[Federal Register Volume 61, Number 33 (Friday, February 16, 1996)]
[Proposed Rules]
[Pages 6199-6210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3657]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 22 and 90
[WT Docket No. 96-18; PP Docket No. 93-253; FCC 96-52]
Future Development of Paging Systems and Implementation of
Section 309(j) of the Communications Act--Competitive Bidding
AGENCY: Federal Communications Commission.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: In this Notice of Proposed Rule Making in WT Docket No. 96-18
and PP Docket No. 93-253 (Notice), the Commission proposes to implement
geographic licensing for paging services to streamline licensing
procedures for Common Carrier Paging (CCP) and Private Carrier Paging
(PCP). The Commission proposes to transition to a geographic licensing
approach, and issue licenses for geographic areas, rather than on a
transmitter-by-transmitter basis. The Commission also proposes to adopt
competitive bidding rules to select among mutually exclusive paging
applications.
The Commission also addresses how paging applications should be
treated during the pendency of this rulemaking. The Commission proposes
to hold in abeyance and not process applications for paging channels
received after the adoption date of this Notice, except during the
pendency of this proceeding incumbent licensees may add sites to
existing systems or modify existing sites, so long as such additions or
modifications do not expand the interference contour of the incumbent's
existing system. With respect to CCP and PCP licensees who have
obtained nationwide exclusivity, the Commission will allow applications
for additional sites, without restrictions.
With respect to paging applications that were filed prior to the
February 8, 1996 adoption date of this Notice and remain pending, the
Commission proposes to process such applications provided that they are
not mutually exclusive with other applications, and the relevant period
for filing competing applications has expired as of the adoption date
of this Notice. The processing of mutually exclusive pending
applications and applications for which the relevant period for filing
competing applications has not yet expired will be held in abeyance
until the conclusion of this proceeding. In the Notice, the Commission
examines ways to promote continued growth and preserve vigorous
competition in the paging industry through revisions to the common
carrier and private carrier paging regulations. The Commission seeks to
establish a comprehensive and consistent regulatory scheme that will
simplify and streamline licensing procedures. To reach this objective,
the Commission proposes to transition to geographic licensing and to
adopt competitive bidding rules for mutually exclusive paging
applications.
DATES: Comments are to be filed on or before March 18, 1996. Reply
Comments are to be filed on or before April 2, 1996. Comments on the
Interim Licensing Proposal are to be filed on or before March 1, 1996.
Reply Comments on the Interim Licensing Proposal are to be filed on or
before March 11, 1996.
ADDRESSES: Federal Communications Commission, 1919 M Street, N.W.,
Washington, D.C. 20554.
FOR FURTHER INFORMATION CONTACT: Mika Savir or Rhonda Lien, Commercial
Wireless Division, Wireless Telecommunications Bureau, at (202) 418-
0620.
SUPPLEMENTARY INFORMATION: This Notice of Proposed Rule Making in WT
Docket No. 96-18 and PP Docket No. 93-253, adopted February 8, 1996,
and released February 9, 1996, is available for inspection and copying
during normal business hours in the FCC Dockets Branch, Room 230, 1919
M Street, N.W., Washington, D.C. The complete text may be purchased
from the Commission's copy contractor, International Transcription
Service, Inc., 2100 M Street, N.E., Suite 140, Washington, D.C. 20037
(202) 857-3800).
Synopsis of Notice of Proposed Rule Making:
I. Background
1. The Commission first allocated spectrum for the CCP service in
1949. The Commission responded to the growth of the paging market in
1982 by allocating 40 new channels in the 931 MHz band exclusively for
use by CCP operators and dedicating three of these channels for use by
nationwide systems.
2. PCP was established by the Commission, and authorized on
specified channels within each private radio service category, with
licensees authorized either to operate systems for their own internal
use or to provide service to limited categories of eligible users. In
1982, the Commission allocated 40 channels in the 929 MHz band for PCP,
with some channels to be licensed for internal-use systems and others
for PCP systems that could provide commercial paging service to
eligible users under Part 90. In 1993, the Commission allowed PCP
operators to provide service to the public on virtually the same
unrestricted basis as CCP operators.
3. The Omnibus Budget Reconciliation Act of 1993 amended the
Communications Act of 1934, as amended (the Act) to divide all mobile
services into two categories: Commercial Mobile Radio Services (CMRS)
and private mobile radio service (PMRS), and mandated that
``substantially similar'' mobile services receive comparable regulatory
treatment. The Commission concluded in the CMRS Second Report and
Order, Implementation of Sections 3(n) and 332 of the Communications
Act, Second Report and Order, GN Docket No. 93-252, 59 Fed. Reg. 18493
(April 19, 1994) (CMRS Second Report and Order), that PCP services were
subject to reclassification as CMRS as of August 10, 1996. In the CMRS
Third Report and Order, Implementation of Sections 3(n) and 332 of the
Communications Act, Third Report and Order, GN Docket No. 93-252, 59
Fed. Reg. 59945 (Nov. 21, 1994) (CMRS Third Report and Order), the
Commission concluded that PCP and CCP are substantially similar
services that should be subject to comparable regulation to the extent
feasible, and that geographic licensing should be considered in both
services.
[[Page 6200]]
A. Common Carrier Paging
a. Current Licensing Procedures
4. Under current rules, a CCP channel is assigned to a single
licensee in each area on an exclusive basis. Licensees' protected
service areas are based upon predicted coverage of the transmitters in
their systems; licensees must apply for additional transmitter
locations when expanding their systems. On all CCP allocations other
than 931 MHz, known as lower band CCP channels, applicants specify
which channels they want. Applications filed within the designated
filing window for the same channel in the same area are, by definition,
mutually exclusive. The 931 MHz band applications are not channel-
specific. Therefore, when there are more available channels in an area
than there are applications for new channel assignments, 931 MHz
applications are not mutually exclusive. In most major markets, the
number of applications often exceeds the number of available channels,
resulting in all applications being treated as mutually exclusive.
b. Part 22 Rewrite Order
5. In the Part 22 Rewrite Order, Revision of Part 22 of the
Commission's Rules Governing the Public Mobile Services, Report and
Order, CC Docket No. 92-115, 59 Fed. Reg. 59502 (Nov. 17, 1994) (Part
22 Rewrite Order), the Commission revised its licensing rules for all
Part 22 services, including adoption of new licensing rules for 931 MHz
paging frequencies. The Part 22 Rewrite Order provided that, as of
January 1, 1995, all 931 MHz applicants, including those who had
applications pending under the old rules, would be required to specify
channels in their applications. After a 60-day filing window for such
channel-specific applications, the Commission would grant those
applications that were not mutually exclusive and use competitive
bidding to select among the mutually exclusive applications.
B. Private Carrier Paging
a. Current Licensing Procedures
6. Historically, PCP channels have been licensed on a shared basis,
such that licensees would not obtain exclusive rights to a particular
channel and may be required to share the channel with others in the
same area. Under the current rules, PCP applicants for all non-929 MHz
PCP channels and five of the forty 929 MHz channels must submit their
applications to a frequency coordinator who recommends a channel to be
assigned by the Commission. PCP applicants are not currently subject to
competing applications or mutual exclusivity selection procedures, such
as lotteries, comparative hearings, or auctions.
7. As a result of the Commission's adoption of the PCP Exclusivity
Order, Amendment of the Commission's Rules to Provide Channel
Exclusivity to Qualified Private Paging Systems at 929-930 MHz, Report
and Order, PR Docket No. 93-35, 58 Fed. Reg. 62289 (Nov. 26, 1993) (PCP
Exclusivity Order), thirty-five of the forty 929 MHz PCP channels may
be licensed on an exclusive basis. Licensees whose systems operate on
these channels were allowed to earn exclusivity on a local, regional,
or nationwide basis, by constructing multi-transmitter systems meeting
certain build out criteria. The remaining incumbent licensees are
allowed to continue operating without being forced to change channels
or location. Applicants for exclusive PCP channels continue to submit
their applications to a frequency coordinator, and applications are
processed on a first-come, first-served basis.
II. Discussion
A. Geographic Licensing Proposal
a. Overview
8. Paging operators currently choose the areas they seek to serve
by applying for licenses on a site-by-site basis. The boundary of the
licensee's service area is derived from the composite service areas of
existing base stations. Geographic licensing for paging channels would
enhance regulatory symmetry with other CMRS services. In this Notice,
the Commission considers geographic licensing in the context of all
paging channels, including 931 MHz, 929 MHz, and lower band CCP and PCP
channels.
9. The Commission tentatively concludes that the public interest
would be served by converting to geographic licensing for all paging
channels that are licensed on an exclusive, non-nationwide basis.
Licensing such systems by geographic areas for ten-year license terms,
rather than by individual sites, would simplify paging system expansion
and substantially reduce the administrative burden on both paging
licensees and the Commission.
10. The Commission proposes that all incumbent systems be entitled
to continue operating under existing authorizations with full
protection from interference. Geographic licensees and incumbents could
enter into voluntary negotiations with respect to the purchase or
relocation of the incumbents' facilities. Any request for transfer or
assignment of an incumbent authorization to the geographic licensee is
presumed to be in the public interest, although each request will be
reviewed as required by Section 310(d) of the Act. In addition, if an
incumbent fails to construct, discontinues operations, or otherwise has
its license terminated, the Commission proposes that the geographic
area covered by the incumbent's authorization revert automatically to
the geographic licensee. To the extent geographic licensing is adopted,
the Commission proposes to eliminate the finder's preference under Part
90 of the Commission's rules. The Commission seeks comment on the
geographic licensing proposal.
11. 931 MHz and 929 MHz Channels. Under the geographic licensing
proposal in this Notice, 931 and 929 MHz licensees would be extended
the same flexibility, to the extent feasible, as cellular and PCS
licensees in terms of the location, design, construction, and
modification of their facilities throughout their geographic areas. The
Commission tentatively concludes that geographic licensing would
decrease the filing burden on 931 and 929 MHz licensees and provide
additional operational flexibility. Such licensing also would expedite
the processing of applications by reducing the number of licenses to be
issued and simplifying the determinations of which license applications
are mutually exclusive. The Commission seeks comment on this tentative
conclusion.
12. Nationwide Channels. The Commission proposes to exclude from
geographic licensing the following channels that have been assigned to
single licensees on a nationwide basis under the existing rules: the
three CCP channels (931.8875, 931.9125, and 931.9375 MHz) dedicated for
nationwide use and all PCP channels for which licensees have met the
construction requirements for nationwide exclusivity as of the adoption
date of this Notice. The Commission will announce, by Public Notice,
the specific PCP channels excluded for nationwide use at a later time.
The Commission tentatively concludes that a licensee who has obtained
nationwide exclusivity on a paging channel should be given a single
nationwide license for use of the channel instead of continuing to
operate under site-specific authorizations. The Commission tentatively
concludes that if a licensee fails to comply with the construction and
service requirements for nationwide exclusivity, the channel should be
made available for geographic licensing, and such licensee would
receive protection as an incumbent only
[[Page 6201]]
for those areas where it has completed construction and commenced
service. The Commission seeks comment on whether MTel's second channel
(931.4375 MHz) used virtually on a nationwide basis, should be
designated a nationwide channel, and whether it should be excluded from
our geographic licensing proposal.
13. Lower Band CCP Channels. The Commission also tentatively
concludes that geographic licensing should be extended to CCP channels
in the 35, 43, 152, and 454 MHz bands. The Commission asks commenters
to address the relative costs and benefits of converting lower band
channels to geographic licensing. The Commission also seeks comment on
whether competitive bidding should be used to select among mutually
exclusive paging and BETRS applications, and whether to allow
geographic partitioning of licensing areas to make spectrum available
to BETRS operators in sparsely populated regions.
14. Shared PCP Channels. The Commission seeks comment on whether
and when to use geographic licensing for lower band PCP channels (i.e.,
those PCP frequencies in the 152/158 MHz, 462 MHz, 465 MHz bands),
which currently are licensed on a shared basis. The Commission also
seeks comment on whether to (1) convert lower band shared PCP channels
to exclusive use and implement geographic licensing; (2) issue only a
certain number of licenses per shared channel and use competitive
bidding to choose among mutually exclusive applications once the limit
is reached; or (3) retain the status quo. The Commission tentatively
concludes that if the shared paging channels were to convert to
exclusive licensing, a geographic licensing approach would be
appropriate.
15. The Commission requests comment on the costs and benefits of
continuing to license some channels on a shared basis versus licensing
all channels on an exclusive basis, how such licensing plans would
affect the rights of incumbent licensees, and whether a geographic plan
is the most practical way in which to begin licensing these channels on
an exclusive basis.
b. Defining the Service Areas
16. The Commission seeks comment on the use of Metropolitan
Statistical Areas (MTAs) and on other options for defining service
areas for all of the various paging services. The Commission
tentatively concludes that MTAs form the most appropriate geographic
area boundaries for paging systems, because they are economically-
defined regions that appear to best mirror the size and development of
existing paging systems. MTAs also offer advantages from an
administrative perspective, because they are more efficient for the
Commission to license than smaller areas that require issuance of more
licenses. Commenters should provide empirical data on the area covered
by existing paging systems and how such coverage areas compare to MTAs.
17. The Commission tentatively concludes that, if MTA service areas
are adopted, three licensing regions in addition to the 47 Rand McNally
MTAs would be used to cover United States territories: Guam and the
Northern Mariana Islands would be licensed as a single area, Puerto
Rico and the U.S. Virgin Islands as a single area, and American Samoa
as a single area. Alaska would be licensed as a single area separate
from the Seattle MTA.
18. Rand McNally is the copyright owner of the MTA/BTA Listings,
which list the counties contained in each BTA/MTA, as embodied in Rand
McNally's Trading Area System BTA/MTA Diskette and geographically
represented in the map contained in Rand McNally's Commercial Atlas &
Marketing Guide. Rand McNally has licensed the use of its copyrighted
MTA/BTA Listings and maps for certain services such as PCS, 800 MHz and
900 MHz SMR, and Local Multipoint Distribution Services. These blanket
licensing agreements authorize the conditional use of Rand McNally's
copyrighted material in connection with these particular services,
require interested persons using the material to include a legend on
reproductions (as specified in the license agreement) indicating Rand
McNally's ownership, and provide for a payment of a license fee to Rand
McNally. Currently, paging services are not covered by a blanket
copyright license agreement. A paging authorization grantee who does
not obtain a copyright license (either through a blanket license
agreement or some other arrangement) from Rand McNally for use of the
copyrighted material may not rely on grant of a Commission
authorization as a defense to any claim of copyright infringement
brought by Rand McNally against such grantee.
c. Treatment of Incumbents
19. The Commission tentatively concludes that there is no feasible
means to relocate incumbents to alternative channels. Therefore,
incumbent licensees would be allowed to continue to operate under their
existing site-specific authorizations or a single system-wide license,
and geographic licensees would be required to provide protection to all
co-channel systems that are constructed and operating within their
service areas. No incumbent licensee would be allowed to expand beyond
its existing interfering contour and into the geographic licensee's
territory without the consent of the geographic licensee unless the
incumbent in question is itself the geographic licensee for the
relevant channel.
20. The Commission proposes that incumbent licensees should be
permitted to modify or add transmitters in their existing service area
without prior notification to the Commission, as long as the
interfering contour of the pre-existing system is not expanded.
Incumbents would be free to negotiate voluntary arrangements with
geographic licensees to allow expansion within a geographic area. The
Commission seeks comment on whether this proposal strikes a proper
balance between the competing interests of geographic and incumbent
licensees and whether there are any circumstances under which
incumbents should be permitted to expand into unserved areas without
the geographic licensee's consent.
d. Coverage Requirements
21. The Commission seeks comment on whether geographic paging
licensees should be subject to minimum coverage requirements as a
condition of licensing. The Commission tentatively concludes that
geographic licensees should be required to provide coverage to one-
third of the population within their geographic areas within three
years of initial license grant and to two-thirds of the population by
the end of five years, or in the alternative, provide substantial
service to the geographic license area at five years. A geographic
licensee must, three years from license grant, either submit a showing
that the one-third population coverage standard has been met, or
provide written notification that it has elected to show substantial
service to the geographic license area five years from license grant.
Each geographic licensee must, three years from license grant, indicate
how it expects to demonstrate substantial service at five years. The
Commission tentatively concludes that population-based coverage
requirements are more appropriate than geographic-based coverage
requirements, because strictly geographic-based requirements may lead
to coverage in sparsely populated areas where service is not needed or
is economically unjustified. The Commission requests comment on the
costs and benefits of imposing coverage requirements on geographic
licensees,
[[Page 6202]]
the specific coverage criteria proposed, and any alternative criteria.
22. The Commission tentatively concludes that under this geographic
licensing scheme, ``slow growth'' extensions for paging systems in the
929-930 MHz spectrum are unnecessary and that such extensions could
hinder geographic licensing because an incumbent licensee obtaining a
construction extension could effectively occupy an entire market area.
Therefore, the Commission proposes to dismiss all ``slow growth''
applications pending at the time an order pursuant to this Notice is
adopted, without prejudice to refile under the new geographic licensing
scheme. The Commission seeks comment on its tentative conclusion and
proposal to dismiss pending ``slow-growth'' extensions.
23. The Commission also tentatively concludes that, regardless of
the extent to which their respective service areas are occupied by co-
channel incumbents, geographic licensees should be responsible for
meeting their coverage requirements. This rule will deter applicants
who have a limited ability to provide coverage in a geographic area
from seeking the geographic license for anti-competitive reasons, e.g.,
to block expansion by an incumbent who already provides substantial
coverage. The ``substantial service'' option will provide an incentive
for incumbents already providing substantial coverage to seek
geographic licenses in the areas they serve. The Commission proposes to
require the geographic licensee to meet its coverage requirement
directly (e.g., by utilizing vacant spectrum or acquiring such spectrum
through buy-outs of incumbent licensees). The Commission asks
commenters to address the advantages and disadvantages of these
proposals and any alternatives.
24. The Commission tentatively concludes that a geographic
licensee's failure to meet the coverage requirements should result in
automatic cancellation of the geographic license. The Commission also
tentatively concludes that if a licensee loses its geographic license
for failure to comply with coverage requirements authorizations that
the licensee held prior to the auction for sites constructed and
operating would be reinstated. The Commission requests comment on this
proposal and any alternatives.
e. Co-Channel Interference Protection
25. The Commission seeks comment on the appropriate interference
protection criteria for incumbent co-channel facilities and to co-
channel licensees in neighboring service areas.
a. Protection of Incumbent Systems
26. Paging systems are currently protected from co-channel
interference by a variety of rules that govern transmitter height and
power, distance between stations, the licensee's protected service
area, and/or the field strength of the licensee's service and
interfering signals. The Commission proposes to retain these criteria
to define the interference protection rights of incumbent licensees
under any geographic licensing scheme that may be adopted. There are
some variations in the specific methodologies used to measure
interference in the different paging services. Therefore, the
Commission seeks comment on whether to adopt a standard methodology for
measuring interference in all paging bands or to retain existing
criteria in our rules.
27. Lower Band CCP Channels. In the Part 22 Rewrite Order, the
Commission adopted a series of mathematical formulas to determine
service and interfering contours in each CCP frequency range, other
than 931 MHz. If lower band CCP channels are converted to geographic
licensing, the Commission proposes to retain the mathematical formulas
and contour overlap provisions adopted in the Part 22 Rewrite Order to
define the interference protection rights of incumbents. The Commission
seeks comment on this proposal, and asks commentators to provide
empirical evidence showing whether the current Part 22 formulas would
provide satisfactory co-channel protection to incumbents.
28. 931 MHz Channels. The Commission seeks comment on whether
incumbents licensed in the 931 MHz band should continue to be protected
based on our existing tables of standard radii if geographic licensing
is adopted for 931 MHz channels. The Commission tentatively concludes
that the eight-radial contour method and mathematical formulas used for
the lower band CCP channels may be preferable to a fixed table of
standard radii, because it will more reasonably predict potential
interference to incumbents and provide geographic licensees with
greater flexibility in placing their facilities. The Commission invites
comment on this tentative conclusion.
29. The Commission seeks comment on the appropriate mathematical
formula for determining service and interference contours if the eight-
radial contour method for 931 MHz channels is adopted. The Commission
proposes to use the following mathematical formula, which is similar to
the formulas used in the lower band CCP services:
d = k x hx x py
The proposed formula is derived from the form of equations commonly
used for propagation path loss. In this formula, ``d'' is the radial
distance to the contour, ``h'' is the antenna center of radiation
height above average terrain along the cardinal radial, ``p'' is the
radial effective radiated power. The remaining factor ``k'' and
exponents ``x'' and ``y'' are numerical figures that can be determined
experimentally by matching the resulting curve to that of an
established propagation model for a given signal field strength. The
Commission proposes to assume a median field strength of 47
dBV/m as the basis for the service contour to determine the
appropriate formula for the 931 MHz service and interference contour
calculations. Statistically, this equates to a reasonably strong field
strength (in the 32 to 40 dBV/m range) at more than 90% of
locations in a suburban environment. The Commission proposes to assume
a median field strength of 21 dBV/m as the basis for the
interfering contour. The Commission proposes to derive corresponding
distances from these field strengths by using the Okumura 900 MHz
propagation curves as the propagation model. The specific formulas
would be:
Service: dkm = 0.108 x hm0.61 x pw0.32
Interfering: dkm = 3.033 x hm0.38 x pw0.16
In these formulas, ``km'' represents kilometers, ``m'' represents
meters, and ``w'' represents watts. The Commission seeks comment on
these formulas and their suitability for calculating service and
interfering contours for 931 MHz paging systems. Applying the formula,
a paging station operating at 1000 watts effective radiated power with
an antenna height of 305 meters (1000 feet) above average terrain would
have a service contour of approximately 32.2 kilometers (20 miles),
which is consistent with the service radius afforded under the current
rules. The Commission seeks comment on whether any variations in the
formula are needed, and on the field strength proposed for service and
interfering contours.
30. 929 MHz Exclusive Channels. Interference protection for
exclusive 929 MHz licensees currently is provided by rules requiring
standard minimum geographic separations between stations, which are
based on station height and power. These separations are based on the
same height-power table that is used for 931 MHz paging. The PCP rules,
unlike the CCP rules, do not
[[Page 6203]]
formally define a protected service contour or interference contour for
each station. The Commission proposes to adopt service and interference
contour criteria for 929 MHz paging using the same methodology proposed
for 931 MHz paging.
31. Non-Exclusive PCP Channels. Rules for paging systems on non-
exclusive PCP channels prescribe operating requirements such as
monitoring prior to transmitting to determine if the channel already is
in use, minimizing the length of messages, and yielding to others
transmitting communications related to the immediate safety of life.
The Commission requests comment on whether incumbent licensees should
receive interference protection.
b. Maximum Power and Height-Power Limits
32. Maximum Power Limits. In the Part 22 Rewrite proceeding, the
Commission concluded that a maximum power limit of 3500 Watts ERP is
appropriate for paging facilities in the 931 MHz band, because it
allows for the use of high power facilities where needed, yet provides
sufficient protection from intermodulation interference and receiver
desensitization. The Commission tentatively concludes that the maximum
ERP limit for these facilities should be raised to a maximum of 3500
Watts in order to bring the rules governing non-nationwide 929 MHz
facilities into conformity with those already in effect for 931 MHz,
nationwide 929 MHz, and Narrowband PCS facilities. This would provide
929 MHz licensees with the benefits of higher power operation without
unduly increasing the risk of interference. The Commission proposes to
retain the current maximum ERP limits for the various lower band paging
channels and seeks comment on this proposal and any alternatives.
33. Maximum Height-Power Limits. Height-power limits serve to limit
the service and interfering range of a facility to a constant distance.
The Commission proposes to eliminate the height-power limit for 929 MHz
licensees. With respect to the lower band channels, most of which
continue to be occupied by smaller systems, the Commission proposes to
maintain the current height-power limits, to continue to limit the
range of each facility and promote spectrum efficiency.
c. Adjacent Geographic Licensees
34. The Commission tentatively concludes that geographic licensees
should provide interference protection either by (1) reducing the
signal level at their service area boundary (e.g., by positioning
directional antennas in such a way that the contour does not encroach
on a geographic licensee's adjacent territory), or (2) negotiating some
other mutually acceptable agreement with all potentially affected
geographic licensees in adjacent areas. The Commission seeks comment on
this proposal and any alternatives.
f. Licensing in Mexican and Canadian Border Areas
35. In the Mexican and Canadian border areas, paging channel
availability may be restricted by treaty and limitations on ERP and
antenna height may be placed on additional channels. The Commission
tentatively concludes that all geographic areas should be licensed on a
uniform basis without distinguishing border from non-border areas, even
if some spectrum is unusable, if paging services are converted to
geographic licensing. The Commission proposes that geographic licensees
be entitled to use any available border-area channels, subject to the
relevant rules regarding international assignment and coordination of
such channels.
g. Eligibility
36. The Commission tentatively concludes that both incumbents and
new entrants should be allowed to apply for geographic licenses without
restrictions on eligibility. In cases where there are multiple co-
channel incumbents in a geographic area, the Commission tentatively
concludes that incumbents can form consortia or joint ventures and
apply collectively for the geographic license, or enter into
partitioning agreements. The Commission seeks comment on these
proposals. In particular, commenters are requested to discuss the
relationship between the coverage already provided by an incumbent in a
geographic area and the perceived value of the geographic license to
that incumbent and other potential applicants.
h. Channel Aggregation Limit
37. The Commission proposes to assign geographic licenses on a
channel-by-channel basis. The Commission seeks comment on whether an
aggregation limit is appropriate for paging frequencies, and if so,
what that limit should be. The Commission seeks comment on whether it
would be more appropriate to cap the combined aggregation of paging and
narrowband PCS spectrum rather than imposing a limit on paging only.
B. Competitive Bidding Issues
a. Auctionability of Paging Services
38. The Commission proposes to adopt comparable competitive bidding
procedures for both exclusive PCP channels and CCP channels, and seeks
comment on this proposal. The Commission seeks comment on what
competitive bidding methods should be used to award licenses in
conjunction with the proposal to adopt geographic licensing for CCP
services. The Commission also seeks comment on whether to adopt
equivalent competitive bidding procedures for competing applications
for exclusive PCP channels.
b. Competitive Bidding Design
a. Bidding Methodology
39. In the Competitive Bidding Second Report and Order,
Implementation of Section 309(j) of the Communications Act--Competitive
Bidding, Second Report and Order, PP Docket No. 93-253, 59 Fed. Reg.
(May 4, 1994) (Competitive Bidding Second Report and Order), the
Commission established criteria to select which auction design method
to use for particular auctionable services. The two most important
design elements are the number of auction rounds (single or multiple),
and the order in which licenses are auctioned (sequentially or
simultaneously). These two elements can be combined to create four
basic auction designs: sequential single round, simultaneous single
round, sequential multiple round, and simultaneous multiple round. The
Commission seeks comment on which of the above auction methodologies
should be used for the auction of paging licenses.
40. In the Competitive Bidding Second Report and Order, the
Commission stated that simultaneous multiple round auctions would be
the preferred method where licenses have strong value
interdependencies. The Commission seeks comment on whether simultaneous
multiple round auctions would be too burdensome to implement from an
administrative perspective, given the large number of paging licenses,
and whether simultaneous multiple round auctions or another competitive
bidding methodology such as oral outcry is most appropriate for the
paging services.
b. License Grouping
41. Depending upon the auction methodology chosen, there are
several alternatives for grouping of paging licenses. The Commission
seeks comment on how paging licenses should be grouped for competitive
[[Page 6204]]
bidding purposes and on possible license groupings.
c. Bidding Procedures
42. In the Competitive Bidding Second Report and Order, the
Commission established general procedures for simultaneous multiple
round auctions, including bid increments, duration of bidding rounds,
stopping rules, and activity rules. The Commission seeks comment on the
bidding procedures that should be used for licensing of paging
services.
43. Bid Increments. If a multiple round auction is used, the
Commission proposes to establish minimum bid increments for bidding in
each round of the auction, based on the same considerations in prior
orders. The Commission proposes to adopt a minimum bid increment of
five percent of the high bid in the previous round or $0.01 per
activity unit, whichever is greater. The Commission proposes to retain
the discretion to vary the minimum bid increments for individual
licenses or groups of licenses at any time before or during the course
of the auction, based on the number of bidders, bidding activity, and
the aggregate high bid amounts. The Commission also proposes to retain
the discretion to keep an auction open if there is a round in which no
bids or proactive waivers are submitted.
44. Stopping Rules for Multiple Round Auctions. In a multiple round
auction, a stopping rule must be established for determining when the
auction is over. Markets may close individually, simultaneously, or a
hybrid approach may be used. The Commission seeks comment on whether a
stopping rule is needed and if so, which one should be used. A market-
by-market stopping rule would be the least complex approach from an
administrative perspective, if a multiple round auction is used. Under
a market-by-market approach, bidding closes on each license after one
round passes in which no new acceptable bids are submitted for that
particular license. With a simultaneous stopping rule, bidding remains
open on all licenses until there is no bidding on any license. Under a
hybrid approach, a simultaneous stopping rule, coupled with an activity
rule designed to bring the markets to close within a reasonable period
of time, could be used to close auctions with high value licenses. For
lower value licenses, the simpler market-by-market closing could be
employed.
45. Activity Rules. The Commission tentatively concludes that it is
unnecessary to implement an activity rule if a market-by-market
stopping rule is employed. An activity rule is less important when
markets close one by one, because failure to participate in any given
round may result in a lost opportunity to bid at all, if that round
turns out to be the last. The Commission seeks comment on this
tentative conclusion.
46. The Commission tentatively concludes that if an activity rule
is used, the Milgrom-Wilson approach should be used. The Commission
seeks comment on this tentative conclusion. Under the Milgrom-Wilson
approach, the minimum activity level, measured as a fraction of the
self-declared maximum eligibility, will increase during the course of
the auction. During the first stage of the auction, a bidder is
required to be active on licenses encompassing at least 60 percent of
the activity units for which it is eligible. The penalty for falling
below that activity level is a reduction in eligibility. During the
first stage, if activity is below the required minimum level,
eligibility in the next round will be calculated by multiplying the
current round activity by five-thirds (5/3). In the second stage, a
bidder who wishes to maintain its current eligibility is required to be
active on 80 percent of the activity units for which it is eligible in
the current round. During the second stage, if activity is below the
required minimum level, eligibility in the next round will be
calculated by multiplying the current round activity by five-fourths
(5/4). In the third stage, a bidder who wishes to maintain its current
eligibility is required to be active on licenses encompassing 95
percent of the activity units for which it is eligible in the current
round. In the final stage, if activity in the current round is below
the required activity level, eligibility in the next round will be
calculated by multiplying the current round activity by twenty-
nineteenths (20/19).
47. Duration of Bidding Rounds. The Commission proposes to retain
the discretion to vary the duration of bidding rounds or the interval
at which bids are accepted (e.g., run two or more rounds per day rather
than one), in order to move the auction toward closure more quickly. If
this mechanism is used, the Commission would most likely shorten the
duration and/or intervals between bidding rounds where there are
relatively few licenses to be auctioned, where the value of the
licenses is relatively low, or in early rounds to speed the auction
process. Where license values are expected to be high or where large
numbers of licenses are being auctioned, the Commission proposes to
increase the duration and/or intervals between bidding rounds. The
Commission proposes to announce by Public Notice the duration and
intervals between bidding rounds. The Commission also proposes to
announce by Public Notice, before each auction, the stopping rule to be
used. The Commission seeks comment on these proposals.
48. Anti-Collusion Rules. In the Competitive Bidding Second Report
and Order, the Commission adopted a special rule designed to prevent
collusive conduct in the context of competitive bidding. The Commission
tentatively concludes that the anti-collusion rules should be applied
to the auctions for paging services. The Commission proposes to apply
Section 1.2105(c) of the rules, which prohibits bidders that have
applied for any of the same geographic license areas from communicating
with one another regarding the substance of their bids or bidding
strategies after short-form applications (FCC Form 175) have been
filed. Additionally, applicants may not discuss the substance of their
bids or bidding strategies with bidders, other than those identified on
the short-form application, that are bidding in the same geographic
license areas. The post-filing deadline prohibition on discussions
extends to providing indirect information that affects bids or bidding
strategy. Communications among bidders concerning matters unrelated to
the license auction would be permitted. Even when an applicant has
withdrawn its application after the short-form filing deadline, the
applicant may not enter into a bidding agreement with another applicant
bidding on the geographic license areas from which the first applicant
withdrew. In addition, once the short-form application has been filed,
a party with an attributable interest in one bidder may not acquire a
controlling interest in another bidder bidding for licenses in any of
the same geographic license areas. Additionally, the Commission
proposes to amend Section 22.129 of the rules to prohibit settlements
between applicants after the short-form deadline has passed. The
Commission also proposes to require winning bidders to submit with
their long-form application a detailed explanation of the terms,
conditions, and parties involved in any auction-related consortium,
joint venture, partnership, or other agreement entered into prior to
the close of bidding.
49. There are three exceptions to the rule prohibiting discussions
with other applicants after the filing of the short-form application.
First, an applicant may modify its short-form application to reflect
formation of bidding agreements or changes in ownership at any time
before or during the auction, as long as
[[Page 6205]]
the changes do not result in change of control of the applicant, and
the parties forming the bidding agreement have not applied for licenses
in any of the same geographic license areas. Applicants may also make
agreements to bid jointly for licenses, so long as the applicants have
not applied for licenses in any of the same geographic license areas.
Finally, a holder of a non-controlling attributable interest in an
applicant may acquire an ownership interest in, or enter into a bidding
agreement with other applicants in the same geographic license area, if
the owner of the attributable interest certifies that it has not
communicated and will not communicate bids or bidding strategies of
more than one of the applicants in which it holds an attributable
interest or with which it has a bidding agreement, and the arrangements
do not result in any change of control of an applicant.
50. Bidders who are found to have violated the Commission's anti-
collusion rules or who are in violation of U.S. antitrust laws in
connection with participation in the auction process may, among other
sanctions, be subject to the loss of their down payment or their full
bid amount, cancellation of their licenses, and may be prohibited from
participating in future auctions. The Commission seeks comment on these
proposals.
c. Procedural and Payment Issues
a. Pre-Auction Application Procedures
51. As geographic licensees gain use of a large geographic area and
the freedom to locate base stations anywhere within that larger
geographic region, they differ from the existing paging service
licenses that are essentially confined to a smaller region.
Accordingly, the Commission proposes to treat all geographic applicants
as initial applicants for Public Notice, application processing, and
auction purposes, regardless of whether they are already incumbent
operators.
52. In the Competitive Bidding Second Report and Order, the
Commission determined that only a short-form application prior to
competitive bidding should be required, and that only winning bidders
should be required to submit a long-form license application after the
auction. The Commission proposes to extend the application of these
rules to the competitive bidding process for paging services.
53. Under this proposal, before a paging services auction, the
Wireless Telecommunications Bureau would release an initial Public
Notice announcing the auction. The initial Public Notice would specify
the licenses to be auctioned and the time and place of the auction in
the event that mutually exclusive applications are filed. The Public
Notice would specify the method of competitive bidding to be used,
applicable bid submission procedures, stopping rules, activity rules,
and the deadline by which short-form applications must be filed and the
amounts and deadlines for submitting the upfront payment. Applications
submitted before the release of the Public Notice would be returned as
premature. Likewise, applications submitted after the deadline
specified by Public Notice would be dismissed, with prejudice, as
untimely.
54. All bidders would be required to submit short-form applications
on FCC Form 175 (and FCC Form 175-S, if applicable), by the date
specified in the initial Public Notice. Applicants would be encouraged
to file FCC Form 175 electronically. Detailed instructions regarding
electronic filing would be contained in a bidder information package.
Those applicants filing manually would be required to submit one paper
original and one diskette original of their application, as well as two
diskette copies. The short-form applications would require applicants
to provide the information required by Section 1.2105(a)(2) of the
Commission's rules. Specifically, each applicant would be required to
specify on its FCC Form 175 application certain identifying
information, including its status as a designated entity (if
applicable), its classification (i.e., individual, corporation,
partnership, trust, or other), the geographic areas and channel(s) or
channel blocks(s) for which it is applying, and assuming that the
licenses will be auctioned, the names of persons authorized to place or
withdraw a bid on its behalf. The Commission seeks comment on this
proposal and specifically on whether further ownership disclosure
should be required.
55. The Commission proposes that if only one application that is
acceptable for filing for a particular license is received, and thus
there is no mutual exclusivity, a Public Notice would be issued
cancelling the auction for that license and establishing a date for the
filing of a long-form application (FCC Form 600), the acceptance of
which would trigger the procedures permitting petitions to deny. If no
petitions to deny are filed, the application would be grantable after
30 days. The Commission would require that bidders' applications
contain all information and documentation sufficient to demonstrate
that the application is not in violation of Commission rules, and may
dismiss applications not meeting those requirements prior to the
competitive bidding.
b. Amendments and Modifications
56. To encourage maximum bidder participation, the Commission
proposes to provide applicants with an opportunity to correct minor
defects in their short-form applications prior to the auction. On the
date set for submission of corrected applications, applicants that on
their own discover minor errors in their applications (e.g.,
typographical errors, incorrect license designations, etc.) would be
permitted to file corrected applications. Applicants would not be
permitted to make any major modifications to their applications until
after the auction. Applicants could modify their short-form
applications to reflect formation of consortia or changes in ownership
at any time before or during an auction, provided such changes would
not result in a change in control of the applicant, and provided that
the parties forming consortia or entering into ownership agreements
have not applied for licenses in any of the same geographic license
areas. In addition, applications that are not signed would be dismissed
as unacceptable.
57. Upon reviewing the short-form applications, the Commission
would release a Public Notice listing all accepted, rejected, and
incomplete applications. Applicants would be given an opportunity to
cure incomplete applications. An applicant who fails to submit a
sufficient upfront payment to qualify it to bid on any license being
auctioned would not be identified on this Public Notice as a qualified
bidder. Each applicant listed on the Public Notice would be issued a
bidder identification number and further information and instructions
regarding auction procedures.
c. Upfront Payments
58. The Commission proposes to require paging auction participants
to tender a substantial upfront payment as a condition of bidding, in
order to ensure that only serious, qualified bidders participate in
auctions and to ensure payment of the penalty in the event of bid
withdrawal or default. For services that are licensed by simultaneous
multiple round auction, the Commission proposes a standard upfront
payment formula of $0.02 per activity unit for the largest combination
of MHz-pops a bidder anticipates bidding on in any single round of
bidding. The Commission proposes a minimum upfront payment of $0.02 per
[[Page 6206]]
activity unit or $2,500, whichever is greater. The Commission
tentatively concludes that a minimum $2,500 upfront payment should be
required regardless of the bidding methodology.
59. Upfront payments would be due approximately fourteen days
before a scheduled auction. This period should be sufficient to allow
the Commission time to process upfront payment data and release a
Public Notice listing all qualified bidders. The specific procedures to
be followed in the tendering and processing of upfront payments are set
forth in Section 1.2106 of the Commission's rules.
d. Down Payment and Full Payment
60. The Commission proposes to apply the 20 percent down payment
requirement set forth in the Competitive Bidding Second Report and
Order to winning bidders for paging licenses. Such a down payment would
be due within five business days following the Public Notice announcing
the winning bidders. The Commission proposes to require paging auction
winners to pay the full balance of their winning bids within five
business days following Public Notice that the Commission is about to
award the license.
e. Bid Withdrawal, Default, and Disqualification
61. The Commission proposes to adopt bid withdrawal, default, and
disqualification rules for the paging services based on the procedures
in the general competitive bidding rules. Under these procedures, any
bidder who withdraws a high bid during an auction before the Commission
declares bidding closed, or defaults by failing to remit the required
down payment within the prescribed time, would be required to reimburse
the Commission. The bidder would be required to pay the difference
between its high bid and the amount of the winning bid the next time
the license is offered by the Commission, if the subsequent winning bid
is lower. A defaulting auction winner would be assessed an additional
payment of three percent of the subsequent winning bid or three percent
of the amount of the defaulting bid, whichever is less. The additional
payment would be satisfied first from the upfront payment, and
additional funds would be required if necessary. In the event that an
auction winner defaults or is otherwise disqualified, the Commission
proposes to re-auction the license either to existing or new
applicants. The Commission would retain discretion, however, to offer
the license to the next highest bidder at its final bid level if the
default occurs within five business days of the close of bidding.
f. Long-Form Applications
62. If the winning bidder makes the down payment in a timely
manner, the Commission proposes the following procedures: A long-form
application would be filed by a date specified by Public Notice,
generally within ten business days after the close of bidding. After
the winning bidder's down payment and long-form application is
received, the Commission will review the application to determine if it
is acceptable for filing. In addition to the information required in
the FCC Form 600, designated entities will be required to submit
evidence to support their claim to any special provision available for
designated entities ultimately adopted by an Order as a result of this
Notice. This information may be included in an exhibit to FCC Form 600.
This information will enable the Commission, and other interested
parties, to ensure the validity of the applicant's certification of
eligibility for bidding credits, installment payment options, and any
other special provisions. Upon acceptance for filing of the long-form
application, the Commission will issue a Public Notice announcing this
fact, triggering the filing window for petitions to deny. If the
Commission denies all petitions to deny, and is otherwise satisfied
that the applicant is qualified, the license(s) will be granted to the
auction winner.
g. Petitions to Deny and Limitations on Settlements
63. The petition to deny procedures in Sections 22.130 and 90.163
of the Commission's rules will apply to the processing of applications
for the paging services. Thus, a party filing a petition to deny
against a paging application will be required to demonstrate standing
and meet all other applicable filing requirements. The Commission will
limit the consideration that an applicant or petitioner is permitted to
receive for agreeing to withdraw an application or a petition to deny
to the legitimate and prudent expenses of the withdrawing applicant or
petitioner.
h. Transfer Disclosure Requirements
64. The Commission tentatively concludes that the transfer
disclosure requirements of Section 1.2111(a) of the Commission's rules
should apply to all paging services licenses obtained through the
competitive bidding process. Generally, licensees transferring their
licenses within three years after the initial license grant would be
required to file, together with their transfer applications, the
associated contracts for sale, option agreements, management
agreements, and all other documents disclosing the total consideration
received in return for the transfer of its license.
i. Performance Requirements
65. Section 309(j)(4)(B) of the Act requires the Commission to
establish rules for auctionable services that ``include performance
requirements, such as appropriate deadlines and penalties for
performance failures, to ensure prompt delivery of service to rural
areas, to prevent stockpiling or warehousing of spectrum by licensees
or permittee, and to promote investment in and rapid deployment of new
technologies and services.'' The Commission decided, in the Competitive
Bidding Second Report and Order, that in most auctionable services,
existing construction and coverage requirements provided in the service
rules would be sufficient to meet this standard, and that it was
unnecessary to impose additional performance requirements. In this
Notice the Commission proposed service rules for paging that would
require geographic licensees either to meet minimum population coverage
requirements or demonstrate substantial service in their licensing
areas. The Commission tentatively concludes that these proposed
coverage requirements are sufficient to meet the requirements of
Section 309(j)(4)(B) of the Act. The Commission proposes that failure
to meet these requirements would result in automatic license
cancellation, and does not propose to adopt additional performance
requirements for paging services.
d. Treatment of Designated Entities
a. Overview and Objectives
66. Section 309(j)(3)(B) of the Act provides that in establishing
auction eligibility criteria and bidding methodologies, the Commission
shall ``promot[e] economic opportunity and competition and ensur[e]
that new and innovative technologies are readily accessible to the
American people by avoiding excessive concentration of licenses and by
disseminating licenses among a wide variety of applicants, including
small businesses, rural telephone companies, and businesses owned by
members of minority groups and women.'' The Commission seeks comment on
various proposals and tentative decisions regarding designated entity
provisions that should be incorporated into the competitive bidding
procedures for paging services.
[[Page 6207]]
b. Eligibility for Designated Entity Provisions
67. Small Businesses. The Commission tentatively concludes that it
is appropriate to establish special provisions in the paging rules for
competitive bidding by small businesses. The Commission believes that
small businesses applying for paging licenses should be entitled to
some form of bidding credit and should be allowed to pay their bids in
installments, and seeks comment on this tentative conclusion.
68. Minority and Women-Owned Businesses. Prior to the Supreme
Court's decision in Adarand Contractors, Inc. v. Pena, 115 S.Ct. 2097
(1995) (Adarand), the Commission concluded that in licensing of
broadband and narrowband PCS, minority and women-owned businesses might
have difficulty accessing sufficient capital to be viable auction
participants or service providers in the absence of special provisions
in our auction rules. In Adarand, however, the Supreme Court ruled that
racial classifications imposed by the federal government are subject to
strict scrutiny. At this time, the Commission does not have a
sufficient factual record with respect to spectrum-based services
generally or paging services specifically to sustain such measures
under strict scrutiny.
69. The Commission proposes to limit special provisions in the
paging auction rules to small businesses. The Commission seeks comment
on this proposal. The Commission seeks comment on the possibility that
in addition to small business provisions, separate provisions for women
and minority-owned entities should be adopted for paging services. To
comply with the Supreme Court's ruling in Adarand, any race-based
classification must be a narrowly tailored measure that furthers a
compelling governmental interest. The Commission seeks comment on
whether the capital requirements of paging pose a barrier to entry by
minorities and women, and whether assisting women and minorities to
overcome such a barrier, if it exists, would constitute a compelling
governmental interest. The Commission seeks comment on whether separate
provisions for women and minorities are necessary to further such an
interest and whether such provisions can be narrowly tailored to
satisfy the strict scrutiny standard.
c. Set-Aside Spectrum
70. The Commission tentatively concluded that it is not necessary
to adopt an entrepreneurs' block for paging. The Commission tentatively
concludes that the capital requirements of the paging service are not
so substantial that certain blocks of spectrum should be insulated from
very large bidders in order to provide meaningful opportunities for
designated entities.
d. Bidding Credits
71. Bidding credits allow eligible designated entities to receive a
payment discount (or credit) on their winning bid in an auction. In the
Competitive Bidding Second Report and Order, the Commission determined
that competitive bidding rules applicable to individual services would
specify the entities eligible for bidding credits and the bidding
credit amounts for each particular service. As a result, the Commission
has adopted a variety of bidding credit provisions for small businesses
and other designated entities in auctionable services. The Commission
seeks comment on the appropriate level of bidding credit for paging in
comparison to other auctionable services.
72. The Commission also seeks comment on the possibility of
offering tiered bidding credits for different sizes of small
businesses. The Commission proposes to establish two levels of bidding
credits: a 10 percent bidding credit for all small businesses and a 15
percent credit for small businesses that meet a more restrictive gross
revenue threshold. These two levels of bidding credits would not be
cumulative.
73. The Commission also seeks comment on the appropriate definition
of small business to be applied for purposes of the bidding credits
proposed above. In conjunction with the proposal to provide two levels
of bidding credits, the Commission proposes to establish two small
business definitions: to obtain the 10 percent bidding credit, an
applicant would be limited to $15 million in average gross revenues for
the previous three years; to obtain a 15 percent credit, the applicant
would be limited to $3 million in gross revenues for the previous three
years. In both cases, the applicant would be required to aggregate the
gross revenues of its affiliates and attributable investors for
purposes of determining eligibility. If a control group is formed, the
applicant must aggregate the gross revenues of its affiliates and
attributable investors for purposes of determining eligibility. The
Commission seeks comment on whether these thresholds, and the proposed
bidding credit amounts associated with them, are sufficient for paging
in light of the build-out costs associated with constructing a paging
system throughout a market area, or whether alternative definitions
would be more suitable. Comment is also sought on whether the proposed
small business definitions are sufficiently restrictive to protect
against businesses receiving bidding credits when in fact they do not
need them.
74. The Commission seeks comment on the degree to which the
revenues of affiliates and major investors should be considered in
determining small business eligibility. The Commission also seeks
comment on which attribution threshold should be applied to paging
applicants seeking to qualify as small businesses.
75. The Commission proposes to make the small business bidding
credit available on all paging channels that are licensed on a
geographic basis, rather than limiting its availability to certain
channels. The Commission seeks comment on this proposal, and on whether
there is a reasonable basis for providing credits on some channels and
not others.
e. Installment Payments
76. The Commission proposes to adopt an installment payment option
for small businesses that successfully bid for paging licenses. Under
this proposal, licensees who qualify for installment payments would be
entitled to pay their winning bid amount in quarterly installments over
the ten-year license term, with interest charges to be fixed at the
time of licensing at a rate equal to the rate for ten-year U.S.
Treasury obligations plus 2.5 percent. In addition, the Commission
proposes to tailor installment payments to the needs of different size
entities. Small businesses with $3 million or less in gross revenues
for the preceding three years would make interest-only payments for the
first five years of the license term, while small businesses with $15
million or less in gross revenues for the preceding three years would
make interest-only payments during the first two years.
77. The Commission tentatively concludes that small businesses
eligible for installment payments may pay a reduced down payment. Five
percent of the winning bid would be due five days after the auction
closes, with the remaining five percent down payment due five days
after Public Notice that the license is ready for grant. Under this
proposal, the license would be granted within ten business days after
receiving such down payment. The Commission seeks comment on this
proposal, and the need, if any, for a reduced upfront payment for
entities qualifying as a small business.
[[Page 6208]]
f. Unjust Enrichment Provisions
78. The Commission seeks comment on whether, in services such as
paging, where there is no entrepreneurs' block to further restrict the
class of entities eligible for substantial governmental benefits, the
public interest would be served by adopting an approach similar to that
used in the narrowband PCS context, in which bidding credits and
installment payments immediately become due upon transfer to an
ineligible entity. The Commission also seeks comment on whether an
approach to unjust enrichment similar to that adopted for the 900 MHz
SMR service, in which a holding period was imposed, would be optimal
for the paging services.
g. Rural Telephone Company Partitioning
79. The Act directs the Commission to ensure that rural telephone
companies have the opportunity to participate in the provision of
spectrum-based services. Rural areas, because of their more dispersed
populations, tend to be less profitable to serve than more densely
populated urban areas. Rural telephone companies, however, are well
positioned because of their existing infrastructure to serve these
areas. The Commission seeks comment on whether similar provisions
should be incorporated into the paging rules. Commenters are
specifically encouraged to provide information on the extent to which
paging service is available in rural areas.
80. The Commission believes that geographic partitioning should be
made available to rural telephone companies on the same basis as in
PCS. Such a partitioning scheme would provide rural telephone companies
with the flexibility to serve areas in which they already provide
service, while the remainder of the service area could be served by
other providers. Under this proposal, rural telephone companies would
be permitted to acquire partitioned paging licenses in one of two ways:
(1) by forming bidding consortia consisting entirely of rural telephone
companies to participate in auctions, and then partitioning the
licenses won among consortia participants, or (2) by acquiring
partitioned paging licenses from other licensees through private
negotiation and agreement either before or after the auction.
Partitioned areas would be required to conform to established
geopolitical boundaries (such as county lines) and that each area
include all portions of the wireline service area of the rural
telephone company applicant that lies within each PCS area. In
addition, if a rural telephone company receives a partitioned license
post-auction from another PCS licensee, the partitioned area must be
reasonably related to the rural telephone company's wireline service
area. The Commission also proposes to use the definition for rural
telephone companies implemented in the Competitive Bidding Fifth Report
and Order for broadband PCS. Rural telephone companies would be defined
as local exchange carriers having 100,000 or fewer access lines,
including all affiliates. The Commission seeks comment on whether CCP
and PCP paging applicants would benefit from expanding this concept to
other designated entities or to all paging licensees in general, and
whether partitioning should be extended to small businesses that may be
able to provide niche services in a specific geographic area.
C. Interim Licensing
a. Freeze on New Applications
81. Because of the fundamental changes proposed in the paging
licensing rules, the Commission is suspending the acceptance of new
applications for paging channels as of the adoption date of this
Notice, except as provided below. This interim policy will not apply to
assignment or transfer of control applications, which will continue to
be processed under existing procedures.
82. Incumbent licensees will be allowed to add sites to existing
systems or modify existing sites, provided that such additions or
modifications do not expand the interference contour of the incumbent's
existing system. Under the current Part 22 rules, such additions or
modifications are allowed by CCP licensees without prior Commission
approval if the added site is within both existing service and
interference contours. The Commission finds that the public interest is
served by continuing to allow such modifications because they will give
incumbents the flexibility to make internal site modifications without
affecting spectrum availability to others. The Commission also believes
that it serves the public interest to exempt incumbents from the
requirement that the service area not be modified so long as the
licensee's interference contour is maintained. Using the interference
contour as the sole basis for modification provides the same protection
to other licensees as the current rules but provides a simpler analysis
of determining permissible modifications.
83. The Commission also finds that it is in the public interest to
allow 929 MHz licensees on exclusive channels the same flexibility as
Part 22 licensees to make similar changes within their interference
contours. Such modifications afford incumbents flexibility and will not
prejudice other licensees, as no expansion is allowed beyond the
incumbent's interference contour. The Commission believes that such
modifications will not affect any auction for geographic area licenses,
as the size of an incumbent's protected interference contour will not
change.
84. CCP and PCP licensees with nationwide exclusivity on a paging
channel will be allowed to apply for additional sites without
restrictions. The addition of such sites by the nationwide licensee
will not affect the spectrum availability to others.
85. The Commission seeks comment on an expedited basis on whether
during the pendency of this proceeding, incumbents should be allowed to
file new applications that would expand or modify their existing
systems beyond their existing interference contours with such
modifications receiving only secondary site authorization. Secondary
operations may not cause interference to operations authorized on a
primary basis, and they are not protected from interference from
primary operations. Thus, under this alternative, applications to
expand an incumbent's existing interference contour would receive no
interference protection in the event that the Commission ultimately
adopts the geographic licensing proposals in this Notice. Such an
approach would be similar to the interim licensing policy in the 900
MHz SMR service. The Commission seeks comment on this alternative and
on whether any limitations on secondary licensing are needed.
b. Processing of Pending Applications
86. With respect to paging applications that were filed prior to
the adoption of this Notice and that remain pending, the Commission
will process such applications provided that (1) they are not mutually
exclusive with other applications as of the adoption date of this
Notice, and (2) the relevant period for filing competing applications
has expired as of the adoption date of this Notice. The Commission
believes that this approach gives the appropriate consideration to
those applicants who filed applications prior to our proposed changes
and whose applications are not subject to competing applications.
Processing of mutually exclusive pending applications and applications
for which the relevant period for filing
[[Page 6209]]
competing applications has not expired will be held in abeyance until
the conclusion of this proceeding. Upon the adoption of an order in
this proceeding, the Commission will process or dismiss all remaining
pending applications in accordance with such new rules as are adopted.
a. Licensing of 931 MHz CCP Frequencies
87. The Commission adopted new processing rules for 931 MHz CCP
licenses in the Part 22 Rewrite Order based on channel-specific
applications and use of competitive bidding to select licensees in the
event of mutually exclusive applications. The Commission issued a
temporary stay of the new Part 22 licensing rules for 931 MHz until it
resolved certain pending applications. The Commission retains the
existing stay of the new Part 22 licensing rules until competitive
bidding procedures are established in this proceeding. The Commission
will therefore continue processing 931 MHz CCP applications which were
pending prior to the adoption date of this Notice, and for which the 60
day window for filing competing applications has expired, under the
application procedures in effect prior to January 1, 1995.
Consequently, pending 931 MHz CCP applications that are not mutually
exclusive with other applications will be processed, while mutually
exclusive 931 MHz applications will be held pending the outcome of this
proceeding. Upon the adoption of an order in this proceeding, the
Commission will process or dismiss all remaining pending applications
in accordance with such new rules as are adopted.
b. Licensing of Lower Band CCP Channels
88. The Commission will process non-mutually exclusive lower band
CCP applications under the existing rules, provided that the window for
filing competing applications has closed as of the adoption date of
this Notice. The Commission will continue to hold all mutually
exclusive lower band CCP applications until competitive bidding rules
are established.
c. Licensing of 929 MHz PCP Exclusive Channels
89. The Commission will continue to process non-mutually exclusive
PCP applications that were filed before the adoption date of this
Notice, pending the outcome of this proceeding. Because these
applications are subject to coordination, they are generally not
subject to mutually exclusive applications. Nonetheless, to the extent
that pending mutually exclusive applications may exist, processing of
such applications will be held in abeyance until the conclusion of the
rulemaking.
90. Under the current PCP exclusivity rules, applicants are granted
conditional exclusivity when they are licensed, and permanent
exclusivity is awarded when the licensee demonstrates that it has
constructed and is operating a qualified system. As a result, numerous
requests for conditional and permanent exclusivity are pending before
the Commission. Because of the proposed changes to the PCP rules in
this proceeding, the Commission believes that consideration of such
requests should be postponed while this proceeding is pending. In the
event that the geographic area licensing proposals are adopted, all
existing PCP facilities would receive full protection as incumbents,
and such pending exclusivity requests would be moot. The Commission
will therefore suspend action on all pending exclusivity requests until
the conclusion of this rulemaking.
d. Licensing of Non-Exclusive PCP Channels
91. The Commission will continue to process pending applications
for non-exclusive PCP channels pending the outcome of this proceeding.
Applications will be processed through the frequency coordinator under
existing procedures.
IV. Procedural Matters and Ordering Clauses
Final Regulatory Flexibility Analysis
Summary: This Notice contains proposed or modified information
collections subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law No. 104-13. It has been submitted to the Office of
Management and Budget (OMB) for review under Section 3507(d) of the
PRA. OMB, the general public, and other Federal agencies are invited to
comment on the proposed or modified information collections contained
in this proceeding.
Dates: Written comments by the public on the proposed and/or
modified information collections are due March 18, 1996. Written
comments must be submitted by the Office of Management and Budget (OMB)
on the proposed and/or modified information collections on or before 60
days after date of publication in the Federal Register.
Address: In addition to filing comments with the Secretary, a copy
of any comments on the information collections contained herein should
be submitted to Dorothy Conway, Federal Communications Commission, Room
234, 1919 M Street, N.W., Washington D.C., 20554, or via the Internet
to dconway@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.
Further Information: For additional information concerning the
information collections contained in this Notice, contact Dorothy
Conway at (202) 418-0217 or via the Internet at dconway@fcc.gov.
Supplementary Information:
Paperwork Reduction Act: This Notice contains either a proposed or
modified information collection. The Commission, as part of its
continuing effort to reduce paperwork burdens, invites the general
public and the Office of Management and Budget (OMB) to comment on the
information collections contained in this Notice, as required by the
Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and agency
comments are due on March 18, 1996, at the same time as the other
comments in the Notice. OMB comments are due 60 days from the date of
publication of this Notice in the Federal Register. Comments should
address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
Title Revision of Part 22 and Part 90 of the Commission's Rules to
Facilitate Future Development of Paging Systems and Implementation of
Section 309(j) of the Communications Act--Competitive Bidding.
Form No.: N/A.
Type of Review: New Collection.
Respondendents: Existing and prospective private paging and common
carrier paging licensees.
Number of Respondents: Approximately 750 existing licensees;
approximately 525 auction winners.
Estimated Time Per Response: Approximately 845 hours for list of
existing transmitter sites; 1,221 hours for request for single
authorization for multiple site licenses; 262.5 hours for demonstration
of compliance with relocation notification requirements; 721 hours for
ownership and gross
[[Page 6210]]
revenue information for small businesses; 262.5 hours for disclosure of
terms of joint bidding agreements; 787.5 hours for transfer disclosure
information.
Total Annual Burden: A one-time burden of approximately 4,099.5
hours.
Total Respondents Costs: $1,008,036.
Needs and Uses: On February 8, 1996, the Commission adopted a
Notice of Proposed Rule Making that examines ways to establish a
comprehensive and consistent regulatory scheme that will simplify and
streamline licensing procedures and provide a flexible operating
environment for both common carrier and private paging services. To
this end, the Notice proposes to establish a geographic, rather than a
site-based, licensing approach. The Notice also proposes to adopt
auction rules for mutually exclusive paging applications so that
available channels may be assigned rapidly to applicants, who will, in
turn, expedite service to the public.
To ensure that the process of streamlining our paging regulations
correctly gauges current usage of the applicable spectrum, it may be
necessary for us to request that existing paging licensees notify the
Commission of the location of their various transmitter sites. The
Notice also proposes to require that licensees submit information that
they meet applicable coverage requirements. Further, the Notice
proposes that incumbent licensees operating at multiple sites may
exchange their multiple site license for a single license after the
completion of the auction for the spectrum blocks within which their
frequencies are included provided they submit a showing that their
authorized facilities have been constructed and placed in operation and
the contours associated with these facilities are contiguous and
overlapping. The Notice also proposes that auction winners submit proof
of their notification to incumbents operating on frequencies included
within the auction winners' spectrum blocks of their intention to
relocate such incumbent.
In addition, the proposed auction procedures include (1) a
requirement that auction winners claiming status as a small business
submit detailed ownership and gross revenue information necessary to
determine whether they qualify as a small business pursuant to
Commission rules; (2) a requirement that auction winners disclose the
terms of joint bidding agreements, if any, with other auction
participants in order to ensure the integrity of the market structure;
and (3) a requirement that licensees who transfer licenses within three
years maintain a file of all documents and contracts pertaining to the
transfer.
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 the Commission's
rules, 47 CFR Secs. 1.1202, 1.1203, 1.1206(a).
Ordering Clauses
It is ordered that the pending applications for paging licenses
that are not mutually exclusive with other paging applications will be
processed to the extent possible under our existing licensing rules.
It is further ordered that applications for PCP exclusivity and
waiver requests received after the adoption date of this Notice of
Proposed Rulemaking will be held in abeyance and not processed until
further notice, except as otherwise indicated above with respect to
Interim Licensing.
List of Subjects
47 CFR Part 22
Communications common carriers, Recordkeeping requirements.
47 CFR Part 90
Common carriers, Recordkeeping requirements.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 96-3657 Filed 2-15-96; 8:45 am]
BILLING CODE 6712-01-P
