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Federal Communications Commission FCC 00- 403
Before the
Federal Communications Commission
Washington, D. C. 20554
In the Matter of
Implementation of Sections 309( j) and 337 of the Communications Act of 1934
as Amended
Promotion of Spectrum Efficient Technologies on Certain Part 90
Frequencies
Establishment of Public Service Radio Pool in the Private Mobile
Frequencies Below 800 MHz
Petition for Rule Making of The American Mobile Telecommunications Association
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WT Docket No. 99- 87
RM- 9332
RM- 9405
RM- 9705
REPORT AND ORDER
AND FURTHER NOTICE OF PROPOSED RULE MAKING
Adopted: November 9, 2000 Released: November 20, 2000
Comment Date: 60 days after publication in the Federal Register
Reply Comment Date: 90 days after publication in the Federal Register
By the Commission:
TABLE OF CONTENTS
Paragraph #
I. INTRODUCTION AND EXECUTIVE SUMMARY ......................................................................... 1
II. BACKGROUND ............................................................................................................................. 10
A. Commission Implementation of the 1993 Auction Standard ......................................................... 10
B. The Balanced Budget Act of 1997 .............................................................................................. 13
III. REPORT AND ORDER .................................................................................................................. 18
A. Framework for Determining Whether Licenses Are Subject to Auction ........................................ 18
1. Obligation to Avoid Mutual Exclusivity ............................................................................... 19
2. License Scope ...................................................................................................................... 28
3. Band Manager Licenses ....................................................................................................... 34
B. Auction Design for Private Radio Spectrum Deemed Subject to Auction ..................................... 51
1. Competitive Bidding Methodology and Design ..................................................................... 52
2. Eligibility Requirements ....................................................................................................... 54
3. Processing of New Applications ........................................................................................... 57
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C. Exemption from Competitive Bidding for Public Safety Radio Services ...................................... 62
1. Scope of Public Safety Radio Services Exemption ................................................................ 63
2. Resolution of Mutually Exclusive Applications for Services Exempt from Competitive
Bidding ................................................................................................................................ 88
D. Proposals Regarding Private Land Mobile Radio Services .......................................................... 92
1. Licensing of “Refarming” Bands .......................................................................................... 93
2. UTC Proposal To Establish a New Public Safety Radio Pool in the Private Mobile
Bands Below 470 MHz ........................................................................................................ 97
3. AMTA Proposal To Restructure Licensing Framework for PLMR Services in the 450-
470 MHz Band .................................................................................................................. 104
4. Licensing of PLMR Channels in the 800 MHz Band for Use in Commercial SMR
Systems ............................................................................................................................. 108
5. Revision of Part 90 Multiple Licensing Rules ..................................................................... 120
E. Section 337 Licensing for Public Safety Services ...................................................................... 127
IV. FURTHER NOTICE OF PROPOSED RULE MAKING ............................................................... 137
A. AMTA Proposal to Require New Spectrum Efficient Technologies ........................................... 137
B. Licensing of PLMR Channels in the 900 MHz Band for Use in Commercial SMR
Systems ................................................................................................................................... 143
V. PROCEDURAL MATTERS ......................................................................................................... 145
A. Ex Parte Presentations ............................................................................................................. 145
B. Regulatory Flexibility Act Analyses ......................................................................................... 146
C. Final Paperwork Reduction Act of 1995 Analysis ..................................................................... 147
D. Filing Procedures ..................................................................................................................... 149
E. Further Information .................................................................................................................. 153
VI. ORDERING CLAUSES ................................................................................................................ 154
APPENDIX A: COMMENTS AND REPLY COMMENTS FILED IN WT DOCKET 99- 87
APPENDIX B: FINAL RULES
APPENDIX C: FINAL REGULATORY FLEXIBILITY ANALYSIS
APPENDIX D: INITIAL REGULATORY FLEXIBILITY ANALYSIS
I. INTRODUCTION AND EXECUTIVE SUMMARY
1. In this Report and Order and Further Notice of Proposed Rule Making, we adopt rules and
policies to implement Sections 309( j) and 337 of the Communications Act of 1934 (“ Communications
Act”), as amended by the Balanced Budget Act of 1997 (“ Balanced Budget Act”), 1 which was signed into
law on August 5, 1997. The Balanced Budget Act significantly revised Section 309( j) of the
Communications Act, which is the principal statutory provision that governs the Commission’s auction
authority for the licensing of radio services. With the Notice of Proposed Rule Making in WT Docket No.
99- 87, we initiated this proceeding and requested comment on changes to the Commission’s rules and
policies to implement our revised auction authority. 2
1 Pub. L. No. 105- 33, Title III, 111 Stat. 251 (1997).
2 See Implementation of Sections 309( j) and 337 of the Communications Act of 1934 as Amended;
Promotion of Spectrum Efficient Technologies on Certain Part 90 Frequencies; Establishment of Public Service
Radio Pool in the Private Mobile Frequencies Below 800 MHz, WT Docket No. 99- 87, RM- 9332, RM- 9405,
(continued….)
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2. Specifically, this Report and Order sets out the general framework for exercise of the
Commission’s auction authority in light of the Balanced Budget Act’s revisions to Section 309( j) of the
Communications Act. 3 First, we examine how the Balanced Budget Act revised the statutory language of
Section 309( j). In particular, we consider amended Section 309( j)( 1) ’s directive to use competitive bidding
to resolve mutually exclusive license applications for those radio services that do not fall within one of
Section 309( j)( 2) ’s auction exemptions. These statutory changes are considered in light of our continuing
obligation under Section 309( j)( 6)( E) to avoid mutual exclusivity and to fulfill the public interest objectives
enumerated in Section 309( j)( 3).
3. In this Report and Order, we conclude that in non- exempt services, the Commission’s authority
under the Balanced Budget Act continues to permit it to adopt licensing processes that result in the filing of
mutually exclusive applications where the Commission determines that such an approach would serve the
public interest. We do not, however, make any changes to license assignment procedures in existing
services that preclude or limit the likelihood of mutually exclusive applications, nor do we make any
specific determination about what licensing procedures to adopt for future services. Rather, we will reserve
for future service- specific rulemaking proceedings the question of what type of licensing mechanism to use
in each case, e. g., geographic area licensing, site- by- site licensing, or any other licensing process.
Moreover, any consideration of whether we should use licensing procedures in a particular service that
increase the likelihood of mutually exclusive applications will be based on careful analysis of the public
interest considerations of Section 309( j)( 3) as they apply to the specific characteristics, uses, and demands
of the service.
4. We also conclude that in addition to other licensing mechanisms we have used previously, we
should consider the use of band manager licensing as a future option for private as well as commercial
services. We used the band manager concept for the first time in the 700 MHz guard bands, 4 and believe
that it has the potential in other new spectrum allocations to provide private users with greater flexibility to
access spectrum in amounts of bandwidth, periods of time, and geographic areas that best suit their needs.
For example, we have recently initiated a proceeding to reallocate 27 MHz of spectrum in bands below 3
GHz from Federal Government to non- government use, and have sought comment on whether this spectrum
could address demand in the congested private radio bands. 5 In that proceeding, we seek comment on the
possibility of using band managers for some of those bands, as well as other licensing options.
5. We also define the scope of the Balanced Budget Act’s exemption from auctions for licenses
and permits issued for “public safety radio services.” We conclude that this “public safety” exemption
(Continued from previous page)
Notice of Proposed Rule Making, 14 FCC Rcd 5206 (1999) (“ Notice”). For the reasons discussed in the Notice,
this proceeding does not address satellite services. See Notice at ¶ 65.
3 See 47 U. S. C. § 309( j) (1999).
4 See Service Rules for the 746- 764 and 776- 794 MHz Bands, and Revisions to Part 27 of the
Commission’s Rules, WT Docket No. 99- 168, Second Report and Order, 15 FCC Rcd 5299, 5311- 12 at ¶ 26
(2000) (“ 700 MHz Second Report and Order”) (establishing specific requirements for Guard Band Manager
licenses for the 700 MHz guard bands).
5 See Reallocation of 27 Megahertz of Spectrum Transferred from Government Use, ET Docket No. 00-221,
RM- 9267, RM- 9692, RM- 9797, RM- 9854, Notice of Proposed Rule Making, FCC 00- 395, at ¶ 1 (rel. Nov.
20, 2000) (“ 27 MHz Reallocation Order”).
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from auctions was intended to apply not only to traditional public safety services such as police, fire, and
emergency medical services, but also to spectrum usage by entities such as utilities, railroads, transit
systems, and others that provide essential services to the public at large and that need reliable
communications in order to prevent or respond to disasters or crises affecting their service to the public.
We also conclude, however, that the public safety exemption applies only to services in which these public
safety uses, i. e., protection of safety of life, health, and property within the meaning of Section
309( j)( 2)( A), comprise the dominant use of the spectrum. Thus, services in which such uses are not
dominant (and in which mutual exclusivity occurs) will not be exempt from auctions, even if some
individual licensees in the service use the spectrum for public safety purposes as defined by the statute.
6. The Report and Order also addresses a number of proposals to amend our licensing and
eligibility rules for existing private services. 6 In general, we conclude that the existing rules should be
retained. Specifically, we decline a request by the American Mobile Telecommunications Association
(“ AMTA”) to establish geographic area licensing and competitive bidding rules in the 450- 470 MHz band.
We also decline the Utilities Telecommunications Council’s (“ UTC’s”) 7 request to create a separate radio
pool of private land mobile frequencies for entities that do not qualify for the existing Public Safety Radio
Pool spectrum, but that fall within the broader “public safety” exemption established by Section
309( j)( 2)( A).
7. We do make a limited change, however, to our use restrictions affecting 800 MHz Business
and Industrial/ Land Transportation (“ BI/ LT”) channels, which currently prohibit commercial use by
licensees. We conclude that subject to certain safeguards, BI/ LT licensees should be allowed to modify
their licenses to permit commercial use, or to assign or transfer their licenses to CMRS operators for
commercial use. To prevent trafficking, we will not allow such modifications, assignments, or transfers
until five years after the initial grant date of the license, and we will prohibit a licensee who modifies or
transfers a license under this provision from obtaining new BI/ LT spectrum in the same location for one
year.
8. In addition, we address issues relating to the awarding of licenses under Section 337 of the
Communications Act, which allows public safety entities (defined more narrowly than in Section
309( j)( 2)( A)) to apply for “unassigned” spectrum not otherwise allocated for public safety use. We
conclude that where the Commission has proposed rules for the licensing of particular spectrum by auction,
requests for licensing under Section 337 should not be deemed in the public interest once the competitive
bidding process has begun except under extraordinary circumstances. Moreover, we conclude that Section
337 relief should only be available if the applicant demonstrates that there is no available public safety
spectrum in any band in the geographic area where the public safety use is proposed.
9. Finally, in the Further Notice of Proposed Rule Making, we seek comment on a petition for
rulemaking filed by AMTA proposing that certain Part 90 licensees be required to employ new spectrum-efficient
technologies. 8 In particular, we seek further comment on the effectiveness of the Part 90 rules that
6 A list of the parties that filed pleadings and ex parte notices in the captioned proceedings, and the
abbreviations used to refer to such parties, is attached at Appendix A.
7 UTC is now known as the United Telecom Council.
8 AMTA Petition for Rulemaking (RM- 9332) at 3 (filed June 19, 1998) (“ AMTA Petition I”).
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have been adopted in the course of the Commission’s Refarming proceeding, PR Docket No. 92- 235, 9 the
current pace of migration to narrowband technology, and on whether enough time has elapsed to allow us
to evaluate the effectiveness of our current rules. We also seek comment on whether to permit 900 MHz
BI/ LT licensees to modify their licenses to permit CMRS use.
II. BACKGROUND
A. Commission Implementation of the 1993 Auction Standard
10. The Omnibus Budget Reconciliation Act of 1993 (“ 1993 Budget Act”) 10 added Section 309( j)
to the Communications Act, authorizing the Commission to award licenses for use of the electromagnetic
spectrum through competitive bidding where mutually exclusive applications are filed. The 1993 Budget
Act expressly authorized, but did not require, the Commission to use competitive bidding to choose among
mutually exclusive applications for initial licenses or construction permits. 11 As we described in detail in
the Notice, the Commission in a series of rulemaking proceedings adopted rules and policies to implement
Section 309( j). 12
11. Pursuant to the 1993 Budget Act, Section 309( j)( 1), "General Authority," only permitted the
Commission to use competitive bidding for subscriber- based services if mutual exclusivity existed among
initial license applications. Section 309( j)( 6)( E) also made clear that the Commission was not relieved of
its obligation in the public interest to continue to use engineering solutions, negotiation, threshold
qualifications, service regulations and other means to avoid mutual exclusivity. 13 The Commission has
determined that applications are “mutually exclusive” if the grant of one application would effectively
9 See Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify
the Policies Governing Them, PR Docket No. 92- 235, Report and Order and Further Notice of Proposed Rule
Making, 10 FCC Rcd 10,076 (1995) (“ Refarming Report and Order and Further Notice”); Memorandum
Opinion and Order, 11 FCC Rcd 17,676 (1996); Second Report and Order, 12 FCC Rcd 14,307 (1997); Second
Memorandum Opinion and Order, 14 FCC Rcd 8642 (1999); Third Memorandum Opinion and Order, 14 FCC
Rcd 10,922 (1999); Report and Order and Further Notice of Proposed Rule Making, 15 FCC Rcd 16,673 (2000)
(collectively, the “Refarming Proceeding”).
10 Pub. L. No. 103- 66, Title VI, § 6002( a), 107 Stat. 312, 387 (1993).
11 47 U. S. C. § 309( j)( 1) (1996). As added by the 1993 Budget Act, Section 309( j)( 1) stated:
(1) General Authority. -- If mutually exclusive applications are accepted for filing for any initial license
or construction permit which will involve a use of the electromagnetic spectrum described in paragraph (2), then
the Commission shall have the authority, subject to paragraph (10), to grant such license or permit to a qualified
applicant through the use of a system of competitive bidding that meets the requirements of this subsection.
Paragraph (10) provided a number of conditions precedent and conditions subsequent to the
Commission's use of competitive bidding, which are moot. See 47 U. S. C. § 309( j)( 10).
12 See Notice at 5208- 21 ¶¶ 3- 22. See also Implementation of Section 309( j) of the Communications
Act - Competitive Bidding, PP Docket No. 93- 253, Second Report and Order, 9 FCC Rcd 2348 (1994)
(" Competitive Bidding Second Report and Order"); Implementation of Section 309( j) of the Communications Act
- Competitive Bidding, PP Docket No. 93- 253, Second Memorandum Opinion and Order, 9 FCC Rcd 7245
(1994) (" Competitive Bidding Second M O & O").
13 47 U. S. C. § 309( j)( 6)( E).
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preclude the grant of one or more of the other applications. 14 Where the Commission receives only one
application that is acceptable for filing for a particular license that is otherwise auctionable, there is no
mutual exclusivity, and thus no auction. Therefore, mutual exclusivity is established when competing
applications for a license are filed.
12. Section 309( j)( 1) also restricted the use of competitive bidding to applications for “initial”
licenses or permits. 15 In addition, Section 309( j)( 2) set forth conditions beyond mutual exclusivity that had
to be satisfied in order for spectrum to be auctionable. 16 Generally speaking, these conditions subjected to
auction those services in which the licensee was to receive compensation from subscribers for the use of the
spectrum. 17 Former Section 309( j)( 2) further directed the Commission, in evaluating the “uses to which
bidding may apply,” to determine whether “a system of competitive bidding will promote the [public
interest] objectives described in [Section 309( j)( 3)].” 18 Employing these criteria, the Commission identified
a number of services and classes of services that were auctionable and not auctionable under the 1993
Budget Act, provided mutually exclusive applications were filed. 19 As we explained in the Notice, the
14 See Notice at 5210 ¶ 4 (citing Competitive Bidding Second Report and Order, 9 FCC Rcd at 2350
n. 5).
15 Renewal licenses were excluded from the auction process. See H. R. Rep. No. 103- 111, at 253. See
also id. at 2355.
16 See 47 U. S. C. § 309( j)( 2)( A) (1996).
17 Among the services found to be auctionable under the 1993 Budget Act were narrowband and
broadband Personal Communications Services, Public Mobile Services, 218- 219 MHz Service, Specialized
Mobile Radio Services (SMR), Private Carrier Paging (PCP) Services, Multipoint Distribution Service (MDS),
Local Multipoint Distribution Service (LMDS), 2. 3 GHz Wireless Communications Service (WCS), satellite
Digital Audio Radio Service (DARS), Direct Broadcast Satellite (DBS) Service, 17 220- 222 MHz radio service,
Location and Monitoring Service (LMS), and VHF Public Coast Stations, all of which involve commercial use of
the spectrum. See Notice at 5212- 13 ¶ 8; see also Competitive Bidding Second Report and Order, 9 FCC Rcd at
2359 ¶¶ 62- 63. The plain language of the 1993 Budget Act also excluded traditional broadcast services from
competitive bidding, because broadcast licensees do not receive compensation from subscribers. See Competitive
Bidding Second Report and Order, 9 FCC Rcd at 2352 ¶ 22.
18 47 U. S. C. § 309( j)( 2)( B) (1996). Section 309( j)( 3), entitled “Design of Systems of Competitive
Bidding,” directs that these factors be addressed in both identifying classes of licenses to be issued by competitive
bidding, and designing particular methodologies of competitive bidding. The objectives are listed as follows:
(A) the development and rapid deployment of new technologies, products, and services for the benefit of the
public, including those residing in rural areas, without administrative or judicial delays;
(B) promoting economic opportunity and competition and ensuring 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;
(C) recovery for the public of a portion of the value of the public spectrum resource made available for
commercial use and avoidance of unjust enrichment through the methods employed to award uses of that
resource; and
(D) efficient and intensive use of the electromagnetic spectrum.
47 U. S. C. § 309( j)( 3)( A)-( D).
19 See Notice at 5212- 14 ¶¶ 8- 9.
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services deemed nonauctionable under the 1993 Budget Act were non- subscriber based, private and
noncommercial offerings operating on a variety of frequency bands. 20
B. The Balanced Budget Act of 1997
13. In 1997, Congress revised the Commission’s auction authority. Specifically, the Balanced
Budget Act of 1997 amended Section 309( j)( 1) to require the Commission to award mutually exclusive
applications for initial licenses or permits using competitive bidding procedures, except as provided in
Section 309( j)( 2). Sections 309( j)( 1) and 309( j)( 2) now state:
(1) General Authority.-- If, consistent with the obligations described in paragraph (6)( E),
mutually exclusive applications are accepted for any initial license or construction permit,
then, except as provided in paragraph (2), the Commission shall grant the license or permit
to a qualified applicant through a system of competitive bidding that meets the
requirements of this subsection.
(2) Exemptions.-- The competitive bidding authority granted by this subsection shall not
apply to licenses or construction permits issued by the Commission- -(
A) for public safety radio services, including private internal radio services used
by State and local governments and non- government entities and including
emergency road services provided by not- for- profit organizations, that--
(i) are used to protect the safety of life, health, or property; and
(ii) are not made commercially available to the public;
(B) for initial licenses or construction permits for digital television service given to
existing terrestrial broadcast licensees to replace their analog television service
licenses; or
(C) for stations described in section 397( 6) 21 of this title. 22
As mentioned above, prior to the Balanced Budget Act of 1997, Sections 309( j)( 1) and 309( j)( 2) granted the Commission the authority to use competitive bidding to resolve mutually exclusive applications for
initial licenses or permits if the principal use of the spectrum was for subscription- based services and competitive bidding would promote the objectives described in Section 309( j)( 3). 23 As amended by the
Balanced Budget Act of 1997, Section 309( j)( 1) states that the Commission shall use competitive bidding to resolve mutually exclusive initial license or permit applications, unless one of the three exemptions
provided in the statute applies. 24
14. As noted above, the Balanced Budget Act of 1997 left unchanged the restriction that
competitive bidding may only be used to resolve mutually exclusive applications. Moreover, the general
auction authority provision of Section 309( j)( 1) now references the obligation under Section 309( j)( 6)( E) to
20 See Notice at 5214- 19 ¶¶ 10- 17.
21 47 U. S. C. § 397( 6). Section 397( 6) defines the terms "noncommercial educational broadcast station"
and "public broadcast station."
22 47 U. S. C. § 309( j)( 1), (2) (as amended by Balanced Budget Act, § 3002) (footnote added).
23 See 47 U. S. C. § 309( j)( 1) and (2) (1996).
24 See 47 U. S. C. § 309( j)( 2) (emphasis added).
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use engineering solutions, negotiation, threshold qualifications, service regulations, or other means to avoid
mutual exclusivity where it is in the public interest to do so. In addition, the portion of the Conference
Report that accompanies this section of the legislation emphasizes that notwithstanding the Commission’s
expanded auction authority, its determinations regarding mutual exclusivity must still be consistent with
and not minimize its obligations under Section 309( j)( 6)( E). 25
15. Section 309( j)( 2), as amended by the Balanced Budget Act of 1997, exempts from auctions
licenses and construction permits for public safety radio services, digital television service licenses and
permits given to existing terrestrial broadcast licensees to replace their analog television service licenses,
and licenses and construction permits for noncommercial educational broadcast stations and public
broadcast stations. The Commission has found that the list of exemptions from our general auction
authority set forth in Section 309( j)( 2) is exhaustive, rather than merely illustrative, of the types of licenses
or permits that may not be awarded through a system of competitive bidding. 26 Left unchanged by the
Balanced Budget Act of 1997 is Section 309( j)( 3) ’s directive to consider the public interest objectives in
identifying classes of licenses and permits to be issued by competitive bidding.
16. The Conference Report for Section 3002( a) of the Balanced Budget Act of 1997 states that the
exemption for public safety radio services includes “private internal radio services” used by utilities,
railroads, metropolitan transit systems, pipelines, private ambulances, volunteer fire departments, and not-for-
profit organizations that offer emergency road services, such as the American Automobile Association
(“ AAA”). 27 The Conference Report also notes that the exemption is “much broader than the explicit
definition for ‘public safety services’” included in Section 337( f)( 1) of the Communications Act, 28 for the
purpose of determining eligibility for licensing in the 24 MHz of spectrum reallocated for public safety
services. 29
25 The conferees expressed concern that the Commission not interpret its expanded auction authority in
a manner that overlooks engineering solutions or other tools that avoid mutual exclusivity. See H. R. Conf. Rep.
No. 105- 217, 105th Cong., 1st Sess., at 572 (1997) (“ Conference Report”).
26 Implementation of Section 309( j) of the Communications Act -- Competitive Bidding for Commercial
Broadcast and Instructional Television Fixed Service Licenses, MM Docket No. 97- 234, First Report and Order,
13 FCC Rcd 15920, 16000 ¶ 199 (1998) (“ Commercial Broadcast Competitive Bidding First Report & Order”).
27 See Conference Report at 572. The 1997 amendments also eliminate the Commission’s authority to
issue licenses or permits by random selection after July 1, 1997, with the exception of licenses or permits for
noncommercial educational radio and television stations. See Balanced Budget Act at § 3002( a)( 2)( B)( 5).
28 47 U. S. C. § 337( f)( 1), added by Balanced Budget Act § 3004. See Conference Report at 572.
29 Conference Report at 572. For purposes of comparison, the definition of "public safety services"
included in Section 337( f)( 1) provides:
The term "public safety services" means services- -(
A) the sole or principal purpose of which is to protect the safety of life, health, or property;
(B) that are provided- -
(i) by State or local government entities; or
(ii) by nongovernmental organizations that are authorized by a governmental entity whose
primary mission is the provision of such services; and
(C) that are not made commercially available to the public by the provider.
(continued….)
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17. As we discuss in greater detail below, the statutory changes to the Commission’s auction
authority brought about by Balanced Budget Act primarily affect those classes of radio service that are
referred to generically as “private services.” Our use of the term “private services” in the context of the
1993 Budget Act’s auction exemption referred to those radio services “that did not involve the payment of
compensation to the licensee by subscribers, i. e., that were for internal use.” 30 Generally, the private radio
services are used by government or business entities to meet their own internal communications needs or by
individuals for personal communications, rather than to provide communications services to others. 31 In this
Report and Order, we use the term “private services” broadly to refer to the family of non- broadcast, non-subscriber
based fixed or mobile radio services (i. e., radio services that are for internal uses). 32 This
Report and Order does not revisit any determinations made pursuant to the 1993 Budget Act of those radio
services subject to competitive bidding. Rather, here we establish a framework for our future
determinations of which radio services may be subject to competitive bidding. For example, we intend to
use this framework to guide our decisions in regard to the spectrum bands that are the subject of a separate
Notice of Proposed Rule Making in which we are proposing to reallocate 27 MHz of spectrum in bands
below 3 GHz from Federal Government to non- government use. 33
III. REPORT AND ORDER
A. Framework for Determining Whether Licenses Are Subject to Auction
18. In this Report and Order, we evaluate the scope of our spectrum auction authority under
Section 309( j) and establish a framework for determining whether licenses are subject to auction. First, we
consider how the Balanced Budget Act’s revision of our auction authority under Section 309( j) of the
Communications Act affects future determinations of which services may be subject to auction. In
particular, this analysis focuses on the application of the public interest factors enumerated in Section
309( j)( 3) and the Commission’s Section 309( j)( 6)( E) obligation in the public interest to avoid mutual
exclusivity in application and licensing proceedings for those radio services that are not specifically exempt
from auction under Section 309( j)( 2). 34 We also recognize the potential for band manager licensing of
(Continued from previous page)
47 U. S. C. § 337( f)( 1).
30 See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2352 ¶¶ 23- 25.
31 Many different entities use private systems for a variety of purposes, and the systems themselves
operate on a number of different spectrum bands. As was explained in detail in the Notice, to date, the
Commission has employed a variety of alternative licensing approaches for these private radio services. See
Notice at 5214- 19 ¶¶ 11- 17.
32 Broadly speaking, the category of “private services” includes the Private Land Mobile Radio Services;
parts of the Maritime and Aviation Services; the Private Operational Fixed Service; Amateur and Personal Radio
Services. When used in this general sense, “private services” also includes the public safety radio services
(which fall within the three aforementioned service classifications) as well as frequencies allocated to the Public
Safety Radio Pool.
33 Among other things, that Notice of Proposed Rule Making seeks comment on whether that spectrum
could address demand in the congested private radio bands. See 27 MHz Reallocation Order.
34 See 47 U. S. C. §§ 309( j)( 6)( E), 309( j)( 2). See also Competitive Bidding Second Report and Order, 9
FCC Rcd at 2352- 53 ¶¶ 21- 28.
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auctionable private radio services where that licensing mechanism is likely to serve the public interest and
otherwise satisfy the Commission’s overall spectrum management responsibilities and obligations under the
Communications Act.
1. Obligation to Avoid Mutual Exclusivity
19. Background. In the Notice, the Commission sought comment broadly on how the Balanced
Budget Act’s amendments to Section 309( j) affect its determinations of which services may be subject to
auction. 35 In particular, we asked whether the express reference in Section 309( j)( 1) to the Commission’s
obligation to avoid mutual exclusivity under Section 309( j)( 6)( E) changes the scope or content of that
obligation. 36 We also asked how we should apply the public interest factors in Section 309( j)( 3) in
establishing licensing schemes or methodologies under the Balanced Budget Act for both new and existing,
commercial and private services. 37 We inquired whether the Commission’s previous analysis of its
obligation under Section 309( j)( 6)( E) is still appropriate in view of the revisions to Section 309( j)( 1) and
309( j)( 2), i. e., whether we should continue to evaluate our obligation to avoid mutual exclusivity by
weighing the public interest objectives of Section 309( j)( 3). 38 With respect to services currently using
licensing schemes in which mutually exclusive applications are not filed, we asked whether Congress, in
emphasizing our obligation to avoid mutual exclusivity, intended that we give greater weight to that
obligation and less to other public interest objectives. 39
20. Discussion. Private radio service interests generally argue that the Balanced Budget Act has
not expanded the Commission’s auction authority, particularly as it applies to private wireless services. 40
They argue that the added reference in Section 309( j)( 1) to the Commission’s obligation under Section
309( j)( 6)( E) to consider alternatives to mutual exclusivity requires the Commission to give greater weight
to the goal of avoiding mutual exclusivity and less to other public interest objectives in determining which
wireless services are potentially auctionable. 41 Under these commenters’ proposed interpretation, the
35 Notice, 14 FCC Rcd at 5222 ¶ 25.
36 Id. at 5235 ¶ 60.
37 Id.
38 Id. at 5239 ¶ 64.
39 Id. at 5235 ¶ 60.
40 See, e. g., AAR Comments at 8; API Comments at 14- 16; API Reply Comments at 3- 4; Blooston
Comments at 5- 10; Blooston Reply Comments at 2- 3; Boeing at 2, 4 (“[ a] ny implementation of the Balanced
Budget Act amendments of 1997 must first acknowledge that Congress flatly restricted the Commission’s
competitive bidding authority with Section 309( j)( 6)( E)…”); Boeing Reply Comments at 1- 2; CellNet Reply
Comments at 2- 4; Cinergy Comments at 4- 5; Cinergy Reply Comments at 2- 3; ComEd Comments at 4- 6;
ComEd Reply Comments at 2- 3; CSAA Reply Comments at 4; Entergy Comments at 4- 5; Entergy Reply
Comments at 2- 3; Ford Reply Comments at 2; FIT Comments at 1- 4; Intek Comments at 4- 6; ITA Comments at
4- 7; ITA Reply Comments at 2- 5; Kenwood Comments at 2- 3; LMCC Comments at 5- 6; Motorola Comments at
7- 8; Motorola Reply Comments at 2; MRFAC Comments at 6- 8; NTCC Comments at 4- 5; PCIA Comments at 4-
5; SCANA Comments at 5- 6; SCANA Reply Comments at 2- 3; Trimble Comments at 3- 6; UEC Comments at 4-
5; UTC Comments at 6.
41 See, e. g., AAR Comments at 8 (“ the Commission’s first obligation under Section 309( j)( 1)
(referencing Section 309( j)( 6)( E)) is to use all appropriate methods to avoid mutual exclusivity”); API Comments
(continued….)
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Commission’s first objective in establishing a licensing mechanism for any non- auction exempt service
must be to seek a method that avoids mutual exclusivity. 42 In the view of these commenters, only if the
Commission determines that mutual exclusivity cannot be avoided, i. e., that the service can only be licensed
through processes that result in the filing of mutually exclusive applications, can it consider the public
interest factors set forth in Section 309( j)( 3) for purposes of determining the appropriate methodology to
award licenses through competitive bidding. 43
21. We disagree with the interpretation of amended Section 309( j)( 1) advanced by these
commenters. The obligation to consider alternatives to mutual exclusivity set forth in Section 309( j)( 6)( E)
has existed since the Commission was first authorized to conduct auctions of spectrum licenses by the 1993
Budget Act. 44 The Commission has consistently interpreted this provision to mean that it has an obligation
to attempt to avoid mutual exclusivity by the methods prescribed therein only when doing so would further
the public interest goals of Section 309( j)( 3). 45 We conclude that the amendment of Section 309( j)( 1) by
(Continued from previous page)
at 15 (“ the Commission must give prior, independent consideration to its obligation to avoid mutual exclusivity,
rather than continuing to weigh this obligation against the ‘public interest factors’ set forth in Section
309( j)( 3)”); Boeing Comments at 4- 5 (“ Congress intended the obligations specified in the Commission’s general
auction authority of Section 309( j)( 1) to take priority over the public interest criteria found in Section 309( j)( 3)”);
Boeing Reply Comments at 2; CellNet Reply Comments at 2- 4; Cinergy Comments at 5; Cinergy Reply
Comments at 2- 3; ComEd Comments at 6; ComEd Reply Comments at 2- 3; Entergy Comments at 5; Entergy
Reply Comments at 2- 3; Intek Comments at 4- 5; ITA Comments at 4; ITA Reply Comments at 3 (“ before using
competitive bidding as a licensing mechanism, the Commission must first consider ways to avoid mutual
exclusivity”); Kenwood Comments at 2- 3; LMCC Comments at 6 (“ it is clear that the Commission must first
seek to avoid mutual exclusivity); Motorola at 4- 8; MRFAC Comments at 6- 8; NTCC Comments at 4- 5; PCIA
Comments at 4- 5; PIRSC Comments at 3, 10; SBT Comments at 8; SCANA Comments at 6; SCANA Reply
Comments at 2- 3; UEC Comments at 5; UTC Comments at 6.
42 See, e. g., API Comments at 15; Boeing Comments at 4- 5; Boeing Reply Comments at 2 (“ the
Commission has a threshold responsibility to resolve mutual exclusivity before ever considering the use of
competitive bidding”); CellNet Reply Comments at 2- 4; Cinergy Comments at 5; ComEd Comments at 6; CSAA
Comments at 5; Entergy Comments at 5; Ford Reply Comments at 2; Intek Comments at 4- 5; ITA Comments at
4- 7; ITA Reply Comments at 3; Kenwood Comments at 2- 3; MRFAC Comments at 6- 8; NTCC Comments at 4-
5; PCIA Comments at 4- 5; PIRSC Comments at 7; SBT Comments at 8; SBT Reply Comments at 32; SCANA
Comments at 6; UTC Comments at 6.
43 See, e. g., API Comments at 15; Boeing Comments at 4- 5; Boeing Reply Comments at 2; CellNet
Reply Comments at 2- 4; Cinergy Comments at 5; ComEd Comments at 6; Entergy Comments at 5; Kenwood
Comments at 2- 3; LMCC Comments at 5- 6; PCIA Comments at 4- 5; SCANA Comments at 6; SBT Reply
Comments at 32; UEC Comments at 4- 5; UTC Comments at 7; UTC Reply Comments at 2.
44 See 47 U. S. C. § 309( j)( 6)( E) (1994).
45 See, e. g., Amendment of the Commisson’s Rules Regarding the 37.0- 38.6 GHz and 38.6- 40.0 GHz
Bands, ET Docket No. 95- 183, Implementation of Section 309( j) of the Communications Act – Competitive
Bidding, 37.0- 38.6 GHz and 38.6- 40.0 GHz Bands, PR Docket No. 93- 253, Memorandum Opinion and Order,
14 FCC Rcd 12428, 12441- 12445 ¶¶ 22- 28 (1999); Revision of Part 22 and Part 90 of the Commission’s Rules to
Facilitate Future Development of Paging Systems, WT Docket No. 96- 18; Implementation of Section 309( j) of
the Communications Act – Competitive Bidding, PR Docket No. 93- 253, Memorandum Opinion and Order on
Reconsideration and Third Report and Order, 14 FCC Rcd 10030 (1999); Amendment of Part 90 of the
Commission’s Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, PR
Docket No. 93- 144, Second Report and Order, 12 FCC Rcd 19079, 19104 ¶ 62, 19154 ¶ 230 (1997);
(continued….)
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the Balanced Budget Act to add a cross- reference to Section 309( j)( 6)( E) serves to underscore the
Commission’s pre- existing obligation, but did not change its fundamental scope or content. 46 More
specifically, we conclude that the Balanced Budget Act amendments to Section 309( j) do not preclude the
Commission from using licensing mechanisms for private services that permit the filing of mutually
exclusive license applications if the Commission determines that it is in the public interest to do so.
22. We base our conclusion on several factors. First, nothing in the statutory language suggests
that Congress intended to narrow the Commission’s discretion to use licensing mechanisms based on
mutual exclusivity. The addition of a cross- reference to Section 309( j)( 6)( E) does not turn avoidance of
mutual exclusivity into the paramount goal of the statute, but simply underscores that the Commission
should continue to consider alternatives to mutual exclusivity as it did prior to the Balanced Budget Act,
i. e., based on whether such alternatives would promote the public interest objectives in Section 309( j)( 3).
Moreover, Congress did not change the language of Section 309( j)( 6)( E) itself, indicating that it did not
intend to change the scope of the Commission’s obligation under that provision. Indeed, Section
309( j)( 6)( E) itself continues to state – as it did prior to the Balanced Budget Act – that the Commission has
the “obligation in the public interest… to avoid mutual exclusivity, 47 which underscores that the
Commission is required to avoid mutual exclusivity only if it is in the public interest to do so.
23. Finally, the plain language of Section 309( j)( 3) negates the contention that Congress intended
that section to be subordinate to Section 309( j)( 6)( E). Specifically, Section 309( j)( 3) directs the
Commission to consider the public interest objectives specified therein in “identifying classes of licenses
and permits to be issued by competitive bidding, in specifying the eligibility and other characteristics of
such licenses and permits, and in designing methodologies for use under this subsection.” 48 This language
makes clear that the public interest objectives of Section 309( j)( 3) apply broadly to the threshold issue of
which licenses should be subject to auction, which necessarily requires consideration in each case of
whether to adopt a licensing mechanism based on mutual exclusivity.
24. Our interpretation of Section 309( j) is also supported by the legislative history of the Balanced
Budget Act. In the Conference Report, Congress explicitly stated that the Balanced Budget Act expanded
the scope of the auction authority previously conferred by the 1993 Budget Act. 49 However, Congress also
(Continued from previous page)
Amendment of Part 90 of the Commission’s Rules to Facilitate Future Development of SMR Systems in the 800
MHz Frequency Band, Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 9972, 10009- 10 ¶ 115
(1997).
46 See, e. g., DIRECTV, Inc. v. FCC, 110 F. 3d 816 (D. C. Cir. 1997)( affirming FCC decision establishing
an auction procedure for assigning DBS spectrum, and noting that “[ n] othing in 309( j)( 6)( E) requires the FCC to
adhere to a policy it deems outmoded ‘in order to avoid mutual exclusivity in ... licensing proceedings’”)( decided
prior to enactment of the Balanced Budget Act); Benkelman Telephone Co. v. FCC, 220 F. 3d 601, petition for
rehearing on other grounds pending (D. C. Cir. 2000) (denying petitions for review of FCC rulemaking orders
establishing geographic area licensing system for certain paging licenses and adopting a competitive bidding
procedure for mutually exclusive applications) (decided after enactment of the Balanced Budget Act).
47 47 USC § 309( j)( 6)( E) (emphasis added).
48 47 U. S. C. § 309( j)( 3) (emphasis added).
49 The portion of the Conference Report that discusses the statute’s amendments to the Commission’s
auction authority is entitled “Section 3002( a) -- extension and expansion of auction authority.” Conference
Report, at 572 (emphasis added).
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expressed concern that the Commission not interpret its expanded auction authority in a way that would
reduce its Section 309( j)( 6)( E) obligations:
[T] he conferees emphasize that, notwithstanding its expanded auction authority, the
Commission must still ensure that its determinations regarding mutual exclusivity are
consistent with the Commission's obligations under section 309( j)( 6)( E). The conferees
are particularly concerned that the Commission might interpret its expanded competitive
bidding authority in a manner that minimizes its obligations under section 309( j)( 6)( E),
thus overlooking engineering solutions, negotiations, or other tools that avoid mutual
exclusivity. 50
This language from the Conference Report makes clear that Congress sought continuity rather than change
in the Commission’s application of Section 309( j)( 6)( E). Contrary to the assertions of some private
services commenters, 51 Congress did not intend to create a new and greater obligation to avoid mutual
exclusivity, but rather sought to ensure that in exercising its expanded auction authority, the Commission
would continue to give Section 309( j)( 6)( E) the same weight it had prior to the Balanced Budget Act. 52
25. We also conclude that this interpretation of the Balanced Budget Act is consistent with the
Commission’s spectrum management responsibilities. Section 309( j)( 3)( D) requires the Commission to
promote efficient use of the spectrum, which is a valuable and finite public resource. 53 To accomplish
these objectives, the Commission must have the freedom to consider all available spectrum management
tools and the discretion to evaluate which licensing mechanism is most appropriate for the services being
offered. 54 Thus, as the D. C. Circuit has recognized, the Commission is not required to adopt a licensing
process that avoids mutual exclusivity but undermines the public interest goals embodied in the statute. 55
Subsequent to the adoption of the Balanced Budget Act, the D. C. Circuit concluded that the Section
309( j)( 6)( E) obligation does not foreclose new licensing schemes that are likely to result in mutual
exclusivity. 56 If the Commission finds such schemes to be in the public interest, the court states, it may
50 Id.
51 See, e. g., Cinergy Comments at 5; ComEd Comments at 6; Entergy Comments at 5; PIRSC
Comments at 7; SCANA Comments at 6; UEC Comments at 4- 5.
52 H. R. Conf. Rep. No. 105- 217, 105 th Cong., 1 st Sess., at 572 (1997) (“ Conference Report”) (emphasis
added).
53 47 U. S. C. § 309( j)( 3)( D).
54 See Amendment of the Commission’s Rules Regarding Multiple Address Systems, WT Docket No.
97- 81, Report and Order, 15 FCC Rcd 11,956, 11,962- 63 ¶¶ 12, 13- 15 (2000) (“ MAS Report and Order”) (“[ W] e
believe that Section 309( j)( 6)( E) allows us to determine the licensing approach that is most appropriate for the
services being offered, taking into account the dominant use of the spectrum, administrative efficiency and other
related licensing issues.”).
55 See DIRECTV, Inc. v. FCC, 110 F. 3d 816, 828 (D. C. Cir. 1997) (Section 309( j)( 6)( E) does not
require Commission to adhere to policy it deems outmoded in order to avoid mutual exclusivity in licensing
proceedings); Benkelman Telephone Co., et al. v. FCC, 220 F. 3d 601, 606 petition for rehearing on other
grounds pending (D. C. Cir. 2000).
56 Benkelman Telephone Co., et al. v. FCC, 220 F. 3d 601, 606, petition for rehearing on other grounds
pending (D. C. Cir. 2000).
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implement them “without regard to [S] ection 309( j)( 6)( E) which imposes an obligation only to minimize
mutual exclusivity ‘in the public interest’ and ‘within the framework of existing policies. ’” 57 In the past,
the Commission has found with respect to many services that the adoption of a licensing scheme that results
in the filing of mutually exclusive applications encourages efficient use of the spectrum as mandated by
Section 309( j)( 3). 58 In other instances, the Commission has determined that a licensing approach that
avoids mutual exclusivity, e. g., site- based, first- come, first- served licensing, best serves the public interest.
For instance, we recently decided to license certain bands of spectrum designated for Multiple Address
Systems (“ MAS”) on a first- come, first- served, site- by- site basis. 59 We conclude that the Balanced Budget
Act did not change the nature of the public interest analysis required of the Commission when deciding the
licensing process for a particular service. Therefore, in establishing processes for assigning initial licenses,
the Commission will continue to fulfill its obligation under Section 309( j)( 6)( E) and consider the public
interest goals of Section 309( j)( 3).
26. We emphasize that our conclusion applies to decisions regarding the licensing of existing
services as well as future services. We recognize that many private wireless licensees contend that we
should avoid auctioning private wireless spectrum that is currently licensed through processes that avoid
mutual exclusivity. 60 These commenters assert that where the Commission has used licensing methods in
the private services that avoid the filing of mutually exclusive applications (e. g., first- come, first- served
licensing, shared use, frequency coordination), the Balanced Budget Act requires us to continue using these
methods and prohibits us from converting to licensing methods that would result in mutual exclusivity. 61
27. We reject this interpretation of the statute. Prohibiting the Commission from considering
57 Id. (citations omitted) (citing DIRECTV, Inc. v. FCC, 110 F. 3d 816, 828 (D. C. Cir. 1997).
58 See, e. g., Amendment of Part 90 of the Commission’s Rules to Facilitate Future Development of SMR
Systems in the 800 MHz Frequency Band, PR Docket No. 93- 144, Memorandum Opinion and Order on
Reconsideration, 12 FCC Rcd 9972, 10009- 10010 ¶ 115 (1997).
59 MAS Report and Order, 15 FCC Rcd at 11,973- 74 ¶ 45. See also Commercial Broadcast Competitive
Bidding First Report and Order, 13 FCC Rcd at 15,920 ¶ 17 (allowing a limited period for engineering solutions
or settlements by competing applicants).
60 See, e. g., AAA Comments at 6 (“ the existing system has worked well for private radio licensees,
generally enabling widespread and efficient use of shared channels by many different users without
interference.”); API Comments at 16; API Reply Comments at 3- 4; Blooston Comments at 7- 10; ITA Comments
at 24; ITA Reply Comments at 4; Blooston Comments at 10 (“[ t] he current system of frequency coordination and
first- come, first- served filing is fast, efficient and rarely results in mutual exclusivity”); Boeing Comments at 4-8;
Boeing Reply Comments at 1- 3; CellNet Comments at 6- 9; CellNet Reply Comments at 2- 4; Cinergy Reply
Comments at 2- 3; ComEd Reply Comments at 2- 3; CSAA Reply Comments at 4; Entergy Reply Comments at 2-
3; FIT Comments at 1- 4; Intek Comments at 4- 5; ITA Comments at 4- 7; ITA Reply Comments at 2- 5; Kenwood
Comments at 3- 5; LMCC Comments at 3- 6; Mark IV Comments at 5, 10- 11; Motorola Comments at 7- 8;
Motorola Reply Comments at 2; MRFAC Comments at 5; NTCC Comments at 2- 5; PCIA Comments at 2- 4;
SCANA Reply Comments at 2- 3; Trimble Comments at 3- 6.
61 See, e. g., API Comments at 16; Blooston Comments at 7 (“[ t] he express language of Section 309( j),
and its legislative history, unequivocally establish that the Commission is obligated to preserve the shared use
licensing methodology in the private internal radio services”); Blooston Reply Comments at 3; Boeing Comments
at 4- 8; Boeing Reply Comments at 1- 3; CellNet Comments at 6- 9; CellNet Reply Comments at 2- 4; ITA
Comments at 4- 6;
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changes to licensing methodologies applicable to existing services would contravene the intent of the
Balanced Budget Act and restrict the Commission’s ability to act in the public interest. 62 Thus, we believe
it remains fully within the Commission’s authority to convert from a licensing method that avoids mutual
exclusivity to one that is based on mutual exclusivity and auctions, as we have done in the case of certain
services in the past. 63 At the same time, as discussed below, we believe that in order for this option to be
considered in any service, the Commission, as part of its public interest analysis, should give significant
consideration to the effectiveness of existing licensing mechanisms that avoid mutual exclusivity, and
should weigh the potential costs of changing such mechanisms against the potential benefits.
2. License Scope
28. Background. In the Notice, the Commission sought comment on whether the use of geographic
area licensing for non- exempt private radio services would further the public interest goals of Section
309( j)( 3). 64 We solicited comment on the costs and benefits of implementing geographic area licensing in
the private radio frequency bands and asked whether licensing schemes other than geographic area licensing
would better serve the public interest. 65 In deciding if geographic area licensing would be appropriate for a
given radio service or class of frequencies, we asked whether we should consider the actual purpose for
which the spectrum is used or proposed to be used, as well as the purpose for which the spectrum is
currently allocated. 66 We inquired whether the use of geographic area licensing would speed the
assignment of new channels and facilitate further build- out of wide- area systems. 67 We also suggested that
the shared private service bands may be so heavily used that adopting a geographic area licensing scheme
may not serve any purpose because so little “white space” would be available to geographic area licensees
that there would be no interest in applying for the geographic area licenses. 68 The Commission further
sought comment on the likely effects of geographic area licensing on incumbent systems and potential new
entrants for private radio services. 69
62 See Benkelman Telephone Co., et al. v. FCC, 220 F. 3d 601, 606, petition for rehearing on other
grounds pending (D. C. Cir. 2000) (Section 309( j)( 6)( E) imposes an obligation only to minimize mutual
exclusivity in the public interest and within the framework of existing policies); Orion Communications Ltd. v.
FCC, 213 F. 3d 761, 763 (D. C. Cir. 2000) (notwithstanding other means of avoiding mutual exclusivity, “the
statute cannot be read to direct the FCC to adopt all other means available”).
63 See, e. g., Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of
SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93- 144, Second Report and Order, 12 FCC Rcd
19079 (1997); Amendment of the Commission's Rules Regarding the 37.0- 38.6 GHz and 38.6- 40.0 GHz Bands,
ET Docket No. 95- 183, Report and Order and Second Notice of Further Rule Making, 12 FCC Rcd 18600
(1997)(“ 39 GHz Report and Order”).
64 Notice, 14 FCC Rcd at 5241 ¶¶ 66- 67.
65 Id.
66 Id. at 5241- 5242 ¶ 69.
67 Id. at 5241 ¶ 67.
68 Id.
69 Id.
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29. Discussion. The Commission has previously concluded with respect to many commercial
services that geographic area licensing is a highly efficient licensing scheme. 70 Among other benefits, it
facilitates aggregation by licensees of smaller service areas into seamless regional and national service
areas, allows development of strategic and regional business plans, provides licensees with greater build-out
flexibility and is efficient for the Commission to administer. Our decisions to establish geographic area
licensing in commercial services have been based on our commitment to serve the public interest as
required by Section 309( j)( 3).
30. Private wireless licensees generally urge the Commission to retain the current non- geographic
licensing schemes employed in the private radio bands. 71 They assert that existing methodologies based on
first come/ first served, site- by- site licensing, and frequency coordination effectively serve the
communications needs of private radio licensees. 72 They further argue that geographic area licensing would
be inappropriate and counterproductive in the private radio bands. 73 Private wireless licensees state that
unlike commercial service providers that seek to offer the widest possible coverage, the majority of private
70 See, e. g., Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future
Development of Paging Systems, WT Docket No. 96- 18, Second Report and Order and Further Notice of
Proposed Rulemaking, 12 FCC Rcd 2732, 2744 ¶ 15 (1997). In addition, in the rule making proceeding
implementing competitive bidding to award licenses in the 39 GHz band, the Commission concluded that
predetermined service areas provide a more orderly structure for the licensing process and foster efficient
utilization of the spectrum in an expeditious manner. 39 GHz Report and Order, 12 FCC Rcd at 18647 ¶ 101. See also 800 MHz Second Report and Order,
12 FCC Rcd 19079, 19087 ¶ 10.
71 See, e. g., Advocacy Comments at 2- 3; API Comments at 12- 14; API Reply Comments at 3- 4;
Blooston Comments at 7- 10; Blooston Reply Comments at 3- 4; Boeing Comments at 4- 8; Boeing Reply
Comments at 1- 3; CellNet Comments at 7- 9; CellNet Reply Comments at 2- 4; Cinergy Comments at 8, 11;
Cinergy Reply Comments at 2- 3; ComEd Comments at 9, 13; ComEd Reply Comments at 2- 3; CSAA Reply
Comments at 4; Entergy Comments at 8, 11; Entergy Reply Comments at 2- 3; FIT Comments at 1- 4; ICA
Comments at 2, 4; Intek Comments at 4- 6; ITA Comments at 4- 7; ITA Reply Comments at 2- 5; Kenwood
Comments at 3- 5; LMCC Comments at 3- 6; Mark IV Comments at 5, 10- 11; Motorola Comments at 7- 8;
Motorola Reply Comments at 2; MRFAC Comments at 5; NTCC Comments at 2- 5; PCIA Comments at 2- 4;
SBT Reply Comments at 2, 7- 8, 26; SCANA Comments at 9, 12- 13; SCANA Reply Comments at 2- 3; Trimble
Comments at 3- 6; UEC Comments at 8, 11; UTC Comments at 20.
72 See, e. g., AAA Comments at 6; Advocacy Comments at 3; API Comments at 12- 14; Blooston
Comments at 7- 12; Blooston Reply Comments at 3- 4; Boeing Comments at 4- 8; Boeing Reply Comments at 1- 3;
CellNet Comments at 7- 9; CellNet Reply Comments at 2- 4; Cinergy Comments at 9, 11; Cinergy Reply
Comments at 2- 3; ComEd Comments at 11, 13; ComEd Reply Comments at 2- 3; Entergy Comments at 9, 11;
Entergy Reply Comments at 2- 3; FIT Comments at 1- 4, 7; Ford Reply Comments at 8; ICA Comments at 2, 4;
Intek Comments at 4- 6; ITA Comments at 24; ITA Reply Comments at 4; Kenwood at 3- 5; LMCC Comments at
3- 6; Motorola Comments at 7- 8; Motorola Reply Comments at 2; NTCC Comments at 2- 3; PCIA at 2- 4; PIRSC
Comments at 19; SCANA Comments at 10, 13; SCANA Reply Comments at 2- 3; UEC Comments at 9, 11; UTC
Comments at 20- 21; UTC Reply Comments at 3.
73 See, e. g., API Comments at 12- 14; Blooston Comments at 7- 12; Blooston Reply Comments at 3- 12;
CellNet Comments at 8- 9; CellNet Reply Comments at 2- 4; Cinergy Comments at 10- 11; ComEd Comments at
12- 13; Entergy Comments at 10, 11; FIT Comments at 4- 7; ICA Comments at 3; Intek Comments at 5; ITA
Comments at 16- 17; LMCC Comments at 4- 5; MRFAC Comments at 5; SBT Reply Comments at 3; SCANA
Comments at 11- 12; UEC Comments at 10- 11; UTC Comments at 20- 21; UTC Reply Comments at 4.
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radio licensees are interested in tailoring their operations to specific geographically confined needs. 74 These
licensees point out that they serve themselves in the areas in which they conduct their core activities, not the
public at large across broad market areas. 75 A number of commenters also argue that the use of geographic
area licensing violates Section 309( j)( 6)( E), claiming that it creates mutual exclusivity rather than avoids it. 76
31. As discussed above, we have concluded that Section 309( j)( 6)( E) does not prevent the
Commission from adopting licensing processes, such as geographic area licensing, that serve the public
interest but happen to result in the filing of mutually exclusive license applications. 77 We have also rejected
commenters’ arguments that the Commission is required by the Balanced Budget Act to retain current site-based
licensing schemes in existing private services. 78 Nonetheless, we recognize, as many commenters
have pointed out, that the decision to convert from current site- based licensing methods to geographic
licensing should not be made unless it is clear that the benefits of making the change outweigh the costs. 79
Based on the record in this proceeding, we see no reason to make such an across- the- board change to
existing licensing processes in private services. Therefore, we will not adopt geographic area licensing
rules for existing private services in this rulemaking. Instead, with respect to private services, the
Commission will continue to make determinations on a service- by- service basis of whether to adopt
geographic area licensing, site- by- site licensing, or any other licensing scheme based on its obligation under
Section 309( j)( 6)( E) and the public interest considerations of Section 309( j)( 3).
32. We recognize that some private licensees oppose geographic area licensing because they equate
it with the use of competitive bidding, which they strongly oppose in the private services. 80 Blooston, for
example, contends that the adoption of auctions in private services would make it difficult for many
traditional private users to obtain licenses because they would be unable to outbid commercial service
74 See, e. g., API Comments at 12- 14; Blooston Comments at 7- 12; Blooston Reply Comments at 3- 4;
CellNet Comments at 8- 9; Cinergy Comments at 9; ComEd Comments at 11; Entergy Comments at 9; MRFAC
Comments at 5; SCANA Comments at 10- 11; UEC Comments at 9.
75 See, e. g., API Comments at 12- 14; Blooston Comments at 8, 10- 12; Blooston Reply Comments at 3- 4;
CellNet Comments at 8- 9; MRFAC Comments at 5;
76 See, e. g., AAR Comments at 7- 8; API Comments at 16; Blooston Comments at 7, 10- 12; Blooston
Reply Comments at 3; Boeing Comments at 4; Boeing Reply Comments at 3; CellNet Comments at 7; CellNet
Reply Comments at 3; Intek Comments at 5; ITA Comments at 6.
77 See Section III. B. 2. supra (discussing obligation to avoid mutual exclusivity under Section
309( j)( 6)( E)). Furthermore, even where we decide in a specific service that it is in the public interest to continue
site- by- site licensing, such a decision does not necessarily preclude the use of auctions where competing
applicants seek to operate at the same site on the same frequency. See Commercial Broadcast Competitive
Bidding First Report and Order, 13 FCC Rcd 15920.
78 See supra ¶¶ 25- 27.
79 See e. g., Blooston Comments at 10- 17;
80 See, e. g., Blooston Comments at 5- 13; CellNet Comments at 7- 9; Cinergy Comments at 11; ComEd
Comments at 13; Entergy Comments at 11; ITA Comments at 10; SBT Reply Comments at 26; SCANA
Comments at 12- 13; UEC Comments at 11; UTC Reply Comments at 1.
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providers seeking to use the spectrum for subscriber- based services. 81 This view incorrectly assumes that if
the Commission were to adopt geographic area licensing for private radio services, it would also eliminate
eligibility restrictions for such services and permit commercial entities to bid for private spectrum for
commercial use. In fact, with one limited exception in the 800 MHz band, 82 we have concluded that we
should not change existing eligibility and use rules for services that are currently restricted to private radio
eligibles. 83
33. Moreover, even where we choose to retain eligibility restrictions on private spectrum, there
may be ways in which geographic licensing could be employed to accommodate the needs of private radio
users. For example, as noted above, we intend to use the framework adopted in this Report and Order to
guide our decisions in regard to the separate Notice of Proposed Rule Making in which we are proposing to
transfer 27 MHz of spectrum in bands below 3 GHz to non- government use. 84 In addition, as discussed
below, the use of band managers could be an effective means of providing private radio users the flexibility
to obtain access to the amount of spectrum, in terms of quantity, length of time, and geographic area, that
best suits their needs. 85 In addition, we could tailor our auction designs and procedures in ways that serve
the specialized needs of the private wireless industry. 86
3. Band Manager Licenses
34. Background. In the Notice, we sought comment on whether to establish a new class of licensee
called a “band manager” in the private radio services. 87 We described band managers in the Notice as a
class of Commission licensee that engages in the business of making its spectrum available for use by
others through private, written contracts. 88 We solicited comment on a broad range of issues relating to how
band manager licenses should be defined, and whether the public interest would be served by using band
manager licensing to address current and projected needs for private internal radio services. 89 We inquired
whether the concept of a band manager fits within the Commission’s overall spectrum management
responsibilities and obligations under the Communications Act. 90 We also asked a number of questions
about whether and when a band manager licensing approach may be more effective relative to alternative
81 Blooston Comments at 13; see also Boeing Comments at 6- 7; PIRSC Comments at 13.
82 See Section III. C. 4. infra (discussing limited availability of B/ ILT channels in the 800 MHz band for
use in CMRS systems).
83 See Section III. B. 2. infra (discussing eligibility requirements for auctionable services currently
allocated for private radio use).
84 See 27 MHz Reallocation Order.
85 See infra ¶¶ 35- 50.
86 See infra ¶¶ 51- 61.
87 See Notice, 14 FCC Rcd at 5247- 49 ¶¶ 88- 95.
88 See id. at 5247 ¶ 89.
89 See id. at 5247- 48 ¶¶ 90- 92.
90 See id. at 5247- 48 ¶ 90.
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methods of licensing private internal communications services. 91 Finally, we sought comment on a full
range of license implementation issues, including whether it would be necessary to have more than one
band manager in each geographic license area and what types of ownership and control requirements might
be appropriate for band managers in the private services. 92
35. Discussion. For the reasons discussed below, we believe that band manager licensing is a
viable mechanism that should be considered for licensing in spectrum allocated for the private services. 93
This Report and Order sets forth a framework to guide our determination in future proceedings concerning
private services as to the circumstances under which we might use band manager licensing as an alternative
or an addition to other licensing methods. We also review some of the considerations that we might take
into account in defining a band manager’s rights and responsibilities in the context of particular services.
We emphasize that this Report and Order does not adopt band manager licensing in any existing private
service, nor do we make any specific decision to do so in any future service. Rather, we reserve for future
service- specific rulemaking proceedings the question of whether to use band manager licensing in each
case. Such determinations will be based on careful analysis of the public interest considerations of Section
309( j) of the Communications Act as they apply to the specific characteristics, uses, and demands of the
service.
36. Since the Notice was adopted, we have implemented a form of band manager licensing for the
first time in the 700 MHz Second Report and Order. 94 In that proceeding, we concluded that band
manager licensing would be an effective and efficient way to manage the 700 MHz Guard Band spectrum
while minimizing the potential for harmful interference to public safety operations in adjacent bands. 95 We
91 See id. at 5248 ¶ 92.
92 See id. at 5248- 49 ¶¶ 91- 94.
93 We also regard band manager licensing as an option to be considered in spectrum in which
commercial services are authorized, as evidenced by our recent decision to license band managers in the 700
MHz guard bands. (The lessees of 700 MHz guard band spectrum may be either commercial service providers or
private users.) In addition, we have sought comment on whether band managers licensing would be appropriate
in the 3650- 3700 MHz band (and in the 4.9 GHz band should we find that the public interest supports the pairing
of these bands). See Amendment of the Commission’s Rules With Regard to the 3650- 3700 MHz Government
Transfer Band, ET Docket No. 98- 237; 4.9 GHz Band Transferred from Federal Government Use, WT Docket
No. 00- 32, First Report and Order and Second Notice of Proposed Rule Making, FCC 00- 363 ¶ 81 (rel. Oct. 24,
2000). However, because licensees in commercial services typically operate with fewer restrictions and in a more
market- driven environment than private licensees, there may be less need in some commercial services to
designate band managers as a specific “class” of licensees. Instead, a potential issue is the degree to which all
commercial licensees should have the option to use some or all of their spectrum in the same manner as a band
manager, i. e., to make spectrum available to third party users without the need for prior Commission approval,
while retaining primary responsibility for compliance with the Commission's rules. We plan to address this issue
more broadly in our upcoming secondary markets proceeding, which will address issues related to spectrum
leasing in wireless services generally. See Promoting Efficient Use of Spectrum Through Elimination of Barriers
to the Development of Secondary Markets, WT Docket No. 00- 230, Notice of Proposed Rule Making, FCC 00-
402 (adopted Nov. 9, 2000) (“ Secondary Markets Notice”) (Commission initiative to develop rules and policies
to promote secondary markets in radio spectrum). Therefore, we defer further discussion of band managers in
the commercial services context to that proceeding.
94 See 700 MHz Second Report and Order, 15 FCC Rcd at 5311- 12 at ¶ 26.
95 Id. at 5313 ¶ 30.
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also found that band manager licensing in the 700 MHz guard bands would enable parties to more readily
acquire spectrum with a minimum of Commission involvement. 96 We adopted licensing rules for Guard
Band Managers that were based on specific policy objectives that we considered relevant to those bands.
To ensure that Guard Band Managers would make their spectrum available to third parties, we required
that Guard Band Managers act solely as spectrum brokers, prohibited them from using spectrum for their
own private internal communications or to provide telecommunications services, and limited the amount of
spectrum that they may lease to affiliated entities. 97 To further our objective of making the 700 MHz
guard band spectrum available to a wide range of users, we adopted certain requirements to ensure fair and
nondiscriminatory access to the spectrum by potential users. 98
37. Our recent adoption of Guard Band Manager licensing in the 700 MHz proceeding should help
guide us in evaluating whether to adopt band manager licensing in future proceedings. 99 Nevertheless, a
number of private radio commenters in the present proceeding argue that band manager licensing of private
services is contrary to the public interest. 100 We agree that the use of band managers in spectrum restricted
to private services may raise different issues from those that led to our decision for the 700 MHz guard
band spectrum, which was open to all users, including commercial service providers and private radio
eligibles. 101 There may be instances where we determine that band manager licensing is not appropriate,
and where band manager licensing is adopted, we may adopt rules governing band manager activity that
differ from those applicable to Guard Band Managers. As discussed below, however, we reject the view
that band managers are inappropriate for private services generally.
38. A principal argument advanced by opponents of band manager licensing in private services is
that in comparison to other licensing methods, band manager licensing will necessarily make it more
difficult and costly for private spectrum users to obtain spectrum. 102 We do not agree. Band manager
licensing is a potential response to the underlying scarcity of spectrum for private radio services.
Repeatedly, we have recognized this problem and have attempted to address it through regulatory initiatives
aimed at increasing spectral and economic efficiencies in the use of private radio spectrum. 103 In the
absence of market- based mechanisms to promote efficient spectrum use, however, private radio spectrum
has become congested and “users have little incentive to use that resource more efficiently because any
privately initiated attempt to improve efficiency would confer benefits on all users of the shared spectrum,
96 See id.
97 See id. at 5324- 26 ¶¶ 56- 60.
98 See id. at 5327- 28 ¶¶ 63- 67.
99 See id. at 5311- 23 ¶¶ 25- 51.
100 See Boeing Comments at 11; FIT Comments at 6; RRS Comments at 7; SBT Comments at 21; API
Reply Comments at 7.
101 We note that, even if we choose to restrict band managers in a particular service to lease only to
private radio eligibles for permissible private uses, a band manager would still be considered to be engaged in a
commercial activity.
102 See generally Boeing Comments at 10- 14; Western Resources 4- 5; AWWA Comments at 9.
103 See, e. g., Refarming Proceeding.
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with only a fraction of these benefits accruing to the party undertaking the effort.” 104 By contrast, band
manager licensing is a market- based mechanism that can create incentives for efficient spectrum use.
Because band managers would be able to charge private users for spectrum use, users would likely be
discouraged from engaging in spectrally inefficient and low value uses. In addition, band managers may
realize greater economies of scale than existing private radio licensees. Finally, as in the case of the 700
MHz guard bands, we have the option of licensing more than one band manager in each license area, if we
think it important to ensure that potential spectrum users have a choice of band managers. These factors
will help ensure that efficiencies and cost savings associated with band manager licensing are passed on to
private spectrum users.
39. We also disagree with the view that band manager licensing inevitably results in a
concentration of private spectrum in the hands of a few licensees while depleting the spectrum available to
others. 105 To the contrary, we believe that band manager licensing can increase the diversity of users of
private spectrum. With a band manager, different types of spectrum users would have broad flexibility to
satisfy their particular spectrum needs with fewer transactional costs and regulatory burdens than are
associated with acquiring a full- term license under the Commission’s existing license assignment and
partial assignment procedures. Because band manager licensing may result in different types of users being
able to access the same spectrum, we believe that this mechanism is consistent with the congressional intent
underlying Section 309( j) ’s directive to encourage diversity in licensing. 106
40. In addition to allowing for wider variety of users, band manager licensing is intended to
facilitate apportionment of spectrum in a more dynamic fashion than existing licensing procedures permit,
thus making spectrum more responsive to market demands and technological changes. 107 We note that the
marketplace is increasingly responding to such demands, with system operators increasingly offering
services that have historically been provided only over private radio frequencies. 108 Band manager
licensing is likely to accelerate this trend toward more efficient use of private radio spectrum. Rather than
deplete spectrum, band manager licensing approaches will be developed with the objective of affording
spectrum users additional options to access spectrum to meet their particularized needs.
41. In light of these considerations, we find no merit in SBT’s assertion that band manager
licensing would be “an economic disaster for local users” and small businesses. 109 We see no reason to
104 Gregory L. Rosston & Jeffrey S. Steinberg, Using Market- Based Spectrum Policy to Promote the
Public Interest, 50 Fed. Comm. L. J. 87, 109 (1997)(“ Market- Based Spectrum Policy”).
105 See, e. g., Blooston Reply Comments at 10- 11; SBT Comments at 23; Boeing Comments at 11.
106 See 47 U. S. C. §309( j)( 3)( B).
107 See Principles for Reallocation of Spectrum To Encourage the Development of Telecommunications
Technologies For the New Millenium, Policy Statement, 14 FCC Rcd 19,868, 19,871- 72 ¶ 12 (1999)(“ Spectrum
Policy Statement”).
108 Some commenters note that they are increasing relying on commercial service providers to supply
some of their communications needs. See, e. g., AAR Reply Comments at 9. On a similar note, News Corp. has
unveiled plans to develop set- top boxes capable of linking electric meters to networks, a telemetry function which
has historically been handled wirelessly via private radio spectrum. See “Murdoch Sees Satellites as Way to
Keep News Corp. Current,” New York Times C1, C7 (June 16, 2000).
109 See SBT Comments at 18.
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believe that small businesses would not be awarded band manager licenses. Indeed, in our recently-concluded
auction of 700 MHz Guard Band Manager licenses, five of the nine winning bidders claimed
small business status. 110 When licenses are awarded through competitive bidding, the Commission may –
and usually does – award bidding credits and other preferences to small businesses. 111 We also disagree
with SBT’s assertion that band managers would have no incentive to deal with small businesses. Band
managers would be in the business of marketing and providing access to spectrum directly to eligible
entities, which would give rise to economic incentives to intensively use the spectrum and permit access to
as many users and types of users as possible.
42. Some commenters argue that band manager licensing is an improper delegation of the
Commission’s spectrum management and licensing authority under the Communications Act. 112 We
previously concluded in the 700 MHz guard band proceeding that band manager licensing is fully
consistent with our statutory spectrum management obligations. 113 For a number of reasons, we continue
to believe that conclusion is correct, and we reiterate it today. First, because band managers are to be
licensed and regulated by the Commission, the Commission fulfills its statutory obligation under Section
309( a) to determine whether licensing of spectrum will serve the public interest, convenience, and necessity. 114 Second, we do not regard the creation of band managers as an improper delegation of our regulatory
authority over the use of spectrum. Band managers must operate and make spectrum available subject to
the Commission’s rules and oversight. Allowing band managers to make frequencies available to end users
is analogous to the present frequency coordination process that requires applicants in some private services
to use a frequency coordinator to select a frequency that will most effectively meet the applicant’s needs
while minimizing interference to licensees already using a given frequency band. 115 We view band
managers as engaging in activities similar to those of a coordinator, though with greater rights and
responsibilities to manage the spectrum covered by its license, consistent with technical limitations and
other regulations for the licensed radio bands.
43. We also reject the view that band manager licensing is inherently inconsistent with the
requirements of Section 310( d) of the Communications Act. 116 Section 310( d) prohibits the transfer of a
radio license or any rights thereunder without Commission approval. 117 Generally speaking, one of the
110 See “700 MHz Guard Band Auction Raises $519,892,575.00,” News Release (Sept. 21, 2000).
Additional information on the results of this auction may be found on the Commission’s Auctions Web page:
.
111 See 47 C. F. R. §1.2109( e).
112 See Cinergy Comments at 25; ComEd Comments at 26; Entergy Comments at 24; SCANA
Comments at 26- 27; SBT Comments at 19; Ameren Comments at 25; Boeing Reply Comments at 3; Blooston II
Reply Comments at 11. See generally AWWA Comments at 9; PIRSC Comments at 18.
113 See 700 MHz Second Report and Order, 15 FCC Rcd at 5319- 21 ¶¶ 42- 47.
114 See 47 U. S. C. § 309( a)( Commission authority to grant applications found to serve the public interest,
convenience, and necessity).
115 See 700 MHz Second Report and Order, 15 FCC Rcd at 5320- 21 ¶ 45.
116 See 47 U. S. C. §§ 310( d). See also id. at 5321 ¶ 46.
117 47 U. S. C. §§ 310( d). In any examination of control, the Commission considers both legal (de jure)
and actual (de facto) control.
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Commission’s primary concerns in any analysis under Section 310( d) is to determine what party or parties
may be held accountable for activities undertaken pursuant to a Commission license. 118 In the 700 MHz
Second Report and Order, we concluded that our Guard Band Manager rules allowing licensees to lease
spectrum to third parties were consistent with the requirement that licensees retain ultimate control of their
licenses. 119 For example, we provided Guard Band Managers with full authority and the duty to take
whatever actions are necessary to ensure third- party compliance with the Act and our rules. 120 We also
stated that a Guard Band Manager has the right to suspend or terminate its lessee’s operations if the
lessee’s system is causing harmful interference or otherwise violating Commission rules. 121 We believe that
the approach taken in the 700 MHz Guard Band proceeding demonstrates that band manager licensing can
be implemented consistently with the requirements of Section 310( d). To the extent that we adopt
alternative models for band manager licensing in future service- specific proceedings, we believe that issues
relating to the statutory framework for such models can and should be addressed in those proceedings. 122
44. While we conclude that band manager licensing should be considered as an option in the
licensing of private services, we recognize that there are also arguments in favor of retaining the current
118 Id. For example, in the case of broadcast auxiliary facilities, the Commission has emphasized that it
would hold the broadcast licensee responsible for any interference or misuse of the facilities that occurs during
operation by the non- licensed user. See Amendment of Part 74, Subpart F of the Commission's Rules to Permit
Shared Use of Broadcast Auxiliary Facilities with Other Broadcast and Non- broadcast Entities and to Establish
New Licensing Policies for Television Broadcast Auxiliary Stations, BC Docket No. 81- 794, Report and Order,
FCC 83- 153, at 12, 53 Rad. Reg. 2d (P & F) 1101, 1983 WL 183062 (1983). The principle of licensee
responsibility may be found throughout the Commission’s rules. See, e. g., Implementation of Section 3( n) of the
Communications Act – Regulatory Treatment of Mobile Services, GN Docket No. 93- 252, Second Report and
Order, 9 FCC Rcd 1411, 1430- 31 (1994); 47 C. F. R. §§ 90.179( b)( licensee of shared radio station is responsible
for assuring that facility is used in compliance with Commission rules); 21.13( f)( licensee must retain effective
control where day- to- day management and operation of facilities are carried out by manager). We emphasize,
however, that any analysis of de facto control over a band manager license must be considered in the context of
this unique licensing scheme, and our express authorization of these activities pursuant to a band manager
license application.
119 See 700 MHz Second Report and Order, 15 FCC Rcd at 5321 ¶ 46. We also required Guard Band
spectrum use agreements to contain provisions under which the spectrum lessee agrees to comply with all
applicable Commission rules, accept FCC oversight and enforcement consistent with the Guard Band Manager's
license, and cooperate fully with any investigation or inquiry conducted by either the Commission or the Guard
Band Manager. Id. These provisions ensure that the Commission has an additional means of enforcing its rules
directly against the lessee. They do not, however, diminish the rights or obligations of the Guard Band Manager
to exercise control as licensee.
120 Id., 15 FCC Rcd at 5322- 23 ¶ 50.
121 See 700 MHz Second Report and Order, 15 FCC Rcd at 5322- 23 ¶ 50. We also required Guard Band
spectrum use agreements to contain provisions under which the spectrum lessee agrees to comply with all
applicable Commission rules, accept FCC oversight and enforcement consistent with the Guard Band Manager's
license, and cooperate fully with any investigation or inquiry conducted by either the Commission or the Guard
Band Manager. Id. These provisions ensure that the Commission has an additional means of enforcing its rules
directly against the lessee. They do not, however, diminish the rights or obligations of the Guard Band Manager
to exercise control as licensee.
122 We also address issues relating to Section 310( d) as it applies to spectrum leasing in our secondary
markets proceeding. See Secondary Markets Notice at ¶¶ 70- 82.
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site- by- site licensing approach in existing private radio services, as many commenters advocate. 123
Commenters raise legitimate concerns about the costs to spectrum users, both in terms of financial costs
and delays in making spectrum accessible, that may be associated with changing a licensing scheme in an
existing service. In light of these considerations, we have no plans at this time to implement band manager
licensing in existing private radio bands that are licensed on a site- by- site basis. 124 We will continue to
evaluate this issue on an ongoing basis, however. As many of the commenters who oppose band manager
licensing acknowledge, demand for private radio spectrum is increasing and available spectrum is scarce. 125
Thus, while existing licensing schemes in the private radio services may tend to avoid mutually exclusive
applications, such approaches may also raise barriers to new demands for access to private radio spectrum
that may have significant public benefits. Compared with transactional costs and time periods associated
with acquiring a full- term license under the Commission’s existing licensing regimes, band manager
licensing may have advantages because band managers may be able to complete frequency coordination
and authorize wireless operations with significantly lower transactional costs and in less time. A number of
commenters have observed that past Commission initiatives, such as refarming and authorization of
infrastructure sharing, have increased spectral efficiency in the private radio services. 126 We believe that
band manager licensing is another method that under some circumstances can help us progress towards
greater efficiency in the use of private radio bands. 127
123 See, e. g., PCIA Comments at 2- 5; SBT Reply Comments at 17; API Reply Comments at 7.
124 Our experience is that the use of geographic overlay licenses in private radio services may promote
spectrtum efficiency. See, e. g., Refarming Report and Order, 10 FCC Rcd at 10138- 39 ¶¶ 141- 143. Indeed, one
may conceive of many scenarios under which this flexible licensing tool might be employed to alleviate
congestion in encumbered frequency bands. By way of illustration, a band manager overlay licensee might
aggregate unencumbered spectrum from one band with spectrum leased from an incumbent licensee in another
frequency band within in its geographic license service area. The band manager could then lease the aggregated
spectrum to third parties. This is not to imply that the incumbent would suffer a degradation in service, as the
band manager might provide the incumbent with equipment that is more spectrally efficient or might offer to
operate the incumbent’s system over other licensed frequencies as part of its bargain, provided such uses are
otherwise consistent with the Commission’s rules.
125 See, e. g., Cinergy Comments at ii (“ Private radio spectrum is already insufficient to meet the needs
of eligibles…”); API Comments at 22; PCIA Comments at 21- 22; Motorola Comments at 9.
126 See Motorola Comments at 9; NTCC Comments at 7- 8.
127 Indeed, we are currently considering a proposal advanced by the Association of American Railroads
under which a large number of incumbent private radio licenses would be aggregated into a single band
manager- type license. See “Wireless Telecommunications Bureau Seeks Comment on Association of American
Railroads Petition for Modification of Licenses for Use in Advanced Train Control Systems and Positive Train
Control Systems,” Public Notice, DC 00- 1171 (rel. May 26, 2000)( seeking authority to modify 1069 land mobile
base stations using six 900 MHz channel pairs into single geographic license whose total area would be defined
as a 140- mile zone centered on the rights- of- way of all operating rail lines in the United States). We also note
that some public safety and private radio users have been required to seek regulatory relief from certain
regulatory requirements in order to have the flexibility to engage in some of the types of arrangements that might
be accommodated under a band manager licensing. See, e. g., “Wireless Telecommunications Bureau Seeks
Comment on Western Resources, Inc. Request for Waiver to Permit Sharing of Its 900 MHz Industrial and Land
Transportation Trunked Radio System With Public Safety Users,” Public Notice, DA 00- 1405 (rel. June 23,
2000).
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45. While we are hopeful that band manager licensing can yield efficiencies in existing spectrum
use, we also agree with private radio users that this is a complement to rather than a substitute for pursuing
new spectrum allocations. 128 We therefore intend to continue to explore the need for new spectrum
allocations to address the needs of private and public safety users. We also believe that band manager
licensing should be carefully considered as a licensing option for newly- allocated spectrum. For example,
we have recently initiated a proceeding to reallocate 27 MHz of spectrum in bands below 3 GHz from
Federal Government to non- government use, and have sought comment on proposals for band manager
licensing in portions of that spectrum. 129
46. We also believe that band manager licensing can be structured to prevent the types of
problems that some commenters contend will occur, including problems of interference, 130 loss of spectrum
efficiency, 131 and inadequacy of user access and service. 132 Although the rights and obligations of band
managers may vary somewhat from service to service, we anticipate that band managers will generally
have economic incentives to eliminate interference so as to ensure that end users receive quality service.
Band managers will also be required to coordinate the use of frequencies among end user clients to
minimize interference, and will be obligated to ensure that their lessees satisfy the interference protection
requirements set forth in the Commission’s rules both as to incumbent private radio licensees and licensees
in adjacent frequency bands. Band managers will also be responsible for resolving interference conflicts
among their customers and, in the first instance, among their customers and neighboring users of spectrum
licensed to other band managers or other licensees. We have recognized that one way to allow greater
flexibility in the use of spectrum is to permit licensees to negotiate arrangements among themselves to
control interference rather than rely on mandatory technical rules. 133
47. Band managers also have the potential to promote more efficient use of their licensed spectrum
due to their financial incentive to maximize spectral efficiency and use. This incentive is likely to
encourage band managers to reach private commercial agreements with incumbents, other band managers
and adjacent licensees on effective spectrum management. The band manager will be responsible for
managing a significant portion of spectrum and will attempt to maximize its use by finding additional third
party users. In this way, band manager licensing may achieve greater efficiencies than existing licensing
schemes in appropriate circumstances. Similarly, we find little merit in assertions that band managers will
engage in unfair or discriminatory behavior 134 and warehouse spectrum. 135 We are confident that band
managers will have incentives to open the use of the spectrum for all eligible users. Nonetheless, we will
128 Some commenters support the use of band manager licensing only for new spectrum allocations.
See, e. g., USMSS Comments at 14; Joint Filers Comments at 21- 22.
129 See 27 MHz Reallocation Order at ¶¶ 26, 31- 32.
130 See, e. g., UTC Comments at 41.
131 See, e. g., AWWA Comments at 9.
132 See, e. g., id. at 8- 9.
133 See Spectrum Policy Statement, 14 FCC Rcd at 19,870- 71 at ¶ 9.
134 See, e. g., API Comments at 17; SBT Comments at 18; Cinergy Comments at 25; Entergy Comments
at 25; SCANA Comments at 27; Ameren Comments at 26; ComEd Comments at 28.
135 See SBT Comments at 17; OSC Comments at 1. See generally API Reply Comments at 7.
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consider whether it is appropriate for band managers in other bands to be subject to the same types of rules
as 700 MHz Guard Band Managers regarding fair and nondiscriminatory access to the band manager’s
spectrum, and limits on the type of restrictions that band managers may impose on their customers’ use of
the spectrum. 136 If circumstances warrant, moreover, the Commission might consider imposing reasonable
access standards or other requirements to forestall anticompetitive behavior. 137
48. In assessing whether a band manager licensing mechanism may be appropriate for a specific
private services band, we intend to look at a number of factors. For example, we might consider whether
there are entities who can effectively perform the functions of a band manager, and whether other licensing
options may be overly cumbersome or inefficient. Our decisions on whether and how to license band
managers in other bands may also be guided by our experience with the 700 MHz Guard Bands. However,
the band manager rules we adopt in other bands may differ in some or all respects from our Guard Band
Manager rules. As an initial matter, if we decide to license band managers in other bands, we will
determine whether the spectrum should be licensed exclusively to band managers or to band managers
along with other types of licensees. In considering band manager licensing, we will decide whether the
band manager may be solely a broker of spectrum or may also use its licensed spectrum for its own internal
communications or to provide telecommunications services.
49. If we permit band managers to use their spectrum in addition to leasing it, we will also
consider whether rules are needed to ensure that band managers continue to perform their core spectrum
management functions. Thus, if we determine that a band manager will not be limited to acting as a
spectrum broker, we will also consider whether it is appropriate to limit the amount of spectrum that a band
manager may retain for its own use. 138 In addition, we will consider whether to adopt rules concerning the
types of entities that may lease spectrum from a band manager. For example, if we decide to limit the
amount of spectrum that a band manager may employ for its own communications needs or service
offerings, we might advance that regulatory objective by limiting the amount of spectrum that a band
manager leases to affiliated entities. We may provide the band manager in a given band flexibility to lease
its spectrum for a wide range of uses, including fixed or mobile, private or commercial radio services.
Alternatively, we could adopt eligibility restrictions for the band managers similar to those we have
historically adopted for licensees in existing private radio services. 139
50. We believe that the framework outlined above presents a workable set of guidelines in our
future considerations of whether and how to license band managers in private radio services, and how to
advance the policy objectives we establish for the bands under consideration. We emphasize that, where we
find band manager licensing to be appropriate, we intend to seek input on how band manager licenses can
136 See, e. g., id. at 5327- 28 ¶¶ 63- 67 (establishing standards of fair and nondiscriminatory access for
Guard Band Manager leasing activities).
137 In the 700 MHz proceeding, for example, we require Guard Band Managers to lease the predominant
amount of their spectrum to non- affiliates. See 700 MHz Second Report and Order, 15 FCC Rcd at 5325 ¶ 59.
We also remind licensees and spectrum users that state and federal antitrust and consumer protection laws may
apply to their conduct.
138 See, e. g., id. at 5326 ¶ 59 (limiting amount of spectrum Guard Band Managers may lease to
affiliates).
139 See, e. g., 47 C. F. R. §90.35( a) (eligibility for Part 90 licenses on Industrial/ Business Pool
frequencies).
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be most appropriately defined for the service in a manner that affords users the broad flexibility to access
spectrum, maximizes efficient use of the spectrum, and yields greater benefits than site- by- site or other
traditional licensing techniques.
B. Auction Design for Private Radio Spectrum Deemed Subject to Auction
51. We next discuss issues of auction design and implementation for those services that were not
subject to auction under the 1993 Budget Act but may be determined to be subject to auction under our
revised auction authority. The services that may be determined to be subject to auction under our expanded
auction authority are, by and large, private radio services which are presently licensed under procedures
that generally do not result in the filing of mutually exclusive applications. Thus, we next consider issues of
auction design and implementation for those services that may be subject to auction in the future.
1. Competitive Bidding Methodology and Design
52. Background. We have concluded above that Section 309( j), as amended by the Balanced
Budget Act, gives the Commission authority to conduct auctions in the private services if, subject to its
obligation to avoid mutual exclusivity, the Commission determines that the use of competitive bidding
would serve the public interest. 140 In the event that the Commission adopts a licensing scheme that results
in mutual exclusivity, the Commission seeks to develop a competitive bidding process that is tailored to the
specific characteristics of the private radio services, the various purposes for which spectrum in those
services is used, and the needs of the various types of entities holding licenses in those services. 141 In the
Notice, we stated that Section 1.2103( a) of our rules sets forth the various types of auction designs from
which we may choose to award licenses for services or classes of services subject to competitive bidding. 142
We also pointed out that under Section 309( j) the Commission has authority to design and test other
auction methodologies. 143 In light of these options, we sought comment generally on the types of
competitive bidding designs and methodologies to be considered for any private radio services that may be
determined to be auctionable as a result of the Balanced Budget Act. 144 We also asked about the frequency
with which we should conduct auctions of private radio services spectrum that we determine is auctionable,
and whether we should conduct auctions at regularly scheduled intervals. 145 In addition, we asked whether
certain procedures such as bidding credits and spectrum caps would be appropriate in the private radio
140 See Section III. A. 1. supra.
141 See Notice, 14 FCC Rcd at 5244 ¶ 77.
142 Id. at 5244- 45 ¶ 78; 47 C. F. R. § 1.2103( a). Alternative designs include: (1) sequential multiple-round
auctions, using either oral ascending, remote and/ or on- site electronic bidding; and (2) sequential or
simultaneous single round auctions, using either remote and/ or on- site electronic bidding, or sealed bids. See
generally 47 C. F. R. § 1.2103( a).
143 Id. at 5244- 45 ¶ 78 (citing Amendment of Part 1 of the Commission’s Rules -- Competitive Bidding
Procedures, WT Docket No. 97- 82, Order, Memorandum Opinion and Order and Notice of Proposed Rule
Making, 12 FCC Rcd 5686, 5691 ¶ 6 (1997)).
144 Id. at 5245 ¶ 79.
145 Id. at 5245 ¶ 80.
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services. 146
53. Discussion. Although we received little public comment on these issues, we believe that the
specialized nature of private radio services merits consideration of changes to our general auction design
and procedures. We intend to consider proposals to amend our competitive bidding methodology for
specific private radio services on a service- by- service basis. We may, for instance, decide to implement
procedures such as bidding credits, spectrum caps, and auctions at regularly scheduled intervals. We have
provided bidding credits to eligible applicants in many of our previous auctions 147 and believe that
applicants for licenses in the auctionable private radio services should also be eligible to receive such
financial benefits provided they meet the necessary criteria. We further believe that scheduling auctions for
licenses in the private services at regular intervals would be particularly beneficial to the private wireless
industry. We recognized in the Notice that private internal radio service licensees using spectrum to
conduct their day- to- day business operations may not be able to wait a significant amount of time to obtain
authorizations for the frequencies they need to conduct their businesses. 148 Conducting auctions at
regularly scheduled intervals of whatever spectrum we determine to be available in our inventory would
ensure that private users have the opportunity to acquire the spectrum they need to operate their businesses.
Further, we confirm our determination made in the Part I Third Report and Order to continue to define
small businesses for purpose of private wireless auction rules based on the characteristics and capital
requirements of the specific service. 149
2. Eligibility Requirements
54. Background. The Notice solicited comment on a broad range of questions relating to eligibility
for participation in spectrum auctions for private radio services. 150 In particular, we sought comment on
whether to restrict eligibility to participate in auctions for private wireless services so that we might be able
to tailor a competitive bidding system to afford private wireless users reasonable opportunities to obtain
sufficient spectrum to meet the needs of their day- to- day business operations. We requested comment on
whether participation in private wireless spectrum auctions should be limited to certain types of entities,
such as small businesses, non- commercial entities or public safety organizations, and whether to afford
certain classes of applicants priority status in an auction.
55. Discussion. With respect to services that are currently restricted to private radio eligibles, we
have no plans to change existing eligibility and use rules. Our decision of whether to use competitive
bidding to assign licenses is independent of any determination relating to licensee eligibility.
146 Id. at 5247 ¶ 87.
147 See, e. g., Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Procedures, WT
Docket No. 97- 82, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, ET Docket
No. 94- 32, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374
(1997) (modified by Erratum, DA 98- 419 (rel. Mar. 2, 1998)) (adopting small business bidding credits). See also
47 C. F. R. § 1.2110 (definition of small business designated entities for purposes of FCC’s competitive bidding
processes).
148 Notice, 14 FCC Rcd at 5245 ¶ 80.
149 See Part 1 Third Report and Order, 13 FCC Rcd at 388 ¶ 18.
150 See Notice, 14 FCC Rcd at 5245- 47 ¶¶ 81- 87.
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56. As to newly allocated spectrum, we will make decisions on eligibility at the time we
promulgate specific service rules for those bands. In recent years, the Commission has generally favored
open eligibility rather than eligibility restricted to particular types of entities. We have taken this approach
based on the finding that open eligibility generally promotes efficiency in spectrum markets and results in
the award of licenses to those who value them most highly. 151 Nevertheless, we recognize that this general
approach may not be appropriate in all cases and we may decide to restrict eligibility in particular cases if
such restrictions are consistent with our spectrum management responsibilities under Section 309( j).
3. Processing of New Applications
57. Background. In the Notice, we posed a number of questions concerning the implementation of
competitive bidding for services in which licenses will be assigned by auction for the first time. 152 In
particular, we requested comment on measures that might be necessary to prevent applicants from using the
current application and licensing processes to engage in speculative activity prior to our adoption of auction
rules, such as temporary application freezes or interim rules imposing shorter time periods for construction
or build- out. 153
58. Discussion. In the event we decide to adopt competitive bidding for a private radio service, we
will continue to make service- by- service determinations as to whether to temporarily suspend acceptance of
applications for new licenses, amendments, or major modifications, or adopt interim rules imposing shorter
time periods for construction or build- out. Commenters uniformly oppose the use of application freezes, 154
noting that they can be disruptive to existing operations and can often last longer than initially anticipated.
We are mindful that even short- term freezes have the potential to harm incumbents as well as potential new
entrants and, by extension, the public. 155
59. We observe that the Commission has delegated authority to impose application filing freezes in
the private wireless services to the Chief of the Wireless Telecommunications Bureau. 156 While we defer to
151 See generally Market- Based Spectrum Policy, at 92- 111.
152 See Notice, 14 FCC Rcd at 5249 ¶¶ 96- 97.
153 See id.
154 See, e. g., Cinergy Comments at 26- 27; UTC Comments at 24- 25; MRFAC Comments at 13; Ameren
Comments at 26- 28; CellNet Comments at 17- 19; UTC Reply at 20- 22.
155 See, e. g., Revision of Part 22 and Part 90 of the Commission’s Rules to Facilitate Future
Development of Paging Systems; Implementation of Section 309( j) of the Communications Act – Competitive
Bidding, First Report and Order, 11 FCC Rcd 16,570, 16,581- 82 (1996). Thus, in declining requests to impose a
freeze on certain private wireless license applications, we noted that we are “reluctant to freeze the acceptance of
applications without evidence that there is a serious problem that cannot be resolved under current rules and
procedures.” Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the
Policies Governing Them and Examination of Exclusivity and Frequency Assignment Policies of the Private
Land Mobile Services, PR Docket No. 92- 235, Second Memorandum Opinion and Order, 14 FCC Rcd 8642,
8649- 50 ¶ 14 (1999)( denying requests by API and UTC for imposition of freeze on channels adjacent to those
used by Power or Petroleum Radio Services).
156 See 47 C. F. R. §§ 0.131; 0.331. Such decisions are procedural in nature and therefore not subject to
the notice and comment requirements of the Administrative Procedure Act. See 5 U. S. C. §§ 553( b)( A); see also
Neighborhood TV Co. v. FCC, 742 F. 2d 629, 637- 38 (D. C. Cir. 1984) (holding Commission's filing freeze is a
(continued….)
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the Bureau’s expertise and experience in making such determinations, we believe that the Bureau should be
guided by a principle of using the least restrictive means available to deter speculative applications.
Generally, the Bureau has carefully balanced the benefits and costs to incumbent users, new entrants and
the public of applying such measures.
60. In exercising its delegated authority, the Bureau has generally refrained from imposing
licensing freezes upon applications for private, internal use facilities on the grounds that such applications
are not subject to the same speculative pressures that may be present in commercial contexts. 157 In
commercial contexts our practice has been to temporarily suspend the acceptance of applications upon the
adoption of competitive bidding rules and new geographic licensing schemes; 158 however, in the private
wireless services the Bureau has previously found that incentives for speculative abuse are limited. 159 Most
commenters contend that the private radio services are not likely to be targeted by speculators and oppose
the use of freezes in these services. 160 Nevertheless, we are concerned that for private services in which we
decide licenses will be assigned by competitive bidding for the first time, it may be necessary to adopt
temporary licensing freezes to prevent applicants from using the current application and licensing processes
to engage in speculative activity prior to our adoption of auction rules, thus limiting the effectiveness of our
decision.
61. Commenters are divided on the issue of whether short construction deadlines should be used to
deter speculative licensing activity. 161 For example, Cinergy asserts that “[ t] he current construction periods
represent the perfect balance of being short enough to prevent speculation but long enough to allow all
types of licensees to secure funding, order equipment and build new communications facilities.” 162 AWWA
(Continued from previous page)
procedural rule not subject to the notice and comment requirements of the Administrative Procedures Act);
Buckeye Cablevision, Inc. v. United States, 438 F. 2d 948, 952- 53 (6th Cir. 1971) (same); Kessler v. FCC, 326
F. 2d 673, 680- 82 (D. C. Cir. 1963) (same).
157 See Notice, 14 FCC Rcd at 5249 n. 224.
158 See, e. g., MAS Report and Order, 15 FCC Rcd at 12,005 ¶115 (2000).
159 See, e. g., Revision of Part 22 and Part 90 of the Commission’s Rules to Facilitate Future
Development of Paging Systems; Implementation of Section 309( j) of the Communications Act – Competitive
Bidding, Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 2732, 2757- 58 ¶
43 (1997) (exempting private radio applications from paging licensing freeze and prohibiting conversion of
private facilities to commercial use). Licensing freezes are not unheard of in the private services, however. For
example, the Bureau imposed a temporary freeze on the acceptance of PLMR applications ancillary to its freeze
on applications for public coast stations sharing the same spectrum. (Public coast licensees are CMRS providers
that allow ships at sea to send and receive messages and interconnect with the public switched network.) See
Amendment of the Commission's Rules Concerning Maritime Communications, PR Docket No. 92- 257, Second
Report and Order and Second Further Notice of Proposed Rulemaking, 12 FCC Rcd 16949, 17015 ¶ 32( 1997).
See also Amendment of the Commission’s Rules Regarding Multiple Address Systems, WT Docket No. 97- 81,
Notice of Proposed Rule Making and Order, 12 FCC Rcd 7973, 8003- 8004 ¶¶ 68- 71 (1997).
160 See, e. g., CellNet Comments at 19; UTC Comments at 24- 26.
161 See id. at 25- 26;
162 Cinergy Comments at 28. See Ameren Comments at 28 (same); SCANA Comments at 29 (same);
Entergy Comments at 27 (same); ComEd Comments at 30 (same);
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finds this proposal “problematic” for utilities and public agencies which, it asserts, would be unable to
complete the bidding, contracting and construction processes within time frames any shorter provided for
under existing rules. 163 Others favor shortened construction periods in the event of a transition to a new
licensing scheme, 164 but differ on whether extension requests should be permitted. 165 We have previously
recognized that shortened construction deadlines may serve as an effective deterrent to potential speculation
by those with no sincere interest in constructing radio facilities. 166 With respect to private radio services,
we remain convinced that reduced construction periods may be an appropriate spectrum management tool.
However, given the broad range of private services involved in this rulemaking and those services’ differing
objectives and needs, the Commission will not adopt a new framework here for making such
determinations. Rather, we will retain the discretion to adopt temporary licensing freezes or shorter
construction periods as a means of deterring speculative licensing activity on a service- by- service basis.
C. Exemption from Competitive Bidding for Public Safety Radio Services
62. Since it initially became law, Section 309( j)( 2) of the Communications Act has contained
provisions qualifying the Commission’s auction authority. 167 As is discussed above, the Balanced Budget
Act significantly revised Section 309( j)( 2) to enumerate three types of spectrum licenses to which our
competitive bidding authority does not apply. 168 Two of the three exemptions relate to categories of
broadcast licenses. 169 The auction exemptions for those categories of broadcast licenses have been
addressed in other Commission decisions and will not be discussed any further here. 170 Rather, the
163 See AWWA Comments at 10.
164 See, e. g., UTC Comments at 10.
165 Compare NTCC Comments at 21 (“ reducing the construction period is not as critical as ensuring that
construction deadlines are not extended for just any reason.”) with CellNet Comments at 20 (urging waiver of
deadlines where wide- area or complex networks are involved).
166 See, e. g., 220 MHz Third Report and Order, 12 FCC Rcd 10,943, 11,085¶ 336 (1997)( requiring full
construction and operation of Phase I non- nationwide 220 MHz facilities prior to beginning primary fixed or
paging operations); Amendment of Part 90 of the Commission’s Rules to Provide for the Use of the 220- 222
MHz Band by the Private Land Mobile Radio Service, PR Docket No. 89- 552, Fifth Report and Order, 13 FCC
Rcd 24,615, 24,629 (1998)( requiring construction and operation of Phase I non- nationwide 220 MHz systems
prior to disaggregation or partitioning).
167 See discussion at Section II, supra. See also Competitive Bidding Second Report and Order, 9 FCC
Rcd at 2352- 54.
168 See discussion at Section II, supra.
169 See 47 U. S. C. § 309( j)( 2)( B) and (C) (as amended by Balanced Budget Act, § 3002) (exemptions for
digital television services, noncommercial educational broadcast stations, and public broadcast stations).
170 We addressed Section 309( j)( 2)( C) ’s statutory exemption for noncommercial and public broadcast
stations in the First Report and Order in MM Docket 97- 234. See In the Matter of Implementation of Section
309( j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television
Fixed Service Licenses; Reexamination of the Policy Statement on Comparative Broadcast Hearings; Proposals to
Reform the Commission's Comparative Hearing Process to Expedite the Resolution of Cases, MM Docket No.
97- 234, GC Docket No. 92- 52, Gen Docket No. 90- 264, First Report and Order, 13 FCC Rcd 15,920, 15,928- 31
¶¶ 20- 25 (1998).
(continued….)
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following discussion focuses on the scope of Section 309( j)( 2)( A) ’s exemption for “public safety radio
services,” 171 and mechanisms that may be used in the event we receive mutually exclusive applications for
public safety radio services.
1. Scope of Public Safety Radio Services Exemption
63. Background. Section 309( j)( 2)( A), as amended by the Balanced Budget Act, states that the
Commission’s auction authority does not extend to licenses and permits issued
(A) For public safety radio services, including private internal radio services used by State and
local governments and non- government entities and including emergency road services provided by
not- for- profit organizations, that –
used to protect the safety of life, health, or property; and
(ii) are not made commercially available to the public;
As we stated in the Notice, this exemption from the Commission’s auction authority is of particular
importance to determining the auctionability of wireless spectrum. 172 In the Notice, we sought comment on
the various elements of the statutory exemption.
64. Discussion. As discussed in greater detail below, we conclude that the statutory exemption for
public safety services applies not only to traditional public safety services such as police, fire, and
emergency medical services, but also to services designated for non- commercial use by entities such as
utilities, railroads, transit systems, and others that provide essential services to the public at large and that
need reliable internal communications in order to prevent or respond to disasters or crises affecting their
service to the public. We also conclude that the public safety exemption applies only to services in which
these public safety uses comprise the dominant use of the spectrum. Thus, services in which such uses are
not dominant (and in which mutual exclusivity occurs) are not statutorily exempt from auctions, even if
some individual licensees in the service may choose to use the spectrum for public safety purposes as
defined by the statute.
(Continued from previous page)
The statute also exempts initial licenses for digital television (DTV) services. The Commission issued
initial DTV licenses simultaneously to all eligible full- power permitees and licensees in the Fifth Report and
Order in the DTV proceeding (MM Docket 87- 268). See Advanced Television Systems and Their Impact upon
the Existing Television Broadcast Service, Fifth Report and Order, 12 FCC Rcd 12809 (1997). The DTV license
assignments were made pursuant to Section 336( a)( 1) of the Communications Act, which was added by the
Telecommunications Act of 1996; these assignments were made prior to the enactment of the Balanced Budget
Act. As we observed in our Notice of Proposed Rule Making in MM Docket No. 97- 234, competitive bidding
procedures for future digital television services that do not fall within Section 309( j)( 2)( B) ’s exemption for DTV
licenses will be the subject of a future rulemaking. See In the Matter of Implementation of Section 309( j) of the
Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed
Service Licenses; Reexamination of the Policy Statement on Comparative Broadcast Hearings; Proposals to
Reform the Commission's Comparative Hearing Process to Expedite the Resolution of Cases, MM Docket No.
97- 234, GC Docket No. 92- 52, Gen Docket No. 90- 264, Notice of Proposed Rule Making, 12 FCC Rcd 22,363,
at 22,368- 69 ¶ 10 (1997).
171 See 47 U. S. C. § 309( j)( 2)( A).
172 Notice, 14 FCC Rcd at 5222 ¶ 26.
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65. As set forth in greater detail below, in applying this analysis to existing private services, we
conclude that spectrum currently allocated to the Public Safety Radio Pool, to the extent it is licensed on an
exclusive basis, is within the scope of the statutory exemption. We also conclude that the exemption does
not apply to exclusively licensed spectrum in the 220, 800, and 900 MHz bands allocated to
Industrial/ Land Transportation and Business Radio use, nor does it apply to exclusive private land mobile
radio frequencies in the 470- 512 MHz band, 173 because the dominant use of these bands is not “public
safety” use as defined by Section 309( j)( 2)( A). With respect to other private services that are not
exclusively licensed, we do not need to determine the applicability of the public safety exemption at this
time because mutual exclusivity does not occur in these services.
66. We do provide, however, the following guidance regarding our interpretation of the public
safety exemption, and discuss the factors we will consider in assessing its applicability to future situations.
As a threshold matter, we find that the exemption should be evaluated in terms of its application to
particular services rather than to particular classes or groups of licensees within a service. The statutory
language provides that the exemption applies to “public safety radio services.” 174 While the legislative
history of the Balanced Budget Act refers to particular “users” as being exempt, we believe that this
language is best interpreted as illustrating the types of services that fall within the new statutory term, i. e.,
services like those used by the entities referenced in the legislative history. Because the applicability of the
exemption to any service must be decided before the service is licensed, our analysis in each case must be
based on the use and eligibility rules that we establish for the service. We therefore agree with the majority
of commenters that delineating the scope of the exemption is a matter of determining whether the rules for a
particular service cause it to fall within the definition of a “public safety radio service,” rather than
attempting to predict the uses of spectrum that will develop after licensing occurs. 175 We therefore
conclude that the exemption can apply only to spectrum that the Commission specifically allocates for the
particular uses that Congress intended to benefit. 176 We note that the public safety radio services
exemption does not preclude the Commission from allocating additional spectrum only for traditional
public safety services as defined by Part 90 of the Commission’s Rules. We discuss each of the elements
of the statutory exemption in turn.
67. Private Internal Radio Services. The statutory public safety exemption includes “private
internal radio services” used for public safety purposes. 177 In the Notice, we proposed to define “private
internal radio services” by adapting the Part 90 definition of “internal system” to also include fixed services
(which are governed by Part 101). 178 The commenters broadly support adopting the Part 90 definition for
173 See 47 C. F. R. § 90.311( a)( 1) (permitting a wide variety of users in the 470- 512 MHz band, including
Business Radio Service eligibles).
174 47 U. S. C. § 309( j)( 2)( A) (emphasis supplied).
175 The majority of commenters agree that the exemption applies to “services.” See, e. g., Alliant Energy
Comments at 2; AAA Comments at 10; API Comments at 4- 8; CellNet Comments at 10; Georgia Comments at 3;
DeKalb County, Georgia Water and Sewer and Division Comments at 2; EBMUD Comments at 3. But see
Cinergy Comments at 13 (exemption applies to certain licensees); accord ComEd Comments at 19; Entergy
Comments at 13.
176 Notice, 14 FCC Rcd at 5224- 25 ¶ 30.
177 47 U. S. C. § 309( j)( 2)( A).
178 Notice, 14 FCC Rcd at 5225- 26 ¶ 32.
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purposes of determining this element of the statutory exemption. We therefore adopt this definition, i. e., we
define a “private internal radio service” as a service in which the licensee does not make a profit, and all
messages are transmitted between fixed operating positions located on premises controlled by the licensee
and the associated fixed or mobile stations or other transmitting or receiving devices of the licensee, or
between mobile stations or other transmitting or receiving devices of the licensee. 179
68. We also requested comment on whether the “private internal” use definition should include
services in which licensees operate systems on a not- for- profit basis and under a cost- sharing agreement, on
a cooperative basis, or as a multiple- licensed system for internal communications to support their own
operations. 180 Consistent with most of the comments addressing this issue, we now decide that once we
deem a particular service to be a public safety radio service, the spectrum will be auction- exempt even if
some of the users operate their systems under some type of cost- sharing arrangement or through multiple
licensing. 181 We note, however, that the services on which such use is permitted currently (e. g., Private
Land Mobile Radio Services) are licensed in a manner that does not give rise to mutual exclusivity, so that
it is not necessary at this time to consider the applicability of the exemption to these services. 182
69. State and Local Governments. The exemption includes “private internal radio services” used
by both public and private entities, i. e., “state and local governments and non- government entities.” 183 In
the Notice, we requested comment on our tentative conclusion that we should presume that all state and
local government entities are eligible for licensing in the public safety radio services without any further
showing as to eligibility, rather than require all state and local government entities to demonstrate their
eligibility for licensing in the public safety radio services. 184 In establishing eligibility for licensing in the
public safety spectrum in the 700 MHz band, the Commission concluded that all state and local
government entities would be presumed eligible without further showing as to eligibility. 185 The Conference
Report accompanying the Balanced Budget Act makes clear that Congress intended the public safety radio
services exemption to be broader than the definition of “public safety services” eligible for licensing in the
700 MHz band, i. e., to include a larger universe of services. 186 Commenters addressing this issue agree
that the Commission should presume eligibility for state and local government entities. 187 Consequently, we
179 Id.
180 Id. at 5226 ¶ 33. See infra at Section III. D. 5. regarding multiple licensing.
181 See, e. g., ARINC Comments at 3- 4; Arizona Public Service Company Comments at 3; BGE
Comments at 2; Georgia Comments at 2- 3; DeKalb County, Georgia Water and Sewer Division Comments at 3;
EBMUD Comments at 3; ITA Joint Commenters Comments at 10- 11; SCANA Reply Comments at 5; Ameren
omments at 22- 24; UTC Comments at 14.
182 See infra at Section III. D. 5. for a discussion on multiple licensing.
183 47 U. S. C. § 309( j)( 2)( A).
184 See Notice, 14 FCC Rcd at 5227 ¶ 36.
185 See The Development of Operational, Technical and Spectrum Requirements For Meeting Federal,
State and Local Public Safety Agency Communication Requirements through the Year 2010, WT Docket No. 96-
86, First Report and Order and Third Notice of Proposed Rule Making, 14 FCC Rcd 152, 180- 81 ¶ 54 (1998).
186 Conference Report at 572.
187 See, e. g., APCO Comments at 2- 6; MDTA Comments at 4; NJHA Comments at 3; NJTA Comments at
(continued….)
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conclude that all state and local government entities are eligible for licensing in the public safety radio
services without any further showing as to eligibility, subject to the statutory requirements for spectrum to
be deemed auction- exempt.
70. Non- government Entities. In the Notice, we requested comment on whether we should
establish any eligibility criteria for non- government entities (NGOs) to ensure that public safety radio
services spectrum licensed to these entities is used to protect the safety of life, health, or property and is not
made commercially available to the public. 188 Most commenters addressing this issue oppose the
imposition of eligibility restrictions, such as governmental approval requirements. 189 We agree. A
statutory analysis supports this conclusion. The definition for “public safety services” in Section 337( f) of
the Communications Act requires NGOs to be authorized by a governmental entity in order to be eligible
for public safety spectrum in the 764- 776/ 794- 806 MHz (700 MHz) band, but the public safety radio
services exemption in Section 309( j)( 2) contains no such condition. This distinction indicates that
Congress did not intend to subject NGOs to such requirements in order to be eligible for public safety radio
service spectrum. 190 Accordingly, we conclude that we shall not establish any eligibility criteria for NGOs
separate and apart from the eligibility requirements for each public safety radio service. 191
71. Section 309( j)( 2)( A) also provides that the exemption includes services used by not- for- profit
organizations providing emergency road services. The legislative history to the Balanced Budget Act
reflects that this service exemption includes “radio services used by not- for- profit organizations that offer
emergency road services, such as the American Automobile Association,” and explains that the Senate
“included this particular exemption in recognition of the valuable public safety service provided by
emergency road services.” 192 The Conference Report specifies that this exemption was not meant to
include “internal radio services used by automobile manufacturers and oil companies to support emergency
road services provided by those parties as part of the competitive marketing of their products.” 193
Commenters were divided 194 in response to our question in the Notice regarding whether we should exclude
(Continued from previous page)
3- 4; NYSTA Comments at 3- 4; Nextel Reply Comments at 11; The Peace Bridge Authority Comments at 3; UTC
Comments at 15.
188 Notice, 14 FCC Rcd at 5228 ¶ 37.
189 See, e. g., CII Comments at 13- 14; UTC Comments at 15.
190 See McGarry v. Secretary of the Treasury, 853 F. 2d 981, 986 (D. C. Cir. 1988) (statutory provisions
should be construed as to be consistent with each other) (citing Citizens to Save Spencer County v. United States
Environmental Protection Agency, 600 F. 2d 844, 870 (D. C. Cir. 1979)).
191 Commercial service providers are not NGOs in this context. Commercial service providers intending
to provide telecommunications services to public safety entities will not be able to apply for auction- exempt
spectrum. See infra ¶¶ 82- 83.
192 Conference Report at 572.
193 Id.
194 See AAA Comments at 3 (Commission should only include not- for- profit entities under this
exemption); accord Cal State Reply Comments at 5. But see Rocky Mountain Reply Comments at 4- 5
(Commission should allow for- profit entities within this exemption).
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providers of emergency road services that are not organized as not- for- profit entities from using auction-exempt
spectrum. 195 The statute makes a specific distinction between for- profit and not- for- profit entities
in this context. The statute does not make this distinction in any other context with respect to the
exemptions from competitive bidding. We conclude that a radio service used by for- profit entities
providing emergency road services is not auction- exempt. The for- profit nature of such entities takes them
outside the scope of the emergency road services exemption, even if they arguably otherwise meet the
statutory criteria. 196
72. Protection of Life, Health, or Property. Congress requires that the exemption apply to private
internal services used by state and local governments and non- government entities to protect life, health, or
property. Thus, the most prominent issue in delineating the scope of the exemption is to determine which
services are “used to protect the safety of life, health, or property” within the meaning of the statute. 197
73. As a threshold question, we must determine what proportion of users in a given service must be
the type of user that Congress intended to be able to make use of exempt spectrum, in order for the service
to be deemed a public safety radio service. For example, is a service auction- exempt so long as any of the
users within that service are qualified to obtain such spectrum? Or must all, or the majority, of the entities
within the service, be qualified to obtain such spectrum? In the Multiple Address System proceeding, we
looked to the “dominant” or “primary” use of each band to determine whether to assign it by competitive
bidding. 198 In other words, we examined whether the majority of users within a given band are qualified to
obtain auction- exempt spectrum, in order to determine whether that band should be designated as auction-exempt.
We will use the same approach here.
74. In order to determine whether a given service is primarily utilized by the type of user Congress
intended to exempt from competitive bidding, we must determine what users Congress intended to include
within the exemption. In the Notice, we tentatively concluded that Congress intended to include those users
of spectrum currently allocated for traditional public safety uses. 199 Specifically, we proposed to designate
the following spectrum as exempt from assignment by competitive bidding procedures:
1. Private Land Mobile Radio Services currently assigned to the Public Safety Radio
195 See Notice, 14 FCC Rcd at 5227 ¶ 35.
196 AAA’s contentions that the Commission may not auction spectrum allocated to either the former
Auto Emergency Radio Services (AERS), nor spectrum outside of the former AERS frequencies used by AAA
and other non- profit auto emergency users, AAA Comments at 4, are related to this issue. AAA notes that in
many locations, the AERS frequencies are so crowded that AAA clubs have been forced to obtain licenses in
different private land mobile frequency bands, and contends that under the language of Balanced Budget Act,
these frequencies also are included in the exemption when they are used by AAA or another not- for- profit
emergency road service provider. Id. These comments relate to the larger issues of whether the exemption
applies to blocks of spectrum or to classes of users. As explained above, we conclude that the exemption applies
to blocks of spectrum, not classes of users. AAA’s concerns regarding frequencies used by non- profit auto
emergency users will be addressed at a future date, when we make a service- by- service determination of which
services fall within the exemption.
197 47 U. S. C. § 309( j)( 2)( A)( i).
198 MAS Report and Order, 15 FCC Rcd 11,965, 11,967 ¶¶ 20, 25.
199 Notice, 14 FCC Rcd at 5223- 24 ¶¶ 27- 29.
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Pool. This pool is comprised of those services formerly 200 housed in the Public Safety Radio
Services 201 and the Special Emergency Radio Services. 202
2. Public safety spectrum in the 700 MHz band. 203
3. The ten 220 MHz band non- nationwide channel pairs allocated for the exclusive
use of Public Safety eligibles. 204
4. The two contiguous channel pairs in each of the thirty- three inland VHF Public
Coast areas set aside for public safety users. 205
Commenters agree that Congress clearly intended to include this spectrum within the exemption. 206 We
now conclude that the portions of spectrum listed above are public safety radio services for purposes of
eligibility for the exemption. We also find that the five channel pairs in the 932/ 941 MHz Multiple
Address Systems bands designated for Federal Government and/ or public safety use as defined by Part 90
of the Commission’s rules 207 fall within the exemption.
75. As stated earlier, we believe that Congress intended for the exemption to include a larger
universe of uses than traditional public safety and the legislative history of the Balanced Budget Act
provides guidance regarding the intended further scope of the exemption. Specifically, the Conference
Report states that the exemption for public safety radio services includes the private internal radio services
200 The former services were consolidated in the Public Safety Pool in 1997. In the Matter of
Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the Policies
Governing Them, Second Report and Order, 12 FCC Rcd 14307, 14317- 18 ¶ 20 (1997) (“ Refarming Second
Report and Order”).
201 See 47 C. F. R. § 90.16. The Public Safety Radio Services included the Local Government, Police,
Fire, Highway Maintenance, Forestry- Conservation, and Emergency Medical Radio Services. See 47 C. F. R. Part
90, Subpart B, Note, former § 90.15 (1997).
202 See 47 C. F. R. § 90. 16. The Special Emergency Radio Service covered the licensing of radio
communications of hospitals and clinics, ambulance and rescue services, veterinarians, persons with disabilities,
disaster relief organizations, school buses, beach patrols, persons or organizations in isolated areas, and
emergency standby and repair facilities for telephone and telegraph systems. See 47 C. F. R. Part 90, Subpart C,
Note, former § 90.33 (1997).
203 See Notice, 14 FCC Rcd at 5224 ¶ 28.
204 Amendment of Part 90 of the Commission’s Rules to Provide for the Use of the 220- 222 MHz Band
by the Private Land Mobile Radio Service, PR Docket No. 89- 552, Third Report and Order; Fifth Notice of
Proposed Rule Making, 12 FCC Rcd 10943, 10973- 74 ¶ 61 (1997). See Notice, 14 FCC Rcd at 5224 ¶ 29.
205 Amendment of the Commission’s Rules Concerning Maritime Communications, Third Report and
Order and Memorandum Opinion and Order, PR Docket No. 92- 257, 13 FCC Rcd 19853 (1988). See Notice, 14
FCC Rcd at 5224 ¶ 29.
206 See, e. g., APCO Comments at 3- 4; Motorola Comments at 5; Nextel Comments at 8- 9.
207 See MAS Report and Order, 15 FCC Rcd at 11,971 ¶ 37.
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used by “utilities, railroads, metropolitan transit systems, pipelines, private ambulances, and volunteer fire
departments.” 208 The inclusion of private ambulances and volunteer fire departments is due to the fact that
the services they perform supplement or, in some areas, replace traditional public safety functions
ordinarily provided by local governments. Accordingly, we conclude that spectrum bands, the dominant
use 209 of which are by entities that use their communications systems to perform such public safety
services, should be exempt from auction.
76. However, the other entities identified in the Conference Report -- utilities, pipelines,
metropolitan transit systems and railroads – do not have, as their primary missions, traditional public
safety functions. Utilities and pipelines exist to bring, among other things, gas, water and electricity to
consumers; transit systems and railroads exist to transport people and goods. In determining what common
characteristics they do have, and thus what other entities Congress intended the exemption to encompass,
we find helpful the Final Report of the Public Safety Wireless Advisory Committee (PSWAC), which the
Commission, jointly with the National Telecommunications and Information Administration, chartered to
provide advice and recommendations on the current and future requirements for public safety
communications. 210 PSWAC recommended a definition of “Public Services” as services “that furnish,
maintain, and protect the nation’s basic infrastructures which are required to promote the public’s safety
and welfare.” 211 It stated, “Public service providers, such as transportation companies and utilities[,] rely
extensively on radio communications in their day- to- day operations, which involve safeguarding safety and
preventing accidents from occurring.” 212 The Commission relied on a similar concept when it established
special frequency coordination requirements for spectrum formerly used exclusively by the power,
petroleum, and railroad industries because, in these industries, radio is used as a critical tool for responding
to emergencies that could impact hundreds or thousands of people. Although the primary functions of these
organizations is not necessarily to provide safety services, the nature of their day- to- day operations
provides little or no margin for error and in emergencies they can take on an almost quasi- public safety
function. Any failure in their ability to communicate by radio could have severe consequences on the
public welfare. For example, the failure or inability of trains to communicate with each other or a central
dispatcher could result in unsafe conditions and an increased risk of derailment. Also, utility companies
need to possess the ability to coordinate critical activities during or following storms or other natural
disasters that disrupt the delivery of vital services to the public such as provision of electric, gas, and water
supplies. 213
208 Conference Report at 572.
209 See supra ¶ 74.
210 Public Safety Wireless Advisory Committee, Final Report at 7 (1996).
211 Id. at 45.
212 Id. at 33.
213 Refarming Second R& O, 12 FCC Rcd at 14329- 30 ¶ 41. Subsequently in this proceeding, the
Commission amended the rules to require that frequencies formerly allocated to the power, petroleum, and
railroad industries on either an exclusive or shared basis be coordinated only by the frequency coordinator of the
relevant service, or, at the relevant frequency coordinator’s discretion, with its written concurrence. Replacement
of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the Policies Governing Them,
Second Memorandum Opinion and Order, PR Docket No. 92- 235, 14 FCC Rcd 8642, 8647- 48 ¶ 9 (1999)
(“ Refarming Second MO& O”). The Refarming Second MO& O is currently on reconsideration, and has been
(continued….)
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77. Against this background, we observe that the entities identified in the Conference Report which
do not use their communications principally for the protection of life, health or property -- utilities,
railroads, metropolitan transit systems and pipelines -- have two characteristics in common. First, these
entities have an infrastructure that they use primarily for the purpose of providing essential public services
to the population at large. In this context, an infrastructure can be described as fixed physical facilities
that extend beyond the licensee’s place of business to areas where the public at large live and work and are
therefore exposed to adverse results stemming from a breakdown in the licensee’s infrastructure. The
second common characteristic is that the reliability and availability of the communications systems for
these entities is necessary for them, as part of their regular mission, to prevent or respond to a disaster or
crisis affecting the public at large. 214 Specifically, the public depends on these services, which affect the
daily lives of members of the public and interruption in the service may have dangerous consequences.
Accordingly, we conclude that a radio service not allocated for traditional public safety uses will be deemed
to protect the safety of life, health or property within the meaning of Section 309( j)( 2)( A)( i) if the dominant
use of the service is by entities that (1) have an infrastructure that they use primarily for the purpose of
providing essential public services to the public at large; and (2) need, as part of their regular mission,
reliable and available communications in order to prevent or respond to a disaster or crisis affecting the
public at large.
78. For instance, an electric utility meets both prongs of the two- part standard. Power lines extend
far beyond the utility’s power plant and into areas where members of the public live and work. A
breakdown in the electric utility’s infrastructure or fixed physical facilities (e. g., a live wire) creates a
dangerous condition for members of the public. Additionally, a dependable communications system is
necessary for an electric utility to respond to an interruption in service that may hinder the delivery of vital
services (e. g., without power, a home may lack heat in the winter or air conditioning in the summer).
Similarly, a metropolitan transit system meets both parts of the standard . A metropolitan transit system
has an infrastructure or fixed physical facilities (e. g., railroad tracks) where a breakdown in the system
(e. g., derailment) creates a dangerous condition that would adversely affect the public at large. Moreover,
a reliable communications system is essential for a metropolitan transit system to enable quick response to
any disruption in service as an interruption can create a dangerous condition and would impede the delivery
of vital transportation services to the public.
79. Some commenters argue that all private wireless communications, in some respect, protect the
safety of life, health, and property of the public, and therefore all private wireless services should be
auction- exempt. 215 They note that individuals in virtually every industry rely upon their private wireless
radio systems to ensure the safety of their employees and enhance their productivity and operations and
contribute to the continued growth and vibrancy of the economy. 216 As a general matter, we agree with
(Continued from previous page)
stayed with respect to frequencies formerly allocated on a shared basis to these industries. Replacement of Part
90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the Policies Governing Them,
Fourth Memorandum Opinion and Order, 15 FCC Rcd 7051 (1999) (“ Refarming Fourth MO& O”).
214 See, e. g., ComEd Comments at 16- 19; Entergy Comments at 14- 16; Joint Commenters Comments at
7; API Reply Comments at 7.
215 See Cinergy Comments at 18, 21; Entergy Comments at 17, 20; Joint Commenters Comments at 8-9,
14; SBT Comments at 3- 4; USMSS Comments at 5- 6.
216 Indeed, virtually all of the commenters argue that the specific radio services they use, or that are used
by the entities they represent, fall within the “public safety radio services” exemption because such radio uses in
(continued….)
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these characterizations. We conclude, however, that extending the exemption to all private wireless
services would go beyond the legislative intent. As noted earlier, Section 309( j) formerly applied only to
subscriber- based services, and thus exempted the private wireless services because these services were
generally not subscriber- based. The Balanced Budget Act amended the statute to direct the Commission to
use auctions to resolve mutually exclusive applications for all radio services, unless they fall within a
specific exemption. To interpret the exemption for public safety radio services in Section 309( j)( 2)( A) in a
manner that effectively negates the changes to Section 309( j)( 1) would not be reasonable.
80. It is apparent that Congress deemed utilities, railroads, metropolitan transit systems and
pipelines to be entities that protect the safety of life, health, or property for purposes of public safety radio
services. We agree with the commenters, however, that the list in the Conference Report was presented for
illustrative purposes and not as an exhaustive listing. 217 Nonetheless, we believe that only spectrum used
for the provision of services similar to those listed in the Conference Report should be included in the
exemption, and that only similar entities can satisfy the aforementioned two- part standard. 218 For instance,
telephone maintenance, although not specifically mentioned in the Conference Report, meets the two- part
standard. In applying the standard, providers of such services have an infrastructure that serves the public
where a breakdown in the system (e. g., cut wire) impedes the ability to communicate by telephone, which is
a vital service in today’s society. In addition, a reliable communications system is necessary for telephone
maintenance to enable quick response to an interruption in the delivery of telephone service in an
emergency situation. On the other hand, for example, taxi cabs do not meet both prongs of the two- part
standard and are therefore unlike those entities listed in the Conference Report. Although taxi cabs
arguably provide essential services to the public, the providers of this service do not have an infrastructure
or fixed physical facility where a breakdown in its system (e. g., a disabled taxi cab) adversely affects the
public at large.
81. While we will not at this time attempt to provide an extensive list of exempt public safety radio
services, we do conclude that the Industrial/ Land Transportation and Business Radio categories within the
800 MHz band 219 and 900 MHz band, 220 and the private land mobile radio frequencies in the 470- 512 MHz
(Continued from previous page)
some way enhance the safety of their employees or the public safety. See, e. g., ARINC Comments at 9 (airlines
and aviation support); AAR Reply Comments at 3 (railroads); CellNet Comments at 2- 3 (gas, electric and water);
ComEd Comments at 2- 5 (electric utilities); Florida Fruit & Vegetable Association Reply Comments (RM- 9405)
at 2- 3 (Florida agricultural producers); FIT Comments at 8 (forest products); Ford Reply Comments at 6- 8
(automotive); HP Comments (RM- 9405) at 1 (medical telemetry); LMCC Comments at 6- 8 (land mobile);
Motorola Comments at 3- 10 (private land mobile); NRMCA Reply Comments (RM- 9405) at 2 (concrete); NPGA
Reply Comments (RM- 9405) at 3 (propane); NUCA Reply Comments (RM- 9405) at 2 (water and wastewater
infrastructure).
217 See, e. g., Joint Commenters Comments at 8. Indeed, the Conference Report states that the
exemption “includes” the above listed- services, and does not state that the exemption is “limited to” those
services. Conference Report at 572.
218 See supra ¶ 77.
219 The “800 MHz Band” is a reference to the frequencies in the 806- 824 and 851- 869 MHz bands. See
47 C. F. R. Part 90, Subpart S.
220 The “900 MHz Band” is a reference to the frequencies in the 896- 901 and 935- 940 MHz bands. See
id.
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band, shall not be exempt from auction under the public safety radio service exemption. The dominant use
of these frequencies is by persons primarily engaged in the operation of a commercial activity, to support
day- to- day business operations (such as dispatching and diverting personnel or work vehicles, coordinating
the activities of workers and machines on location, or remotely monitoring and controlling equipment). The
dominant use is not by entities with an infrastructure that they use primarily for the purpose of providing
essential public services to the public at large, and that need, as part of their regular mission, such
spectrum to prevent or respond to a disaster or crisis affecting the public at large. Accordingly, we
conclude that the 470- 512, 221 800, 900 MHz bands shall be subject to auction to the extent that mutually
exclusive applications are filed. However, we emphasize that we will continue to utilize existing licensing
approaches for these bands, which tend to avoid mutual exclusivity, thereby minimizing the possibility of
competitive bidding.
82. Noncommercial Proviso. The public safety radio services exemption requires that the radio
services not be made commercially available to the public. 222 We sought comment on how the term “not
made commercially available to the public” should be defined. 223 The Commission has interpreted similar
language in implementing the congressional definition of “commercial mobile service.” In that context, the
Commission interpreted the term “for profit,” 224 which we believe is inherent to “commercial” use, as
including any service that is provided with the intent of receiving monetary gain. 225 The Commission also
found that a service is available “to the public” if it is offered to the public without restriction as to who
can receive it. 226 Because the purpose of that proceeding was to determine the meaning of commercial
mobile service, as defined in Section 332( d) of the Communications Act, the Commission was required to
include in its definition those services “effectively available to a substantial portion of the public.” 227 The
Commission concluded that if service is provided exclusively for internal use or is offered only to a
significantly restricted class of eligible users, it is made available only to insubstantial portions of the
public, and cited as an example of this, the Public Safety Radio Services. 228 We shall apply a definition of
221 We recognize that, unlike the 800 and 900 MHz Industrial/ Land Transportation and Business Radio
categories, the 470- 512 MHz band is available to Public Safety users. See 47 C. F. R. § 90.311( a). We do not
believe, however, that the level of use by such users is sufficient to require a different conclusion with respect to
the applicability of the public safety radio service exemption to the 470- 512 MHz band.
222 47 U. S. C. § 309( j)( 2)( A)( ii).
223 Notice, 14 FCC Rcd at 5230 ¶¶ 45- 46, 5232- 33 ¶ 51.
224 See 47 U. S. C. § 332( d)( 1).
225 In the Matter of Implementation of Sections 3( n) and 332 of the Communications Act, Regulatory
Treatment of Mobile Services, Second Report and Order, GN Docket No. 93- 252, 9 FCC Rcd 1411, 1427 ¶ 43
(1994) (CMRS Second R &O).
226 Id. at 1439 ¶ 65.
227 See 47 U. S. C. § 332( d)( 1)( B).
228 CMRS Second R &O, 9 FCC Rcd at 1440 ¶ 67. See also id. at 1509- 10 ¶¶ 265- 268. While we have
held that provision of service to eligibles in the Business Radio Service category is essentially service to the
public, this is because the class of eligibles in this pool is extremely broad. Specifically, this pool encompasses
users engaged in commercial activities and clergy activities, as well as, those that operate educational,
philanthropic, or ecclesiastical institutions, hospitals, clinics and medical associations. 47 C. F. R. § 90. 31.
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“commercially available to the public” that is consistent with these definitions. Accordingly, for the
purposes of the auction exemption under Section 309( j) of the Communications Act, we find that “not
made commercially available to the public” means that the service is not provided with the intent of
receiving compensation, and is not available to a substantial portion of the public. 229
83. In the Notice, we also asked whether commercial service providers intending to provide
telecommunications services to public safety entities should be able to apply for auction- exempt spectrum. 230 We agree with the commenters who argue that commercial service providers and public safety
agencies have very different goals and incentives regarding spectrum use, and caution that if licenses for
scarce public safety radio spectrum are assigned to commercial providers, public safety entities may find it
virtually impossible to secure sufficient spectrum for their own internal needs. Also, if we expand
eligibility to commercial providers declaring an intent to serve public safety entities, it would be difficult to
ensure that the dominant use of this spectrum would be by entities that protect the safety of life, health, or
property. 231 In addition, we conclude that permitting such use of public safety radio service spectrum
would be contrary to Congress’s intent. We believe that Congress created the exemption to give entities
that protect the safety of life, health, or property, at a minimum, an opportunity to secure access to
spectrum without having to pay for it. Assigning public safety radio service spectrum to commercial
providers could conflict with this intention by compelling public safety radio service eligibles to pay for
access to auction- exempt spectrum. 232 We agree with Nextel that including commercial third- party
providers within the exemption would enlarge it beyond all limits of reasonableness. 233 Thus, we believe
that creating an opportunity for commercial operators to obtain public safety radio service spectrum would
contravene congressional intent.
84. Restrictions on Use. Another important issue is the scope of permissible uses for public safety
radio services spectrum, and more specifically, whether such licensees are required to use their auction-exempt
frequencies exclusively for safety- related purposes. 234 Section 337( f)( 1) of the Communications
Act defines a “public safety service” for determining eligibility for licensing in the 24 MHz of spectrum
reallocated for public safety services, as a service the “sole or principal purpose” of which is to protect the
safety of life, health or property. 235 By contrast, the auction exemption under Section 309( j)( 2) contains no
229 We also requested comment on whether services on which entities operate their systems under a
nonprofit cost- sharing or cooperative agreement, or as a multiple licensed system, should be considered
commercially available to the public. Notice, 14 FCC Rcd at 5230 ¶ 46. As we decided in the previous paragraph,
once we have determined that a particular radio service is a public safety radio service, the spectrum will be
auction- exempt even if some users operate their systems using such licensing arrangements.
230 Notice, 14 FCC Rcd at 5228 ¶ 38.
231 See Notice, 14 FCC Rcd at 5228 ¶ 38.
232 We recognize that there may be situations where public safety radio service eligibles find it more cost
effective to contract out their commercial needs to a commercial service provider, rather than construct their own
systems. We believe that leaving this choice in the hands of the public safety radio service eligibles best
comports with congressional intent.
233 Nextel Reply Comments at 12- 13.
234 See Notice, 14 FCC Rcd at 5224- 25 ¶ 30.
235 47 U. S. C. § 337( f)( 1)( A).
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such restriction. The majority of commenters oppose the imposition of a requirement that spectrum be
solely or principally used for public safety communications. 236 They argue that it is difficult to draw the
line where public safety ends and routine business begins because day- to- day business communications
often have a safety- related purpose.
85. We conclude that because utilities, pipelines and railroads do not use their frequencies
exclusively for safety- related purposes, Congress could not have intended that entities using exempt
spectrum use that spectrum exclusively for such purposes. Furthermore, it would be overly burdensome to
require licensees to differentiate between, and use different frequencies for, pure public safety
communications and business communications, which may also serve a safety- related purpose.
Accordingly, we agree that we should not, at this time, impose an additional restriction upon licensees in
auction- exempt services to limit their use of their assigned frequencies to be exclusively for safety- related
purposes. We do, however, expect that licensees making use of auction- exempt spectrum will be using that
spectrum primarily to protect the safety of life, health or property. This is so because, given our principles
for determining what frequencies are in public safety radio services, we anticipate that the spectrum will be
used by entities with reasonably predictable (in frequency and types of occurrences, if not in exact timing)
public safety- related needs. When such needs arise, licensees should dedicate their public safety radio
service spectrum to addressing the situation. We also expect users of auction- exempt spectrum to make
efficient use of that spectrum for safety- related purposes, and to use other available spectrum, or
commercial providers, for more general business- related purposes that are not primarily safety- related.
86. Eligibility Requirements. In the Notice, we noted that applicants seeking spectrum for public
safety radio services without bidding competitively are able to apply for such designated spectrum or, if
they meet the requirements of Section 337( f), file a waiver request for unassigned spectrum pursuant to
Section 337( c). 237 In this connection, we sought comment on whether entities eligible for licenses in the
public safety radio services should also be eligible to bid competitively for spectrum that has been
designated for private or commercial radio use. 238
87. We do not believe that it was Congress’s intent to forbid entities eligible to be licensed on
public safety radio services from voluntarily participating in auctions for spectrum that is not exempted
from our competitive bidding authority. Hence, we conclude that entities eligible for licenses in the public
safety radio services are eligible to participate in auctions of other spectrum. We note that the licensing
mechanisms adopted in this Report and Order would not enable entities eligible for public safety radio
services to select auctionable spectrum and exercise an exemption privilege. Therefore, those entities
eligible for licenses in the public safety radio services that desire to participate in the auction of other
spectrum will be required to comply with the same regulations, including filing and payment requirements,
to which every other bidder is subject. Accordingly, the Commission will not make any special provisions
for entities eligible for the public safety radio services that choose to competitively bid for auctionable
spectrum. Further, if a public safety radio service eligible voluntarily chooses to seek licenses in
236 See, e. g., AAA Reply Comments at 4; AAR Comments at 5- 7; CellNet Comments at 11; CII
Comments at 11- 13; ComEd Comments at 9- 12; Ford Reply Comments at 6- 7; Joint Commenters Comments at
8; LMCC Comments at 6- 7; PCIA Comments at 5- 6; UTC Comments at 16- 18. But see Nextel Comments at 8- 9
(arguing that only bands which are used exclusively or almost exclusively for public safety should be auction-exempt).
See also ARINC Comments at 2 and 7 (supporting a principal use standard).
237 Notice, 14 FCC Rcd at 5246 ¶ 85.
238 Id.
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auctionable spectrum, the spectrum will not thereby become auction- exempt.
2. Resolution of Mutually Exclusive Applications for Services Exempt from
Competitive Bidding
88. Background. In the Notice, we requested comment on how to resolve mutual exclusivity
between applications for spectrum exempt from competitive bidding. 239 We noted that the Balanced Budget
Act terminated the Commission’s authority to use lotteries to choose among mutually exclusive
applications and concluded that we are precluded from using random selection procedures to resolve
mutually exclusive applications for auction- exempt public safety radio services. 240 Thus, we specifically
sought comment on whether engineering solutions, negotiation, threshold qualifications, service regulations,
or other means, such as comparative hearings and first- come, first- served licensing, should be used to
resolve mutual exclusivity in cases where frequency coordination is unsuccessful in avoiding mutual
exclusivity. 241
89. Discussion. Commenters overwhelmingly express support for the Commission’s continued use
of frequency coordination as a mechanism to limit instances of mutually exclusive applications. 242
Although frequency coordination greatly reduces instances of mutual exclusivity, we acknowledge the
possibility that it may not resolve all conflicts. Commenters offered various proposals to address situations
where frequency coordination is not adequate. For instance, several commenters suggest that mutually
exclusive applications may be resolved through first- come, first- served procedures. 243 We agree with these
commenters that first- come, first- served procedures may resolve some cases of mutually exclusive
applications. However, such procedures may not be as useful if applications are received on the same day
from different coordinators, or if the Commission opens a filing window. During a filing window, each
application is given a filing status equal to any other application filed during the window. Hence,
frequency coordination, coupled with first- come, first- served licensing procedures may not prevent every
case of mutual exclusivity.
90. Other commenters suggest alternative approaches, such as private negotiations, shared use
procedures and engineering solutions. 244 Specifically, CII Joint Commenters and United Telecom Council
present a detailed procedure involving private negotiations to encourage the resolution of mutually
exclusive applications without the Commission’s involvement. 245 In this suggested procedure, applicants
who file mutually exclusive applications must, within a specified time period, such as sixty to ninety days,
239 Notice, 14 FCC Rcd at 5233 ¶ 52.
240 Id. at 5233 ¶ 53.
241 Id.
242 See, e. g., AAR Comments at 8; Blooston Comments at 10; Boeing Comments at 5; NAM/ MRFAC,
Inc. Reply Comments at 7; Motorola Comments at 3; Radscan Reply Comments at 6; RRS Comments at 4; Rocky
Mountain Reply Comments at 6; SCANA Comments at 8.
243 See, e. g., Joint Commenters Comments at 7; Joint Commenters Reply Comments at 4; Intek
Comments at 6; LMCC Comments at 3- 4.
244 See, e. g., Boeing Comments at 5; CII Comments at 23- 24; UTC Comments at 19.
245 CII Comments at 23- 24; UTC Comments at 19.
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resolve the conflict through private negotiation. 246 According to the commenters, the parties could devise
engineering solutions and/ or coordination procedures that would enable spectrum sharing. 247 Additionally,
if the parties are unsuccessful at reaching an agreement by the end of the negotiation period, the applicants
could be provided with the option of expedited alternative dispute resolution procedures, such as binding
arbitration or mediation. 248 In the event that these procedures prove unsuccessful, the commenters indicate
that the Commission should dismiss the applications and deem the requested frequencies unavailable for
licensing by any party for a period of at least ninety days, as an incentive for the parties to reach an
agreement. 249
91. We are aware that there may be instances where frequency coordination and/ or first- come,
first- served licensing will be inadequate and the Commission will receive mutually exclusive applications
for licenses in the public safety radio services. However, we believe that such instances will be rare and
conclude that the Commission should continue to rely on the regulatory tools already available to it to
resolve mutually exclusive applications that may not be resolved by competitive bidding. In addition to
commenters’ suggestion that we provide a time period during which mutually exclusive applicants may
negotiate a mutually agreeable solution, the Commission can also work with the relevant frequency
coordinators to find alternative spectrum, develop engineering solutions, dismiss the applications with or
without prejudice, or refer the matter to a comparative hearing. These tools have been sufficient heretofore
to resolve mutually exclusive applications for non- auctionable spectrum, and, particularly given the
expectation that such situations will continue to be rare, there does not appear to be sufficient grounds to
implement a new procedural framework.
D. Proposals Regarding Private Land Mobile Radio Services
92. A number of issues have been raised regarding our auction authority in the context of licensing
in the private radio services. First, we consider whether geographic licensing and competitive bidding
should be employed on the PLMR frequencies below 470 MHz that are currently licensed under a scheme
developed in our “refarming” docket. Next, we consider a proposal advanced by a coalition of private
radio users to create a third radio pool to accommodate the needs of “critical infrastructure industries.” We
also rule on a proposal advanced by the American Mobile Telecommunications Association, Inc.
(“ AMTA”) to restructure the licensing framework for the 450- 470 MHz band. This Report and Order
also analyzes a proposal to permit the incorporation of PLMR spectrum in the 800 MHz band into
commercial mobile radio services (“ CMRS”) systems. Finally, we address the issue of whether the Part 90
multiple licensing rules should be changed in light of our revised auction authority.
1. Licensing of “Refarming” Bands
93. Background. In the Notice, we sought comment on whether the public interest would best be
served by retaining our current licensing scheme, rather than adopting geographic licensing and competitive
bidding, for the PLMR frequencies below 470 MHz. 250 We noted that the current licensing scheme for
246 CII Comments at 23- 24; UTC Comments at 19.
247 CII Comments at 23- 24; UTC Comments at 19.
248 CII Comments at 23- 24; UTC Comments at 19.
249 CII Comments at 23- 24; UTC Comments at 19.
250 Notice, 14 FCC Rcd at 5241 ¶ 68.
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these frequencies came out of the lengthy “Refarming” proceeding, 251 in which the Commission, inter alia,
consolidated the twenty PLMR services into two broad frequency pools, 252 and implemented procedures
that will result in the transition to more spectrally efficient, narrowband technologies by requiring that
future equipment meet increasingly efficient standards. 253
94. Discussion. The commenters were nearly uniform in their opposition to the introduction of
geographic area licensing in the Refarming bands. 254 The National Association of Manufacturers
(“ NAM”) and MFRAC, Inc., for example, note that the Commission and the private radio community have
spent the better part of the past eight years formulating and refining the policies for Refarming. 255 They
caution that with the process nearly complete, users and equipment vendors would be subject to great
uncertainty and displacement, should the current licensing scheme be changed, as the private land mobile
community has relied on the Commission’s Refarming decisions to date in forming investment plans. 256 We
agree. Moreover, we believe that there simply has not been enough time since the adoption of the
Refarming provisions to reap the full benefit of the revised procedures.
95. Moreover, we note that the refarmed bands below 470 MHz are currently licensed on a shared,
rather than exclusive, basis. 257 Many licensees operate on the same channels in most geographic areas.
These channels are heavily congested in most major urban areas, so the number of incumbents, particularly
in the areas where geographic overlay licenses would be most desirable, would create nearly impossible due
diligence requirements and would make the spectrum, at best, only marginally useful to a geographic area
licensee. We believe that this militates against geographic overlay licensing of this spectrum.
96. Thus, we conclude that the public interest would best be served by retaining our current
licensing scheme. Accordingly, we shall not, at this time, reexamine the licensing scheme for the PLMR
frequencies below 470 MHz. We emphasize, however, that this decision applies only to the existing
allocation and not to any spectrum that might subsequently be allocated for PLMR services. 258 In addition,
251 See, e. g., Refarming Second R& O, 12 FCC Rcd 14307; Replacement of Part 90 by Part 88 to Revise
the Private Land Mobile Radio Services and Modify the Policies Governing Them, PR Docket No. 92- 235,
Memorandum Opinion and Order, 11 FCC Rcd 17676 (1996); Replacement of Part 90 by Part 88 to Revise the
Private Land Mobile Radio Services and Modify the Policies Governing Them, PR Docket No. 92- 235, Report
and Order and Further Notice of Proposed Rule Making, 10 FCC Rcd 10076 (1995) (“ Refarming Report and
Order and Further Notice”).
252 See Refarming Second R& O, 12 FCC Rcd at 14315 ¶ 15.
253 Refarming Report and Order and Further Notice, 10 FCC Rcd at 10098 ¶ 36.
254 See, e. g., AEP Comments at 4; API Comments at 12; AAR Comments at 7; Blooston Comments at
10; Cal State Reply Comments at 5; LMCC Comments at 4- 6; Motorola Comments at 8. But see AMTA
Comments at 2;
255 NAM/ MFRAC Reply Comments at 15.
256 Id.; accord, e. g., PCIA Comments at 4.
257 See 47 C. F. R. § 90.173( a).
258 See, e. g., Principals for Reallocation of Spectrum to Encourage the Development of
Telecommunications Technologies for the New Millennium, Policy Statement, 14 FCC Rcd 19868, 19878- 79 ¶
24 (1999).
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we would not be precluded from revisiting the licensing scheme for the Refarming bands at some later date
and adopting a new approach, such as the use of band managers. 259
2. UTC Proposal To Establish a New Public Safety Radio Pool in the Private
Mobile Bands Below 470 MHz
97. Background. In the Notice, we requested comment 260 on a rulemaking petition submitted by
UTC, The Telecommunications Association (“ UTC”), 261 the American Petroleum Institute (“ API”), and the
Association of American Railroads (“ AAR”) (jointly referred to as the “Critical Infrastructure Industries”
or “CII”). 262 UTC represents electric, gas, water, and steam utilities, and natural gas pipelines. 263 API
represents companies in all phases of the petroleum and natural gas industries. 264 AAR represents railroads
operating in the United States, Canada, and Mexico. 265 The petition proposes to create a third radio pool,
in addition to the Public Safety and Industrial/ Business (I/ B) Radio Pools already used for private radio
frequencies below 470 MHz. We also sought comment on whether this approach would be feasible for
other frequency bands. 266 For the reasons set forth below, we find that a third pool is not called for at this
time, and we deny the petition for rule making.
98. Discussion. The petition urges the Commission to create a Public Service Radio Pool in the
PLMR bands below 800 MHz open to entities that do not qualify for Public Safety Radio Pool spectrum,
but are eligible to use the public safety radio service spectrum exempted from the Commission’s auction
authority under the Balanced Budget Act. 267 The CII propose to form the proposed Public Service Pool
from all of the channels formerly allocated exclusively to the Power, Petroleum and Railroad Radio
Services before those services (and others) were consolidated into the I/ B Pool in the Refarming Second
Report and Order. 268 The CII also propose moving a portion of the channels formerly shared by these
services with one or more of the other services now in the I/ B Pool. 269 The CII further state that the Public
259 See, e. g., Service Rules for the 746- 764 and 776- 794 MHz Bands and Revisions to Part 27 of the
Commission’s Rules, Second Report and Order, 15 FCC Rcd 5299, 5311- 14 ¶¶ 26- 32 (2000).
260 See Notice, 14 FCC Rcd at 5229 ¶ 41.
261 UTC is now known as the United Telecom Council.
262 UTC, The Telecommunications Association, American Petroleum Institute, and Association of
American Railroads Petition for Rulemaking (RM- 9405) (filed August 14, 1998) (UTC Petition).
263 Id. at 2.
264 Id.
265 Id. at 3.
266 See Notice, 14 FCC Rcd at 5229 ¶ 41.
267 UTC Petition at 19.
268 See Refarming Second R& O, 12 FCC Rcd at 14315- 16 ¶ 15.
269 UTC Petition at 21. The CII specifically propose that 61% of the shared low band frequencies, 8% of
the shared frequencies in the 70 MHz band, 52% of the shared frequencies in the VHF high band, and 61% of the
shared UHF frequencies should be allocated to the proposed new pool, in addition to all of the channels
exclusively used by the CII.
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Service Pool should also include frequencies formerly allocated to services used by any other industries that
we conclude are eligible for auction- exempt public safety radio service spectrum. The CII recommend that
the Commission should examine claims of eligibility for any new Public Service Pool closely. 270
99. The CII argue that a pool to accommodate the needs of critical infrastructure industries is
needed to protect the availability of spectrum for qualified entities, because of the public safety components
of their requirements. 271 While critical infrastructure industries have legitimate spectrum needs, we do not
believe these needs warrant removing frequencies from the I/ B Pool. The I/ B Pool was created to address
the scarcity of PLMR spectrum, by consolidating spectrum to make fallow frequencies available to parties
in need. 272 We are not persuaded that creating a third pool would not exacerbate the shortage of PLMR
spectrum, overall, for the entire set of eligibles for the I/ B Pool.
100. The CII also argue that a third pool is needed because the power, petroleum and railroad
industries’ radio operations need greater protection from interference caused by other users than the
Commission has provided. 273 The CII note that the Refarming Second Report and Order requires entities
that apply for frequencies formerly allocated solely to the Power, Petroleum, and Railroad Radio Services
to obtain coordination from the frequency coordinator for the respective service. 274 They argue, however,
that greater protection is needed in light of increasing instances of interference by new systems being
licensed near utility and pipeline operations. 275 Critics of the petition argue that there is insufficient
evidence of widespread interference problems to justify the creation of a third pool, and that isolated
incidences of interference do not create a justification. 276 We agree that the number of instances of actual
electrical interference do not appear so large as to justify the inefficiencies that could arise from creating a
third pool.
101. Furthermore, several commenters contend that the exclusive coordination prerogative
granted to the CII creates a de facto separate pool for these entities, and that therefore a separate pool for
270 Id. at 19- 20. A number of commenters urge that if we were to create a separate pool, they should also
be included within that pool. See, e. g., ARINC Comments at 9 (airlines and aviation support); FFVA Reply
Comments (RM- 9405) at 2- 3 (Florida agricultural producers); FIT Comments at 8 (forest products); HP
Comments (RM- 9405) at 1 (medical telemetry); NRMCA Reply Comments (RM- 9405) at 2 (concrete); NPGA
Reply Comments (RM- 9405) at 3 (propane); NUCA Reply Comments (RM- 9405) at 2 (water and wastewater
infrastructure).
271 UTC Petition at 7- 8.
272 See Refarming Second R& O, 12 FCC Rcd at 14315- 16 ¶ 15.
273 UTC Petition at 8.
274 See Refarming Second R& O, 12 FCC Rcd at 14330 ¶ 42.
275 UTC Petition at 9. See also API Reply Comments (RM- 9405) at 3- 5; AWWA Comments (RM-9405)
at 1; AWWA Comments at 5- 6; National Fuel Gas Company Comments (RM- 9405) at 2; NRECA
Comments (RM- 9405) at 2- 3; NU Comments (RM- 9405) at 3; UTC Comments (RM- 9405) at 7- 9.
276 See, e. g, PCIA Reply Comments (RM- 9405) at 3; Petroleum Communications, Inc. Comments (RM-9405)
at 2.
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the CII is not necessary. 277 We also note that the question of whether that exclusive coordination
prerogative should be expanded to include frequencies formerly allocated to the Power, Petroleum, and
Railroad Radio Services on a shared basis is pending in the Refarming proceeding. 278 We believe that the
issue of how to protect these services from interference is more appropriately addressed there.
102. Finally, the CII contend that because Congress specifically intended to include within the
exemption to competitive bidding the private internal radio services used by utilities, pipelines and
railroads, the creation of a Public Service Radio Pool for the CII would effectuate Congressional intent by
protecting those services from encroachment by non- essential services. 279 The purpose of the exemption
from our competitive bidding authority for public safety radio services is to relieve entities that protect the
safety of life, health, and property from having to purchase spectrum at auction. 280 There is no basis upon
which to infer other or additional congressional intent with respect to this provision. Finally, the CII’s
argument that we should create a third pool in order to avoid complications due to the potential introduction
of auctions in the I/ B Pool is not persuasive. 281 Because PLMR frequencies below 470 MHz currently are
licensed in a manner that tends to avoid mutually exclusive applications, such complications generally do
not arise. 282
103. Accordingly, for all the reasons stated above, we deny the petition. We note, however, that
our decision not to create a third pool below 470 MHz does not preclude us from using other mechanisms
(e. g., Bands Managers or a change of licensing schemes) in these or other bands, in order to appropriately
respond to the concerns set forth by the CII.
3. AMTA Proposal To Restructure Licensing Framework for PLMR Services in
the 450- 470 MHz Band
104. Background. On July 30, 1999, after we released the Notice, AMTA, a trade association
representing the specialized wireless communications industry, filed a petition for rule making proposing to
fundamentally restructure the licensing framework for PLMR frequencies in the 450- 470 MHz band. 283
277 Refarming Fourth MO& O, 15 FCC Rcd 7051. See, e. g., Joint Commenters Comments at 12; NAM
/MRFAC Reply Comments at 3.
278 See Refarming Fourth MO& O, 15 FCC Rcd at 7056 ¶ 14. (staying Refarming Second MO& O, 14
FCC Rcd at 8647- 48 ¶ 9 (1999) (expanding the rule to formerly shared frequencies), pending resolution of
petitions for reconsideration).
279 UTC Petition at 7.
280 See Conference Report at 572.
281 UTC Petition at 17- 18.
282 Notice, 14 FCC Rcd at 5217 ¶ 14.
283 AMTA Petition for Rulemaking (RM- 9705) at 11 (filed July 30, 1999) (AMTA Petition II). AMTA
filed a previous petition for rule making on June 19, 1998, proposing that certain Part 90 licensees be required to
employ new spectrum- efficient technologies. AMTA Petition for Rulemaking (RM- 9332) (filed June 19, 1999)
(AMTA Petition I). Because the issues raised in that petition are relevant to the instant proceeding, we included
it in the Notice. See Notice, 14 FCC Rcd at 5242 ¶ 71. We discuss AMTA Petition I infra in the Further Notice
of Proposed Rule Making.
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Currently, this band is licensed by 6. 25 kilohertz frequency pairs assigned on a site- by- site basis. The
frequencies are licensed on a shared basis, and frequency coordination is required. 284 The frequencies are
divided between the Public Safety Radio Pool (8 MHz) and the Industrial/ Business (I/ B) Radio Pool (12
MHz). 285
105. AMTA proposes that we divide the 450- 470 MHz band I/ B Radio Pool so that 2
megahertz would be available for site- based licensing on a shared basis, and 10 megahertz would be
licensed by geographic area in .5 megahertz paired blocks (creating twenty licenses per market). 286 Five of
the twenty licenses would be set aside for private, internal systems, leaving the remaining fifteen available
for either internal or commercial systems. 287 In addition, any incumbent that is not a winning bidder for its
frequency and area would be required either to move to the shared channels or elect to receive service from
a commercial geographic licensee. 288 The petition was placed on public notice on August 24, 1999. 289 We
believe that it is appropriate to consider these proposals as part of the instant proceeding.
106. Discussion. Although we believe that geographic licensing is generally a highly efficient
means of assigning spectrum, in this instance we agree with the commenters that do not believe such an
approach is warranted in the 450- 470 MHz band. 290 First, as we stated above in our discussion of the
Refarming bands (which include the 450- 470 MHz band), the benefits of geographic overlay licensing of
this spectrum may be limited because these channels are heavily congested in most urban areas. 291 In
addition, we note that many commenters were concerned by the AMTA proposal’s effect on incumbent
operations. 292 Motorola, for example, believes the relocation choices offered to incumbents in many cases
will not provide a legitimate option. 293 Similarly, the Industry Coalition states that even if relocation were
possible, the logistics would be staggering, causing devastating disruptions in service and severe levels of
284 See 47 C. F. R. §§ 90.173( a), 90.175.
285 See 47 C. F. R. §§ 90.20( c)( 3), 90.35( b)( 3).
286 AMTA Petition II at 13.
287 Id.
288 Id. at 16. An incumbent electing to obtain such service would receive replacement equipment paid
for by the commercial geographic licensee. Id.
289 Public Notice, Report No. 2356 (rel. Aug. 24, 1999).
290 See, e. g., Blooston Comments (RM- 9705) at 4; AAR Opposition (RM- 9705) at 4 (implementation of
the AMTA proposal will neglect railroad critical safety functions); APCO Comments (RM- 9705) at 2; ARINC
Comments (RM- 9705) at 3; Mobex Opposition (RM- 9705) at 4- 5; Industry Coalition Joint Opposition (RM-9705)
at 6 (the adoption of AMTA’s proposals would merely suppress marketplace choice for no purpose other
than to create new business opportunities for AMTA’s members).
291 See supra ¶ 95.
292 See, e. g., SBT Comments (RM- 9705) at 2; Motorola Opposition (RM- 9705) at 4- 5; Chadmoore
Reply Comments (RM- 9705) at 3 (forced migration of incumbents is unreasonable and would not serve the
public interest); Mobex Opposition (RM- 9705) at 6- 7 (forced relocation would cause harmful and devastating
disruptions in service as well as massive interference).
293 Motorola Opposition (RM- 9705) at 4- 5; Chadmoore Reply Comments (RM- 9705) at 3.
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interference as a result of compressing tens of thousands of private wireless communications facilities
within a limited amount of spectrum. 294
107. In light of these concerns, we conclude that it is not advisable to revisit the licensing
scheme for the 450- 470 MHz band at this time. Moreover, we believe that not enough time has elapsed in
order to reap the benefits of the licensing reforms that were adopted as part of the Refarming proceeding. 295
We therefore deny AMTA’s petition. This decision does not, however, preclude us from deciding in the
future that some alternative approach is warranted.
4. Licensing of PLMR Channels in the 800 MHz Band for Use in Commercial
SMR Systems
108. Background. In the Notice, we noted that some spectrum currently allocated for private
internal use is also used to provide subscriber- based services, pursuant to intercategory sharing or rule
waiver. 296 We referred to a request by Nextel Communications, Inc. (Nextel) for waivers to permit it to
acquire by assignment Part 90 PLMR services frequencies, and utilize those frequencies for CMRS
operation in its 800 MHz SMR systems. 297 Subsequently, the Wireless Telecommunications Bureau
(Bureau) granted Nextel’s request in part and denied in part. 298 Specifically, the Bureau granted those
waivers and assignments where Nextel would use the spectrum for relocation of incumbent licensees on the
upper 200 channels of the 800 MHz band. 299 The Bureau also permitted Nextel to use PLMR frequencies
in its SMR network, but only on the condition that at least seventy- five percent of the channels involved in
the waiver requests would be used to relocate upper 200 channel incumbents. 300 The Bureau declined to
address broader issues raised by Nextel’s request to acquire channels without relocating an upper 200
incumbent, and determined that incorporation into the instant proceeding would be the more appropriate
avenue to resolve such a proposal. 301 Consequently, the Bureau released a Public Notice incorporating the
record of the Nextel matter into the instant proceeding and seeking comment on whether the Commission’s
licensing rules for PLMR channels in the 800 MHz band should be amended to allow their use in CMRS
systems. 302
294 Industry Coalition Joint Opposition (RM- 9705) at 5.
295 See, e. g., Blooston Comments (RM- 9705) at 7; ARINC Comments (RM- 9705) at 2.
296 See Notice, 14 FCC Rcd at 5241 ¶ 69.
297 See id. at 5241 n. 201.
298 See Applications of Nextel Communications, Inc. and Associated Waiver Request of 47 C. F. R. §§
90.617( c) and 90.619( b), Order, 14 FCC Rcd 11678 (WTB 1999) (Nextel Order), reconsideration pending (filed
Aug. 20, 1999).
299 See id. at 11689 ¶ 26.
300 See id. at 11691 ¶ 30.
301 See id. at 11691- 92 ¶¶ 31- 32.
302 See Wireless Telecommunications Bureau Incorporates Nextel Communications, Inc. Waiver Record
into WT Docket No. 99- 87, Public Notice, 14 FCC Rcd 11795 (WTB 1999). In response to this public notice
comments and reply comments were filed by the following: AAA, AMTA, API, APCO, Blooston I, Boeing,
(continued….)
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109. Discussion. We first address whether our Rules should be amended to allow PLMR
licensees to assign or transfer spectrum to CMRS licensees for use in CMRS operations. Commenters
were split on this issue. Commenters supporting such a change argue that licensees should be permitted to
enter into voluntary assignment agreements that alter the use of the spectrum 303 because such voluntary
transactions, wherein the licensee is willing to forego use of the spectrum for the consideration offered by
the other party, result in the most economically efficient use of the spectrum. 304 That is, they contend that
if a PLMR licensee finds advantageous the terms of commercial service, including the assignment of its
frequency( ies) to the CMRS operator, then we should allow such transactions because the CMRS operator
values the frequency( ies) more highly than the PLMR licensee. 305 We note that the 800 MHz band is
particularly suited to such flexibility because 800 MHz PLMR and CMRS channels are interleaved, rather
than grouped into separate subbands. 306 In addition, a review of our licensing database indicates a greater
presence in the 800 MHz Business and I/ LT channels of licenses on which CMRS operations are permitted,
through rule waivers or inter- category sharing, than in other PLMR bands. We therefore find that
permitting such transactions would create additional flexibility for both PLMR licensees seeking to fill their
communications needs and for CMRS licensees seeking additional spectrum.
110. Consequently, we will amend our Rules to allow 800 MHz Business and I/ LT licensees to
assign or transfer their spectrum to CMRS licensees for use in CMRS operations. 307 Moreover, unlike the
Bureau’s decision in the Nextel Order, we will not require that any portion of the channels transferred or
(Continued from previous page)
Chadmoore, ComEd, FM Communications, Inc. (FM) Ex Parte Letter, FIT, Joint Commenters, MRFAC,
NAM/ MRFAC, Nextel, NTCC, PCIA, Rocky Mountain, SBT, and Ameren.
303 AMTA Comments at 14; APCO Reply Comments at 7; Chadmoore Comments at 4- 5; Chadmoore
Reply Comments at 2- 4; FM Ex Parte Letter; Nextel Comments at 14- 15; Nextel Reply Comments at 22- 23;
NTCC Comments at 14- 15; PCIA Comments at 21- 23.
304 See, e. g., Nextel Comments at 15; Chadmoore Comments at 4.
305 See, e. g., AMTA Comments at 14; Chadmoore Reply Comments at 2; Nextel Comments at 15; PCIA
Comments at 23.
306 See 47 C. F. R. § 90.617.
307 This decision resolves the related issue raised elsewhere by the Southern Company. See Letter from
Christine M. Gill, McDermott, Will & Emery to David Furth, Senior Legal Advisor, Wireless
Telecommunications Bureau (dated May 18, 2000). Southern seeks a determination that the Commission’s Rules
permit a CMRS licensee that obtained 800 MHz PLMR spectrum via intercategory sharing to transfer that
spectrum to another CMRS licensee for use in its CMRS system. Pursuant to our decision above, we will permit
CMRS use of assigned 800 MHz PLMR channels, whether the transferor/ assignor is a PLMR or CMRS licensee.
We emphasize that CMRS use will be limited to the 800 MHz PLMR channels because most of the other PLMR
spectrum is shared spectrum. In this context, freer channel transferability in this band is warranted. In addition,
the Refarming proceeding significantly affected a substantial portion of the PLMR spectrum below 512 MHz. As
a result, we are reluctant to introduce additional policy changes with respect to the PLMR spectrum until more
time has passed and we have the opportunity to fully analyze the benefits of the licensing reforms that were
adopted as part of the Refarming proceeding. Similarly, we are not applying the decision above to PLMR
spectrum at 900 MHz, but we seek comment in the Further Notice of Proposed Rule Making on whether we
should do so. The approach we adopt today is new, and we believe that we should examine its results with
respect to the availability of spectrum for future PLMR needs before we consider extending this approach to other
bands.
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assigned to CMRS licensees be used to relocate upper 200 channel incumbents. We are not persuaded that
we should require the relocation of upper 200 channel incumbents as a condition of approving the
transaction. That the spectrum at issue would be used predominantly for relocation purposes was
important to the Bureau’s public interest analysis of Nextel’s waiver request. 308 In this broader proceeding,
however, we conclude that permitting such assignments and transfers will be beneficial for other reasons.
We are convinced that alienability of PLMR licenses will enhance spectral use and efficiency. Limiting the
flexibility of spectrum use to relocating upper 200 channel incumbents does not serve the public interest,
and would merely erect another barrier to achieving maximum spectral efficiency.
111. Similarly, we also will permit these PLMR licensees to modify their PMRS licenses to
allow CMRS use in their own systems. Just as with assignments and transfers, spectral efficiencies and
technological developments will be aided by providing PLMR licensees with this same flexibility. Allowing
PLMR licensees the flexibility to modify their licenses for CMRS use permits the PLMR licensee to assess
marketplace needs and economic factors when determining the best and most efficient use of spectrum. 309
112. We disagree with those commenters opposed to permitting the incorporation of PLMR
spectrum into CMRS systems, who argue that it will reduce the available supply of PLMR spectrum. 310
They note that the Commission’s purpose in eliminating intercategory sharing of non- SMR spectrum by
SMR applicants 311 was to stop encroachment on PLMR frequencies by commercial SMR licensees and
eligibles, 312 and argue that allowing CMRS use of 800 MHz PLMR spectrum would further exacerbate the
current shortage of private spectrum. 313 We do not find these concerns persuasive. These objections seem
to envision a scenario in which current PLMR licensees voluntarily surrender their rights to frequencies
they are not using or are using inefficiently and these frequencies are then returned to the PLMR pool so as
to be available for licensing to other private users. It has been our experience, however, that licensees do
not in any large measure turn back to the Commission PLMR frequencies they no longer need or are using
inefficiently; rather, they continue to hold the spectrum. Consequently, we believe that allowing licensees
308 See Nextel Order, 14 FCC Rcd at 11691 ¶ 30.
309 See Chadmoore Reply Comments at 2- 3; Nextel Comments at 7.
310 See, e. g., AAA Comments at 12; API Comments at 20- 22; API Reply Comments at 6; Blooston I
Comments at 13- 17; Boeing Comments at 11- 12; Boeing Ex Parte Letter at 4- 5; Boeing Reply Comments at 6;
ComEd Comments at 21- 22; FIT Comments at 9- 10; ITA Comments at 23; Intek Comments at 6; MFRAC
Comments at 9- 10; NAM/ MRFAC Reply Comments at 16; Rocky Mountain Comments at 9; SBT Reply
Comments at 12- 13.
311 See Amendment of Part 90 of the Communications Act Regulatory Treatment of Mobile Services,
First Report and Order, Eighth Report and Order and Second Further Notice of Proposed Rulemaking, PR
Docket 93- 144, 11 FCC Rcd 1463, 1536- 37 ¶¶ 138- 142 (1995); 47 C. F. R. § 90.621( e) (1996). In 1997, the
Commission affirmed its decision to eliminate intercategory sharing by SMR eligibles. Amendment of Part 90 of
the Commission’s Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, PR
Docket No. 93- 144, Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 9972, 10,005- 06 ¶ 106
(1997).
312 See API Comments at 20; Boeing Letter at 4- 5; FIT Comments at 9- 10; ITA Comments at 23 and
SBT Reply Comments at 12- 13.
313 See AAA Comments at 12- 13; API Comments at 21- 22; ITA Comments at 23; SBT Reply
Comments at 12- 13.
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to modify their licenses for CMRS use or assign or transfer these frequencies to CMRS entities will not
materially affect the supply of available spectrum for licensing from the PLMR pool.
113. However, we deny Nextel’s proposal to eliminate the distinction between CMRS spectrum
and non- Public Safety PLMR spectrum with respect to initial licensing. 314 We believe that the existing
PLMR pool of unassigned frequencies should remain available on an initial basis to PLMR eligibles only,
to construct new systems or expand existing systems. Therefore, we maintain the eligibility criteria for all
new applications.
114. While we will allow incumbent PLMR licensees to transfer or modify their licenses for
CMRS use, we do not want to facilitate trafficking of PLMR spectrum (e. g., PLMR eligibles acquiring
new licenses from the existing pool of unassigned frequencies for the purpose of selling them to CMRS
providers). 315 Several methods are employed to avoid trafficking, including holding periods, random audits,
moratoria on acquiring new frequencies and reporting requirements. 316 In that connection, PCIA, 317
supported by several other commenters, 318 suggests that we discourage trafficking by adopting a rule
providing that a licensee that transfers or assigns 800 MHz PLMR spectrum to a CMRS licensee may not
apply for new spectrum for six months after the Commission consents to the transfer or assignment. We do
not believe that this proposal is sufficient to reduce potential trafficking of PLMR services licenses.
Instead, we will preclude a licensee that modifies its license or transfers or assigns its license to a CMRS
operator, or an affiliate of the modifying or assigning licensee, from applying for 800 MHz PLMR
spectrum in the same area 319 for one year. 320
314 See Nextel Comments at 14- 15; Nextel Reply Comments at 2, 22- 23.
315 The Commission has defined as trafficking as “speculation, barter or trade in licenses.” See KaStar
73 Acquisition, LLC and KaStar 109.2 Acquisition, LLC, Applications for Consent to Transfer Control,
Memorandum Opinion and Order, 15 FCC Rcd 1615, 1619- 20 ¶ 12 (1999).
316 See id. (explaining that the Commission’s anti- trafficking rule was designed to discourage
speculators and prevent the unjust enrichment of those who do not implement their proposed systems); see also
Implementation of Section 309( j) of the Communications Act – Competitive Bidding, PP Docket No. 93- 253,
Fifth Report and Order, 9 FCC Rcd 5532, 5583- 84 ¶ 117 (1994) (“ Competitive Bidding Fifth Report and
Order”) (explaining that a holding period would be imposed to avoid sham arrangements with broadband PCS
licenses); Reexamination of the Comparative Standards for Non- Commercial Educational Applicants, MM
Docket No. 95- 31, Report and Order, 15 FCC Rcd 7386, 7424- 25 ¶¶ 93, 94 (1999) (explaining that holding
periods, random audits and certifications are used to ensure that the selection process is not undermined by the
rapid re- assignment or transfer of broadcast stations); Amendment of Part 90, Subparts M and S, of the
Commission’s Rules, PR Docket No. 86- 404, Report and Order, 3 FCC Rcd 1838, 1847 ¶79 (1988) (prohibiting
application for new channels for one year to stem circumvention of channel recovery rules).
317 See PCIA Comments at 20- 23.
318 See AMTA Comments at 14; APCO Reply Comments at 7; Chadmoore Comments at 4; Chadmoore
Reply Comments at 3; NTCC Comments at 15.
319 We will define the area as 70 miles from the subject station. See 47 C. F. R. § 90.621( b).
320 We note that a one- year moratorium has been imposed upon General Category licensees that make
partial assignment of a station’s frequencies to stem trafficking in licenses. See 47 C. F. R. § 90.609( c); see also
(continued….)
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115. In addition, we will allow modification to CMRS use or assignment to a CMRS operator
only in the case of PLMR licenses that were initially granted at least five years prior to the modification,
transfer, or assignment. 321 We believe a five- year holding period is appropriate because such a requirement
has been applied to other situations where speculation and trafficking were concerns. For example, our
rules provide that licensees are subject to unjust enrichment payments for any license transfer that occurs
within five years of the license grant. 322 In this regard, we also note that 800 MHz PLMR licensees can
receive an extended implementation period for of up to five years, if they demonstrate that such a period is
required to construct the proposed wide- area system. 323 One of our goals in requiring a holding period is to
ensure that these channels will continue to be initially licensed only to entities that will use them for PLMR
communications. A holding period of less than five years could undermine this goal by allowing many
wide- area licensees to modify or transfer their licenses for CMRS use before they finish construction.
116. We will not apply this five year holding period to licenses already granted, or for which the
application already was filed, as of the adoption date of this Report and Order. It is our belief that no
purpose would be served by applying the holding period to licenses obtained or requested before we
amended our rules to permit assignment and/ or transfer of 800 MHz Business and I/ LT channels for
CMRS use, because prior to adoption of this Report and Order, no speculative incentive to acquire
Business and I/ LT frequencies can be inferred.
117. We are confident that the rules adopted herein, coupled with existing requirements in our
rules, 324 provide the necessary safeguards against trafficking in PLMR licenses for the purpose of assigning
the license to a CMRS operator or using the spectrum to provide a CMRS service. We note that neither
the one- year moratorium nor the five- year holding requirement is applicable to PLMR- to- PLMR
assignments and/ or transfers.
118. In addition, we note that there have been incidents of interference to public safety licensees
in this band even though CMRS providers operate within their licensed paramaters. To address this issue,
an FCC/ public safety/ industry task force is investigating solutions for preventing and fixing interference to
800 MHz public safety operations. We seek to avoid the potential for future incidents of such interference
that could result from the modification of PLMR facilities to CMRS. Consequently, we will require 800
MHz licensees seeking to use spectrum for CMRS, upon submitting a modification application, to: (a)
certify that the co- or adjacent channel 800 MHz public safety licensees in the same geographic area have
been notified of the application; and (b) commit that they will take affirmative steps to avoid harmful
(Continued from previous page)
Amendment of Part 90, Subparts M and S, of the Commission’s Rules, PR Docket No. 86- 404, 3 FCC Rcd 1838,
1847 ¶ 79 (1988)
321 See Competitive Bidding Fifth Report and Order, 9 FCC Rcd at 5583- 84 ¶ 117 (explaining that a
holding period would be imposed to avoid sham arrangements with broadband PCS licenses).
322 See 47 C. F. R. § 1.2111( b)( 1).
323 See 47 C. F. R. § 90.629.
324 Section 90.155 requires the licensee to have its station placed in operation within twelve months
from the date of grant to avoid automatic cancellation. 47 C. F. R. § 90.155. Moreover, Section 90.609 requires
complete construction of the radio facility prior to any transfer or assignment. 47 C. F. R. § 90.609. Additionally,
Section 90.157 provides that a license will cancel automatically if there is discontinuance of station operation for
twelve months or more. 47 C. F. R. § 90.157.
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interference 325 to such public safety licensees. 326 We believe that these actions together will reduce the risk
of increased interference in this band.
119. All 800 MHz PLMR licenses, including those granted before the rule change, may be
assigned, transferred or modified in accordance with the new rules set forth herein. In addition, all new and
pending applications for assignment, transfer, or modification will be subject to these new rules. However,
other transactions were approved under previous and arguably more flexible terms and conditions. In this
connection, we note that an application for review is pending with respect to the prior Nextel applications
and associated waiver requests. 327 Thus, in that regard, we believe that we should defer any decision
affecting the transactions associated with the Nextel waivers to the disposition of the application for
review. We believe that this approach will provide us with flexibility with respect to our treatment of the
issues raised in the application for review
5. Revision of Part 90 Multiple Licensing Rules
120. Background. In the Notice, we sought comment on whether eliminating or modifying the
multiple licensing rules would be appropriate in light of the potential expansion of our auction authority to
include private radio services. 328 The multiple licensing rules provide that two or more entities may be
licensed for the same land station, provided that each licensee complies with the Commission’s Rules
regarding permissible communications and each licensee is eligible for the frequency( ies) on which the land
station operates. 329
121. A “multiple- licensed” system, also known as a “community repeater,” is a base station in
the Part 90 private land mobile radio services which functions as a mobile relay, enabling low power
mobile units to communicate with one another over a wide area by picking up a signal from one unit and
repeating it to another. 330 Generally, the licensees who share a multiple- licensed facility have been brought
together by a third party, often the manufacturer of the land mobile equipment or a retailer, who operates
the station on a profit- making basis. 331 The Commission does not usually regulate this third party’s activity
and the third party is not licensed by the Commission. 332 Multiple licensing has been a widespread practice
325 See also 47 C. F. R. §§ 90.173( b), 90.403( e) (requiring licensees to undertake precautions to avoid
harmful interference).
326 See Letter from Robert M. Gurss, counsel for APCO, to Magalie Roman Salas, Secretary, FCC (dated
Nov. 6, 2000).
327 See Nextel Order, 14 FCC Rcd 11678.
328 Notice, 14 FCC Rcd at 5232 ¶ 50.
329 See 47 C. F. R. § 90.185.
330 In the Matter of an Inquiry Concerning the Multiple Licensing of Land Mobile Radio Systems
(‘ Community Repeaters’) in the Bands 806- 812 and 851- 866 MHz, PR Docket No. 79- 107, Notice of Inquiry, 71
FCC 2d 1391, 1392 ¶ 4 (1979).
331 Id. at 1392 ¶ 5.
332 Id. The third- party equipment provider is also sometimes one of the multiple licensees in order to
serve its own internal communications need, but this is an infrequent scenario.
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in the land mobile services since the 1960s. 333
122. In 1982, the Commission re- examined the multiple licensing of facilities in the private land
mobile radio services and found such practices to be permissible as a matter of law and desirable as a
matter of public policy. 334 The Commission noted that SMRs provide a possible substitute for multiple
licensing, but concluded that the record did not support commenters’ claims that third- party managers were
competing unfairly with radio common carriers. 335
123. In 1992, in connection with the Refarming proceeding, the Commission proposed
eliminating multiple licensing because (1) from a user’s standpoint, such facilities were indistinguishable
from SMR facilities; and (2) the users’ needs could adequately be met by SMR and private carrier
licensees, which were more widely available than they were ten years earlier. 336 When the Commission
implemented the 1993 Budget Act, however, it concluded that Congress recognized the benefits of allowing
private radio users to enter into legitimate cost- sharing arrangements, and did not intend such arrangements
to be classified as for- profit CMRS. 337 This conclusion was based upon the definition of “mobile service”
adopted in the 1993 Budget Act. 338 The Commission determined that the legislative intent was to provide
for shared use 339 and multiple licensed “private” communications systems exempt from the competitive
bidding process. 340 Despite concern that these systems are often indistinguishable from commercial
systems, the Commission deemed it appropriate at that time to retain multiple licensing as a non- auction,
private radio licensing alternative. 341 The Commission stated, however, that it would closely monitor the
use of multiple licensing in order to ensure that unlicensed station managers did not attempt to provide for-
333 Id. at 1392 ¶ 6.
334 Amendment of Parts 89, 91, 93 and 95 of the Commission’s Rules and Regulations to Adopt New
Practices and Procedures for Cooperative Use and Multiple Licensing of Stations in the Private Land Mobile
Radio Services, Docket No. 18921, Report and Order, 89 FCC 2d 766, 771 ¶ 7 (1982).
335 Id.
336 Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the
Rules Governing Them, PR Docket No. 92- 235, Notice of Proposed Rule Making, 7 FCC Rcd 8105, 8131
(1992).
337 CMRS Second Report and Order, 9 FCC Rcd at 1430 ¶ 47.
338 See id. at 1430 n. 75. The definition of “mobile service” in 47 U. S. C. § 153( 27) refers to
communications that may be licensed on an “individual, cooperative, or multiple basis.”
339 See 47 C. F. R. § 90.185. Multiple licensing (licensed under code FB4) must be distinguished from
shared use. Section 90.179 of the Commission’s Rules discusses shared use of radio stations. Shared use of
facilities, licensed under code FB7, occurs when persons not licensed for the station control the station for their
own use pursuant to the licensee’s authorization. Shared use may be either on a non- profit, cost- shared basis or
on a for- profit private carrier basis depending on the spectrum being used. Thus, shared use involves one
licensee who shares its systems with other non- licensees who could get their own license but choose not to.
340 CMRS Second R & O, 9 FCC Rcd at 1430 ¶ 47.
341 Id.
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profit service in competition with CMRS licensees. 342
124. Discussion. We agree with the American Mobile Telecommunication Association, Inc.
(“ AMTA”) that multiple licensing is still permissible as a matter of law and desirable as a matter of public
policy because the “practical realities” which led to the development of community repeaters continue to
prevail. 343 AMTA states that most Part 90 licensees cannot independently afford the monthly site rent for a
tower or rooftop which could provide the necessary coverage, and that if each entity had to construct a
separate system, it would be difficult to coordinate. 344
125. MRFAC, on the other hand, states that the relevant rules for multiple licensing are widely
ignored, little enforced, and an invitation to abuse. 345 Some recent decisions support the view that not every
multiple licensing application represents a legitimate private radio cost- sharing proposal. For example, in
East River Electric Power Cooperative, 346 East River, which previously had applied unsuccessfully for
SMR frequencies, sought a waiver of the multiple licensing rules to permit use of its excess capacity by
entities not otherwise eligible to use those frequencies. 347 Opponents of the proposal argued that East River
simply intended to provide a for- profit commercial communications service to other parties. 348 The
Wireless Telecommunications Bureau (Bureau) agreed, and found that East River’s proposal was not a
legitimate multiple licensing arrangement under Section 90.185 of the Commission’s Rules. 349 While East
River’s use of its system for internal communications remained PMRS, the proposed sale of excess
capacity to third parties did not. More recently, in Viking Dispatch Services, Inc., we rejected a purported
sharing proposal on the grounds that it really was a for- profit CMRS. 350 Viking proposed to operate forty-two
sites for PMRS two- way mobile dispatch systems as a third- party provider on a not- for- profit, cost-shared
basis. 351 We concluded that Viking’s proposal was not PMRS because it intended only to provide
service to others. 352 We also concluded that it was not a true not- for- profit arrangement, because the
system manager and equipment vendor was an affiliate of Viking. 353 Therefore, Viking’s request was
denied.
342 Id. at 1430- 31 ¶ 49.
343 See AMTA Comments at 7.
344 Id.
345 MRFAC Comments at 8 n. 2.
346 East River Electric Power Cooperative, Order, 13 FCC Rcd 5871 (WTB 1997).
347 Id. at 5873- 74 ¶¶ 5- 6.
348 Id. at 5876 ¶ 9.
349 Id. at 5876- 78 ¶¶ 10- 11
350 Viking Dispatch Services, Inc., Memorandum Opinion and Order, 14 FCC Rcd 18814 (1999).
351 Id. at 18815 ¶ 2.
352 Id. at 18817- 18 ¶ 7.
353 Id. at 18818- 19 ¶ 8.
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126. Given the light response to our request for comment on whether to modify the multiple
licensing rules, however, we conclude that cases such as these are exceptional, and do not warrant
eliminating multiple licensing. Furthermore, eliminating multiple licensing would be contrary to our
current efforts to introduce more, not less, flexibility in how licensees use their spectrum. 354 Thus, as in
Viking and East River, we will continue to closely monitor multiple- licensed systems and judge their
validity on a case- by- case basis.
E. Section 337 Licensing for Public Safety Services
127. Background. The Balanced Budget Act added a new Section 337 to the Communications
Act. Section 337 of the Communications Act, inter alia, provides certain public safety entities the
opportunity to apply for unused spectrum not otherwise allocated for public safety use. For purposes of
applying Section 337 and determining who may invoke its provisions, subsection 337( f) defines the term
“public safety services” as “services –
(A) the sole or principal purpose of which is to protect the safety of life, health or property;
(B) that are provided- -(
i) by State or local government entities; or
(ii) by nongovernmental organizations that are authorized by a governmental entity whose
primary mission is the provision of such services; and
(C) that are not made commercially available to the public by the provider.” 355
128. The terms and conditions under which an eligible entity may apply to the Commission for
spectrum under Section 337 are provided at subsection (c)( 1) of Section 337 as follows:
(c) Licensing of Unused Frequencies for Public Safety Services.- -(
1) Use of unused channels for public safety services.-- Upon application by an entity seeking to
provide public safety services, the Commission shall waive any requirement of this Act or its
regulations implementing this Act (other than its regulations regarding harmful interference) to the
extent necessary to permit the use of unassigned frequencies for the provision of public safety
services by such entity. An application shall be granted under this subsection if the Commission
finds that- -
(A) no other spectrum allocated to public safety services is immediately available
to satisfy the requested public safety service use;
(B) the requested use is technically feasible without causing harmful interference
to other spectrum users entitled to protection from such interference under the
Commission’s regulations;
(C) the use of the unassigned frequency for the provision of public safety services
is consistent with other allocations for the provision of such services in the
geographic area for which the application is made;
(D) the unassigned frequency was allocated for its present use not less than 2
years prior to the date on which the application is granted; and
(E) granting such application is consistent with the public interest. 356
354 See Spectrum Policy Statement, 14 FCC Rcd 19868 (1999).
355 47 U. S. C. § 337( f).
356 47 U. S. C. § 337( c)( 1).
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129. If the Commission finds that the applicant satisfies the statutory criteria, the authorization
pursuant to Section 337 is granted. 357 Providers of public safety services may obtain spectrum via Section
337( c) without engaging in competitive bidding. 358
130. In the Notice, we sought comment on how to apply the statutory criteria. We specifically
requested commenters to address the statutory requirement that the frequency applied for be “unassigned”
and that the showing necessary to demonstrate that granting the application would be in the public interest,
with particular attention to the question of whether it would be in the public interest for applicants seeking
to provide public safety services to apply for frequencies that, while not yet licensed to another entity,
already have been identified and designated by the Commission as frequencies to be licensed by auction. 359
Since enactment of the statute, we have issued several decisions on Section 337 applications. 360
131. Discussion. Some commenters suggest that an applicant need not satisfy all five statutory
criteria to satisfy the requirements of Section 337( c), if it makes a particularly strong showing for the
factors it does meet. 361 We disagree. We do not find any statutory basis or legislative history supporting
such a conclusion. Indeed, the legislative history clearly states, “Before granting applications under this
subsection, the Commission must make five specific findings.” 362 All five statutory criteria must be
satisfied to receive authorization based on a Section 337 request. 363
132. In addition, we believe that further exposition regarding two of the criteria is warranted.
With regard to the statutory requirement that “no other spectrum allocated to public safety services is
immediately available to satisfy the requested public safety service use,” 364 several Section 337 applicants
apparently have interpreted this provision as only requiring a showing that no public safety frequencies are
357 Notice, 14 FCC Rcd at 5234 ¶ 56.
358 Id. at 5233 ¶ 54.
359 Notice, 14 FCC Rcd at 5234 ¶ 57.
360 See e. g., South Bay Regional Public Communications Authority, Memorandum Opinion and Order,
13 FCC Rcd 23,781 (1998) (South Bay) (granting Section 337 application); see also, e. g., New Hampshire
Department of Transportation, Memorandum Opinion and Order, 14 FCC Rcd 19,438 (WTB 1999) (New
Hampshire) (denying Section 337 application); see also Hennepin County, Order, 14 FCC Rcd 19,418 (WTB
1999); County of Sacramento, California, Order on Reconsideration, 15 FCC Rcd 12,600 (WTB 2000)
(“ Sacramento”) (granting Section 337 application).
361 APCO Comments at 13- 14; IAFC/ IMSA Comments at 6- 7.
362 Conference Report at 579.
363 See, e. g., South Bay, 13 FCC Rcd at 23796 ¶ 33 (applicant demonstrated all 5 criteria); County of
San Mateo, California, Memorandum Opinion and Order, 14 FCC Rcd 19002, ¶ 10 (WTB 1999) (applicant
demonstrated all 5 criteria); City of Pomona, California, Order, 15 FCC Rcd 15,597 ¶ 7 (WTB 2000) (applicant
demonstrated all 5 criteria).
364 47 U. S. C. § 337( c)( 1)( A).
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currently available in the same band as the frequencies being requested. 365 We disagree with this
interpretation. We believe that the statutory language is clear in that it expressly requires that no other
spectrum allocated to public safety services be available without any qualification. Thus, we believe that
the statute requires that there be no unassigned public safety spectrum, or not enough for the proposed
public safety use, in any band in the geographic area in which the Section 337 applicant seeks to provide
public safety services. 366
133. With regard to the statutory requirement that “granting such application is consistent with
the public interest,” 367 we believe that our analysis under this criterion generally will entail a balancing of
various public interest factors. For instance, some commenters assert that unlicensed spectrum should be
available to entities seeking to provide public safety services, even if the spectrum is in the process of being
auctioned. 368 We agree that spectrum does not per se become unavailable to Section 337 applicants once
we have initiated the competitive bidding process. Competing spectrum management goals may be
implicated by Section 337 requests, depending upon when such requests are filed during the competitive
bidding process. On the one hand, we do not believe that Congress intended for Section 337 applications to
compromise or frustrate the competitive bidding process generally. On the other hand, there may be
circumstances in which the public interest would warrant grant of a Section 337 request on spectrum that is
subject to competitive bidding. Thus, we conclude that the state of the competitive bidding process when
the Section 337 application is received is relevant to our determination of whether grant of the waiver
request and the associated application( s) is in the public interest, as required by subsection (c)( 1)( E).
134. As a result, we will balance such determinations on a case- by- case basis. In a number of
cases to date we have granted Section 337 requests utilizing the five criteria for spectrum that was
potentially subject to auction. For example, we granted such a request by South Bay Regional
Communications Authority for channels in the 470- 512 MHz band. 369 As part of that grant we assigned
auctionable narrowband PCS channels to a third party that applied for the same channels South Bay
requested. This resolution enabled South Bay to gain access to spectrum it needed for important public
safety needs. In another instance, the Wireless Telecommunications Bureau granted a Section 337 request
for channels that had been designated for auction in the 900 MHz band. 370 The Bureau weighed the five
factors in the statute, and determined that a grant was warranted, despite the fact the spectrum was subject
to an application freeze and a paging auction. Significantly, at the time the Section 337 request was filed in
this case, the auction date had not yet been established for the frequencies at issue.
365 See, e. g., New Hampshire, 14 FCC Rcd at 19,439 ¶ 4, 19,442 ¶ 8; County of Burlington, New Jersey,
Order on Reconsideration, 15 FCC Rcd 16,569 ¶ 7 (WTB 2000).
366 See 47 U. S. C. §§ 337( c)( 1)( A); see also Conference Report at 579- 80 (“ spectrum must not be
immediately available on a frequency already allocated to public safety services.”). We note that an applicant
that could not obtain relief pursuant to Section 337 because public safety spectrum was available in other bands
could nonetheless seek a rule waiver pursuant to Section 1.925 of the Commission’s Rules, 47 C. F. R. § 1.925.
367 47 U. S. C. § 337( c)( 1)( E).
368 See, e. g., APCO Comments at 12- 13; APCO Reply Comments at 7- 8; IAFC/ IMSA Comments at 5- 8;
NYSTEC Comments at 12- 13.
369 See South Bay, 13 FCC Rcd at 23796 ¶ 33.
370 See Sacramento, 15 FCC Rcd 12600, 12607 ¶ 19.
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135. Therefore, in reviewing Section 337 waiver requests, we will balance a variety of public
interest factors such as the likelihood that the spectrum will be auctioned, the likely timetable for such an
auction, and the effect that grant of the request may have on such a future auction against the stated needs
of the applicant and our obligation to promote public safety. 371 Section 337 requests received early in the
competitive bidding process, before an auction is announced, will likely weigh more in favor of a grant than
requests received on the eve of an auction. For example, at the rulemaking stage, when we are soliciting
comments on whether to auction a particular spectrum band, we may give more weight to the public
interest considerations of the public safety applicant than to our concerns about the impact on the auction
process. However, once the mechanisms for a particular spectrum auction are in place, beginning with the
issuance of a public notice announcing the date of the auction (typically four to six months before the
auction), the competitive bidding process is substantially underway. At this juncture, we believe that
accepting Section 337 applications would substantially impair our ability to conduct an orderly auction, on
which prospective bidders depend in planning their auction strategies. Consequently, such requests will be
subject to stricter review than those received earlier, and we anticipate that only in highly extraordinary
circumstances will they be found to satisfy the requirements of Section 337( c)( 1)( E). 372 In these situations,
Section 337 applicants will be expected to provide a showing that grant of their requests would result in
significant public interest benefits that outweigh the uncertainty and disruption to the auction process that
would be associated with a grant of their requested waiver.
136. Finally, we take this opportunity streamline our processing of Section 337 requests by
amending our rules to require that Section 337 requests be filed in the same manner and on the same
form( s) as ordinary applications requesting the subject spectrum. Specifically, Section 337 waiver requests
and applications for commercial spectrum must be filed through the Universal Licensing System using
Form 601 Main Form and Schedules B and J, 373 and applicants will need to register their Taxpayer
Identification Number or Employer Identification Number. 374 Additionally, antennas that require
registration must be registered prior to filing the request. 375
371 See 47 U. S. C. § 151.
372 We also note that the legislative history of Section 337 indicates that its intent was to ensure that
“public safety agencies . . . are not denied use of unassigned frequencies that have lain fallow for an extended
period of time.” Conference Report at 579- 580. We question whether spectrum in the process of being auctioned
can fairly be said to be lying fallow, and thus still within the scope of Section 337 requests contemplated by
Congress.
373 See Amendment of Parts 0, 1, 13, 22, 26, 27, 80, 87, 90, 95, 97 and 101 of the Commission’s Rules
to Facilitate Development and Use of the Universal Licensing System in the Wireless Telecommunications
Service, WT Docket No. 98- 20, Report and Order, 13 FCC Rcd 21027, Appendix C (1998).
374 Id. at 21087- 91 ¶¶ 132- 142.
375 Streamlining the Commission’s Antenna Structure Clearance Procedure, Report and Order, WT
Docket No. 95- 5, 11 FCC Rcd 4272 (1995); see also Streamlining the Commission’s Antenna Structure
Clearance Procedure, WT Docket No. 95- 5, Memorandum Opinion and Order on Reconsideration, 15 FCC Rcd
8676 (2000).
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IV. FURTHER NOTICE OF PROPOSED RULE MAKING
A. AMTA Proposal to Require New Spectrum Efficient Technologies
137. Background. On June 19, 1998, AMTA filed a petition for rule making proposing that
certain Part 90 licensees be required to employ new spectrum- efficient technologies. 376 Specifically,
AMTA urges that non- Public Safety licensees in the bands between 222 MHz and 896 MHz be required to
deploy technology that achieves the equivalent of two times the capacity of most current operations. 377 The
gain in efficiency would result in one voice path per 12. 5 kilohertz of spectrum, using a 25 kilohertz
frequency. 378 AMTA proposes that the requirement be phased in from 2003 to 2020, beginning with the
most congested areas. 379 Licensees not deploying this new equipment would be required to accept
secondary status. 380
138. AMTA contends that such requirements are needed because, under the current rules, it is
financially imprudent for a licensee to invest in new, more efficient technology, since doing so results in
additional costs without additional benefits. 381 The current rules, which were adopted in the Refarming
proceeding, provide that, in order to effect a transition to a narrowband channel plan, we will type certify
only increasingly efficient equipment. 382 Specifically, since February 14, 1997, we have certified
equipment for 25 kilohertz channels only if it is also capable of operating on 12. 5 kilohertz and/ or narrower
channels. 383 After January 1, 2005, only new equipment that operates on 6.25 kilohertz channel
bandwidths will be certified. 384 New equipment that operates on 25 and/ or 12. 5 kilohertz channels will be
certified only if it is also capable of operating on 6. 25 kilohertz or narrower channels. 385 The rules do not
376 AMTA Petition for Rulemaking (RM- 9332) at 3 (filed June 19, 1998) (AMTA Petition I).
377 Id. at 6. AMTA would exclude from this proposal all channel blocks awarded by competitive bidding,
as well as Part 90 spectrum at 220 and 900 MHz, because bandwidth requirements are already strict in those
bands. Id.
378 AMTA Petition I at 6.
379 Id. The timetable for compliance with this proposal, which is based on urban area rankings under
Part 90 of the Commission’s Rules, is December 31, 2003 for markets 1- 50; December 31, 2008 for markets 51-
100; and December 31, 2020 for all other markets. See 47 C. F. R. § 90.741.
380 AMTA Petition I at 7. Secondary operations may not cause interference to operations authorized on
a primary basis and are not protected from interference from those primary operations. 47 C. F. R. § 90. 7.
381 AMTA Petition I at 3. AMTA argues that when commercial licensees operate on shared spectrum,
any increased capacity would merely become available to co- channel licensees who have not made a comparable
investment. Id.
382 Refarming Report and Order and Further Notice, 10 FCC Rcd at 10081 ¶ 7.
383 Id.; 47 C. F. R. § 90.203( j)( 2) We also certify new equipment with a maximum bandwidth of 25 kHz
if it meets the efficiency standards set forth in 47 C. F. R. § 90.203( j)( 3).
384 47 C. F. R. § 90.203( j)( 4).
385 Id.
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require users to replace existing systems. 386
139. AMTA’s petition was placed on public notice on July 31, 1998. 387 Because the issues
raised in that petition are relevant to the instant proceeding, the petition was included in the Notice. 388
140. Discussion. When the Commission adopted the current rules in 1995, it specifically
declined to implement a comprehensive set of dates mandating strict manufacturing and licensing
requirements. 389 The Commission concluded that the type certification process itself could provide the
catalyst for transition from one technology to another by promoting a natural migration to new
technologies. 390 The Commission concluded that this approach was preferable to requiring manufacturing
or licensing of narrowband equipment by certain dates, because it would provide users immediate flexibility
in equipment decisions, provide a period for the development of new technologies, and avoid creating an
unreasonable burden for licensees. 391
141. AMTA and other commenters argue that a new approach is needed, because the migration
to narrowband technology is not occurring as rapidly as the Commission intended. 392 Other commenters
believe that the Refarming rules should be retained at least for the time being, because not enough time has
elapsed in order to reap the benefits of the well- considered compromises the Commission adopted in that
proceeding. 393 After considering the record and comments in this proceeding, we are inclined to agree with
AMTA that the current pace of migration to more spectrally efficient technology is not rapid enough. We
seek comment on this tentative conclusion, as well as whether enough time has elapsed to allow us to
evaluate the effectiveness of our current rules.
142. Commenters believing that the rules need to be revised should also discuss what action the
Commission should take. We tentatively conclude that that we should encourage the migration to
narrowband technology by prohibiting the manufacture or importation of equipment that does not meet
386 Refarming Report and Order and Further Notice, 10 FCC Rcd at 10081 ¶ 7.
387 Public Notice, Report No. 2288 (rel. July 31, 1998).
388 See Notice, 14 FCC Rcd at 5242 ¶ 71.
389 Refarming Report and Order and Further Notice, 10 FCC Rcd at 10099 ¶ 37.
390 Id. at 10097- 98 ¶¶ 34- 36.
391 Id. at 10099 ¶ 37.
392 See AMTA Petition I at 5; PCIA Comments (RM- 9332) at 2- 3 (conversion to more efficient
technologies proceeding slowly); UTC Comments (RM- 9332) at 12 (refarming process has caused significant
delays due to regulatory uncertainty); MFRAC Comments (RM- 9332) at 3- 4 (supporting mandatory conversion
to narrowband technology for the “top- 20” markets.); ComSpace Reply Comments (RM- 9332) at 4 (current
regulatory scheme has resulted in unbalanced uncertainty, a delayed transition, and ever increasing congestion).
393 See Chadmoore Reply Comments (RM- 9332) at 3; CICS Comments (RM- 9332) at 2; SCANA
Opposition (RM- 9332) at 5; USMSS Comments (RM- 9332) at 2; see also, e. g., MRFAC Partial Opposition at 5
(the unresolved Refarming issues should be resolved before any new rules are adopted); PCIA Comments at 5- 6
(Commission should wait to impose any type of mandatory conversion until the Refarming rules are in place and
have had time to take effect).
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certain efficiency standards by certain dates. 394 We continue to be concerned that requiring the employment
of new spectrum- efficient technologies by certain dates, as proposed by AMTA, would impose
unreasonable burdens on licensees, and we acknowledge the concerns raised by opponents of AMTA’s
proposal that it would be unfair to require users to replace systems in which they have recently invested
substantial amounts. 395 On the other hand, a user that continues to employ spectrally inefficient equipment,
when more efficient alternatives are available, is harming other users with whom it is sharing the
frequencies in these bands. Therefore, we are also concerned with a system that permits users to remain on
spectrally inefficient systems indefinitely. We request comment on these issues and on the comparative
merits of alternative approaches to addressing these concerns. We also request comment on what timetable
would be appropriate for implementing any new requirement. One alternative would be to prohibit the
manufacture or importation of equipment that does not meet certain efficiency standards by January 1,
2005, which, as noted above, is the date after which, under our current rules, only new equipment that
operates on 6. 25 kilohertz channel bandwidths will be certified. We seek comment on this proposal and
alternative dates for this proposal to become effective. Commenters are encouraged to suggest specific
dates and specific efficiency requirements, and to explain their recommendations.
B. Licensing of PLMR Channels in the 900 MHz Band for Use in Commercial SMR
Systems
143. In the Report and Order portion of this item, we amended our rules to allow 800 MHz
BI/ LT licensees to assign or transfer their spectrum to CMRS licensees for use in CMRS operations, or to
modify the licenses to CMRS use in their own systems. 396 We also adopted rules to safeguard against
trafficking in 800 MHz BI/ LT licenses, and notification procedures to avoid interference to 800 MHz
public safety operations. We did not ask commenters to address whether we should also extend this
flexibility to any other frequency bands, and therefore did not consider any such rule amendments.
144. We now seek comment on whether this flexibility in use of PLMR channels should be
extended to the 900 MHz band. We believe that such an action would promote the statutory objective of
regulatory symmetry among CMRS providers. 397 We intend, if we introduce such flexibility for licensees
in the 900 MHz band, to impose an appropriate holding period requirement on all licenses the application
for which is filed on or after the date we adopt this item. We would take such an action in order to ensure
that our request for comment on this issue does not motivate prospective licensees to apply for vacant
394 We note that the Commission took such an approach with respect to fixed microwave equipment.
See Redevelopment of Spectrum to Encourage Innovation in the Use of New Telecommunications Technologies,
Second Report and Order, ET Docket No. 92- 9, 8 FCC Rcd 6495, 6514 ¶ 53 (1993). The deadline would not
apply to equipment manufactured for export. See id. at 6514 n. 26. See also Amendment of Part 90 of the
Commission’s Rules to Restrict the Use of Radio Transmitters with External Frequency Controls, PR Docket No.
86- 37, 2 FCC Rcd 7221 (1987). See generally 47 C. F. R. § 302( b) (“ No person shall manufacture, import, sell,
offer for sale, or ship devices or home electronic equipment and systems, or use devices, which fail to comply
with regulations promulgated pursuant to this section.”).
395 See AEP Comments (RM- 9332) at 4; APSC Comments (RM- 9332) at 5; BGE Comments (RM- 9332)
at 3; CSW Comments (RM- 9332) at 2.
396 See supra at ¶¶ 110, 111.
397 47 U. S. C. § 332; see, e. g., Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate
Future Development of Paging Systems, Second Report and Order and Further Notice of Proposed Rulemaking,
WT Docket No. 96- 18, 12 FCC Rcd 2732, 2737 (1997).
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PLMR spectrum with the sole intent of using it for CMRS operations. Given the unique characteristics of
the 800 MHz PLMR bands, however, 398 we also seek comment as to whether there are any reasons we
should continue to treat the 800 MHz and 900 MHz bands differently.
V. PROCEDURAL MATTERS
A. Ex Parte Presentations
145. This is a permit- but- disclose notice and comment rule making proceeding. Ex parte
presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as
provided in the Commission’s rules. 399
B. Regulatory Flexibility Act Analyses
146. A Final Regulatory Flexibility Analysis, pursuant to the Regulatory Flexibility Act
(“ RFA”), 400 is contained in Appendix C. An Initial Regulatory Flexibility Analysis, pursuant to the RFA,
is contained in Appendix D. 401
C. Final Paperwork Reduction Act of 1995 Analysis
147. This Report and Order contains a new information collection, and the Further Notice of
Proposed Rule Making contains a proposed information collection. As part of its continuing effort to
reduce paperwork burdens, we invite the general public and the Office of Management and Budget
(“ OMB”) to take this opportunity to comment on the information collections contained in this Report and
Order and Further Notice of Proposed Rule Making as required by the Paperwork Reduction Act of 1995,
Pub. L. No. 104- 13. Public and agency comments are due 60 days after publication of the Report and
Order and Further Notice of Proposed Rule Making 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.
148. In addition to filing comments on the information collections contained in this Report and
Order and Further Notice of Proposed Rule Making with the Secretary, a copy of any comments on the
information collections should be submitted to Judy Boley, Federal Communications Commission, Room 1-C804,
445 12 th Street S. W., Washington, DC 20554, or via the Internet to jboley@ fcc. gov and to Edward
Springer, OMB Desk Officer, 10236 NEOB, 725 – 17 th Street, N. W., Washington, DC 20503 or via the
Internet to edward. springer@ omb. eop. gov.”
398 See supra at ¶ 109.
399 See generally 47 C. F. R. §§ 1.1202, 1.1203, 1.1206.
400 See 5 U. S. C. § 604.
401 See 5 U. S. C. § 603.
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D. Filing Procedures
149. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C. F. R. §§ 1.415,
1.419, interested parties may file comments on or before 60 days after publication in the Federal Register,
and reply comments on or before 90 days after publication in the Federal Register. Comments may be filed
using the Commission's Electronic Comment Filing System (“ ECFS”) or by filing paper copies. See
Electronic Filing of Documents in Rulemaking Proceedings, 13 FCC Rcd 11322, 11326 (1998).
150. Comments filed through the ECFS can be sent as an electronic file via the Internet to
. Generally, only one copy of an electronic submission must be filed.
If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters
must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the
caption. In completing the transmittal screen, commenters should include their full name, Postal Service
mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic
comment by Internet e- mail. To obtain filing instructions for e- mail comments, commenters should send an
e- mail to ecfs@ fcc. gov, and should include the following words in the body of the message, “get form
.” A sample form and directions will be sent in reply.
151. Parties choosing to file by paper must file an original and four copies of each filing. If
participants want each Commissioner to receive a personal copy of their comments, an original plus nine
copies must be filed. All filings must be sent to the Commission's Secretary, Magalie Roman Salas, Office
of the Secretary, Federal Communications Commission, The Portals, 445 12th Street, S. W., Room TW-A325,
Washington, D. C. 20554. In addition, courtesy copies should be delivered to Leora Hochstein,
Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications
Commission, 445 12th Street, S. W., Room #4- A633, Washington, D. C. 20554 and Scot Stone, Public
Safety and Private Wireless Division, Federal Communications Commission, 445 12th Street, S. W., Room
#4- B408, Washington, D. C. 20554.
152. All relevant and timely comments will be considered by the Commission before final action
is taken in this proceeding. Comments and reply comments will be available for public inspection and
duplication during regular business hours in the FCC Reference Information Center, Room CY- A257, 445
12th Street, S. W., Washington, DC 20554. Copies also may be obtained from International Transcription
Services, Inc., 445 12th Street, S. W., Room CY- B400, Washington, DC 20554, (202) 314- 3070.
E. Further Information
153. For further information concerning this Report and Order and Further Notice of Proposed
Rule Making, contact Gary D. Michaels or Leora Hochstein of the Auctions and Industry Analysis
Division at (202) 418- 0660 (voice), (202) 418- 7233 (TTY), or Shellie Blakeney of the Public Safety and
Private Wireless Division at (202) 418- 0680 (voice), (202) 418- 7233 (TTY), Wireless
Telecommunications Bureau, Washington, DC 20554.
VI. ORDERING CLAUSES
154. Accordingly, pursuant to Sections 1, 2, 4( i), 5( c), 7( a), 11( b), 301, 302, 303, 307, 308,
309( j) , 310, 312a, 316, 319, 323, 324, 332, 333, 336, 337, and 351 of the Communications Act of 1934,
as amended, 47 U. S. C. §§ 151, 152, 154( i), 155( c), 157( a), 161( b), 301, 302, 303, 307, 308, 309( j), 310,
312a, 316, 319, 323, 324, 332, 333, 336, 337, and 351, the Balanced Budget Act of 1997, Pub. L. No.
105- 33, Title III, 111 Stat. 251 (1997), and Sections 1.421 and 1.425 of the Commission’s Rules, 47
C. F. R. §§ 1.421 and 1.425, IT IS ORDERED that the REPORT AND ORDER AND FURTHER
NOTICE OF PROPOSED RULE MAKING is hereby adopted.
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155. IT IS FURTHER ORDERED that NOTICE IS HEREBY GIVEN of the proposed
regulatory changes contained in the Further Notice of Proposed Rule Making, and that comment is sought
on these proposals.
156. IT IS FURTHER ORDERED that Parts 1 and 90 of the Commission’s Rules ARE
AMENDED as set forth in Appendix B, and that these Rules shall be effective [60 days after publication
in the Federal Register], except that the information collection contained in these rules become effective
70 days after publication in the Federal Register, following OMB approval, unless a notice is published in
the Federal Register stating otherwise.
157. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4( i), and 303 of the
Communications Act of 1934, as amended, 47 U. S. C. §§ 151, 152, 154( i) and 303, and Section 1.425 of
the Commission’s Rules, 47 C. F. R. § 1.425, the Petition for Rulemaking filed by the American Mobile
Telecommunications Association, Inc. on July 30, 1999 (RM- 9705) IS DENIED.
158. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4( i), 303, and 337 of the
Communications Act of 1934, as amended, 47 U. S. C. §§ 151, 152, 154( i), 303, and 337, the Petition for
Rulemaking filed by UTC, The Telecommunications Association, the American Petroleum Institute, and
the Association of American Railroads on August 14, 1998 (RM- 9405) IS DENIED.
159. IT IS FURTHER ORDERED that the Commission’s Consumer Information Bureau,
Reference Information Center, SHALL SEND a copy of this Report and Order and Further Notice of
Proposed Rule Making, including the Initial Regulatory Flexibility Analysis and Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the U. S. Small Business Administration.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
Secretary
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APPENDIX A: COMMENTS AND REPLY COMMENTS FILED IN WT DOCKET 99- 87
Comments 1
1. Aeronautical Radio, Inc. (ARINC)
2. Alliant Energy (Parent to : Wisconsin Power and Light, Interstate Power Company & IES Utilities,
Inc.)
3. American Automobile Association (AAA)
4. American Electric Power Service Corporation (AEP)
5. The American Mobile Telecommunications Association (AMTA)
6. The American Petroleum Institute (API)
7. American Water Works Association (AWWA)
8. American Water Works Association Government Affairs
9. Amtech Systems Division of Intermec Technologies Coporation (Amtech)
10. Anchorage Water & Wastewater Utility (AWWU)
11. APW Electronics, Inc.
12. Arizona Public Service Company
13. Association of American Railroads (AAR)
14. Association of Public- Safety Communications Officials- International, Inc. (APCO)
15. Baltimore Gas and Electric Company (BGE)
16. Basin Electric Power Cooperative
17. Benton County Public Utility District
18. The Boeing Company (Boeing)
19. Blooston, Mordkofsky, Jackson & Dickens (Blooston I)
Representing:
Automobile Club of Southern California
Betteroads Asphalt Corporation
Clarkson Construction Company, Inc.
Cross Timbers Oil Company
Flash Cab Company
Foster Engineering Company
Hill County Electric Cooperative, Inc.
Hutchinson Telephone Company, Inc.
Lubbock Radio Paging Service, Inc.
Mankato Citizens Telephone Company
Midwest Mobile Radio Service
Minnesota Mining and Manufacturing Co.
Mobilephone of Humboldt, Inc.
Mobile Phone of Texas, Inc.
Nemont Telephone Cooperative
North Pittsburgh Telephone Company
Pond Branch Telephone Company
Supreme Security Systems
TXU Communications Telephone Company
Webster Calhoun Cooperative Telephone Association
The Wilkinsburg- Penn Joint Water Authority
1 This list includes comments and reply comments submitted in response to RM- 9405.
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XIT Rural Telephone Cooperative, Inc.
Zirkelbach Refrigeration, Inc.
20. Blooston, Mordkofsky, Jackson & Dickens (Blooston II)
Representing:
Betteroads Asphalt Corporation
Clarkson Construction Company, Inc.
Cross Timbers Oil Company
Flash Cab Company
Foster Engineering Company
Hill County Electric Cooperative, Inc.
Hutchinson Telephone Company, Inc.
Lubbock Radio Paging Service, Inc.
Mankato Citizens Telephone Company
Midwest Mobile Radio Service
Mobilephone of Humboldt, Inc.
Mobile Phone of Texas, Inc.
Nemont Telephone Cooperative
North Pittsburgh Telephone Company
Pond Branch Telephone Company
Supreme Security Systems
TXU Communications Telephone Company
Webster Calhoun Cooperative Telephone Association
The Wilkinsburg- Penn Joint Water Authority
XIT Rural Telephone Cooperative, Inc.
Zirkelbach Refrigeration, Inc.
21. Dixie Ten Broeck
22. Jack Campitelli
23. CellNet Data Systems, Inc. (CellNet)
24. Central and South West Corporation (CSW)
25. Central Nebraska Public Power and Irrigation (Central)
26. Central Station Alarm Association (CSAA)
27. Chadmoore Wireless Group, Inc. (Chadmoore)
28. Cinergy Corporation (Cinergy)
29. Citizens Water Resources (Citizens Water)
30. City of Calhoun, Georgia Water System (City Administrator)
31. City of Calhoun, Georgia Water System (Director of Public Works)
32. City of Calhoun, Georgia Water System (Mayor)
33. Clay Electric Co- Op
34. Columbus (Georgia) Water Works
35. Commonwealth Edison Company (ComEd)
36. ComSpace Corporation (Comspace)
37. Consumer’s Energy
38. Council Of Independent Communications Suppliers (CICS)
39. Allen Crawford
40. The Critical Infrastructure Industries (CII). Representing: United Telecom Council, American
Petroleum Institute (API) and Association of American Railroads (AAR)
41. DeKalb County, Georgia Water and Sewer Division
42. Allan Dersham
43. East Bay Municipal Utility District (EBMUD)
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44. Entergy Services, Inc. (Entergy)
45. Ford Communications, Inc. (Ford)
46. Forest Industries Telecommunications (FIT)
47. Ronald K. Greenhalgh
48. Henry Radio, Inc.
49. Hewlett- Packard Company (HP)
50. Houston Lighting & Power Company (HL& P)
51. Industrial Telecommunications Association, Inc.( ITA), the Council of Independent Communications
Suppliers (CICA), and The Taxicab & Livery Communications Council (TLCC)
52. International Association of Fire Chiefs, Inc (IAFC)
International Municipal Signal Association (IMSA)
53. International Bridge, Tunnel and Turnpike Association
54. International Communications Association (ICA)
55. Intek Global Corp. (Intek)
56. Kansas City, Missouri Water Services Department
57. Kay Communications, Inc.
58. Kenwood Communications Corporation (Kenwood)
59. Land Mobile Communications Council (LMCC)
60. Lincoln Water System (LWS)
61. Lubrizol Corporation
62. Mark IV Industries Ltd. (Mark IV)
63. David B. Marricle
64. Maryland Transportation Authority (MDTA)
65. McCook Public Power District
66. Midwest Energy, Inc.( Midwest)
67. Minnesota Power, Inc.
68. Motorola
69. MRFAC, Inc. (MRFAC)
70. MTA Bridges & Tunnels (MTA)
71. National Association of Water Companies (NAWC)
72. National Fuel Gas Company
73. National Rural Electric Cooperative Association (NRECA)
74. New England Power Service Company
75. New Jersey Highway Authority (NJHA)
76. New Jersey Turnpike Authority (NJTA)
77. New York State Electric & Gas Corporation (NYSEG)
78. New York State Technology Enterprise Corporation (NYSTEC)
79. New York State Thruway Authority (NYSTA)
80. Nextel Communications, Inc. (Nextel)
81. Niagara Mohawk Power Corporation
82. Northeast Missouri Electric Power Cooperative
83. Northeast Utilities Service Company (NU)
84. North Marine Water District (NMWD)
85. The North Texas Communications Council (NTCC)
86. On Site Communications (OSC)
87. Pacific Gas and Electric (PG& E)
88. PacifiCorp
89. The Peace Bridge Authority
90. The Personal Communications Industry Association, Inc. (PCIA)
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91. The Private Internal Radio Service Coalition (PIRSC)
92. Ponca City Refinery
93. Public Service Electric and Gas Company (PSE& G)
94. Radscan, Inc.
95. Rappahannock Electric Cooperative (REC)
96. Ray’s Radio Shop, Inc. (RRS)
97. Rees Communications
98. City of Sacramento, Department of Utilities
99. San Francisco Public Utilities Commission
100. San Francisco Public Utilities Commission, Water Quality Bureau
101. San Juan Water District
102. SCANA Corporation (SCANA)
103. Mr. Merrill T. See (Mr. See)
104. Small Business In Telecommunications (SBT)
105. Thomas C. Smith
106. South Jersey Transportation Authority (SJTA)
107. The Texas Section of the American Water Works Association
108. Transportation Operations Coordinating Committee (Transcom)
109. Trimble Navigation Limited (Trimble)
110. Turlock Irrigation District (TID)
111. Union Electric Company d/ b/ a Ameren UE and Central Illinois Public Service Company d/ b/ a
Ameren Cips (Ameren)
112. U. S. Department of Transportation (DOT)
113. United States Small Business Administration, Office of Advocacy (Advocacy)
114. The United Telecom Council (UTC)
115. United Water Idaho
116. United Water New York (UWNY)
117. United Water New Jersey (UWNJ)
118. United Water Resources
119. USMSS, Inc. (USMSS)
120. Virginia Electronic and Power Company (Virginia Power)
121. Washington Gas Light Company (Washington Gas)
122. Joseph T. Wehrkamp
123. Western Communications (WC)
124. Western Resources (WR)
125. West Virginia Parkways Economic Development and Tourism Authority( WVPA)
126. WinStar Communications, Inc. (WinStar)
127. Wisconsin Department of Transportation, Division of State Patrol
128. Wisconsin Public Service Corporation (WPSC)
Reply Comments
1. American Automobile Association (AAA)
2. The American Mobile Telecommunications Association (AMTA)
3. The American Petroleum Institute (API)
4. Association of American Railroads (AAR)
5. Association of Public- Safety Communications Officials- International, Inc. (APCO)
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6. Atlantic City Electric Company( Atlantic), Cinergy Corp.( Cinergy), Delmarva Power & Light
Company (Delmarva), Entergy Services, Inc.( Entergy), and Indianapolis Power & Light Company
(IPL) (collectively “the Utilities”)
7. Automobile Club of Southern California (ACSC)
8. The Boeing Company (Boeing)
9. Blooston, Mordkofsky, Jackson & Dickens (Blooston II- Reply)
Representing:
Betteroads Asphalt Corporation
Bobier Electronics
Caprock Communications
Citizens Telephone Company
Clarkson Construction Co./ Total Risk Mgt.
Cross Timbers Oil Company
Electronic Specialties
First Communications
Flash Cab Company
Foster Engineering Company
Hill County Electric Cooperative, Inc.
Hutchinson Telephone Company, Inc.
IMC Agrico Co.
Instant Signal & Alarm Co., Inc.
Lubbock Radio Paging Service, Inc.
Mankato Citizens Telephone Company
Midwest Mobile Radio Service
Minnesota Mining and Manufacturing Co.
Mobilcom
Mobilephone of Humboldt, Inc.
Mobile Communications Service of Miami
Mobile Phone of Texas, Inc.
Nemont Telephone Cooperative
North Pittsburgh Telephone Company
Penasco Valley Telephone
Platte Valley Communications of Kearney, Inc.
Pond Branch Telephone Company
Sanborn Telephone Company
Supreme Security Systems
Teletouch Communications, Inc.
TXU Communications Telephone Company
UBTA Communications
Webster Calhoun Cooperative Telephone Association
Western Atlas International, Inc.
The Wilkinsburg- Penn Joint Water Authority
W. T. Services, Inc.
XIT Rural Telephone Cooperative, Inc.
Zirkelbach Refrigeration, Inc.
10. California State Automobile Association (Cal State)
11. Central Station Alarm Association (CSAA)
12. CellNet Data Systems, Inc. (CellNet)
13. Chadmoore Wireless Group, Inc. (Chadmoore)
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14. Cinergy Corporation (Cinergy)
15. Columbia Energy Group (Columbia)
16. Commonwealth Edison Company (ComEd)
17. ComSpace Corporation (ComSpace)
18. Consolidated Edison Company of New York, Inc.( ConEdison)
19. Entergy Services, Inc. (Entergy)
20. Ford Communications, Inc.
21. Forest Industries Telecommunications (FIT)
22. Florida Fruit & Vegetable Association (FFVA)
23. Joint Comments of the Industrial Telecommunications Association, Inc., the Council of Independent
Communications Suppliers, The Taxicab 7 Livery Communications Council, and the Telephone
Maintenance Frequency Advisory Committee (Joint Commenters)
24. Mark IV Industries, Limited. I. V. H. S. Division (Mark IV)
25. Minnesota Power
26. Motorola
27. MRFAC, Inc.( MRFAC)
28. The National Association of Manufacturers and MRFAC, Inc. (NAM/ MRFAC)
29. National Propane Gas Association (NPGA)
30. National Ready Mixed Concrete Association (NRMCA)
31. National Utility Contractors Association (NUCA)
32. Nextel Communications, Inc. (Nextel)
33. Nextel/ Attachment: Comments by Dr. Rosston
34. Otter Tail Power Company
35. Personal Communications Industry Association, Inc. (PCIA)
36. Radscan, Inc. (Radscan)
37. Rocky Mountain Motorists (Rocky Mountain)
38. SCANA Corporation (SCANA)
39. Small Business In Telecommunications (SBT)
40. Southern Company
41. Trimble Navigation Limited (Trimble)
42. Union Electric Company d/ b/ a Ameren UE and Central Illinois Public Service Company d/ b/ a Ameren
Cips (Ameren)
43. United Telecom Council (UTC)
44. UTC, The Telecommunications Association
Ex Parte Submissions
1. AEP Communications, LLC
2. Ameren, Cinergy Corporation, Commwealth Edison, Entergy Services, and Cinergy
3. American Mobile Telecommunications Association (AMTA)
4. American Petroleum Institute (API)
5. Association of Public- Safety Communications Officials- International, Inc. (APCO)
6. The Boeing Company (Boeing)
7. Cellnet Data Systems, Inc.
8. Central Station Alarm Association
9. CoServ Security, LLC
10. FM Communications, Inc. (FM)
11. Forest Industries Telecommunications (FIT)
12. Global Frontiers, Inc. (Global)
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13. Keller and Heckman on behalf of Colorado Interstate Gas Company, American Petroleum Institute
(API), Shell Oil Company
14. Thomas R. Koeing d/ b/ a Interphone Co. (Interphone)
15. Mark IV Industries Ltd. (Mark IV)
16. Merchants Alarm Systems
17. Mobex Communications, Inc. (Mobex)
18. Motorola, Inc. (Motorola)
19. MRFAC, Inc. (MRFAC)
20. Nextel Communications, Inc. (Nextel)
21. Pacific Wireless Technologies, Inc.
22. Personal Communications Industry Association (PCIA)
23. Representative Steven R. Rothman
24. Representative Cliff Stearns
25. Representative Edolphus Towns
26. Senator Tom Daschle
27. Senator Peter G. Fitzgerald
28. Senator Frank R. Lautenberg
29. Sentry Watch, Inc.
30. Southern Communications Services, Inc. (Southern)
31. Staley Communications, Inc.
32. U. S. A Central Station Alarm Corp.
33. U. S. Environmental Protection Agency (EPA)
34. United Telecom Council (UTC)
35. UTC, The Telecommunciations Association
36. Wiley, Rein & Fielding
Representing:
Industrial Telecommunications Associations, Inc. (ITA)
Motorola, Inc. (Motorola)
Extension of Time to File Reply Comments Submissions
1. Land Mobile Communications Council (LMCC)
2. William R. Miller dba Russ Miller Rental
Petition for Rulemaking RM- 9332
1. American Mobile Telecommunications Association, Inc.( AMTA)
2. UTC, The Telecommunications Association (UTC), Association of American
Railroads( AAR), and the American Petroleum Institute (API)
Support to Petition for Rulemaking RM- 9332
1. American Petroleum Institute (API)
Opposition to Petition for Rulemaking RM- 9332
1. Atlantic City Electric Company( Atlantic), Cinergy Corp.( Cinergy), Delmarva Power & Light
Company (Delmarva), Entergy Services, Inc.( Entergy), and Indianapolis Power & Light Company
(IPL) (collectively “the Utilities”)
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2. Industrial Telecommunications Association, Inc.( ITA), the Council of Independent Communications Suppliers (CICs), The Taxicab & Livery Communications Council (TLCC), and the Telephone
Maintenance Frequency Advisory Committee (TELFAC) and USMSS, Inc. (collectively, “Joint
Commenters”)
3. MRFAC, Inc.( MRFAC)
4. Petroleum Communications, Inc.
5. SCANA Communications, Inc. (SCANA)
Comments Filed in Response to RM- 9705
1. Aeronautical Radio, Inc. (ARINC)
2. American Hospital Association (AHA)
3. American Mobile Telecommunications Association, Inc. (AMTA)
4. Association of American Railroads (AAR)
5. Association of Public- Safety Communications Officials- International, Inc. (APCO)
6. Blooston, Mordkofsky, Jackson & Dickens (Blooston)
Representing:
Automobile Club of Southern California
AAA Colorado
Betteroads Asphalt Corporation
Bobier Electronics
Caprock Communications
Citizens Telephone Company
Clarkson Construction Co./ Total Risk Mgt.
Cross Timbers Oil Company
Electronic Specialties
First Communications
Flash Cab Company
Foster Engineering Company
Hill County Electric Cooperative, Inc.
Hutchinson Telephone Company, Inc.
IMC Agrico Co.
Instant Signal & Alarm Co., Inc.
Lubbock Radio Paging Service, Inc.
Mankato Citizens Telephone Company
Midwest Mobile Radio Service
Minnesota Mining and Manufacturing Co.
Mobilcom
Mobilephone of Humboldt, Inc.
Mobile Communicaitons Service of Miami
Mobile Phone of Texas, Inc.
Nemont Telephone Cooperative
North Pittsburgh Telephone Company
Penasco Valley Telephone
Platte Valley Communications of Kearney, Inc.
Pond Branch Telephone Company, Inc.
Sanborn Telephone Company
Supreme Security Systems, Inc.
Teletouch Communications, Inc.
TXU Communications Telephone Company
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UBTA Communications
Webster- Calhoun Cooperative Telephone Association
Western Atlas International, Inc.
Wilkinsburg- Penn Joint Water Authority
W. T. Services, Inc.
XIT Rural Telephone
Zirkelbach Refrigeration, Inc.
7. ComSpace Corporation (ComSpace)
8. Fisher Wireless Services, Inc.
9. Industry Coalition
Comprised of:
Aeronautical Radio, Inc.
Alliance of Motion Picture and Television Producers
American Automobile Association (AAA)
American Petroleum Institute (API)
American Trucking Associations
Associated Builders & Contractors, Inc.
Association of American Railroads
Council of Independent Communications Suppliers (CICA)
Forest Industries Telecommunications (FIT)
Industrial Telecommunications Association, Inc. (ITA)
International Taxicab and Livery Association
MRFAC, Inc. (MRFAC)
National Food Processors Association
National Mining Association
National Propane Gas Association
National Ready Mixed Concrete Association
National Utility Contractors Association
New England Fuel Institute
Newspaper Association of America
Personal Communications Industry Association (PCIA)
Telephone Maintenance Frequency Advisory Committee (TELEFAC)
United Telecom Council (UTC)
USMSS, Inc. (USMSS)
10. Mobex Communications, Inc. (Mobex)
11. Motorola, Inc. (Motorola)
12. Qualicom, Inc. (Qualicom)
13. Small Business in Telecommunications (SBT)
14. The Boeing Company (Boeing)
Reply Comments Filed in Response to RM- 9705
1. American Mobile Telecommunications Association, Inc. (AMTA)
2. Chadmoore Wireless Group, Inc. (Chadmoore)
3. Industrial Telecommunications Association, Inc. (ITA)
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APPENDIX B: FINAL RULES
Section 1.913 is amended by adding a new paragraph (g) to read as follows:
§1. 913 Application forms; electronic filing and manual filing
****
(g) Section 337 Requests. Applications to provide public safety services submitted pursuant to 47
U. S. C. 337 must be filed on the same form and in the same manner as other applications for the requested
frequency( ies).
Section 90.179 is amended by revising paragraph (g) to read as follows:
§ 90.179 Shared use of stations.
* * * * *
(g) The provisions of this section do not apply to licensees authorized to provide commercial
mobile radio service under this part, including licensees authorized to use channels transferred or assigned
pursuant to § 90.621( e)( 2) of this part.
Section 90.621 is amended by revising paragraph (e)( 2) to read as follows:
§ 90.621 Selection and assignment of frequencies.
* * * * *
(e) * * *
(2) Notwithstanding paragraph (e)( 5) of this section, licensees of channels in the Industrial/ Land
Transportation and Business categories may request a modification of the license, see § 1.947 of this part,
to authorize use of the channels for commercial operation. The licensee may also, at the same time or
thereafter, seek authorization to transfer or assign the license, see § 1.948 of this part, to any person
eligible for licensing in the General or SMR categories. Applications submitted pursuant to this paragraph
must be filed in accordance with the rules governing other applications for Industrial/ Land Transportation
and Business channels, and will be processed in accordance with those rules, except that the modification
application and the assignment application will be placed on public notice in accordance with § 1.933 of
this chapter. Grant of requests submitted pursuant to this paragraph is subject to the following conditions:
(i) A licensee that modifies its license to authorize commercial operations will not be authorized to
obtain additional 800 MHz Business or Industrial/ Land Transportation category channels for sites located
within 113 km (70 mi.) of the station for which the license was modified, for a period of one year from the
date the license is modified. This provision applies to the licensee, its controlling interests and their
affiliates, as defined in § 1. 2110 of this part.
(ii) With respect to licenses the initial application for which was filed on or after November 9,
2000, requests submitted pursuant to paragraph (e)( 2) of this section may not be filed until five years after
the date of the initial license grant. In the case of a license that is modified on or after November 9, 2000 to
add 800 MHz Industrial/ Land Transportation or Business frequencies or to add or relocate base stations
that expand the licensee’s the interference contour, requests submitted pursuant to paragraph (e)( 2) of this
section for these frequencies or base stations may not be filed until five years after such modification.
(iii) Requests submitted pursuant to paragraph (e)( 2) of this section must include a certification
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that written notice of the modification application has been provided to all Public Safety licensees, see §
90.20( a) of this part, with base stations within 113 km (70 mi.) of the site of the channel( s) for which
authorization for commercial use is sought that operate within 25 kHz of the center of those channel( s). If,
pursuant to paragraph (e)( 2), modification and assignment or transfer applications are filed at different
times, the written notice required by this paragraph must be provided each time.
(iv) The applicant must certify that it will take reasonable precautions to avoid causing harmful
interference to Public Safety licensees, see § 90. 20( a) of this part, and to take such action as may be
necessary to eliminate interference to such licensees caused by its operations. (When an assignment or
transfer application is filed pursuant to paragraph (e)( 2) of this paragraph, this representation is required
only of the assignee or transferee.) Licensees of stations suffering or causing harmful interference are
expected to cooperate and resolve this problem by mutually satisfactory arrangements. If the licensees are
unable to do so, the Commission may impose restrictions including specifying the transmitter power,
antenna height, or area or hours of operation.
* * * * *
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APPENDIX C: FINAL REGULATORY FLEXIBILITY ANALYSIS
1. As required by the Regulatory Flexibility Act (“ RFA”), 1 an Initial Regulatory Flexibility
Analysis (“ IRFA”) was incorporated in the Notice of Proposed Rule Making in WT Docket 99- 87. 2 The
Commission sought written public comment on the issues and proposals in the Notice, including comment
on the IRFA. The comments received are discussed below. This Final Regulatory Flexibility Analysis
(“ FRFA”) conforms to the RFA. 3
A. Need for, and Objectives of, the Report and Order
2. This Report and Order was initiated to evaluate the Commission’s auction authority for wireless
telecommunications services following the enactment of the Balanced Budget Act of 1997. The Balanced
Budget Act revised the original spectrum auction standard that had been established under the Omnibus
Budget Reconciliation Act of 1993. In this Report and Order, we develop a framework for making certain
determinations for future licensing of the private wireless services and the scope of the Balanced Budget
Act’s exemption from competitive bidding for licenses and permits issued for public safety radio services.
In attempting to maximize the use of private radio spectrum, we continue our efforts to improve the
efficiency of spectrum use, maintain public safety services, reduce the regulatory burden on spectrum
users, facilitate technological innovation, and provide opportunities for development of competitive new
service offerings. The policies adopted in this Report and Order are also designed to implement Congress’
goal of giving small businesses the opportunity to participate in the provision of spectrum- based services in
accordance with Section 309( j) of the Communications Act of 1934, as amended. 4
3. The Report and Order also amends certain Part 1 and 90 rules to conform the application and
licensing procedures in the private radio services with the new policies described in the Report and Order.
In particular, these amendments adopt filing procedures for license applications submitted pursuant to
Section 337 of the Communications Act, describe procedures by which mutually exclusive applications for
licenses in the public safety radio services will be resolved, and revise certain Part 90 regulations
applicable to the Private Land Mobile Radio (“ PLMR”) services.
B. Summary of Significant Issues Raised by Public Comments in Response to the IRFA
4. There were two timely filed comments in response to the IRFA. 5 The Office of Advocacy of
1 See 5 U. S. C. § 601 et seq. The RFA has been amended by the Contract With America Advancement
Act of 1996, Pub. L. No. 104- 121, 110 Stat. 847 (1996) (“ CWAAA”). Title II of the CWAAA is the Small
Business Regulatory Enforcement Fairness Act of 1996 (“ SBREFA”).
2 See Implementation of Sections 309( j) and 337 of the Communications Act of 1934 as Amended;
Promotion of Spectrum Efficient Technologies on Certain Part 90 Frequencies; Establishment of Public Service
Radio Pool in the Private Mobile Frequencies Below 800 MHz, WT Docket No. 99- 87, RM- 9332, RM- 9405,
Notice of Proposed Rule Making, FCC 99- 52, 14 FCC Rcd 5206 (1999) (“ Notice”).
3 See 5 U. S. C. § 604.
4 47 U. S. C. § 309( j)( 3)( B); see also 47 U. S. C. § 257.
5 See Comment of the Office of Advocacy, U. S. Small Business Administration on the Notice of
Proposed Rulemaking and the Initial Regulatory Flexibility Analysis of the Notice of Proposed Rulemaking, CC
Docket 99- 87 (sic) (filed Aug. 2, 1999) (“ SBA Comments”); Initial Regulatory Flexibility Analysis Comments of
(continued….)
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the U. S. Small Business Administration (“ SBA”) claims that the Notice offers no rationale for changing
licensing procedures for PLMR services, and did not consider the impact of the proposed rules on small
businesses. 6 SBA also argues that the Notice and the IRFA do not describe the impact of the rules on small
businesses and does not provide significant alternatives designed to minimize this impact. 7 The law firm of
Blooston, Mordkofsky, Jackson & Dickens contends that the adoption of geographic licensing and
competitive bidding will adversely impact small businesses, particularly those in rural areas. 8
5. We believe that the Notice provided ample justification for changes in our traditional
approaches to licensing the private radio services. The Notice observed that significant efficiency gains
might be expected from a move to new license assignment mechanisms. In particular, the Commission
noted:
We have previously observed that the use of competitive bidding to assign geographic
overlay licenses in private radio services would promote spectrum efficiency. This
approach would promote competition among licensees, which, in turn, would provide
market- based incentives for efficient spectrum use. In particular, incumbents would be
able to continue existing operations without harmful interference, and overlay licensees
would be able to negotiate voluntary mergers, buyouts, frequency swaps, or similar
arrangements with incumbents. Thus, the overlay licensee would incur an opportunity cost
if spectrum is not used as efficiently as possible and would have incentives to promote
spectrum efficiency. 9
Implicit in this discussion is an understanding (shared by many commenters) that private radio spectrum is
scarce and is in great demand. 10 In addition, the IRFA described how the notice sought comment on how
the Balanced Budget Act’s amendments to Section 309( j) affect the Commission’s determinations of what
services are auctionable. The IRFA also pointed out that the Notice was requesting comment on whether
the Balanced Budget Act’s amendments to Section 309( j) require the Commission to revise its licensing
schemes and license assignment methods to provide for competitive bidding in services that it previously
determined were not auctionable, and on how such schemes for new services might be established. Further,
the IRFA stated that the Notice was considering issues relating to a petition for rulemaking arising from the
statutory exemption from competitive bidding for public safety radio services. In short, the IRFA and the
Notice described the reasons beyond the statutory mandates that provided the basis for the Commission’s
consideration of such licensing mechanisms, and gave commenters adequate opportunity to address the
issues affecting small businesses and others.
(Continued from previous page)
Blooston, Mordkofsky, Jackson & Dickens, WT Docket 99- 87, RM- 9332 (filed Aug. 2, 1999) (“ Blooston IRFA
Comments”).
6 See SBA comments at 1, 2- 3.
7 See id. at 1, 4- 6.
8 See Blooston IRFA Comments at 1.
9 Notice at ¶ 76.
10 See, e. g., Cinergy Comments at ii; API Comments at 22; PCIA Comments at 21- 22; Motorola
Comments at 9.
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6. As can be seen throughout the Notice, the Commission has thoroughly considered the impact
on small businesses of the Balanced Budget Act’s amendments to the Commission’s auction authority
under Section 309( j) of the Communications Act. 11 For example, the Notice sought comment on whether it
would be appropriate to limit auction eligibility to certain classes of small business entities. 12 Specifically,
the Notice inquired as to possible standards to be considered in establishing eligibility, and asked whether it
would be appropriate to adopt the SBA’s size standards under the Standard Industrial Classifications
(“ SIC”), or service- specific size standards, taking into account the characteristics and capital requirements
of particular private services. 13 The Commission also observed that 96 percent of the governmental entities
in the U. S. qualify as small businesses under SBA definitions. 14 Governmental entities are primary users
of spectrum for public safety radio services. Thus, in devoting considerable attention in the Notice to the
exemption from the Commission’s auction authority for public safety radio services and its impact on
public safety users, the Commission was simultaneously considering impacts on small businesses. 15
7. Likewise, the Commission considered significant alternatives designed to minimize impacts on
small business users of private radio spectrum. The RFA requires the Commission to provide an analysis
that discusses significant alternatives, including, among others, “an exemption from coverage of the rule, or
any part thereof, for such small entities.” 16 As is discussed above, a significant portion of the Notice was
devoted to our consideration of exemptions from the statute’s auction mandate. 17 Thus, we adequately
considered the effect on small business from the outset and ultimately developed policies which apply
equally to all parties.
8. SBA and Blooston also suggest that auctions are inherently unfair to small businesses. In
drawing that conclusion, SBA fails to mention that the Commission, in consultation with SBA, has
developed designated entity preferences, such as bidding credits, to facilitate participation by small
businesses in spectrum auctions, 18 and routinely makes bidding credits available to encourage the award of
licenses to small businesses. 19 Contrary to SBA’s assertions, 20 we believe that band manager licensing is
11 See, e. g., Notice, 14 FCC Rcd. at 5242, 5244, 5246 ¶ 72, 77, 83- 84.
12 See id., 14 FCC Rcd. at 5246 ¶ 83- 84.
13 See id.
14 See id., 14 FCC Rcd. at 5261 ¶ 23 (IRFA).
15 See id., 14 FCC Rcd. at 5222- 34 ¶ 26- 57.
16 See 5 U. S. C. § 603( c).
17 See id., 14 FCC Rcd. at 5222- 34 ¶ 26- 57.
18 See, e. g., Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Procedures, WT
Docket No. 97- 82, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, ET Docket
No. 94- 32, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374
(1997) (modified by Erratum, DA 98- 419 (rel. Mar. 2, 1998)) (adopting small business bidding credits). See also
47 C. F. R. § 1.2110 (definition of small business designated entities for purposes of FCC’s competitive bidding
processes).
19 See, e. g., Amendment of Parts 1, 2, 21 and 25 of the Commission’s Rules to Redesignate the 27.5-
29.5 GHz Frequency Band, To Reallocate the 29.5- 30.0 GHz Frequency Band, to Establish Rules and Policies for
(continued….)
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an approach that may benefit small businesses by making more efficient use of the private radio spectrum.
We expect that band manager licensing will allow small business users to obtain access to spectrum in
amounts that are tailored to meet their particularized needs or to outsource their communications
requirements to a third party who may be able to provide service at lower cost. Blooston argues that
auctions are burdensome to small businesses because they may require small entities to hire personnel to
manage day- to- day business affairs while the small business’ managers are participating in the auction. 21
However, we believe that band manager licensing may alleviate this problem by alleviating the need for
small businesses to participate in the auction and instead allow all types of users to more readily secure
access to spectrum in post- auction markets.
9. We find little merit in Blooston’s criticism that small entities may be required to submit
detailed financial showings, which might then be available to competitors. 22 As Blooston acknowledges,
such showings are required only where a small business claims eligibility for a designated entity benefit,
such as a bidding credit. 23 If a small business applicant does not wish to risk disclosing such information to
obtain a bidding discount, it may simply elect not to seek such benefits. 24 Further, the Commission’s
designated entity rules call for the submission of financial data that has presumably already been tabulated
for reasons not related to Commission regulations, thus reducing burdens on small business applicants
which seek to claim these benefits. 25 Finally, of course, financial showings are necessary to ensure that
only qualified entities receive this particular form of government assistance.
10. We disagree with the premise of Blooston’s argument that auctions will lead to a concentration
of licenses in the hands of a few licensees. 26 Rather, where licensees are afforded the flexibility to
maximize use of the spectrum during their license tenure, as under a band manager licensing scheme, those
licensees will have an economic incentive not to discriminate or warehouse, and will instead maximize use
of the spectrum. The Report and Order observes that the Commission will consider whether it is
appropriate for band managers in other bands to be subject to the same types of rules as 700 MHz Guard
(Continued from previous page)
the Local Multipoint Distribution Service and for Fixed Satellite Services; Petitions for Reconsideration of the
Denial of Applications for Waiver of the Commission’s Common Carrier Point- to- Point Microwave Service
Rules; Suite 12 Group Petition for Pioneer Preference, CC Docket No. 92- 297, Second Report and Order, Order
on Reconsideration, and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 12545, 12,686- 96 ¶¶ 340- 63
(1997)( adopting small business credits for LMDS auction).
20 See SBA Comments at 4.
21 See Blooston IRFA Comments at 4.
22 See id.
23 See id.
24 We note that applicants may request that trade secrets and privileged information be withheld from
public inspection. See 47 C. F. R. § 0.459. However, we generally do not grant routinely such requests with
regard to financial information that is necessary to establish eligibility for designated entity benefits.
25 See, e. g., 47 C. F. R. § 1.2110( m) (generally requiring submission of audited financial statement to
prove small business status).
26 See Blooston IRFA Comments at 5.
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Band Managers regarding fair and nondiscriminatory access to the band manager’s spectrum, and limits on
the type of restrictions that band managers may impose on their customers’ use of the spectrum. 27 If
circumstances warrant, moreover, the Commission might consider imposing reasonable access standards or
other requirements to forestall anticompetitive behavior. 28
11. We have also stated that it may be necessary to consider the licensing of more than one
licensee in a given geographic area to promote competition, or the imposition of reasonable access
standards or other such requirements. Our experiences in promoting competition in other wireless services
leads us to believe that competition among band managers would serve to regulate price, quality, and
availability of spectrum. 29
C. Description and Estimate of the Number of Small Entities To Which the Rules Will
Apply
12. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the
number of small entities that may be affected by the proposed rules, if adopted. 30 Under the RFA, small
entities may include small organizations, small businesses, and small governmental jurisdictions. 31 The
RFA generally defines the term “small business” as having the same meaning as the term “small business
concern” under the Small Business Act. 32 A small business concern is one which: (1) is independently
owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria
established by the SBA. 33 A small organization is generally “any not- for- profit enterprise which is
independently owned and operated and is not dominant in its field.” 34 Nationwide, as of 1992, there were
approximately 275,801 small organizations. 35
13. The rule changes effectuated by this Report and Order apply to users of public safety radio
services, and private radio licensees that are regulated under Part 90 of the Commission’s rules, and may
also affect manufacturers of radio equipment. An analysis of the number of small entities affected follows.
14. Public Safety radio services and Governmental entities. Public Safety radio services include
27 See supra ¶ 47.
28 See id.
29 See Implementation of Section 6002( b) of the Omnibus Reconciliation Act of 1993, Annual Report
and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, First Report, 10
FCC Rcd 8844, 8846, 8872 ¶¶ 7, 83 (1995).
30 See 5 U. S. C. § 603( b)( 3).
31 See 5 U. S. C. § 601( 6).
32 Compare 5 U. S. C. § 601( 3) (RFA) with 15 U. S. C. § 632 (SBA).
33 Small Business Act, 5 U. S. C. § 632 (1996).
34 5 U. S. C. § 601( 4).
35 1992 Economic Census, U. S. Bureau of the Census, Table 6 (special tabulation of data under contract
to the Office of Advocacy of the Small Business Administration).
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police, fire, local governments, forestry conservation, highway maintenance, and emergency medical
services. 36 The SBA rules contain a definition for small radiotelephone (wireless) companies, which
encompasses business entities engaged in radiotelephone communications employing no more that 1, 500
persons. 37 There are a total of approximately 127,540 licensees within these services. Governmental entities
as well as private businesses comprise the licensees for these services. The RFA also includes small
governmental entities as a part of the regulatory flexibility analysis. 38 “Small governmental jurisdiction”
generally means “governments of cities, counties, towns, townships, villages, school districts, or special
districts, with a population of less than 50,000.” 39 As of 1992, there were approximately 85,006 such
jurisdictions in the United States. 40 This number includes 38,978 counties, cities and towns; of these,
37,566, or 96 percent, have populations of fewer than 50,000. 41 The Census Bureau estimates that this
ratio is approximately accurate for all governmental entities. Thus, of the 85, 006 governmental entities, the
Commission estimates that 81,600 (91 percent) are small entities.
15. Specialized Mobile Radio (“ SMR”). The Commission awards bidding credits in auctions for
geographic area 800 MHz and 900 MHz SMR licenses to two tiers of firms: (1) “small entities,” those
with revenues of no more than $15 million in each of the three previous calendar years; and (2) “very small
entities,” those with revenues of no more than $3 million in each of the three previous calendar years. The
regulations defining “small entity” and “very small entity” in the context of 800 MHz SMR (upper 10 MHz
and lower 230 channels) and 900 MHz SMR have been approved by the SBA. The Commission does not
know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended
36 With the exception of the special emergency service, these services are governed by Subpart B of
Part 90 of the Commission's rules. 47 C. F. R. §§ 90.15 through 90.27. The police service includes 26,608
licensees that serve state, county and municipal enforcement through telephony (voice), telegraphy (code) and
teletype and facsimile (printed material). The fire radio service includes 22,677 licensees comprised of private
volunteer or professional fire companies as well as units under governmental control. The local government
service that is presently comprised of 40,512 licensees that are state, county or municipal entities that use the
radio for official purposes not covered by other public safety services. There are 7,325 licensees within the
forestry service which is comprised of licensees from state departments of conservation and private forest
organizations who set up communications networks among fire lookout towers and ground crews. The 9,480
state and local governments are licensed to highway maintenance service provide emergency and routine
communications to aid other public safety services to keep main roads safe for vehicular traffic. The 1,460
licensees in the Emergency Medical Radio Service (EMRS) use the 39 channels allocated to this service for
emergency medical service communications related to the actual delivery of emergency medical treatment. 47
C. F. R. §§ 90.15 through 90.27. The 19,478 licensees in the special emergency service include medical services,
rescue organizations, veterinarians, handicapped persons, disaster relief organizations, school buses, beach
patrols, establishments in isolated areas, communications standby facilities and emergency repair of public
communication facilities. 47 C. F. R. §§ 90.33 through 90.55.
37 See 13 C. F. R. § 121.201 (SIC Code 4812).
38 See 5 U. S. C. § 601( 5) (including cities, counties, towns, townships, villages, school districts, or
special districts).
39 5 U. S. C. § 601( 5).
40 U. S. Dept. of Commerce, Bureau of the Census, "1992 Census of Governments."
41 Id.
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implementation authorizations, nor how many of these providers have annual revenues of no more than $15
million. One firm has over $15 million in revenues. We assume, for our purposes here, that all of the
remaining existing extended implementation authorizations are held by small entities, as that term is defined
by the SBA. The Commission has held auctions for geographic area licenses in the 800 MHz (upper 10
MHz) and 900 MHz SMR bands. There were 60 winning bidders that qualified as small and very small
entities in the 900 MHz auction. Of the 1,020 licenses won in the 900 MHz auction, 263 licenses were
won by bidders qualifying as small and very small entities. In the 800 MHz SMR auction, 38 of the 524
licenses awarded were won by small and very small entities.
16. Estimates for PLMR Licensees. Private land mobile radio systems serve an essential role in a
vast range of industrial, business, land transportation, and public safety activities. These radios are used
by companies of all sizes operating in all U. S. business categories. Because of the vast array of PLMR
users, the Commission has not developed a definition of small entities specifically applicable to PLMR
users, nor has the SBA developed any such definition. The SBA rules do, however, contain a definition for
small radiotelephone (wireless) companies. 42 Included in this definition are business entities engaged in
radiotelephone communications employing no more that 1, 500 persons. 43 According to the Bureau of the
Census, only twelve radiotelephone firms of a total of 1, 178 such firms which operated during 1992 had
1,000 or more employees. For the purpose of determining whether a licensee is a small business as defined
by the SBA, each licensee would need to be evaluated within its own business area. The Commission's
fiscal year 1994 annual report indicates that, at the end of fiscal year 1994, there were 1,101,711 licensees
operating 12,882,623 transmitters in the PLMR bands below 512 MHz. 44
17. Equipment Manufacturers. We anticipate that at least six radio equipment manufacturers will
be affected by our decisions in this proceeding. According to the SBA's regulations, a radio and television
broadcasting and communications equipment manufacturer must have 750 or fewer employees in order to
qualify as a small business concern. 45 Census Bureau data indicate that there are 858 U. S. firms that
manufacture radio and television broadcasting and communications equipment, and that 778 of these firms
have fewer than 750 employees and would therefore be classified as small entities. 46
D. Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
18. This Report and Order establishes a framework for making certain determinations for future
licensing of the private wireless services and the scope of the Balanced Budget Act’s exemption from
competitive bidding for licenses and permits issued for public safety radio services. This Report and Order
also imposes new compliance requirements for Part 90 PLMR licensees seeking to modify their licenses to
for use in CMRS systems.
42 See 13 C. F. R. § 121.201 (SIC Code 4812).
43 Id.
44 See Federal Communications Commission, 60th Annual Report, Fiscal Year 1994 at 120- 121.
45 13 C. F. R. § 121.201, Standard Industrial Code (SIC) 3663.
46 U. S. Dept. of Commerce, 1992 Census of Transportation, Communications and Utilities (issued May
1995), SIC 3663.
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19. We make minor revisions to the compliance requirements in Parts 1 and 90 of the
Commission’s Rules to conform the application and licensing procedures in the private and public safety
radio services with the policies described in the Report and Order. These amendments require public safety
applicants seeking licenses Section 337 of the Communications Act to file using the Commission’s Web-based
Universal Licensing System, and require PLMR licensees seeking to modify 800 MHz non- Public
Safety PLMR licenses for use in CMRS systems to demonstrate that they meet the requirements to be
eligible for such modifications.
20. Also, in response to incidents of interference to public safety licensees, a joint task force
composed of members of the public safety community, Commission licensees, and Commission
representatives is investigating solutions for preventing and fixing interference to 800 MHz public safety
operations. We seek to avoid the potential for further incidents of such interference that could result from
the conversion to CMRS. Consequently, we will require licensees seeking to convert to CMRS, upon
submitting a modification application, to: (a) certify that the co- or adjacent- channel 800 MHz public
safety licensees in the same geographic area have been notified of the application; and (b) commit that they
will take affirmative steps to avoid harmful interference to such public safety licensees. We believe that
these actions together will reduce the risk of increased interference in this band.
E. Steps Taken to Minimize Significant Economic Impact on Small Entities and
Significant Alternatives Considered
21. The RFA requires an agency to describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four alternatives (among others): (1) the
establishment of differing compliance or reporting requirements or timetables that take into account the
resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of performance, rather than design,
standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. 47
22. The Part 1 rule adopted in this Report and Order clarifies our policies with regard to the
processing of applications for licenses in the public safety radio services under Section 337 of the
Communications Act. While we considered the alternative of accepting Section 337 requests on an ad hoc
basis, such an approach would not eliminate the procedural uncertainties faced by public safety entities
seeking spectrum. Further, clarification of the process and use of the electronic ULS will greatly reduce
the cost of preparing wireless applications and pleadings, while increasing the speed of the licensing
process. We expect that these changes will benefit all public safety entities, including those 96% of
governmental entities considered to be small entities. Further, use of the ULS will present tremendous
advantages for small businesses because it permits access to licensing information at tremendously reduced
costs. Finally, we observe that we continue to review the burdens imposed by these and other regulations in
our biennial review processes in an effort to minimize regulatory impacts.
23. The Part 90 regulations amended by this Report and Order permit the conversion of 800 MHz
non- Public Safety PLMRS licensees be permitted to convert their spectrum to CMRS use under certain
circumstances, and clarify that spectrum in the 800 MHz non- Public Safety PLMRS may not be shared
under our Part 90 multiple licensing rule. We denied a proposal to eliminate the distinction between
CMRS spectrum and non- Public Safety PLMR spectrum with respect to initial licensing. We believe that
the existing PLMR pool of unassigned frequencies should remain available on an initial basis to PLMR
47 See 5 U. S. C. § 603( c).
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eligibles only, to construct new systems or expand existing systems. Therefore, we maintain the eligibility
criteria for all new applications. Similarly, we considered an alternative of permitting PLMRS licensees to
convert their spectrum without restriction, but rejected that idea because it would undercut important public
interest objectives. The Report and Order imposes a holding period to prevent trafficking of PLMR
spectrum (e. g., PLMR eligible acquiring new PLMR licenses from existing pool of unassigned frequencies
for the purpose of selling them to CMRS providers). Rather than negatively impact small businesses, we
believe that this rule change is likely to benefit small business PLMR licensees by giving them greater
ability to assess marketplace needs and economic factors when determining the best and most efficient use
of spectrum. We believe that the benefits of this rule change the costs that may be associated with
providing the required notice to potentially affected public safety licensees. Further, the Report and Order
finds that allowing licensees to convert their frequencies to CMRS use or assign or transfer these
frequencies to CMRS entities will not affect the supply of available PLMR spectrum for licensing from the
PLMR pool, and thus should not further exacerbate the current shortage of private spectrum available to
small business entities and other PLMR eligibles.
24. Report to Congress: The Commission will send a copy of this Report and Order, including this
FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. 48 In addition, the
Commission will send a copy of this Report and Order, including the FRFA, to the Chief Counsel for
Advocacy of the SBA. A copy of this Report and Order and FRFA (or summaries thereof) will also be
published in the Federal Register. 49
48 See 5 U. S. C. § 801( a)( 1)( A).
49 See 5 U. S. C. §604( b).
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APPENDIX D: INITIAL REGULATORY FLEXIBILITY ANALYSIS FOR FURTHER NOTICE OF PROPOSED RULE MAKING
1. As required by the Regulatory Flexibility Act (“ RFA”), 1 the Commission has prepared this
present Initial Regulatory Flexibility Analysis (“ IRFA”) of the possible significant economic impact on
small entities by the policies and rules proposed in this Further Notice of Proposed Rule Making (“ Further
Notice”). Written public comments are requested on this IRFA. Comments must be identified as responses
to the IRFA and must be filed by the deadlines for comments on this Further Notice provided above in
paras. 149- 152, supra. The Commission will send a copy of the Further Notice, including this IRFA, to
the Chief Counsel for Advocacy of the Small Business Administration (“ SBA”). 2 In addition, the Further
Notice and IRFA (or summaries thereof) will be published in the Federal Register. 3
A. Need for, and Objectives of, the Proposed Rules:
2. The purpose of this Further Notice is to determine whether it would be in the public interest,
convenience, and necessity to amend our rules governing non- public safety private land mobile radio
(“ PLMR”) licensees in the bands between 222 MHz and 896 MHz in order to expedite the transition to
narrowband technology. As is described in the Further Notice, AMTA urges that non- Public Safety
licensees in the bands between 222 MHz and 896 MHz be required to deploy technology that achieves the
equivalent of two times the capacity of most current operations. AMTA asserts that the gain in efficiency
would result in one voice path per 12. 5 kilohertz of spectrum, using a 25 kilokertz frequency. AMTA
proposes that the requirement be phased in from 2003 to 2020, beginning with the most congested areas.
Other commenters believe that the Refarming rules should be retained at least for the time being, because
not enough time has elapsed in order to reap the benefits of the well- considered compromises the
Commission adopted in that proceeding. The Report and Order tentatively concludes that we should
encourage the migration to narrowband technology by prohibiting the manufacture or importation of
equipment that does not meet certain efficiency standards by certain dates and requests comment on these
issues and the comparative merits of alternative approaches to addressing the concerns that have been
raised, including what timetable would be appropriate for implementing any new requirement.
3. The Further Notice also seeks comment on whether to permit 900 MHz Business and
Industrial/ Land Transportation (“ BI/ LT”) licensees to modify their licenses to permit CMRS use. The
Commission believes that extending this flexibility to 900 MHz BI/ LT licensees would promote the
statutory objective of regulatory symmetry among CMRS providers.
B. Legal Basis:
4. Authority for issuance of this Further Notice is contained in Sections 4( i), 303( r), and
332( a)( 2) of the Communications Act of 1934, as amended. 4
1 See 5 U. S. C. § 603. The RFA, see 5 U. S. C. § 601 et. seq., has been amended by the Contract With
America Advancement Act of 1996, Pub. L. No. 104- 121, 110 Stat. 847 (1996) (CWAAA). Title II of the
CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
2 See 5 U. S. C. § 603( a).
3 See id.
4 47 U. S. C. §§ 154( i), 303( r), 332( a)( 2).
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C. Description and Estimate of the Number of Small Entities to Which the Proposed
Rules Will Apply:
5. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the
number of small entities that may be affected by the proposed rules, if adopted. 5 Under the RFA, small
entities may include small organizations, small businesses, and small governmental jurisdictions. 6 The RFA
generally defines the term “small business” as having the same meaning as the term “small business
concern” under the Small Business Act. 7 A small business concern is one which: (1) is independently owned
and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria
established by the SBA. 8 A small organization is generally “any not- for- profit enterprise which is
independently owned and operated and is not dominant in its field.” 9 Nationwide, as of 1992, there were
approximately 275,801 small organizations. 10
6. The proposed rule amendments may affect users of public safety radio services and private
radio licensees that are regulated under Part 90 of the Commission’s rules, and may also affect
manufacturers of radio equipment. An analysis of the number of small entities affected follows.
7. Public Safety radio services and Governmental entities. Public Safety radio services include
police, fire, local governments, forestry conservation, highway maintenance, and emergency medical
services. 11 The SBA rules contain a definition for small radiotelephone (wireless) companies, which
5 See 5 U. S. C. § 603( b)( 3).
6 See 5 U. S. C. § 601( 6).
7 Compare 5 U. S. C. § 601( 3) (RFA) with 15 U. S. C. § 632 (SBA).
8 Small Business Act, 5 U. S. C. § 632 (1996).
9 5 U. S. C. § 601( 4).
10 1992 Economic Census, U. S. Bureau of the Census, Table 6 (special tabulation of data under contract
to the Office of Advocacy of the Small Business Administration).
11 With the exception of the special emergency service, these services are governed by Subpart B of
Part 90 of the Commission's rules. 47 C. F. R. §§ 90.15 through 90.27. The police service includes 26,608
licensees that serve state, county and municipal enforcement through telephony (voice), telegraphy (code) and
teletype and facsimile (printed material). The fire radio service includes 22,677 licensees comprised of private
volunteer or professional fire companies as well as units under governmental control. The local government
service that is presently comprised of 40,512 licensees that are state, county or municipal entities that use the
radio for official purposes not covered by other public safety services. There are 7,325 licensees within the
forestry service which is comprised of licensees from state departments of conservation and private forest
organizations who set up communications networks among fire lookout towers and ground crews. The 9,480
state and local governments are licensed to highway maintenance service provide emergency and routine
communications to aid other public safety services to keep main roads safe for vehicular traffic. The 1,460
licensees in the Emergency Medical Radio Service (EMRS) use the 39 channels allocated to this service for
emergency medical service communications related to the actual delivery of emergency medical treatment. 47
C. F. R. §§ 90.15 through 90.27. The 19,478 licensees in the special emergency service include medical services,
rescue organizations, veterinarians, handicapped persons, disaster relief organizations, school buses, beach
patrols, establishments in isolated areas, communications standby facilities and emergency repair of public
communication facilities. 47 C. F. R. §§ 90.33 through 90.55.
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encompasses business entities engaged in radiotelephone communications employing no more that 1, 500
persons. 12 There are a total of approximately 127,540 licensees within these services. Governmental entities
as well as private businesses comprise the licensees for these services. The RFA also includes small
governmental entities as a part of the regulatory flexibility analysis. 13 “Small governmental jurisdiction”
generally means “governments of cities, counties, towns, townships, villages, school districts, or special
districts, with a population of less than 50,000.” 14 As of 1992, there were approximately 85,006 such
jurisdictions in the United States. 15 This number includes 38,978 counties, cities and towns; of these,
37,566, or 96 percent, have populations of fewer than 50,000. 16 The Census Bureau estimates that this
ratio is approximately accurate for all governmental entities. Thus, of the 85, 006 governmental entities, the
Commission estimates that 81,600 (91 percent) are small entities.
8. Specialized Mobile Radio (“ SMR”). The Commission awards bidding credits in auctions for
geographic area 800 MHz and 900 MHz SMR licenses to two tiers of firms: (1) “small entities,” those
with revenues of no more than $15 million in each of the three previous calendar years; and (2) “very small
entities,” those with revenues of no more than $3 million in each of the three previous calendar years. The
regulations defining “small entity” and “very small entity” in the context of 800 MHz SMR (upper 10 MHz
and lower 230 channels) and 900 MHz SMR have been approved by the SBA. The Commission does not
know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended
implementation authorizations, nor how many of these providers have annual revenues of no more than $15
million. One firm has over $15 million in revenues. We assume, for our purposes here, that all of the
remaining existing extended implementation authorizations are held by small entities, as that term is defined
by the SBA. The Commission has held auctions for geographic area licenses in the 800 MHz (upper 10
MHz) and 900 MHz SMR bands. There were 60 winning bidders that qualified as small and very small
entities in the 900 MHz auction. Of the 1,020 licenses won in the 900 MHz auction, 263 licenses were
won by bidders qualifying as small and very small entities. In the 800 MHz SMR auction, 38 of the 524
licenses awarded were won by small and very small entities.
9. Estimates for PLMR Licensees. Private land mobile radio systems serve an essential role in a
vast range of industrial, business, land transportation, and public safety activities. These radios are used
by companies of all sizes operating in all U. S. business categories. Because of the vast array of PLMR
users, the Commission has not developed a definition of small entities specifically applicable to PLMR
users, nor has the SBA developed any such definition. The SBA rules do, however, contain a definition for
small radiotelephone (wireless) companies. 17 Included in this definition are business entities engaged in
radiotelephone communications employing no more that 1, 500 persons. 18 Entities engaged in telegraph and
12 See 13 C. F. R. § 121.201 (SIC Code 4812).
13 See 5 U. S. C. § 601( 5) (including cities, counties, towns, townships, villages, school districts, or
special districts).
14 5 U. S. C. § 601( 5).
15 U. S. Dept. of Commerce, Bureau of the Census, "1992 Census of Governments."
16 Id.
17 See 13 C. F. R. § 121.201 (SIC Code 4812).
18 Id.
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other message communications with no more than $5 million in annual receipts also qualify as small
business concerns. 19 According to the Bureau of the Census, only twelve radiotelephone firms of a total of
1,178 such firms which operated during 1992 had 1,000 or more employees. For the purpose of
determining whether a licensee is a small business as defined by the SBA, each licensee would need to be
evaluated within its own business area. The Commission's fiscal year 1994 annual report indicates that, at
the end of fiscal year 1994, there were 1,101,711 licensees operating 12,882,623 transmitters in the PLMR
bands below 512 MHz. 20
10. Equipment Manufacturers. We anticipate that at least six radio equipment manufacturers will
be affected by our decisions in this proceeding. According to the SBA's regulations, a radio and television
broadcasting and communications equipment manufacturer must have 750 or fewer employees in order to
qualify as a small business concern. 21 Census Bureau data indicate that there are 858 U. S. firms that
manufacture radio and television broadcasting and communications equipment, and that 778 of these firms
have fewer than 750 employees and would therefore be classified as small entities. 22
D. Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements:
11. Possible requirements under consideration in this Further Notice would impose new
compliance requirements for certain 900 MHz PLMR licensees regulated under Part 90 of the
Commission’s rules that seek to modify their licenses to for use in CMRS systems. Assuming the rules
adopted in the Report and Order are a good model for 900 MHz PLMR (which assumption has yet to be
established), the Commission might require applicants, upon submitting a modification application, to: (a)
certify that the co- or adjacent channel 800 MHz public safety licensees in the same geographic area have
been notified of the application; and (b) commit that they will take affirmative steps to avoid harmful
interference to such public safety licensees. These steps may be necessary to reduce risks of increased
interference.
E. Steps Taken to Minimize Significant Economic Impact on Small Entities, and
Significant Alternatives Considered:
12. The RFA requires an agency to describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four alternatives (among others): (1) the
establishment of differing compliance or reporting requirements or timetables that take into account the
resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of performance, rather than design,
standards; and (4) an exemption from coverage of the rule or any part thereof for small entities. 23
19 Id. (SIC Code 4822).
20 See Federal Communications Commission, 60th Annual Report, Fiscal Year 1994 at 120- 121.
21 13 C. F. R. § 121.201, Standard Industrial Code (SIC) 3663.
22 U. S. Dept. of Commerce, 1992 Census of Transportation, Communications and Utilities (issued May
1995), SIC 3663.
23 See 5 U. S. C. §603( c).
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13. The Commission believes that migration to narrowband technologies, see paras. 137- 42,
supra, should benefit all entities, as it will result in more efficient use of the spectrum by allowing a greater
number of entities to share existing spectrum. However, requiring the use of narrowband equipment by a
date certain, or prohibiting the manufacture or import of non- compliant equipment, could impact some
small entities requiring them to upgrade their communications systems before they would otherwise do so.
An alternative would be to maintain the current rules, which are intended to foster migration to narrowband
technology by way of progressively more stringent type certification requirements. We issue this Further
Notice in order to consider whether a change in the Rules would benefit small entities and other PLMR
licensees.
14. In the Report and Order portion of this item, we amended our rules to allow 800 MHz BI/ LT
licensees to assign or transfer their spectrum to CMRS licensees for use in CMRS operations, or to modify
the licenses to CMRS use in their own systems. We also adopted rules to safeguard against trafficking in
800 MHz Business and I/ LT licenses, and notification procedures to avoid interference to 800 MHz public
safety operations. This Further Notice now seeks comment on whether this flexibility in use of PLMR
channels should be extended to the 900 MHz band.
15. In the context of 800 MHz PLMR, we have found that allowing licensees to convert their
frequencies to CMRS use or assign or transfer these frequencies to CMRS entities will not affect the
supply of available PLMR spectrum for licensing from the PLMR pool, and thus should not further
exacerbate the current shortage of private spectrum available to small business entities and other PLMR
eligibles. An alternative approach might permit such modifications without restriction; 24 however, this
might affect the supply of available PLMR spectrum which might, in turn, have possible adverse effects on
small businesses.
F. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules:
16. None.
24 See supra ¶¶ 113- 16.
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