[Federal Register Volume 60, Number 211 (Wednesday, November 1, 1995)]
[Proposed Rules]
[Pages 55529-55537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27040]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Chapter I
[WT Docket No. 95-157; RM-8643; FCC 95-426]
Plan for Sharing the Costs of Relocation
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Commission adopted a Notice of Proposed Rule Making
(``Notice''), proposing a plan for sharing the costs of relocating
microwave facilities operating in the 1850 to 1990 MHz (``2 GHz'')
band. The Commission's proposal would establish a system whereby
Personal Communications Services (``PCS'') licensees that incur costs
to relocate microwave links outside of their assigned licensing areas
or spectrum blocks would receive reimbursement for a portion of those
costs from other PCS licensees that benefit from the resulting
clearance of the spectrum. In addition to cost-sharing issues, the
Commission asks for comment on whether to clarify certain other aspects
of the Commission's microwave relocation rules. Specifically, the
Commission seeks comment on whether to clarify the definition of ``good
faith'' negotiations, which are required during the mandatory
negotiation period; whether to clarify the definition of ``comparable''
facilities, which must be provided to microwave incumbents by PCS
licensees who seek involuntary relocation; whether to clarify the rules
that allow relocated microwave licensees a 12-month trial period to
ensure their new facilities are comparable; whether to continue to
grant microwave applications for primary status in the 2 GHz band; and
whether to place a time limit on a PCS licensee's obligation to provide
comparable facilities. Also, the Commission stated that, as of the date
the Notice was adopted, it would grant primary status applications only
for minor modifications that would not add to the relocation costs of
PCS licensees.
DATES: Comments must be filed on or before November 30, 1995, and reply
comments must be filed on or before December 21, 1995.
ADDRESSES: Federal Communications Commission, 1919 M Street NW.,
Washington, D.C. 20554.
FOR FURTHER INFORMATION CONTACT:
Linda I. Kinney, (202) 418-0620, Wireless Telecommunications Bureau.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Notice, adopted on
October 12, 1995, and released on October 13, 1995. The complete text
of this Notice is available for inspection and copying during normal
business hours in the FCC Dockets Branch, Room 239, 1919 M Street NW.,
Washington, D.C., and also may be purchased from the Commission's copy
contractor, International Transcription Service, at (202) 857-3800,
2100 M Street NW., Suite 140, Washington, D.C. 20037.
I. Background
In the First Report and Order and Third Notice of Proposed Rule
Making in ET Docket No. 92-9, 57 FR 49020 (October 29, 1992) (``ET
First Report and Order''), the Commission reallocated the 1850-1990,
2110-2150, and 2160-2200 MHz bands from private and common carrier
fixed microwave services to emerging technology services. The
Commission also established procedures for 2 GHz microwave incumbents
to be cleared off of emerging technology spectrum and relocated to
available frequencies in higher bands. The ET First Report and Order
set forth a regulatory framework that encourages incumbents to
negotiate voluntary relocation agreements with emerging technology
licensees or manufacturers of unlicensed devices when frequencies used
by the incumbent are needed to implement the emerging technology. The
ET First Report and Order also stated that, should voluntary relocation
negotiations fail, the emerging technology licensee could request
mandatory relocation of the existing facility, provided that the
emerging technology service provider pays the cost of relocating the
incumbent to a comparable facility.
In the Commission's 1993 Third Report and Order and Memorandum
Opinion and Order in ET Docket No. 92-9, 58 FR 46547 (September 2,
1993) (``ET Third Report and Order''), as
[[Page 55530]]
modified on reconsideration by the Commission's 1994 Memorandum Opinion
and Order, 59 FR 19642 (April 25, 1994) (``ET Memorandum Opinion and
Order''), the Commission established additional details of the
transition plan to enable emerging technology providers to relocate
incumbent facilities to other spectrum. The relocation process now in
effect consists of two periods that must expire before an emerging
technology licensee may proceed to request involuntary relocation. The
first is a fixed two year period for voluntary negotiations (three
years for public safety incumbents, e.g., police, fire, and emergency
medical), during which the emerging technology providers and microwave
licensees may negotiate any mutually acceptable relocation agreement.
If no agreement is reached during the voluntary negotiation period, the
emerging technology licensee may initiate a one-year mandatory
negotiation period--or two-year mandatory period if the incumbent is a
public safety licensee--during which the parties are required to
negotiate in good faith. Should the parties fail to reach an agreement
during the mandatory negotiation period, the emerging technology
provider may request involuntary relocation of the existing facility.
After relocation, the microwave incumbent is entitled to a one-year
trial period to determine whether the facilities are comparable. If the
relocated incumbent can demonstrate that the new facilities are not
comparable to the former facilities, the emerging technology licensee
must remedy the defects or pay to relocate the microwave licensee back
to its former or an equivalent 2 GHz frequency.
Because of the pattern of use of the 1850-1990 MHz band by
microwave incumbents, the relocation burden on each PCS licensee is not
necessarily limited to microwave links within its spectrum block and
licensing area. Some spectrum blocks assigned to microwave incumbents
overlap with one or more PCS blocks. Also, incumbents' receivers may be
susceptible to adjacent or co-channel interference from PCS licensees
in more than one PCS spectrum block. In order to clear a particular
spectrum block for unrestricted PCS use, a PCS licensee may be required
to relocate links in other licensing areas or on other spectrum blocks
that would otherwise cause or receive interference.
On May 5, 1995, Pacific Bell Mobile Services filed a Petition for
Rulemaking (``PacBell Petition'') that proposed a detailed cost-sharing
plan in which PCS licensees on all blocks, licensed and unlicensed,
would share in the cost of relocating microwave stations. On May 16,
1995, the Commission requested comments on PacBell's proposal. Initial
comments were due on June 15, 1995 and replies were due June 30, 1995.
The Commission's cost-sharing proposal is based on PacBell's Petition,
as modified by the Personal Communications Industry Association
(hereinafter referred to as the ``PCIA consensus proposal'').
II. Notice of Proposed Rule Making
A. Cost-Sharing Proposal
The Commission tentatively concludes that the public interest is
served by requiring PCS licensees that benefit from the relocation of a
microwave link to contribute to the costs of that relocation. Under the
Commission's current rules, the PCS licensee that relocates microwave
links (hereinafter referred to as the ``PCS relocator'') has no right
to reimbursement if a PCS licensee relocates a microwave link that
encumbers another PCS licensee's authorized frequencies or is located
in another licensee's territory. Any form of cost-sharing that occurs
must be by private, voluntary negotiation. Although affected PCS
entities may be able to identify each other and negotiate a joint
relocation agreement, parties benefitting from a relocation may not be
in a position to reach such an agreement before one of the parties must
move the link of its own business reasons. In addition, prior to the
licensing of the C, D, E, and F blocks, informal cost sharing of
relocation expenses that benefit these blocks in impossible because the
licensees for these blocks are unknown. As a result, existing PCS
licensees may be hesitant to move links unilaterally without some
assurance that future competitors who benefit from the relocation will
pay a share of the cost.
The Commission believes that adoption of a mandatory cost-sharing
plan would significantly enhance the speed of relocation by reducing
the ``free rider'' problem and creating incentives for PCS licensees to
negotiate system-wide relocation agreements with microwave incumbents.
This would in turn result in faster deployment of PCS and delivery of
service to the public. The Commission also tentatively concludes that
the PCIA consensus proposals, with a few modifications, offers a
practical and equitable approach to allocating the costs of relocation.
The mechanics of the plan are set forth in more detail below. The
Commission seeks comment on the advantages and disadvantages of
adopting mandatory cost-sharing and on the specifics of this proposal.
1. Mechanics of the Cost-Sharing Plan
The Cost-Sharing Formula. Under PCIA's consensus proposal, PCS
licensees would be entitled to reimbursement based on a cost-sharing
formula. The formula is derived by amortizing the cost of relocating a
particular microwave link over a ten-year period. As PCS licensees
enter the market, their share of relocation costs is adjusted to
reflect the total number of PCS licensees that benefit and the relative
time of market entry. The proposed formula is:
[GRAPHIC][TIFF OMITTED]TP01NO95.002
R equals the amount of reimbursement.
C equals the amount paid to relocate the link.
N equals the next PCS licensee that would interfere with the link. (The
PCS relocator is denominated as N=1. After the link is relocated, the
next PCS provider that would interfere would be 2, as so on.)
TN equals T1 plus the number of months that have passed since
the relocator obtained its reimbursement rights.
T1 equals the month that the first PCS licensee obtained rights to
reimbursement (as denoted by the numerical abbreviation for each month,
i.e., March=3).
The Commission tentatively concludes that the above formula
provides an effective and straightforward means of determining a
subsequent licensee's reimbursement obligation. The Commission also
tentatively agrees with PCIA that a PCS relocator should be entitled to
full reimbursement for relocating links with both endpoints outside of
its licensed service area, subject to the reimbursement cap (discussed
in further detail below). Such links are unlikely to interfere with the
relocator's system, and are easy to identify for purposes of
administering the cost-sharing plan. The Commission requests comment on
its proposal and any alternatives.
Expenses Already Incurred. The Commission tentatively concludes
that PCS licensees should be permitted to seek reimbursement for any
relocation costs incurred after the voluntary negotiation period began
for A and B block broadband PCS licensees on April 5, 1995. Once the
new rules are effective, a clearinghouse would be established (as
discussed in further detail below), and receipts from
[[Page 55531]]
expenses already incurred would be submitted to the clearinghouse for
accounting purposes. This would allow those PCS licensees, which have
already relocated or are in the process of relocating microwave
systems, to receive the same reimbursement benefit as other PCS
licensees that relocate microwave systems after any rule change. The
Commission seeks comment on this proposal.
Compensable Costs. Relocation costs can be divided roughly into the
following two categories: the actual cost of relocating a microwave
incumbent to comparable facilities, and payments above the cost of
providing comparable facilities, referred to as ``premium payments.''
The Commission tentatively concludes that premium payments should not
be reimbursable, because such payments are likely to be paid by PCS
licensees to accelerate relocation so that they can be the first
licensee in the market area to offer PCS services. The Commission does
not believe later that market entrants should be required to contribute
to premium payments, because they have not received the corresponding
advantage of being first to market. The Commission therefore proposes
to limit the calculation of reimbursable costs under the formula to
actual relocation costs. Actual relocation costs would include such
items as: radio terminal equipment (TX and/or RX--antenna, necessary
feed lines, MUX/Modems); towers and/or modifications; back-up power
equipment; monitoring or control equipment; engineering costs (design/
path survey); installation; systems testing; FCC filing costs; site
acquisition and civil works; zoning costs; training; disposal of old
equipment; test equipment (vendor required); spare equipment; project
management; prior coordination notification under Section 21.100(d) of
the Commission's rules, 47 CFR 21.100(d); site lease renegotiation;
required antenna upgrades for interference control; power plant upgrade
(if required); electrical grounding systems; Heating Ventilation and
Air Conditioning (HVAC) (if required); alternate transport equipment;
and leased facilities. The Commission requests comment on this
proposal, and on any additional types of costs that commenters believe
should be eligible for reimbursement.
Length of Obligation. The Commission tentatively concludes that the
cost-sharing plan should sunset for all PCS licensees ten years after
the date that voluntary negotiations commenced for A and B block
licensees, which means that cost-sharing would cease on April 4, 2005.
The Commission believes that it is important to set a date certain on
which the clearinghouse will be dissolved, and adopt a cost-sharing
plan with the fewest possible variables so that it will be easy to
administer. The Commission also believes that this time period is
sufficient for all licensees (including those in the C, D, E, and F
blocks, which will be licensed in the near future) to complete most
relocation agreements. This ten-year period also roughly coincides with
the initial PCS license terms and the ten-year depreciation period
under the proposed formula. To the extent that some obligations would
have extended beyond this date under the formula, the Commission
believes that the limited benefit that licensees would receive is
outweighed by the cost of maintaining a clearinghouse beyond the ten-
year period. The Commission seeks comment on this proposal.
Reimbursement Cap. The Commission tentatively concludes that a cap
on the amount subject to reimbursement under the cost-sharing formula
is appropriate, because it protects future PCS licensees--who have no
opportunity to participate in the negotiations--from being required to
contribute to excessive relocation expenses. The Commission also
tentatively concludes that a cap will not force microwave licensees to
contribute to the cost of their own relocation, because a cap on the
amount subject to reimbursement does not limit payments to microwave
incumbents. If a cap is imposed, the Commission believes that the
amount should be sufficient to cover the average cost of relocating a
link. While this may require the initial PCS relocator to bear more of
the cost in cases where relocation expenses are unusually high, setting
the cap at a higher level could shift the burden unfairly to subsequent
licensees in many more cases. Therefore, the Commission tentatively
concludes that a $250,000 per link cap (plus $150,000 if a tower is
required) is appropriate. This amount has the consensus support of PCS
commenters as an accurate approximation of the likely cost of
relocating most microwave stations. In addition, UTAM has estimated
that relocation costs will average $200,000 per link to cover the same
distance as an existing single microwave link. The Commission requests
comment on this proposal.
2. Cost-Sharing Obligation
Creation of Reimbursement Rights. The Commission tentatively
concludes that the PCS relocator should obtain some form of rights for
which it would be entitled to reimbursement. The Commission proposes
that, once a PCS licensee and a microwave incumbent have signed an
agreement that provides for the relocation of a specified number of
microwave links, the parties would submit the relocation agreement to a
clearinghouse. On the date that the relocation agreement is submitted,
the clearinghouse would replace the name of the microwave incumbent
with the name of the PCS relocator in a database maintained for the
purpose of determining reimbursement. As of that date, the PCS
relocator would become the holder of ``reimbursement rights'' for all
links covered by the relocation agreement. When a subsequent PCS
licensee begins the prior coordination notice (``PCN'') process
required by Section 21.100(d) of the Commission's rules, 47 CFR
21.100(d), that licensee would also contact the clearinghouse to
determine whether any PCS relocators hold reimbursement rights for the
channel over which it intends to transmit.
The Commission tentatively concludes that the creation of
reimbursement rights--which are separate, distinct, and unaffiliated
with the underlying microwave license--are preferable to the concept of
transferring the microwave incumbent's ``interference'' rights as
proposed by PCIA. First, the Commission believes that it is important
for the microwave incumbent to retain all of its rights under its
original authorization until its new system is in place. Second, any
transfer of rights relating to a license (even if only partial rights
are being transferred) would require Commission approval under Section
310(d) of the Communications Act, as amended. Thus, under PCIA's
proposal, the microwave incumbent would be required to request
permission from the Commission to transfer its interference rights to a
PCS licensee. The PCS licensee could not obtain the interference rights
until the Commission has acted. The Commission believes that such a
procedure would be time consuming and administratively cumbersome.
Third, the interference rights would have to exist independently from
the microwave license, so that they would not be cancelled at the same
time the microwave incumbent returns its 2 GHz license to the
Commission. The Commission seeks comment on the creation of
reimbursement rights.
Another alternative would be for the microwave licensee to assign
its microwave license to the PCS licensee under Section 94.47 of the
Commission's rules, 47 CFR 94.47, as part of a relocation agreement.
The assignment would require Commission
[[Page 55532]]
approval, but would effectively transfer the incumbent's entire license
to the PCS licensee. The difficulty with this approach is that under
Section 94.53 of the Commission's rules, 47 CFR 94.53, the microwave
license must be cancelled if the facility has been non-operational for
a year. Because the PCS licensee would not operate a microwave system,
a mechanism would be required that enables the PCS licensee to exercise
its rights after the microwave facility has become non-operational. The
Commission seeks comment on the above options and any alternatives.
Definition of Interference. To ascertain whether subsequent
licensees are obligated to make a payment under the proposed plan, the
Commission must decide what standard will be used to determine
interference, and what type of interference (e.g., co-channel, adjacent
channel) triggers a cost-sharing obligation. The Commission tentatively
concludes that the Telecommunications Industry Association (``TIA'')
Bulletin 10-F is an appropriate standard for determining interference
for purposes of the cost-sharing plan. TIA Bulletin 10-F is already the
standard used to determine PCS-to-microwave interference.
The Commission also notes, however, that the procedures set forth
in TIA Bulletin 10-F permit the use of different propagation models and
allow alternative technical parameters to be employed. Therefore, TIA
Bulletin 10-F may not provide a clear standard for determining
interference in some situations. Thus, the Commission seeks comment on
whether the application of Bulletin 10-F should be limited in scope for
reimbursement purposes to the minimum coordination distance equations.
Under this approach, reimbursement would be required for all facilities
within the calculated coordination zone from the PCS base station,
rather than basing the requirement on the more complex and variable
computations of potential interference. The Commission tentatively
concludes that use of these minimum coordination distance equations
would simplify administration of the test for determining whether a
cost-sharing obligation exists, and would reduce the number of disputes
that may otherwise arise over whether interference would have occurred
if the link were still operational. The Commission requests comment on
whether any of the other standard equations of TIA Bulletin 10-F may be
applied more easily for purposes of cost-sharing. The Commission also
seeks comment on whether there is a more appropriate industry-accepted
standard for determining interference.
The Commission also notes that incumbent microwave licensees
generally employ receivers with ``receiving bandwidths'' that
significantly exceed the authorized bandwidth of the associated
transmitter. Accordingly, microwave receivers generally require
protection over a frequency range twice as large as the transmission
bandwidth (i.e., a microwave station with a 5 MHz transmit bandwidth
would require protection within a 10 MHz band to protect its
corresponding receive station). For purposes of determining a
reimbursement obligation, however, the Commission proposes to consider
only interference that occurs co-channel to the transmit and receive
bandwidth of the incumbent microwave licensee. For reimbursement and
cost-sharing purposes only, the Commission proposes that a 5 MHz
bandwidth transmit microwave station would receive only 5 MHz
protection for its receive stations (rather than the 10 MHz adjacent
channel protection it would typically require to protect its receive
station). Excluding adjacent channel interference for purposes of cost-
sharing will serve to simplify administration of the cost-sharing plan
by providing more certainty in determining when a reimbursement
obligation exists. Also, it would reduce the number of receive stations
that would be calculated to receive interference, thereby limiting the
number of situations under which reimbursement is required. The
Commission seeks comment on this proposal and any alternatives. The
Commission also requests comment on whether adjacent channel
interference (i.e., 5 MHz transmit and 10 MHz receive protection)
should be included for purposes of determining a reimbursement
obligation.
With respect to the type of interference that should trigger a
cost-sharing obligation, the Commission tentatively concludes that a
two-part test should be adopted for determining whether reimbursement
is required. Thus, a subsequent licensee would be required to reimburse
the PCS relocator only if (1) The subsequent PCS licensee's system
would have caused co-channel interference to the link that was
relocated, and (2) at least one endpoint of the former link was located
within the subsequent PCS licensee's authorized market area. The
Commission requests comment on whether reimbursement should also be
required if the link that is relocated would have caused adjacent-
channel interference to the subsequent licensee, and whether it would
be difficult to determine if adjacent-channel interference would have
occurred.
Payment Issues. The Commission tentatively concludes that a PCS
licensee should be required to pay under the cost-sharing formula at
the time that its operations would have caused interference with the
relocated link. The Commission also tentatively concludes that a PCS
licensee's reimbursement obligation should be determined at the time
frequency coordination is required. Thus, the Commission proposes that
PCS licensees contact the clearinghouse to determine reimbursement
obligations prior to initiating service, although payment would not be
due in full until the date that the PCS licensee commences commercial
operations. The Commission seeks comment on these proposals.
In addition, the Commission tentatively concludes that PCS
licensees that are allowed to pay for their licenses in installments
under the Commission's designated entity rules should have the same
option available to them with respect to payments under the cost-
sharing formula. The Commission also tentatively concludes that the
installment payment option should be extended to the Unlicensed PCS Ad
Hoc Committee for 2 GHz Microwave Transition and Management (``UTAM'').
Allowing cost-sharing payments to be made in installments will
significantly ease the burden of cost-sharing for these entities. The
Commission further proposes that the specific terms of the installment
payment mechanism, including the treatment of principal and interest,
would be the same as those applicable to the licensee's auction
payments described above. Thus, if a licensee is entitled to pay its
winning bid in quarterly installments over ten years, with interest-
only payments for the first year, it would pay relocation costs under
the same formula. Because UTAM receives its funding in small increments
over an extended period of time, the Commission tentatively concludes
that UTAM should qualify for the most favorable installment payment
plan available to small businesses with gross revenues of $40 million
or less. UTAM would therefore be permitted to make its payments on the
same terms as the C Block small businesses (i.e., using installments,
at a rate equal to ten-year U.S. Treasury obligations applicable on the
date the license is granted, and requiring that payments include
interest only for the first six years with payments of principal and
interest amortized over the remaining four years of the license term).
The Commission
[[Page 55533]]
seeks comment on whether the repayment schedules and interest rates
that it adopted for repaying auction bids are appropriate for cost-
sharing purposes.
3. Role of Clearinghouse
The Commission tentatively concludes that if the proposed cost-
sharing plan is adopted, it should be administered by an industry-
supported clearinghouse. The Commission believes an industry-supported
clearinghouse is preferable to having the cost-sharing plan
administered by the Commission for several reasons. First,
administration of the plan by the Commission would be a significant
drain on the Commission's administrative resources. Second, the
Commission believes that the PCS industry has the capability and the
incentive to support an industry clearinghouse. The Commission does not
propose at this time to designate any particular organization as the
clearinghouse, but seeks comment on the criteria it should use for
designating a clearinghouse, and on whether it should be an existing
organization or a new entity created for this purpose. The Commission
also seeks comment on how the clearinghouse would be funded. One
possibility would be for PCS licensees who seek reimbursement under the
cost-sharing plan to pay an administrative fee to the clearinghouse for
each relocated link that is potentially compensable under the plan. The
Commission believes that any fees assessed should be tied to the actual
administrative costs of operating the clearinghouse. The Commission
seeks comment on the appropriate fee level, as well as on any possible
alternative approaches to funding the clearinghouse.
PCS licensees that seek reimbursement under the formula would be
required to submit all applicable data, including contracts, to the
clearinghouse, which would open a file for each relocation. The
clearinghouse would then determine whether operation by the new PCS
licensee would have caused interference to a relocated microwave
facility, based on TIA Bulletin 10-F. If interference would have
occurred, the clearinghouse would notify the new licensee of its
reimbursement share under the formula. The Commission seeks comment
regarding potential confidentiality issues with respect to information
submitted to the clearinghouse. The Commission believes that specific
information regarding relocation costs will need to be available to
parties that wish to verify the accuracy of the clearinghouse's
reimbursement calculations. The Commission also believes that an open
flow of information is important to the smooth administration of the
cost-sharing plan, which in turn is likely to facilitate productive
negotiations between PCS licensees and microwave incumbents. Finally,
the Commission believes that confidentiality issues should be resolved
by PCS and microwave licensees rather than by the Commission. The
Commission therefore seeks comment on the extent to which the cost-
sharing proposal can accommodate the confidentiality concerns of the
parties.
4. Dispute Resolution Under the Cost-Sharing Plan
The Commission tentatively concludes that disputes arising out of
the cost-sharing plan (i.e., disputes over the amount of reimbursement
required, etc.) should be brought, in the first instance, to the
clearinghouse for resolution. To the extent that disputes cannot be
resolved by the clearinghouse, the Commission encourages parties to use
expedited alternative dispute resolution procedures (``ADR''), such as
binding arbitration, mediation, or other ADR techniques. The Commission
seeks comment on this proposal and on any other mechanisms that would
expedite resolution of these disputes, should they arise. The
Commission also seeks comment on whether parties should be required to
submit independent appraisals of valuations to the clearinghouse at the
time such disputes are brought to the clearinghouse for resolution. In
addition, the Commission seeks comment on whether failure to comply
with cost-sharing obligations should be taken into consideration by the
Commission when deciding on renewal and/or transfer of control or
assignment applications.
B. Relocation Guidelines
1. Good Faith Requirement During Mandatory Negotiations
If a relocation agreement is not reached during the voluntary
negotiation period, the Commission stated in the ET Third Report and
Order that the PCS licensee may initiate a mandatory negotiation
period, during which the parties are required to negotiate in good
faith. The Commission believes that clarification of the term ``good
faith'' will facilitate negotiations and help reduce the number of
disputes that may arise over varying interpretations of what
constitutes good faith. The Commission tentatively concludes that, for
purposes of the mandatory period, an offer by a PCS licensee to replace
a microwave incumbent's system with comparable facilities (defined in
further detail below) constitutes a ``good faith'' offer. Likewise, an
incumbent that accepts such an offer presumably would be acting in good
faith; whereas, failure to accept an offer of comparable facilities
would create a rebuttable presumption that the incumbent is not acting
in good faith. Comparable facilities, as explained below, would be
limited to the actual costs associated with providing a replacement
system, and would exclude any expenses (e.g., consultant fees)
incurred by the incumbent without securing the approval in advance from
the PCS relocator. The Commission seeks comment on this proposal. The
Commission also seeks comment on the appropriate penalty to impose on a
licensee that does not act in good faith.
2. Comparable Facilities
The Commission continues to believe that the current negotiation
process is the most appropriate means for determining comparability of
the existing and replacement facilities. The Commission believes that,
in the vast majority of cases, this procedure provides parties with the
necessary flexibility to negotiate terms for determining comparability
that are mutually agreeable to all parties without the need for
government intervention or mandate. Nonetheless, the Commission
recognizes that because comparability is such a key concept of the
Commission's rules, some clarification of the responsibilities and
obligations of the parties with regard to comparability would be
helpful. Accordingly, the Commission proposes to clarify the factors
that it will use to determine when a facility is comparable, i.e.,
equal to or superior to the fixed microwave facility it is replacing.
The Commission previously stated in the ET Third Report and Order
that to determine comparability it will consider, inter alia, system
reliability, capability, speed, bandwidth, throughput, overall
efficiency, bands authorized for such services, and interference
protection. The Commission notes, however, that many of these factors
are inter-related and that equivalency in each and every one of these
factors is not necessary for comparability. The Commission therefore
now proposes to clarify that the three main factors it will use to
determine when a facility is comparable are: communications throughput,
system reliability, and operating cost. A replacement facility will be
presumed
[[Page 55534]]
comparable if the new system's communications throughput and
reliability are equal to or greater than that of the system to be
replaced, and the operating costs of the replacement system are equal
to or less than those of the existing system. This will ensure that
incumbent users will perceive no qualitative difference between the
original and replacement facilities.
For the purpose of determining comparability, the Commission
proposes to define communications throughput as the amount of
information transferred within the system for a given amount of time.
For digital systems this is measured in bits per second (``bps''), and
for analog systems the throughput is measured by the number of voice
and or data channels. The Commission proposes to define system
reliability as the amount of time information is accurately transferred
within the system. The reliability of a system is a function of
equipment failures (e.g., transmitters, feed lines, antennas,
receivers, battery back-up power, etc.), the availability of the
frequency channel due to propagation characteristic (e.g., frequency,
terrain, atmospheric conditions, radio-frequency noise, etc.), and
equipment sensitivity. For digital systems this would be measured by
the percent of time the bit error rate (``ber'') exceeds a desired
value, and for analog transmissions this would be measured by the
percent of time that the received carrier-to-noise ratio exceeds the
receiver threshold. The Commission proposes to define operating cost as
the cost to operate and maintain the microwave system. For the purpose
of defining comparable systems, the Commission proposes to assume that
the operating cost of all microwave systems are the same provided that
they contain the same number of links. The Commission also proposes to
consider facilities comparable in cases where the specific increased
costs associated with the replacement facilities (e.g., additional
tower and associated radio equipment requirements, additional rents, or
land acquisition costs) are paid by the party relocating the facility,
or the existing microwave operator is fully compensated for those
increased costs. The Commission proposes that any recurring costs be
limited to a single ten-year license term. The Commission seeks comment
on these definitions.
The Commission recognizes that comparable replacement facilities
can be provided by ``trading-off'' system parameters. For example,
communications throughput may be increased by using equipment with a
more efficient modulation technique, and system reliability may be
improved by using better equipment, by adding redundancy in system
design (e.g., multiple receive antennas) or by providing additional
coding, such as forward error correction. Therefore, a system designer
may take advantage of these system ``trade-offs'' to provide comparable
facilities.
The Commission also proposes to clarify that the obligation to
provide comparable facilities under involuntary relocation requires a
PCS licensee to pay the cost of relocating only the specific microwave
links in the incumbent's system that must be moved to prevent harmful
interference by the PCS licensee's system. While the Commission expects
that PCS licensees may voluntarily undertake to relocate entire
microwave systems that include non-interfering links outside the PCS
licensee's particular service area, it does not regard this as a
requirement under involuntary relocation. With respect to those links
that do cause interference, however, PCS licensees must provide
incumbents with a seamless transition from the old facilities to the
replacement facilities. Thus, it may be both more efficient and more
cost-effective in many instances for the parties to move all of the
links in a system at once rather than to relocate them piecemeal. The
Commission seeks comment on this analysis. The Commission also
tentatively concludes that comparable facilities would be limited to
the actual costs associated with providing a replacement system (e.g.,
equipment, engineering expenses). The Commission proposes to exclude
extraneous expenses, such as fees for attorneys and consultants that
are hired by the incumbent without the advance approval of the PCS
relocator. The Commission considers such extraneous expenses to be
``premium payments'' that are not reimbursable after the voluntary
negotiation period has concluded. The Commission seeks comment on its
proposal and any alternatives.
In assessing comparability, the Commission also seeks comment on
how to account for technological disparities between old and new
microwave equipment. In many cases, microwave incumbents may seek to
replace old 2 GHz analog technology with new digital technology on the
relocated channel. The Commission encourages such agreements, but it
does not regard PCS licensees as being required to replace existing
analog with digital equipment when an acceptable analog solution
exists. Thus, the cost obligation of the PCS licensee would be the
minimum cost the incumbent would incur if it sought to replace but not
upgrade its system. The Commission seeks comment on this proposal and
on any alternatives.
The Commission also seeks comment on whether and how depreciation
of equipment and facilities should be taken into account.
Furthermore, the Commission seeks comment on whether additional
information about the value of an incumbent's current system and the
anticipated costs of relocation would also help to facilitate
negotiations. For example, the Commission could require that two
independent cost estimates--prepared by third parties not associated or
otherwise affiliated with either the incumbent licensee or the PCS
provider--be filed with the Commission by parties that have not reached
an agreement within one year after the commencement of the voluntary
negotiation period (April 4, 1996 for A and B block licensees). The
Commission seeks comment on whether it should require the parties to
submit such cost estimates during the voluntary negotiation period. The
Commission also seeks comment on what procedures should be used if the
microwave incumbent and the PCS licensee cannot agree on a third party
to prepare the independent cost estimate.
3. Public Safety Certification
In the ET Third Report and Order, the Commission identified the
select group of public service licensees that warrant special
protection (e.g., an extended voluntary negotiation period). The
Commission tentatively concludes the PCS licensees should have a
readily available means of confirming a microwave licensee's public
safety status. Thus, the Commission proposes that a public safety
licensee should be required to establish: (1) that it is eligible in
the Police Radio, Fire Radio, or Emergency Medical, or Special
Emergency Radio Services, (2) that it is a licensee in one or more of
these services, and (3) that the majority of communications carried on
the facilities involve safety of life and property.
Under the Commission's proposal, if the incumbent fails to provide the
PCS licensee with the requisite documentation, the PCS licensee may
presume that special treatment is inapplicable to the incumbent. The
Commission seeks comment on this proposal.
C. Twelve-Month Trial Period
Section 94.59(e) of the Commission's rules, 47 CFR 94.59(e),
provides a twelve-month period for relocated microwave incumbents to
test their new
[[Page 55535]]
facilities. The purpose of the twelve-month trial period is to ensure
that microwave incumbents have a full opportunity to test their new
systems under real-world operating conditions and to obtain redress
from the PCS licensee if the new system does not perform comparably to
the old system or pursuant to agreed-upon terms. The Commission
proposes that this period should commence at the time that the
microwave licensee begins operations on its new system. The Commission
also tentatively concludes that microwave licensees that have retained
their 2 GHz authorizations during the twelve-month trial period should
surrender them at the conclusion of that period.
Moreover, the Commission does not believe that microwave licensees
are required to retain their 2 GHz licenses through the trial period in
order to retain their rights to relocation and comparable facilities.
Section 94.59 of the Commission's rules, 47 CFR 94.59, provide that, if
the new facility is found not to be comparable during the trial period,
the PCS licensee must either cure the problem, restore the incumbent to
its original frequency, or pay to relocate it to an equivalent 2 GHz
frequency. In the Commission's view, all of these rights reside with
the incumbent as a function of the Commission's relocation rules,
regardless of whether the incumbent has previously surrendered its
license. The Commission therefore proposes to clarify its rules to
indicate that a microwave license may surrender its license as part of
a relocation agreement without prejudice to its rights under the
Commission's relocation rules. The Commission requests comment on this
proposal.
D. Licensing Issues
1. Interim Licensing
As a general matter, the Commission tentatively concludes that
allowing additional primary site grants in the 2 GHz band now that
relocation negotiations are ongoing will unnecessarily impede
negotiations and may add to the relocation obligations of PCS
licensees. Nevertheless, the Commission recognizes that some minor
technical changes to existing microwave facilities may be necessary for
incumbents' continued operations. The Commission does not believe,
however, that these minor technical modifications will significantly
increase the cost to a PCS licensee of relocating a particular link.
To the extent practicable the Commission proposes to continue
applying the current rules governing primary and secondary status to
modification and minor extension applications pending as of the
adoption date of the Notice. While the rulemaking proceeding is
pending, the Commission will continue to accept applications for
primary status, however it will process only minor modifications that
would not add to the relocation costs of PCS licensees. Thus, while the
rulemaking proceeding is pending, the Commission will grant primary
status applications for the following limited number of technical
changes: decreases in power, minor changes in antenna height, minor
coordinate corrections (up to two seconds), reductions in authorized
bandwidths, minor changes in structure heights, changes in ground
elevation (but preserving centerline height), and changes in equipment.
Any other modifications will be permitted only on a secondary basis,
unless a special showing of need justified primary status and the
incumbent is able to establish that the modification would not add to
the relocation costs of PCS licensees. In addition, the Commission will
carefully scrutinize any applications for transfer of control or
assignment to establish that its microwave relocation procedures are
not being abused, and that the public interest would be served by the
grant.
As of the adoption date of its new rules, the Commission proposes
to grant all other modifications and extensions solely on a secondary
basis (with the exception of the minor technical changes listed above).
Secondary operations may not cause interference to operations
authorized on a primary basis, and they are not protected from
interference form primary operations. The Commission believes that
granting secondary site authorizations serves the public interest,
because it balances existing licensees' need to expand their systems
with the goal of minimizing the number of microwave links that PCS
licensees must relocate. The Commission seeks comment on this proposal.
2. Secondary Status After Ten Years
Section 94.59(c) of the Commission's rules, 47 CFR 94.59(c), states
that the Commission will amend the operation license of the fixed
microwave operator to secondary status only if the emerging technology
service entity provides that 2 GHz incumbent with comparable
facilities. The Commission tentatively concludes that microwave
incumbents should not retain primary status indefinitely on spectrum
licensed for emerging technology services. Thus, the Commission
proposes that microwave incumbents that are still operating in the
1850-1990 MHz band on April 4, 2005, should be made secondary on that
date. This date coincides with the date that the clearinghouse would be
dissolved and provides adequate time for completion of microwave
relocation. The Commission seeks comments on whether there should be
some time limit placed on the emerging technology provider's obligation
to provide comparable facilities.
III. Procedural Matters and Ordering Clauses
A. Regulatory Flexibility Analysis
As required by Section 603 of the Regulatory Flexibility Act, the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the expected impact on small entities of the policies and
rules proposed in this Notice. Written public comments are requested on
the IRFA.
Reason for Action: This rulemaking proceeding was initiated to
secure comment on a proposal for sharing costs among broadband PCS
licensees that will relocate 2 GHz point-to-point microwave licensees
currently operating on the spectrum blocks allocated for PCS. This
proposal would promote the efficient relocation of microwave licensees
by encouraging PCS licensees to relocate entire microwave systems,
rather than individual microwave links, thus bringing PCS services to
the public in an efficient manner. The Commission has also proposed to
clarify the terms ``comparable facilities'' and ``good faith''
negotiations, to clarify some aspects of the twelve-month trial period
after relocation, and has proposed to grant all microwave applications
for modifications and extensions solely on a secondary basis (with the
exception of the minor technical changes listed in the Notice).
Objectives: The Commission's objective is to require PCS licensees
that benefit from the relocation of a microwave link to contribute to
the costs of that relocation. A cost-sharing plan is necessary to
enhance the speed of relocation and provide an incentive to PCS
licensees to negotiate system-wide relocation agreements with microwave
incumbents. This action would result in faster deployment of PCS and
delivery of service to the public.
Legal Basis: The proposed action is authorized under the
Communications Act, Sections 4(i), 7, 303(c), 303(f), 303(g), 303(r),
and 332, 47 U.S.C. Secs. 154(i), 303(c), 303(f), 303(g), 303(r), 332,
as amended.
Reporting, Recordkeeping, and Other Compliance Requirements: Under
the proposal contained in the Notice, PCS
[[Page 55536]]
licensees that relocate microwave systems would be required to document
the relocation costs paid and report them to a central clearinghouse.
Later PCS market entrants would then be required to file Prior
Coordination Notices with the clearinghouse and, if necessary,
reimburse the initial relocating PCS licensee on a pro rata basis.
Federal Rules Which Overlap, Duplicate or Conflict With These
Rules: None.
Description, Potential Impact, and Number of Small Entities
Involved: This proposal would benefit small microwave incumbents by
encouraging PCS licensees to relocate entire microwave systems, rather
than individual links that interfere with the PCS licensee's
operations. Microwave licensees would therefore begin operations on
their new channels in an expedited fashion. The 2 GHz fixed microwave
bands support a number of industries that provide vital services to the
public. The Commission is committed to ensuring that the incumbents'
services are not disrupted and that the economic impact of this
proceeding on the incumbents is minimal. The Commission must further
take into consideration that not all of the incumbent licensees are
large businesses, particularly in the bands above 2 GHz, and that many
of the licensees are local government entities that are not funded
through rate regulation. The Commission believes that this proceeding
would further the Commission's policy of encouraging voluntary
agreements to relocate fixed microwave facilities to other bands during
the two-year period. After evaluating comments filed in response to the
Notice, the Commission will examine further the impact of all rule
changes on small entities and set forth its findings in the Final
Regulatory Flexibility Analysis.
Significant Alternatives Minimizing the Impact on Small Entities
Consistent with the Stated Objectives: The Commission has reduced
burdens wherever possible. The regulatory burdens the Commission has
retained are necessary in order to ensure that the public receives the
benefits of innovative new services in a prompt and efficient manner.
The Commission will continue to examine alternatives in the future with
the objectives of eliminating unnecessary regulations and minimizing
any significant economic impact on small entities.
IRFA Comments: The Commission requests written public comment on
the foregoing Initial Regulatory Flexibility Analysis. Comments must
have a separate and distinct heading designating them as responses to
the IRFA and must be filed by the comment deadlines set forth in the
Notice.
B. Paperwork Reduction Act
The Federal Communications Commission, as part of its continuing
effort to reduce paperwork burden, invites the general public and other
Federal agencies to take this opportunity to comment on the following
proposed and/or continuing information collections, as required by the
Paperwork Reduction Act of 1995, Public Law 104-13. Comments are
requested concerning (a) whether the proposed collection of information
is necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
Dates. Written comments on information collection requirements
should be submitted on or before January 2, 1996. If you anticipate
that you will be submitting comments but find it difficult to do so
within the period of time allowed, you should advise the contact person
listed below as soon as possible.
Address. Direct all comments to Dorothy Conway, Federal
Communications Commission, Room 234, 1919 M St., N.W., Washington, DC
20554, or via Internet to dconway@fcc.gov; and Timothy Fain, OMB Desk
Officer, 10236 NEOB, 725 17th St., N.W., Washington, DC 20503, or via
Internet to fain__t@al.eop.gov.
Further Information. For further information contact Dorothy
Conway, (202) 418-0217, or via Internet at dconway@fcc.gov.
Supplementary Information:
Title: Amendment to the Commission's Rules Regarding a Plan for
Sharing the Costs of Microwave Relocation.
Type of Review: New collection.
Respondents: Personal Communications Service licensees that
relocate existing microwave operators, and subsequent Personal
Communications Service applicants potentially benefitted by such
relocation.
Number of Respondents: Approximately 2,000.
Estimated Time Per Response: 15 minutes for each of approximately
2,000 respondents to photocopy and mail information; 40 hours for an
existing or newly-created industry representative to establish and
operate clearinghouse.
Total Annual Burden: Approximately 540 hours.
Needs and Uses: The Commission recently initiated a proceeding
proposing a plan for sharing the costs of relocating microwave
facilities currently operating in the 1850 to 1990 MHz band, which has
been allocated for use by broadband Personal Communications Services.
Amendment of the Commission's Rules Regarding a Plan for Sharing the
Costs of Microwave Relocation, Notice of Proposed Rule Making, adopted
October 12, 1995. The Commission's Notice would establish a mechanism
whereby PCS licensees that incur costs to relocate microwave links
would receive reimbursement for a portion of those costs from other PCS
licensees that also benefit from the resulting clearance of the
spectrum.
The Notice proposes that once a PCS licensee and a microwave
incumbent have signed an agreement with respect to relocation of the
microwave licensee, the parties would submit the relocation agreement
to an industry-supported clearinghouse. The clearinghouse would
maintain a computer database for the purpose of determining the
appropriate amount of reimbursement owed to the relocator PCS licensees
by subsequent PCS licensees who are benefitted by the relocation. When
a subsequent PCS licensee begins the prior coordination notice process
already required by Section 21.100(d) of the Commission's rules (i.e.
proposed frequency usage must be prior coordinated with existing users
and previously filed applicants in the area), that licensee would also
contact the clearinghouse to determine whether any PCS relocators hold
reimbursement rights for the channel over which it intends to transmit.
The clearinghouse would then determine whether operation by the new PCS
licensee would have caused interference to a relocated microwave
facility. If so, the clearinghouse would notify the new licensee of its
reimbursement share under a predetermined formula.
Thus, the Notice tentatively concludes that if the proposed cost-
sharing plan is adopted, it should be administered by an industry-
supported clearinghouse rather than by the Commission. PCS licensees
that seek reimbursement would be required to submit all applicable
data, including contracts, to the clearinghouse. To the extent that
disputes cannot be resolved by the clearinghouse, the Notice proposes
to encourage parties to use expedited alternative dispute resolution
[[Page 55537]]
procedures such as binding arbitration, mediation or other techniques.
The Notice seeks comment on the criteria the Commission should use in
designating a clearinghouse, and on how the clearinghouse would be
funded. The Notice suggests that one funding possibility might be for
PCS licensees seeking reimbursement under the cost-sharing plan to pay
an administrative fee to the clearinghouse.
The legal authority for this proposed information collection
includes 47 U.S.C. Sections 154(i), 303(c), 303(f), 303(g), 303(r) and
332. The information collection would not affect any FCC Forms. The
proposed collection would increase minimally the burden on PCS
licensees that relocate existing microwave licensees and on future PCS
applicants that might have benefited from the relocation by requiring
them to file already-existing paperwork with an industry-supported
clearinghouse.
C. Ex Parte Rules--Non-Restricted Proceeding
This is a non-restricted notice and comment rulemaking proceeding.
Ex parte presentations are permitted except during the Sunshine Agenda
period, provided they are disclosed as provided in Commission rules, 47
CFR 1.1202, 1.1203, and 1.1206(a).
D. Comment Period
Pursuant to applicable procedures set forth in Sections 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments on or before November 30, 1995, and reply
comments on or before December 21, 1995. To file formally in this
proceeding, you must file an original and four copies of all comments,
reply comments, and supporting comments. If you want each Commissioner
to receive a personal copy of your comments, you must file an original
plus nine copies. You should send comments and reply comments to Office
of the Secretary, Federal Communications Commission, Washington, D.C.
20554. Comments and reply comments will be available for public
inspection during regular business hours in the Reference Center of the
Federal Communications Commission, Room 239, 1919 M Street, N.W.,
Washington, D.C. 20554. A copy of all comments should also be filed
with the Commission's copy contractor, ITS, Inc., 2100 M Street, N.W.,
Suite 140, (202) 857-3800.
E. Authority
The proposed action is authorized under the Communications Act,
Sections 4(i), 7, 303(c), 303(f), 303(g), 303(r), and 332, 47 U.S.C.
Secs. 154(i), 303(c), 303(f), 303(g), 303(r), 332, as amended.
F. Ordering Clause
It is ordered that, as of the adoption date of the Notice, the
Commission will continue to accept microwave applications for primary
status in the 2 GHz band, however the Commission will process only
minor modifications that would not add to the relocation costs of PCS
licensees, as described in this Notice. This constitutes a procedural
change which is not subject to the notice and comment and 30-day
effective date requirements of the Administrative Procedure Act. See
Neighborhood TV Co., Inc. v. FCC, 742 F.2d 629 (D.C. Cir. 1984);
Buckeye Cablevision Inc. v. United States, 438 F.2d 948 (6th Cir.
1971). In any event, good cause exists under 5 U.S.C. Section
553(b)(3)(B) and (d)(3), because additional primary site grants in the
2 GHz band will unnecessarily impede the purpose of the current
relocation rules and any new relocation rules adopted in this
proceeding.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-27040 Filed 10-31-95; 8:45 am]
BILLING CODE 6712-01-M
