order and Memorandum Opinion and Order is
available for inspection and copying during normal business hours in
the FCC Reference Center, 445 12th Street, S.W., Room CY-A257,
Washington, D.C. 20554. The full text of the Report and Order and
Memorandum Opinion and Order may also be purchased from the
Commission's copy contractor, International Transcription Services,
1231 20th Street, N.W., Washington, D.C. 20036, telephone (202) 857-
3800, facsimile (202) 857-3805. The full text of the Report and Order
and Memorandum Opinion and Order may also be downloaded at: http://
www.fcc.gov/Bureaus/Wireless/Orders/1999/fcc99239.wp.
Alternative formats (computer diskette, large print, audio cassette,
and Braille) are available to persons with disabilities by contacting
Martha Contee at (202) 418-0260, TTY (202) 418-2555, or at
mcontee@fcc.gov.
Synopsis of the Report and Order and Memorandum Opinion and Order
The Report and Order gives maximum flexibility to 218-219 MHz
Service providers, letting them choose their regulatory status. Mobile
service providers may elect their regulatory status as either
commercial (under the Commercial Mobile Radio Service [CMRS] rules) or
private (under the Private Mobile Radio Service rules). Fixed service
providers may elect their regulatory status as either common carrier or
private, under the conditions set forth in Title III of the
Communications Act of 1934, as amended. Regardless of regulatory
status, the Report and Order further clarifies that both one-and two-
way communications are permissible, as well as Response Transmitter
Unit-to-Response Transmitter Unit (RTU-to-RTU) communications (in
addition to RTU interconnection with the public switched network or any
CMRS service). License terms are extended to ten years, regardless of
whether the license was obtained by lottery or auction.
Regarding payment options, existing licensees that (a) were current
in installment payments (i.e., less than 90 days delinquent) as of
March 16, 1998, or (b) had properly filed grace period requests under
the former installment payment rules, are eligible for a new payment
structure. These eligible licensees may choose between (a)
reamortization of principal and interest installment payments over the
new ten-year period; (b) amnesty wherein licensees surrender any
licenses they choose to the Commission for subsequent auction and, in
return, have all of the outstanding debt on those licenses forgiven
(together with a refund of any installment payments already made,
either in full or applied toward retained licenses, as applicable); or
(c) prepayment whereupon licensees may retain or return as many
licenses as they desire. Licensees electing the prepayment option,
however, must prepay the outstanding principal of any license they wish
to retain.
The Report and Order also resolves constitutional concerns raised
by Graceba Total Communications, Inc. regarding a bidding preference
for minorities and women that was used in the 1994 auction for what is
now the 218-219 MHz Service. Now, every winning bidder that met the
small business qualifications for that auction receives a 25 percent
bidding credit, in order to achieve parity with the bidding credit
formerly given to minorities and women. Minority-and women-owned
winning bidders are not disadvantaged by this action because all such
bidders also met the small business qualifications.
Regarding service and construction requirements, the three-and
five-year construction benchmarks are replaced by a ``substantial
service'' construction requirement, defined as a ``service that is
sound, favorable, and substantially above a level of mediocre service
which might minimally warrant renewal.'' In addition, the following
``safe harbor'' examples achieve compliance: (a) a demonstration of
coverage to twenty percent of the population or land area of the
licensed service area; (b) a demonstration of specialized or
technologically sophisticated service that does not require a high
level of coverage to be of benefit to customers; or (c) a demonstration
of service to niche markets or a focus on serving populations outside
of areas currently serviced by other licensees. These criteria are to
be demonstrated at the time of license renewal.
License transfer restrictions on lotteried licenses are relaxed,
though they remain subject to case-by-case,
[[Page 59657]]
public interest analysis. Spectrum aggregation restrictions are also
relaxed, so that cross-ownership is allowed of both frequency segment A
(218.0-218.5 MHz) and frequency segment B (218.5-219.0 MHz) in the same
service area. Partitioning and disaggregation are now allowed, and any
partitionee/disaggregatee is authorized to hold its license for the
remainder of the original licensee's term.
The Report and Order revises several technical standards as well,
responsive to changes in the original scope of use contemplated for the
218-219 MHz Service. The duty cycle limitation, of a maximum of five
seconds per hour for each RTU, is eliminated. The 100 milliwatt power
limitation on mobile RTUs is reduced to an average of 4 watts, while
maintaining protection for TV Channel 13 reception. Automatic power
control restrictions are eliminated. The cell transmitter station (CTS)
antenna height/transmitter power ratios are removed, but CTS antennas
may still not be taller than is necessary to assure adequate service.
The 20 watt maximum effective radiated power for transmitters is
retained. Section 95.861(e) of the Commission's Rules continues to
provide the framework for resolving interference complaints, with the
further requirement that licensees produce an interference control plan
that includes, as part of the planning process, an analysis of the
proposed system and the methods used to eliminate co- and adjacent
channel interference, together with updates to reflect changes in
system design or construction.
Finally, the Part 1, Subpart Q standardized auction rules are
incorporated by reference, providing a uniform set of competitive
bidding rules on issues concerning designated entities, application and
payment, competitive bidding design, procedure and timing, and anti-
collusion. Small businesses and very small businesses will receive
bidding credits consistent with the Part 1 rules, but installment
payments will no longer be available as a means of financing winning
bids. Small businesses are defined as having average annual gross
revenues not to exceed $15 million for the preceding three years, and
very small businesses are defined as having average annual gross
revenues not to exceed $3 million for the preceding three years.
The Memorandum Opinion and Order dismisses a Petition for
Reconsideration filed by Interactive America Corporation (IAC). IAC
challenged the Commission's failure, prior to the then-planned auction
of IAC's defaulted licenses, to disclose IAC's pending appeal (Auction
No. 13), but that argument is moot because the Commission subsequently
postponed Auction No. 13, and the D.C. Circuit denied IAC's petition
for review. IAC also argued that any 218-219 MHz Service auction should
be delayed until final rules are adopted. However, this Report and
Order adopts such rules, rendering that argument moot as well.
Regulatory Flexibility Act Final Analysis
As required by the Regulatory Flexibility Act (RFA),\1\ an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the
Amendment of Part 95 of the Commission's Rules to Provide Regulatory
Flexibility in the 218-219 MHz Service and Amendment of Part 95 of the
Commission's Rules to Allow Interactive Video and Data Service
Licensees to Provide Mobile Services, Order, Memorandum Opinion and
Order, and Notice of Proposed Rulemaking.\2\ The Commission sought
written public comment on the proposals in the 218-219 MHz Flex NPRM,
including comment on the IRFA. This present Final Regulatory
Flexibility Analysis (FRFA) conforms to the RFA.\3\
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\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has
been amended by the Contract With America Advancement Act of 1996,
Public Law Number 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
the CWAAA is the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA).
\2\ Amendment of Part 95 of the Commission's Rules to Provide
Regulatory Flexibility in the 218-219 MHz Service and Amendment of
Part 95 of the Commission's Rules to Allow Interactive Video and
Data Service Licensees to Provide Mobile Services (proceeding
terminated), Order, Memorandum Opinion and Order, and Notice of
Proposed Rulemaking, 63 FR 52215 (Sept. 30, 1998), 13 FCC Rcd 19064,
19101 (1998) (218-219 MHz Flex NPRM).
\3\ See 5 U.S.C. 604.
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I. Need for, and Objectives of, the Report and Order
This rulemaking proceeding was initiated to secure public comment
on proposals to maximize the efficient and effective use of spectrum in
the 218-219 MHz band, allocated in 1992 to the Interactive Video and
Data Service (IVDS) in the Personal Radio Services, now redesignated as
the 218-219 MHz Service. In attempting to maximize the use of the 218-
219 MHz band, we continue our efforts to improve the efficiency of
spectrum use, reduce the regulatory burden on spectrum users,
facilitate technological innovation, and provide opportunities for
development of competitive new service offerings. The rules adopted in
this Report and Order are also designed to implement Congress' goal of
giving small businesses the opportunity to participate in the provision
of spectrum-based services in accordance with Section 309(j) of the
Communications Act of 1934, as amended (the Communications Act).\4\
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\4\ 47 U.S.C. 257, 309(j).
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II. Summary of Significant Issues Raised by Public Comments in
Response to the Initial Regulatory Flexibility Analysis
No petitions were filed in direct response to the IRFA. In general,
commenters and reply commenters supported our proposals to provide
additional flexibility in the 218-219 MHz Service. Moreover, many of
the commenters and reply commenters were existing 218-219 MHz Service
licensees many of whom, as discussed infra, qualify as small
businesses. These commenters overwhelmingly supported proposals that
would permit (1) acquisitions by partitioning or disaggregation; (2)
218-219 MHz Service licensees and applicants to choose regulatory
status; and (3) non-defaulting 218-219 MHz Service licensees currently
participating in the installment payment plan to elect one of three
restructuring plans concerning their outstanding payments, despite the
increased reporting requirements that these proposals may entail.
III. Description and Estimate of the Number of Small Entities to
Which the Rules Apply
The Regulatory Flexibility Act directs agencies to provide a
description of and, where feasible, an estimate of the number of small
entities that may be affected by the proposed rules, if adopted. The
Regulatory Flexibility Act generally defines the term ``small entity''
as having the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act, unless the Commission
has developed one or more definitions that are appropriate for its
activities.\5\ A small business concern is one which: (1) is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria
[[Page 59658]]
established by the SBA.\6\ A small organization is generally ``any not-
for-profit enterprise which is independently owned and operated and is
not dominant in its field.'' \7\ Below, we further describe and
estimate the number of small entity licensees and regulatees that may
be affected by the proposed rules, if adopted.
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\5\ U.S.C. 601(3) (incorporating by reference the definition of
``small business concern'' in 15 U.S.C. 632). Pursuant to 5 U.S.C.
601(3), the statutory definition of a small business applies
``unless an agency after consultation with the Office of Advocacy of
the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are
appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register.''
\6\ Small Business Act, 15 U.S.C. 632 (1996).
\7\ 5 U.S.C. 601(4).
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The rules adopted in this Report and Order affect a number of small
entities who are either licensees, or who may choose to become
applicants for licenses, in the 218-219 MHz Service. Such entities fall
into two categories: (1) those using the 218-219 MHz Service for
providing interactivity capabilities in conjunction with broadcast
services; and (2) those using the 218-219 MHz Service to operate other
types of wireless communications services with a wide variety of uses,
such as commercial data applications and two-way telemetry services.
Theoretically, an entity could fall into both categories. The spectrum
uses in the two categories differ markedly.
With respect to the first category, the provision of interactivity
capabilities in conjunction with broadcast services could be described
as a wireless provider of subscription television service. The SBA's
rules applicable to subscription television services define small
entities as those with annual gross revenues of $11 million or less.\8\
In the Competitive Bidding Tenth Report and Order, we extended special
competitive bidding provisions to small businesses with annual gross
revenues that are not more than $15 million, and additional benefits to
very small businesses with annual gross revenues that are not more than
$3 million.\9\ On January 6, 1998, the SBA approved of the small
business size standards established in the Competitive Bidding Tenth
Report and Order.\10\
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\8\ 13 CFR 121.201, SIC Code 4841.
\9\ Implementation of Section 309(j) of the Communications Act,
Competitive Bidding, PP Docket No. 93-253, Tenth Report and Order,
61 FR 60198 (Nov. 27, 1996), 11 FCC Rcd 19974, 19981-85 (1996)
(Competitive Bidding Tenth Report and Order), recon. pending.
\10\ See Letter to Daniel B. Phythyon, Chief, WTB, from Aida
Alverez, Administrator, SBA, Dated Jan. 6, 1998.
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The Commission's estimate of the number of small business entities
operating in the 218-219 MHz band for interactivity capabilities with
television viewers begins with the 1992 Bureau of Census report on
businesses listed under SIC Code 4841, subscription television
services, which is the most recent information available. The total
number of entities under this category is 1,788.\11\ There are 1,463
companies in the 1992 Census Bureau report which are categorized as
small businesses providing cable and pay TV services.\12\ We know that
many of these businesses are cable and television service businesses,
rather than businesses operating in the 218-219 MHz band. We also know
that, to date, we have issued 612 licenses in the 218-219 MHz Service.
Therefore, the number of small entities currently providing
interactivity capability to television viewers in the 218-219 MHz
Service which will be subject to the rules will be less than 612.
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\11\ U.S. Small Business Administration 1992 Economic Census
Industry and Enterprise Report, Table 2D, SIC Code 4841 (Bureau of
the Census data adapted by the Office of Advocacy of the U.S. Small
Business Administration).
\12\ The Census table divides those companies by the amount of
annual receipts. There is a dividing point at companies with annual
receipts of $10 million. The next increment is annual receipts of
$17 million, a category that greatly exceeds the SBA definition of
small businesses that provide subscription television services.
However, there are 17 firms in this category, with revenues between
$10-$17 million. Approximately 1,480 SIC Code 4841 category firms
have annual gross receipts of $15 million or less. Only a small
fraction of those 1,480 firms provide IVDS.
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With respect to the second category, neither the Commission nor the
SBA has developed a specific definition of small entities applicable to
218-219 MHz band licensees that would provide wireless communications
services other than that described above. Generally, the applicable
definition of a small entity in this instance appears to be the
definition under the SBA rules applicable to establishments primarily
engaged in furnishing telegraph and other message communications, SIC
Code 4822. This definition provides that a small entity is an entity
with annual receipts of $5 million or less.\13\ The 1992 Census data,
which is the most recent information available, indicates that of the
286 firms under this category, 247 had annual receipts of $4.999
million or less.\14\
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\13\ 13 CFR 121.201, SIC Code 4822.
\14\ 1992 Economic Census Industry and Enterprise Receipts Size
Report, U.S. Bureau of the Census, U.S. Department of Commerce,
Table 2D, SIC Code 4822 (industry data prepared by the Census Bureau
under contract to the U.S. SBA Office of Advocacy).
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The first auction of 218-219 MHz spectrum resulted in 170 entities
winning licenses for 594 Metropolitan Statistical Area (MSA) licenses.
Of the 594 licenses, 557 were won by entities qualifying as a small
business. For that auction, we defined a small business as an entity,
together with its affiliates, that has no more than a $6 million net
worth and, after federal income taxes (excluding any carry over
losses), has no more than $2 million in annual profits each year for
the previous two years.\15\ We cannot estimate, however, the number of
licenses that will be won by entities qualifying as small or very small
businesses under our rules in future auctions of 218-219 MHz spectrum.
Given the success of small businesses in the previous auction, and the
above discussion regarding the prevalence of small businesses in the
subscription television services and message communications industries,
we assume for purposes of this FRFA that in future auctions, all of the
licenses may be awarded to small businesses, which would be affected by
the rule changes we propose.
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\15\ Implementation of Section 309(j) of the Communications Act,
Competitive Bidding, PP Docket No. 93-253, Fourth Report and Order,
59 FR 24947 (May 13, 1994), 9 FCC Rcd 2330, 2336 (1994).
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IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
The final rules adopted in this Report and Order alter the
reporting and recordkeeping requirements for a number of small business
entities. Specifically, (1) 218-219 MHz Service licensees will not be
required to file a license renewal application after five years from
the date of grant of the license, but will be required to file a
license renewal application after ten years after the date of grant of
the license; (2) 218-219 MHz Service licensees will not be required to
file construction reports at specified intervals after initial
licensure, but will be obligated to demonstrate that they are providing
``substantial service'' as a condition for renewal of their license;
and (3) acquisitions by partitioning or disaggregation will be treated
as assignments of a license and parties will be required to comply with
the 218-219 MHz Service licensing requirements. In addition small
business may make elections under the final rules that will alter their
reporting and recordkeeping requirements. Specifically, (1) 218-219 MHz
Service licensees and applicants may choose to elect regulatory status
(common carrier, private, commercial mobile radio service, private
mobile radio service) and file appropriate documentation coincident
with the regulatory status elected; (2) non-defaulting 218-219 MHz
Service licensees currently participating in the installment payment
plan may elect one of three restructuring plans concerning their
outstanding payments; and (3) 218-219 MHz Service licensees electing to
continue making installment payments may be required to execute loan
documents as a condition of the
[[Page 59659]]
reamortization of its installment payment plan under the revised ten-
year term.
V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
In response to general comments filed in this proceeding we have
adopted final rules designed to maximize opportunities for
participation by, and growth of, small businesses in providing wireless
services. Specifically, we expect that the extension of license terms
from five to ten years and allowing partitioning and disaggregation of
licenses, will specifically assist small businesses. We adopted a plan
that provided for a reamortization of installment payment debt in
conjunction with the extension of license term that differed from our
original proposal in specific response to concerns raised in comments
and reply comments. Commenters noted that our original proposal would
have required licensees to pay two years worth of principal payments,
as well as the accrued interest, in a lump sum, within ninety days of
the Report and Order to retain their licenses, and claimed that such a
plan would not allow licensees in particular, small businesses
sufficient time to make new capital arrangements. Commenters proposed a
variety of means of providing relief beyond that which we proposed in
the 218-219 MHz Flex NPRM. We note that some of these proposals such as
a ten-year payout schedule that would be entirely interest-free \16\
may have resulted in greater relief than that provided by the
reamortization procedures adopted in the Report and Order.
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\16\ See CRSPI Reply Comments at 2.
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We also believe that our proposals regarding permissible uses of
218-219 MHz Service, liberalization of construction requirements and
technical restrictions, and elimination of the cross-ownership
restriction, will make expansion of 218-219 MHz Service operations
easier, and this flexibility assists all licensees, including small
business licensees. We considered proposals by small business interests
to eliminate (instead of liberalize) technical restrictions for the
service,\17\ but concluded that limited technical restrictions are
still necessary in order to protect other licensees offering services
(such as TV Channel 13 broadcasting) operating in or in close proximity
of the 218-219 MHz band. We further believe that by retroactively
applying a bidding credit for small businesses to the IVDS auction and
by adopting our general auction rules that provide for small business
bidding credits, we will maximize opportunities for participation by,
and growth of, small businesses in the 218-219 MHz Service. For these
reasons, we did not consider any significant alternatives to our
proposals to minimize significant economic impact on small entities,
nor were any significant alternatives of this nature proposed by
commenters and reply commenters.
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\17\ See, e.g., Petty Comments at 1.
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Report to Congress
The Commission will send a copy of the Report and Order, including
this FRFA, in a report to be sent to Congress pursuant to the Small
Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C.
801(a)(1)(A). In addition, the Commission will send a copy of the
Report and Order, including FRFA, to the Chief Counsel for Advocacy of
the Small Business Administration. A copy of the Report and Order and
FRFA (or summaries thereof) will also be published in the Federal
Register. See 5 U.S.C. 604(b).
List of Subjects in 47 CFR Parts 1, 20 and 95
Communications equipment, Radio, Reporting and recordkeeping
requirements.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR parts 1, 20 and 95 as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),
155, 225, and 303(r).
2. Section 1.2105 is amended by revising paragraph (a)(2)(xi) is to
read as follows:
Sec. 1.2105 Bidding application and certification procedures;
prohibition of collusion.
(a) * * *
(2) * * *
(xi) For C block and 218-219 MHz Service applicants, an attached
statement made under penalty of perjury indicating whether or not the
applicant has ever been in default on any Commission licenses or has
ever been delinquent on any non-tax debt owed to any Federal agency.
* * * * *
PART 20--COMMERCIAL MOBILE RADIO SERVICES
3. The authority citation for Part 20 continues read as follows:
Authority: 47 U.S.C. 154, 160, 251-254, 303, and 332 unless
otherwise noted.
4. Section 20.9 is amended by redesignating paragraph (a)(13) as
(a)(14), redesignating paragraph (a)(12) as (a)(13) and by adding a new
paragraph (a)(12) to read as follows:
Sec. 20.9 Commercial mobile radio services.
(a) * * *
(12) Mobile operations in the 218-219 MHz Service (part 95, subpart
F of this chapter) that provide for-profit interconnected service to
the public;
* * * * *
PART 95--PERSONAL RADIO SERVICES
5. The authority citation for Part 95 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303.
6. Section 95.1 is amended be revising paragraph (b) to read as
follows:
Sec. 95.1 The General Mobile Radio Service (GMRS).
* * * * *
(b) The 218-219 MHz Service is a two-way radio service authorized
for system licensees to provide communication service to subscribers in
a specific service area. The rules for this service are contained in
subpart F of this part.
Subpart F Heading--[Revised]
7. The heading for subpart F is revised to read, ``218-219 MHz
Service.''
8. Section 95.801 is revised to read as follows:
Sec. 95.801 Scope.
This subpart sets out the regulations governing the licensing and
operation of a 218-219 MHz system. This subpart supplements Part 1,
Subpart F of this chapter, which establishes the requirements and
conditions under which commercial and private radio stations may be
licensed and used in the Wireless Telecommunications Services. The
provisions of this subpart contain additional pertinent information for
current and prospective licensees specific to the services governed by
this part 95.
9. Sections 95.803 (a) and (b) and the section heading are revised
to read as follows:
[[Page 59660]]
Sec. 95.803 218-219 MHz Service description.
(a) The 218-219 MHz Service is a two-way radio service authorized
for system licensees to provide communication service to subscribers in
a specific service area.
(b) The components of each 218-219 MHz Service system are its
administrative apparatus, its response transmitter units (RTUs), and
one or more cell transmitter stations (CTSs). RTUs may be used in any
location within the service area.
* * * * *
10. Section 95.805 is revised to read as follows:
Sec. 95.805 Permissible communications.
A 218-219 MHz Service system may provide any fixed or mobile
communications service to subscribers within its service area on its
assigned spectrum, consistent with the Commission's rules and the
regulatory status of the system to provide services on a common carrier
or private basis.
11. Section 95.807 is added to read as follows:
Sec. 95.807 Requesting regulatory status.
(a) Authorizations for systems in the 218-219 MHz Service will be
granted to provide services on a common carrier basis or a private
basis, or on both a common carrier and private basis in a single
authorization.
(1) Initial applications. An applicant will specify on FCC Form 601
if it is requesting authorization to provide services on a common
carrier basis, a private basis, or on both a common carrier and private
basis.
(2) Amendment of pending applications. Any pending application may
be amended to:
(i) Change the carrier status requested; or
(ii) Add to the pending request in order to obtain both common
carrier and private status in a single license.
(3) Modification of license. A licensee may modify a license to:
(i) change the carrier status authorized; or
(ii) add to the status authorized in order to obtain both common
carrier and private status in a single license. Applications to change,
or add to, carrier status in a license must be submitted on FCC Form
601 in accordance with Sec. 1.1102 of this chapter.
(4) Pre-existing licenses. Licenses issued before [effective date
of rules] are authorized to provide services on a private basis.
Licensees may modify this initial status pursuant to paragraph (a)(3)
of this section.
(b) An applicant or licensee may submit a petition at any time
requesting clarification of the regulatory status required to provide a
specific communications service.
12. Section 95.811 is amended by revise paragraphs (b), (c), and
(d) to read as follows:
Sec. 95.811 License requirements.
* * * * *
(b) A CTS must be individually licensed to the 218-219 MHz Service
licensee for the service area in which the CTS is located in accordance
with part 1, subpart F of this chapter if it:
(1) Is in the vicinity of certain receiving locations (see
Sec. 1.924 of this chapter);
(2) May have significant environmental effect (see part 1, subpart
I of this chapter);
(3) Is part of an antenna structure that requires notification to
the Federal Aviation Administration (see part 17, subpart B of this
chapter); or
(4) Has an antenna the tip of which exceeds:
(i) 6.1 meters (20 feet) above ground level; or
(ii) 6.1 meters (20 feet) above the top of an existing man-made
structure (other than an antenna structure) on which it is mounted.
(c) All CTSs not meeting the licensing criteria under paragraph (b)
of this section are authorized under the 218-219 MHz Service system
license.
(d) Each component RTU in a 218-219 MHz Service system is
authorized under the system license or if associated with an
individually licensed CTS, under that CTS license.
13. Section 95.812 is added to read as follows:
Sec. 95.812 License term.
(a) The term of each 218-219 MHz Service system license is ten
years from the date of original issuance or renewal.
(b) Licenses for individually licensed CTSs will be issued for a
period running concurrently with the license of the associated 218-219
MHz Service system with which it is licensed.
14. Section 95.813 is amended by removing paragraph (c) and by
revising paragraph (b) to read as follows:
Sec. 95.813 License eligibility.
* * * * *
(b) An entity that loses its 218-219 MHz Service authorization due
to failure to meet the construction requirements specified in
Sec. 95.833 of this part may not apply for a 218-219 MHz Service system
license for three years from the date the Commission takes final action
affirming that the 218-219 MHz Service license has been canceled.
15. Section 95.815 is amended by revising paragraphs (a) and (b) to
read as follows:
Sec. 95.815 License application.
(a) In addition to the requirements of part 1, subpart F of this
chapter, each application for a 218-219 MHz Service system license must
include a plan analyzing the co- and adjacent channel interference
potential of the proposed system, identifying methods being used to
minimize this interference, and showing how the proposed system will
meet the service requirements set forth in Sec. 95.831 of this part.
This plan must be updated to reflect changes to the 218-219 MHz Service
system design or construction.
(b) In addition to the requirements of part 1, subpart F of this
chapter, each request by a 218-219 MHz Service system licensee to add,
delete, or modify technical information of an individually licensed CTS
(see Sec. 95.811(b) of this part) must include a description of the
system after the proposed addition, deletion, or modifications,
including the population in the service area, the number of component
CTSs, and an explanation of how the system will satisfy the service
requirements specified in Sec. 95.831 of this part.
* * * * *
16. Section 95.816 is revised to read as follows:
Sec. 95.816 Competitive bidding proceedings.
(a) Mutually exclusive initial applications for 218-219 MHz Service
system licenses are subject to competitive bidding procedures. The
procedures set forth in part 1, Subpart Q of this chapter will apply
unless otherwise provided in this part.
(b) Installment payments. Eligible Licensees that elect resumption
pursuant to Amendment of part 95 of the Commission's Rules to Provide
Regulatory Flexibility in the 218-219 MHz Service, Report and Order and
Memorandum Opinion and Order, FCC 99-239 (released September 10, 1999)
may continue to participate in the installment payment program.
Eligible Licensees are those that were current in installment payments
(i.e. less than ninety days delinquent) as of March 16, 1998, or those
that had properly filed grace period requests under the former
installment payment rules. All unpaid interest from grant date through
election date will be capitalized into the principal as of Election Day
creating a new principal amount. Installment payments must be made on a
quarterly basis. Installment payments will be calculated based on new
principal
[[Page 59661]]
amount as of Election Day and will fully amortize over the remaining
term of the license. The interest rate will equal the rate for five-
year U.S. Treasury obligations at the time of licensing.
(c) Eligibility for small business provisions.
(1) A small business is an entity that, together with its
affiliates and controlling interests, has average gross revenues not to
exceed $15 million for the preceding three years.
(2) A very small business is an entity that, together with its
affiliates and controlling interests, has average gross revenues not to
exceed $3 million for the preceding three years.
(3) For purposes of determining whether an entity meets either of
the definitions set forth in paragraph (b)(1) or (b)(2) of this
section, the gross revenues of the entity, its affiliates, and
controlling interests shall be considered on a cumulative basis and
aggregated.
(4) 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.
(5) A consortium of small businesses (or a consortium of very small
businesses) is a conglomerate organization formed as a joint venture
between or among mutually independent business firms, each of which
individually satisfies the definition in paragraph (b)(1) of this
section (or each of which individually satisfies the definition in
paragraph (b)(2) of this section). Where an applicant or licensee is a
consortium of small businesses (or very small businesses), the gross
revenues of each small business (or very small business) shall not be
aggregated.
(d) Controlling interest.
(1) For purposes of this section, controlling interests 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 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 Sec. 1.2110(b)(4) of this chapter, 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.
(e) Bidding credits. A winning bidder that qualifies as a small
business or a consortium of small businesses as defined in this
subsection may use the bidding credit specified in
Sec. 1.2110(e)(2)(ii) of this chapter. A winning bidder that qualifies
as a very small business or a consortium of very small businesses as
defined in this subsection may use the bidding credit specified in
accordance to Sec. 1.2110(e)(2)(i) of this chapter.
(f) Winning bidders in Auction No. 1, which took place on July 28-
29, 1994, that, at the time of that auction, met the qualifications
under the Commission's rules then in effect, for small business status
will receive a twenty-five percent bidding credit pursuant to Amendment
of Part 95 of the Commission's Rules to Provide Regulatory Flexibility
in the 218-219 MHz Service, Report and Order and Memorandum Opinion and
Order, FCC 99-239 (released September 10, 1999).
17. Section 95.819 is revised to read as follows:
Sec. 95.819 License transferability.
(a) A 218-219 MHz Service system license acquired through
competitive bidding procedures (including licenses obtained in cases of
no mutual exclusivity), together with all of its component CTS
licenses, may be transferred, assigned, sold, or given away only in
accordance with the provisions and procedures set forth in 47 CFR
1.2111.
(b) A 218-219 MHz Service system license obtained through random
selection procedures, together with all of its component CTS licenses,
may be transferred, assigned, sold, or given away, to any other entity
in accordance with the provisions and procedures set forth in
Sec. 1.948 of this chapter.
(c) If the transfer, assignment, sale, or gift of a license is
approved, the new
[[Page 59662]]
licensee is held to the construction requirements set forth in
Sec. 95.833 of this part.
18. Section 95.823 is added to read as follows:
Sec. 95.823 Geographic partitioning and spectrum disaggregation.
(a) Eligibility. Parties seeking Commission approval of geographic
partitioning or spectrum disaggregation of 218-219 MHz Service system
licenses shall request an authorization for partial assignment of
license pursuant to Sec. 1.948 of this chapter.
(b) Technical standards.
(1) Partitioning. In the case of partitioning, requests for
authorization of 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
licensed geographic service area. The partitioned service area shall be
defined by coordinate points at every 3 seconds along the partitioned
service area unless an FCC-recognized service area (i.e. Economic
Areas) is utilized or county lines are followed. The geographic
coordinates must be specified in degrees, minutes, and seconds, to the
nearest second of latitude and longitude, and must be based upon the
1983 North American Datum (NAD83). In the case where an FCC-recognized
service area or county lines are utilized, applicants need only list
the specific area(s) (through use of FCC designations or county names)
that constitute the partitioned area.
(2) Disaggregation. Spectrum maybe disaggregated in any amount.
(3) Combined partitioning and disaggregation. The Commission will
consider requests for partial assignments of licenses that propose
combinations of partitioning and disaggregation.
(c) Provisions applicable to designated entities.
(1) Unjust enrichment. See Sec. 1.2111(e) of this chapter.
(2) Parties not qualified for installment payment plans.
(i) When a winning bidder (partitionor or disaggregator) that
elected to pay for its license through an installment payment plan
partitions its license or disaggregates spectrum to another party
(partitionee or disaggregatee) that would not qualify for an
installment payment plan, or elects not to pay for its share of the
license through installment payments, the outstanding principal balance
owed by the partitionor or disaggregator shall be apportioned according
to Sec. 1.2111(e)(3) of this chapter. The partitionor or disaggregator
is responsible for accrued and unpaid interest through and including
the consummation date.
(ii) The partitionee or disaggregatee shall, as a condition of the
approval of the partial assignment application, pay its entire pro rata
amount of the outstanding principal balance on or before the
consummation date. Failure to meet this condition will result in
cancellation of the grant of the partial assignment application.
(iii) The partitionor or disaggregator shall be permitted to
continue to pay its pro rata share of the outstanding balance and, if
applicable, shall receive loan documents evidencing the partitioning
and disaggregation. The original interest rate, established pursuant to
Sec. 1.2110(f)(3)(i) of this chapter at the time of the grant of the
initial license in the market, shall continue to be applied to the
partitionor's or disaggregator's portion of the remaining government
obligation.
(iv) A default on the partitionor's or disaggregator's payment
obligation will affect only the partitionor's or disaggregator's
portion of the market.
(3) Parties qualified for installment payment plans.
(i) Where both parties to a partitioning or disaggregation
agreement qualify for installment payments, the partitionee or
disaggregatee will be permitted to make installment payments on its
portion of the remaining government obligation.
(ii) Each party may be required, as a condition to approval of the
partial assignment application, to execute loan documents agreeing to
pay its pro rata portion of the outstanding principal balance due, as
apportioned according to Sec. 1.2111(e)(3) of this chapter, based upon
the installment payment terms for which it qualifies under the rules.
Failure by either party to meet this condition will result in the
automatic cancellation of the grant of the partial assignment
application. The interest rate, established pursuant to
Sec. 1.2110(f)(3)(i) of this chapter at the time of the grant of the
initial license in the market, shall continue to be applied to both
parties' portion of the balance due. Each party will receive a license
for its portion of the partitioned market.
(iii) A default on an obligation will affect only that portion of
the market area held by the defaulting party.
(d) Construction requirements.
(1) Partitioning. Partial assignors and assignees for license
partitioning have two options to meet construction requirements. Under
the first option, the partitionor and partitionee would each certify
that they will independently satisfy the applicable construction
requirements set forth in Sec. 95.833 of this part for their respective
partitioned areas. If either licensee failed to meet its requirement in
Sec. 95.833 of this part, only the non-performing licensee's renewal
application would be subject to dismissal. Under the second option, the
partitionor certifies that it has met or will meet the requirement in
Sec. 95.833 of this part for the entire market. If the partitionor
fails to meet the requirement in Sec. 95.833 of this part, however,
only its renewal application would be subject to forfeiture at renewal.
(2) Disaggregation. Partial assignors and assignees for license
disaggregation have two options to meet construction requirements.
Under the first option, the disaggregator and disaggregatee would
certify that they each will share responsibility for meeting the
applicable construction requirements set forth in Sec. 95.833 of this
part for the geographic service area. If parties choose this option and
either party fails to do so, both licenses would be subject to
forfeiture at renewal. The second option would allow the parties to
agree that either the disaggregator or the disaggregatee would be
responsible for meeting the requirement in Sec. 95.833 of this part for
the geographic service area. If parties choose this option, and the
party responsible for meeting the construction requirement fails to do
so, only the license of the non-performing party would be subject to
forfeiture at renewal.
(3) All applications requesting partial assignments of license for
partitioning or disaggregation must include the above-referenced
certification as to which of the construction options is selected.
(4) Responsible parties must submit supporting documents showing
compliance with the respective construction requirements within the
appropriate construction benchmarks set forth in Sec. 95.833 of this
part.
19. Section 95.831 is revised to read as follows:
Sec. 95.831 Service requirements.
Subject to the initial construction requirements of Sec. 95.833 of
this subpart, each 218-219 MHz Service system license must demonstrate
that it provides substantial service within the service area.
Substantial service is defined as a service that is sound, favorable,
and substantially above a level of service which might minimally
warrant renewal.
20. Section 95.833 is revised to read as follows:
Sec. 95.833 Construction requirements.
(a) Each 218-219 MHz Service licensee must make a showing of
[[Page 59663]]
``substantial service'' within ten years of the license grant. A
``substantial service'' assessment will be made at renewal pursuant to
the provisions and procedures contained in Sec. 1.949 of this chapter.
(b) Each 218-219 MHz Service licensee must file a report to be
submitted to inform the Commission of the service status of its system.
The report must be labeled as an exhibit to the renewal application. At
minimum, the report must include:
(1) A description of its current service in terms of geographic
coverage and population served;
(2) An explanation of its record of expansion, including a
timetable of new construction to meet changes in demand for service;
(3) A description of its investments in its 218-219 MHz Service
systems;
(4) A list, including addresses, of all component CTSs constructed;
and
(5) Copies of all FCC orders finding the licensee to have violated
the Communications Act or any FCC rule or policy; and a list of any
pending proceedings that relate to any matter described in this
paragraph.
(c) Failure to demonstrate that substantial service is being
provided in the service area will result in forfeiture of the license,
and will result in the licensee's ineligibility to apply for 218-219
MHz Service licenses for three years from the date the Commission takes
final action affirming that the 218-219 MHz Service license has been
canceled pursuant to Sec. 95.813 of this part.
21. Section 95.853 is revised to read as follows:
Sec. 95.853 Frequency segments.
There are two frequency segments available for assignment to the
218-219 MHz Service in each service area. Frequency segment A is
218.000-218.500 MHz. Frequency segment B is 218.501-219.000 MHz.
22. Section 95.855 is revised to read as follows:
Sec. 95.855 Transmitter effective radiated power limitation.
The effective radiated power (ERP) of each CTS and RTU shall be
limited to the minimum necessary for successful communications. No CTS
or fixed RTU may transmit with an ERP exceeding 20 watts. No mobile RTU
may transmit with an ERP exceeding 4 watts.
23. Section 95.859 is amended by revising paragraph (a) and by
removing and reserving paragraph (b) to read as follows:
Sec. 95.859 Antennas.
(a) The overall height from ground to topmost tip of the CTS
antenna shall not exceed the height necessary to assure adequate
service. Certain CTS antennas must be individually licensed to the 218-
219 MHz System licensee (see Sec. 95.811(b) of this part) and the
antenna structures of which they are a part must be registered with the
Commission (see part 17 of this chapter).
24. Section 95.861 is revised to read as follows:
Sec. 95.861 Interference.
(a) When a 218-219 MHz Service system suffers harmful interference
within its service area or causes harmful interference to another 218-
219 MHz Service system, the licensees of both systems must cooperate
and resolve the problem by mutually satisfactory arrangements. If the
licensees are unable to do so, the Commission may impose restrictions
including, but not limited to, specifying the transmitter power,
antenna height or area, duty cycle, or hours of operation for the
stations concerned.
(b) The use of any frequency segment (or portion thereof) at a
given geographical location may be denied when, in the judgment of the
Commission, its use in that location is not in the public interest; the
use of a frequency segment (or portion thereof) specified for the 218-
219 MHz Service system may be restricted as to specified geographical
areas, maximum power, or other operating conditions.
(c) A 218-219 MHz Service licensee must provide a copy of the plan
required by Sec. 95.815(b) of this part to every TV Channel 13 station
whose Grade B predicted contour overlaps the licensed service area for
the 218-219 MHz Service system. The 218-219 MHz Service licensee must
send the plan to the TV Channel 13 licensee(s) within 10 days from the
date the 218-219 MHz Service licensee submits the plan to the
Commission, and the 218-219 MHz Service licensee must send updates to
this plan to the TV Channel 13 licensee(s) within 10 days from the date
that such updates are filed with the Commission pursuant to
Sec. 95.815(b) of this part.
(d) Each 218-219 MHz Service system licensee must provide upon
request, and install free of charge, an interference reduction device
to any household within a TV Channel 13 station Grade B predicted
contour that experiences interference due to a component CTS or RTU.
(e) Each 218-219 MHz Service system licensee must investigate and
eliminate harmful interference to television broadcasting and
reception, from its component CTSs and RTSs, within 30 days of the time
it is notified in writing, by either an affected television station, an
affected viewer, or the Commission, of an interference complaint.
Should the licensee fail to eliminate the interference within the 30-
day period, the CTS(s) or RTU(s) causing the problem(s) must
discontinue operation.
(f) The boundary of the 218-219 MHz Service system, as defined in
its authorization, is the limit of interference protection for that
218-219 MHz Service system.
Sec. 95.863 [Removed]
25. Section 95.863 is removed.
[FR Doc. 99-27874 Filed 11-2-99; 8:45 am]
BILLING CODE 6712-01-P
