9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 Before the Federal Communications Commission Washington, D.C. 20554 GEN Docket No. 90-314 In the Matter of Amendment of the Commission's Rules to Establish New Personal Communications Services RM-7140, RM-7175, RM-7618 PP-6 through PP-10, PP-12, PP-13, PP-15 through PP-20, PP-26, PP-27, PP-41 through PP-52. PP-54 through PP-68, PP-70, PP-72 through PP-78 THIRD REPORT AND ORDER Adopted: December 23, 1993; Released: February 3, 1994 By the Commission: Chairman Hundt not participating; Commissioners Ouello, Barrett, and Duggan issuing sepa rate statements. TABLE OF CONTENTS Paragraph I. INTRODUCTION 1-2 II. BACKGROUND 3-6 III. DISCUSSION 7-301 A. Pioneer's Preferences Granted 7-80 1. American Personal Communications 10-36 2. Cox Enterprises, Inc. 37-50 3. Omnipoint Communications, Inc. 51-74 . 4. License Block 75-80 B. Pioneer's Preferences Denied 81-301 1. American Portable 81-88 Telecommunications 2. Associated PCN Corporation 89-96 3. Atlantic Cellular Company, L.P. 97-99 4. Cablevision Systems Corporation 100-104 5. Linkatel Communications, Inc. 105-106 6. LiTel Telecommunications Corporation 107-113 7. PCN America, Inc. 114-120 8. Personal Communications Network Services of New York, Inc. 121-132 9. Southwestern Bell Personal Communications, Inc. 133-138 10. Tel/Logic, Inc. 139-143 11. US West NewVector Group. Inc. 144-145 12. Vanguard Cellular Systems, Inc. 146-147 13. Sharecom-Austin, L.P. 148-149 14. Time Warner Telecommunications. Inc. 150-156 15. Adelphia Communications Corp. 157-158 16. Advanced MobileComm Technologies, Inc. and Digital Spread Spectrum Technologies, Inc. 159-166 17. American Telephone and Telegraph 167 18. American TeleZone 168-169 19. Ameritech 170-175 20. Bell Atlantic Personal Communications. Inc. 176-181 21. Broadband Communications Corporation 182-183 22. Cable USA, Inc. 184-188 23. Cellular Service, Inc. 189-190 24. Comcast PCS Communications. Inc. 191-196 25. Corporate Technology Partners 197-209 26. Nextel Communications, Inc. 210-215 27. Freeman Engineering Associates. Inc. 216-221 28. Grand Broadcasting Corporation 222-223 29. Iowa Network Services, Inc. 224-225 30. Omnipoint Corporation, Oracle Data Publishing, Inc., and McCaw Cellular Communications, Inc. 226-227 31. Omnipoint Mobile Data Company 228-229 32. Pacific Bell 230-235 33. PacTel Corporation 236-237 34. PageMart, Inc. 238-243 35. Panhandle Telephone Cooperative, Inc. 244-245 36. PCN Communications. Inc. 246-247 37. PerTel. Inc. 248-249 38. Pulson Communications Corporation 250-251 39. Qualcomm Incorporated 252-266 40. Satcom, Inc. 267-273 41. SM Tek, Inc. 274-275 42. Spatial Communications Inc. 276-277 43. Suite 12 Group 278-284 44. Tele-Communications, Inc. 285-286 45. Telmarc Telecommunications 287-288 46. TRX Transportation Telephone Co. 289-293 47. Viacom International. Inc. 294-301 IV. PROCEDURAL INFORMATION 302 1337 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 INTRODUCTION 1. By this action, the Commission recognizes the pio neering efforts of American Personal Communications (APC), Cox Enterprises, Inc. (Cox), and Omnipoint Com munications, Inc. (Omnipoint) and grants each a pioneer's preference for a personal communications service (PCS) license. APC is granted a pioneer's preference for its devel opment and demonstration of technologies that facilitate spectrum sharing by PCS and fixed microwave users op erating in the 2 GHz band. Cox is granted a preference for its development and demonstration of PCS/cable plant in terface technology and equipment that results in a spec trum-efficient application for PCS services. Omnipoint is granted a preference for its development of 2 GHz equip ment utilizing advanced techniques that will facilitate the continued development and implementation of PCS ser vices and technologies. We are denying 47 additional pio neer's preference requests. 2. By virtue of receiving a pioneer's preference, each entity will not be subject to competing applications for a license within a PCS service area. As discussed in paras. 75-80, infra, we are designating for use by each pioneer Channel Block A, 30 megahertz at 1850-1865 and 1930-1945 MHz. APC's service area is the Major Trading Area (MTA) that includes Washington, D.C. and Balti more, Maryland; Cox's service area is the MTA that in cludes San Diego, California; and Omnipoint's service area is the MTA that includes northern New Jersey. We note that both PCS channel blocks and service areas are the subject of petitions for reconsideration and clarification. 1 Should either PCS channel blocks or service areas be amended on reconsideration, the pioneer's preferences will be modified accordingly. BACKGROUND 3. The Commission's pioneer's preference rules provide a means of extending preferential treatment in its licensing process to parties that demonstrate their responsibility for developing new communications services and technologies.2 These rules are intended to foster develop ment of new services and improve existing services by reducing the delays and risks innovators otherwise would face with the Commission's licensing process. 4. To be granted a pioneer's preference, an applicant must demonstrate that it has developed the new service or technology; e.g., that it has developed the capabilities or possibilities of the service or technology or has brought the service or technology to a more advanced or effective state. The applicant also must demonstrate the technical feasibil ity of the new service or technology, either by submitting a technical feasibility showing or having submitted at least preliminary results of an experiment. Finally, a preference will be granted only if the rules adopted are a reasonable outgrowth of the proposal and lend themselves to grant of a preference.3 In the Pioneer's Preference Report and Order, we stated: "[I]t will be our general policy to award a preference to any otherwise qualified innovator meeting our standard even if the Commission's final rules for the service are not identical to the innovator's original pro posal. However, if the modifications are so significant that the particular innovator does not meet the eligibility stan dard, we will not award a preference to that innovator." We further stated that "any pioneer's preference would become final (and its scope determined) if final rules are adopted that are generally similar to the innovator's pro posal."4 An applicant meeting the pioneer's preference standard will be placed on a pioneer's preference track, will not be subject to competing applications, and if other wise qualified will receive a license. Other applicants will compete for additional licenses on a separate track.5 5. The first pioneer's preference was awarded to Volun teers in Technical Assistance (VITA) for being the first to develop and demonstrate the feasibility of using a low- Earth orbit satellite system on VHF/UHF frequencies for civilian digital message communications purposes.6 The sec ond award was made to Mobile Telecommunication Tech nologies Corporation (Mtel) for developing and testing an innovative new 900 MHz narrowband PCS technology that will increase spectrum efficiency.7 6. In the Tentative Decision and Memorandum Opinion and Order (Tentative Decision) in this proceeding we noted that 2 GHz PCS has created unprecedented interest in new technologies and services. The Commission received pio neer's preference requests related to 2 GHz PCS from 89 applicants, of which 50 were accepted for consideration.8 These 50 requests were placed on public notice and com ment was solicited on them. In October 1992, we tenta tively found that APC. Cox, and Omnipoint merited 1 See Public Notice, Report No. 1992, December 13, 1993. 2 The pioneer's preference regulations are codified at 47 C.F.R. §§ 1.402, 1.403, 5.207 (1992). See Establishment of Procedures to Provide a Preference, Report and Order, 6 FCC Red 3488 (1991) (Pioneer's Preference Report and Order); recon. granted in part, Memorandum Opinion and Order, 1 FCC Red 1808 (1992) (Pioneer's Preference Recon. Order); further recon. denied, Memorandum Opinion and Order, 8 FCC Red 1659 (1993) (Pioneer's Preference Further Recon. Order). We are reviewing our pioneer's preference rules to assess the effect of authority to assign licenses by competitive bidding, see Review of the Pio neer's Preference Rules, Notice of Proposed Rule Making, ET Docket No. 93-266, 8 FCC Red 7692 (1993). In the First Report and Order in that proceeding, we decided not to apply any changes to pioneer's preference proceedings in which Tentative Decisions have been made, see FCC 93-551, released January 28, 1994. 3 See 47 CFR § 1.402. 4 See Pioneer's Preference Report and Order, supra note 2, 6 FCC Red at 3495. 3497. 5 See Pioneer's Preference Further Recon. Order, supra note 2. 8 FCC Red at 1659. 6 See Allocate Spectrum for Fixed and Mobile Satellite Ser vices for Low-Earth Orbit Satellites, Report and Order, ET Docket No. 91-280, 8 FCC Red 1812 (1993) (award to VITA). See Establishment of New Personal Communications Ser vices. First Report and Order, GEN Docket No. 90-314 and ET Docket No. 92-100. 8 FCC Red 7162 (1993) (award to Mtel), recon. pending, appeals pending sub nom. BellSouth Corp. v. FCC, No. 93-1518 (D.C. Cir. filed August 20. 1993); Freeman Engineering Associates, Inc. v. FCC, No. 93-1519 (D.C. Cir. filed August 23, 1993). 8 The remaining 39 were incomplete and dismissed for failing to provide basic information required by the Commission's rules, see Tentative Decision and Memorandum Opinion and Order, GEN Docket No. 90-314, 7 FCC Red 7794, 7809-13 (1992), appeal pending sub. nom. Adams Telcom, Inc. v. FCC, No. 93-1103 (D.C. Cir. filed February 2, 1993). Six additional pioneer's requests relating to 900 MHz narrowband PCS were 1338 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 preferences and that the remaining requests should be de nied. A large number of responses were filed to our Tenta tive Decision. After carefully reviewing these submissions, we conclude that APC, Cox, and Omnipoint meet the pioneer's preference standard and therefore merit award of preferences, and that the remaining requests do not meet this standard and therefore do not merit award of preferences. DISCUSSION Pioneer's Preferences Granted 7. APC, Cox, and Omnipoint have led the way in devel oping specific PCS services and innovative system designs or components. Each applicant has demonstrated the tech nical feasibility of their designs through development and testing of experimental systems. APC is granted a pref erence for having developed and demonstrated technologies that facilitate spectrum sharing by mobile PCS and fixed microwave systems at 2 GHz. Such sharing will facilitate implementing new PCS service in a timely manner. Cox is granted a preference for having developed and demon strated the feasibility of innovatively using cable television facilities as part of the PCS infrastructure. Omnipoint is granted a preference for having designed and manufactured a 2 GHz spread spectrum handset and associated base station equipment. 8. To ensure the integrity of our pioneer's preference policies, we are directing the relevant licensing bureau to condition each 2 GHz PCS license obtained through the pioneer's preference process upon the licensee building a system that substantially uses the design and technologies upon which its preference award is based. This condition is consistent with our award of a dispositive pioneer's pref erence. In the Pioneer's Preference Report and Order, we observed that the risk an innovator takes is that it may not be able to translate its developmental work into full busi ness operation. We also observed that an otherwise-quali fied innovator would risk that the Commission may not authorize its proposed service.9 It is inherent in our pio neer's preference policy that the innovator use the technol ogy upon which its preference is based. This condition will apply in the service area for which the preference is being granted and for the initial required five year build-out period 10 specified in the rules for 2 GHz PCS adopted in this docket. 11 9. Additionally, we require the licensing bureau to con dition the grant of 2 GHz PCS licenses awarded under our pioneer's preference rules on holding the license for a minimum of three years or until the construction require ments applicable to the five-year build-out period have been satisfied, whichever is earlier. This condition is con sistent with the Commission's policies established in the initial pioneer's preference rulemaking. There, the Com mission prohibited transfer of a preference on the grounds that the Commission did not intend to create a "futures market" in preferences. 12 Allowing licensees to transfer pioneer's preference licenses before substantial build-out has occurred would be tantamount to allowing the transfer of the preference, and would subvert the purpose of the pioneer's preference policy to "help ensure that innovators have an opportunity to participate in new services that they take a lead in developing ..." 3 As the Commission recog nized in the initial rulemaking, however, there may be circumstances, such as the sale of the company itself, that would result in the transfer of a preference but would not thwart the Commission's policies. We would not preclude requests for waiver of the prohibition on transfer of li censes under these extraordinary circumstances. 10. American Personal Communications, Inc. (PP-6). APC requests a pioneer's preference for having developed and demonstrated technologies that facilitate spectrum sharing by PCS and fixed microwave systems at 2 GHz. APC argues that its Frequency Agile Sharing Technology (FAST) sys tem, designed to use spectrum that APC demonstrated to be available in the 2 GHz band, will facilitate spectrum sharing by PCS and microwave users. 11. In November 1989, APC filed an application for an experimental license to conduct tests related to PCS. In 1991. APC submitted an examination of existing fixed mi crowave use of the 1850-1990 MHz band in the 11 largest markets. 15 APC's analysis and testing demonstrate the exis tence of unused spectrum in the band sufficient to permit initiation of PCS without first relocating existing licensees. The report concluded that enough spectrum is available in the largest metropolitan areas to initiate a commercially viable PCS service if 2.5 megahertz channels are used and "exclusion zones" engineered around existing operations. The exclusion zones were designed to protect existing fixed microwave operations from interference by preventing PCS use of co-channel and adjacent channel frequencies in the proximity of microwave receivers. The boundaries of the exclusion zones were calculated based upon an algorithm that considers three factors: 16 an absolute minimum dis tance from a microwave reception point in all directions. 17 tentatively denied in the Tentative Decision. These six requests were denied in the First Report and Order in GEN Docket No. 90-314 and ET Docket No. 92-100, supra note 7. g See Pioneer's Preference Report and Order, supra note 2. 6 FCC Red at 3492. 10 See Second Report and Order, GEN Docket No. 90-314, 8 FCC Red 7700 at 7754 (1993); recon. pending. We did not take final action on 2 GHz PCS pioneer's preference requests in the Second Report and Order because of the complexity of the issues in this docket and because we had not completed our review of the relationship between recently-enacted competitive bidding authority to PCS licensing and to the pioneer's preference pro gram. Id. at 7704. The Commission will consider a waiver only in a case in which there is an overriding national objective that may be thwarted; such as if nationwide PCS interoperability were to be thwarted. 12 See Pioneer's Preference Report and Order, supra note 2, 6 FCC Red at 3496. 13 Id. at 3488. u Id. at 3496. 15 See APC's Fourth Progress Report at Appendix I. The markets studied were New York. Los Angeles, Chicago, Wash ington, Philadelphia, Detroit, Boston, Dallas, Houston, Miami, and San Francisco. 16 APC's exclusion zone calculations assume a PCS base station transmitting antenna height of 30 feet and transmission at an effective radiated power of 1 watt across the entire 2.5 megahertz channel. 17 For co-channel frequencies, APC considered any point with- 1339 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 a minimum distance in the main beam of the microwave receive antenna,18 and an assumed main microwave beamwidth. 19 12. APC developed its FAST technology to permit locat ing its PCS base stations in a manner that allows using the available spectrum for PCS without an immediate need to relocate microwave incumbents. As explained by APC,20 FAST is a frequency planning and management tool used to predict (and avoid) interference both between private operational fixed service (POFS) and PCS systems, and within a PCS system. The FAST system utilizes theoretical interference analyses verified by signal strength measure ments to determine frequency assignments to PCS base stations. This function is accomplished by a Channel Utili zation Controller (CUC), which monitors and determines the channels each PCS base station may use. The CUC monitors coverage and interference; analyzes and integrates measured data; integrates supporting databases: and sup ports data communications links to each PCS base station. For each PCS base station the CUC calculates theoretical interference values and areas for every POFS station in its database. Both PCS-to-POFS and POFS-to-PCS interference is calculated. The CUC then compiles a list of available channels for each base station. The theoretical interference analysis is recalculated when PCS and/or POFS systems are changed. 13. In addition, the CUC periodically instructs each base station to measure the signal strength of each microwave channel. To accomplish this measurement, the base station receiver tunes to each microwave channel and measures the signal level. The signal strength data is transmitted back to the CUC, which uses the measured data to verify the accuracy of the theoretical interference analysis. After ana lysis, the CUC downloads to each base station its respective available channel list. APC states that the verification pro cedure typically would be done on about a monthly basis, more often when the system is first installed and less afterwards. 14. The specific channel assigned to a call is controlled by a protocol in the call set-up procedure. When a sub scriber's PCS mobile unit21 places or receives a call, the subscriber unit first measures the power on every channel in the available channel list (ACL) (base station transmit, subscriber unit receive), then transmits to the base station on the control channel (base station receive side of channel pair) a request for a voice channel. Also transmitted to the base station are the measurements taken by the subscriber unit on each of the channels in the ACL. 15. PCS base stations continually, i.e., every second, mea sure signal strengths on every voice channel in the ACL (base station receive, subscriber unit transmit). The voice channels in the ACL are ranked by ascending signal strength, the channel ranked number 1 having the least amount of measurable power. When the base station re ceives the subscriber unit's measured data, it ranks the subscriber unit's channels according to the same criteria. For each channel, the base station adds the subscriber unit rank to the base station rank and selects the channel with the lowest total rank. The base station then transmits a message to the subscriber unit on the control channel to select the specific voice channel to be used for the call being set up. By this method the best available channel is selected for each call and interference to or from fixed microwave or other PCS operations prevented. Other mechanisms, such as continual monitoring of the carrier to interference ratio by both base station and subscriber unit, are utilized to ensure that high quality communications continue for the duration of the call. This protocol pro vides an additional measure of protection from interference to ensure that the best available channel is selected for each call. 16. APC states that FAST technology can be used with any relatively narrowband PCS system channel architecture employing a channel bandwidth of 5 megahertz or less. In particular, APC states that the FAST system can be used in conjunction with code division multiple access (CDMA), time division multiple access (TDMA). time division duplexed (TDD), and frequency division duplexed (FDD) systems that use various transmit-receive frequency (chan nel) separations. 17. Finally, APC states that testing of its FAST/CDMA system verified the ability of its technology to complete PCS calls without causing interference to existing micro wave operations. APC maintains that its FAST/CDMA sys tem, operational in downtown Washington, D.C. since October 23, 1992. integrates Oualcomm Inc.'s (Qualcomm's) narrowband CDMA system with FAST.'2 The 1.25 megahertz FDD channels employ a transmit- receive separation of 80 megahertz and each PCS base station transmits a pilot signal in each channel.23 The mobile station scans the base station transmit channels and locks onto the strongest pilot signal, which determines the mobile transmit center frequency. 18. In the Tentative Decision we proposed to grant APC a preference for its development and demonstration of tech nologies that facilitate spectrum sharing at 2 GHz by PCS and existing fixed microwave licensees. A number of par ties oppose our tentative grant to APC. 19. In comments to the Tentative Decision, Bell Atlantic Personal Communications, Inc. (Bell Atlantic) and GTE Service Corporation (GTE) state that APC's proposal is not significantly innovative. Bell Atlantic asserts that APC's FAST method of frequency selection is the only technology it reasonably can claim to have developed and that this in 4.0 miles of a microwave station to be in the exclusion zone. For adjacent channels, any area within a radius of 1.6 miles was considered to be in the exclusion zone. Both values are based upon empirical interference analyses. l * A distance of 25.75 miles was selected to require PCS facilities to be beyond the radio horizon, as viewed from a co-channel receiver. A distance of 14.9 miles was selected for adjacent channel frequencies using empirical interference analy ses. 19 A 10 main beamwidth was selected, based upon the beamwidths of typical microwave receive antennas. 20 A detailed description of APC's technology is contained in APC's Seventh Progress Report, dated April 28. I9Q2, and supplemented by other submissions in both this docket and in the experimental file. 21 For purposes of this Report and Order, the term "mobile unit" is used in a generic sense to include "portable unit." 22 APC's FAST/CDMA system is comprised of three base sta tions, a Oualcomm Telephone Switching Office, and 24 sub scriber units. See APC's Ninth Progress Report. 23 The pilot uses 20% of the RF energy transmitted on the channel. The remaining 80% is available to transmit the com munications itself. 1340 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 technology is unremarkable because it is simply frequency management combined with the dynamic allocation tech nique used by second generation cordless telephone (CT-2) systems. Bell Atlantic asserts that the Commission already has determined that CT-2 technology does not warrant a preference and, since incumbent 2 GHz licensees can be relocated easily. APC's proposal has little relevance or value in facilitating provision of PCS at 2 GHz.24 GTE also argues that APC's FAST approach is not unique, and states that FAST works only if unduly large quantities of spec trum are licensed to each PCS operator. 5 GTE states that PCN America, Inc. (PCNA) discussed an approach similar to FAST in its original petition, and that an analogous approach that has existed for many years is the licensing of narrowband Amplitude Compandored Single Sideband (ACSB) systems on interstitial land mobile channels be tween wideband channels. 20. In response to Bell Atlantic's arguments, APC states that its FAST system uses a combination of theoretical interference and measured data analyses to determine chan nels that can be used without interference to microwave incumbents. According to APC, its system dynamically ad justs to a changing radio frequency environment. APC argues that the advanced techniques it developed to manage interference both within PCS systems and to and from incumbent microwave users cannot legitimately be de scribed as simply traditional frequency management.26 Fur ther, APC states that Bell Atlantic's claim that frequency sharing techniques such as FAST will not be needed be cause the 2 GHz band will be cleared of incumbents fails to consider the transition plan adopted by the Commission in ET Docket No. 92-9.27 21. In response to GTE's arguments, APC notes that GTE opposes all of the preference requests and argues that in opposing APC's request GTE merely is adhering to its view that no party merits a preference regardless of the significance of its accomplishments. APC concludes that GTE's comments ignore the full scope of APC's efforts, provide no new evidence or arguments, and should not receive serious consideration. 22. We conclude that FAST is more than an existing frequency management scheme combined with a CT-2 al location technique; that it permits PCS to be implemented in the same band as microwave users, and permits PCS to share licensed spectrum with these incumbents by utilizing unused frequencies. We do not agree that FAST is similar to PCNA's proposal. The system proposed by PCNA relied upon a completely different overlay technology. We also disagree with GTE that licensing ACSB systems on intersti tial land mobile channels is similar or relevant to consider ing the innovativeness of FAST. The technical problems of designing for spectrum sharing between unlike systems such as fixed microwave and mobile PCS necessarily are substantially different from merely coordinating the fre quency use of systems that are in the same service and therefore have a substantial set of similar characteristics. Further, the integration of CT-2 elements such as the call set-up procedure utilized by APC does not detract from this technology; it is only one part of APC's complete system. APC's system provides substantial additional inter ference protection to both PCS and microwave operations. 23. PCNA, Southwestern Bell Personal Communications, Inc. (SBPC), Personal Communications Network Services of New York, Inc. (PCNS-NY), and Associated PCN Com pany (Associated) argue that APC has not met the standard for a preference award. PCNA states that its efforts -- and not APC's - led to consideration of 2 GHz spectrum for PCS. According to PCNA, its petition initiated Commission consideration of PCS.28 SBPC states that the 1850-1990 MHz band already was under international consideration for PCS; therefore, APC should not be credited with focus ing attention on this band. Further, SBPC argues that APC's analysis of unused spectrum in the 2 GHz band is flawed because it did not include co-channel and adjacent channel exclusion zones in the vicinity of the microwave transmitters. SBPC asserts that had APC's study considered these aspects, significantly less spectrum would have been identified as available for PCS. Additionally, SBPC argues that the FAST concept was not revealed until October 28, 1991 -- more than three months after SBPC disclosed the details of its Intelligent Multiple Access Spectrum Sharing (IMASS) system.29 PCNS-NY states that in its pioneer's preference request filed on July 30, 1991 it originated the proposals governing relocation of existing 2 GHz fixed microwave users that the Commission credits to APC.JO 24. Associated states that it preceded APC with respect to both the proposal of a frequency-agile sharing technology and field testing of this technology. Associated states that it proposed a frequency agile spectrum sharing technology in its experimental PCS license dated August 17. 1990, whereas APC's first mention of the FAST concept was in its Fifth Quarterly Report submitted in October 1991. As sociated states that it conducted the first field tests of its spectrum sharing technology in early October 1991, where as APC's first testing of the FAST concept occurred in April 1992. 25. With respect to the arguments of PCNA, APC re sponds that the raw and unanalyzed data supplied by PCNA significantly differs from the detailed and exhaustive analyses contained in APC's July 1991 FAST Report. APC further notes that PCNA's approach is an overlay scheme that would require PCS systems to use the same frequen cies as the POPS systems, whereas APC's approach is a frequency agile avoidance system that permits PCS systems to utilize unused POPS spectrum. 26. With respect to the arguments of SBPC, APC re sponds that its July 1991 FAST Report quantified PCS spectrum availability in the 1850-1990 MHz band utilizing sound engineering criteria for spectrum sharing/2 APC states that its spectrum sharing study was updated in Au- 24 See Bell Atlantic at 6-13 (January 29, 1993). 25 See GTE at 6-11 (January 29, 1993). 26 See APC Reply at 5-7 and Attachment A of the Reply at 17-18 (March 1, 1993). 27 See Redevelopment of Spectrum to Encourage Innovation in the Use of New Telecommunications Technologies, First Report and Order and Third Notice of Proposed Rule Making, ET Docket No. 92-9, 7 FCC Red 6886 (1992) and Third Report and Order and Memorandum Opinion and Order, ET Docket No. 92-9, 8 FCC Red 6589 (1993), recon. pending. 28 See PCNA at 25-27 (January 28, 1993). 29 See SBPC at 8-13 (January 29, 1993). 30 See PCNS-NY at 9-12 (January 29, 1993). 31 See Associated at 6-8, 25-37, 40-47 (January 29, 1993). 32 See APC Reply at 7-9 and Appendix A of the Reply at 43-49 (March I, 1993). 1341 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 gust 1991 to include co-channel and adjacent channel ex clusion zones in the vicinity of microwave transmitters and that its original conclusions were affirmed.33 APC contends that, in contrast, as late as December 17. 1992 SBPC was still unwilling to quantify PCS spectrum availability or even commit to the feasibility of spectrum sharing.34 Addi tionally, APC states that FAST was designed to work in a highly congested microwave environment. Finally. APC states that it initiated its approach to spectrum sharing in March 1990 and first publicly disclosed it in May 1990. APC states that it has been making systematic measure ments of the 1850-1990 MHz band since April 1991, when it initiated tests of its first transmitter, whereas SBPC first disclosed the IMASS concept in its July 16, 1991 applica tion for experimental authorization. 27. With respect to the arguments of PCNS-NY. APC responds that APC's approach to sharing spectrum with some microwave licensees and relocating others forms the basis for the transition plan adopted by the Commission in ET Docket No. 0 92-9.35 By contrast. APC notes that PCNS-NY's approach is not to share the band, but to clear it entirely of existing users. 28. With respect to the arguments of Associated. APC responds that Associated's proposals are not the same as FAST. 36 APC argues that the entire scope of Associated's developmental activity lies in its attempt to develop a cel lular-style hand-off technique for PCS under the rubric of frequency hopping. Additionally. APC argues that Asso ciated's proposal addresses only fixed microwave to PCS interference protection, and that Associated failed to con sider PCS to fixed microwave interference. Further, APC reiterates that unlike its own frequency avoidance scheme. Associated's proposal is an overlay scheme. Finally, APC states that Associated has not field tested an operating PCS system to demonstrate that its proposals will lead to an interference-free, high capacity PCS system. 29. As we noted in the Tentative Decision, while APC was not the first to suggest the 1850-1990 MHz band for PCS, APC's studies focused attention on sharing this band.3 ' APC's study was the first to demonstrate the fea sibility of initiating PCS operations in this band without first relocating the existing fixed microwave operations. In addition, as set forth by APC, its analysis considered co- channel and adjacent channel interference. Finally, APC clearly stated its intention to geographically share spectrum with POFS stations in its May 3. 1990 application for an experimental license. In the Engineering Exhibit thereto APC stated that it "intends to select microcell locations so as to avoid inter-system co-channel and semi-adjacent chan nel interference." Additionally, it stated that "|a|ll APC portable units can be prevented from operating in the areas of potential interference near the receive antennas of exist ing co-channel licensees by the careful location of base stations."39 Accordingly, to the extent that timing is an issue, the record demonstrates that APC's intentions were revealed before SBPC's disclosure of its IMASS proposal. 30. With respect to the arguments of Associated and PCNA. both parties proposed frequency overlay schemes. We find that such experiments are technically different from a frequency avoidance scheme such as FAST, and therefore there is no need to consider further the request ers' filing timetables. With respect to PCNS-NY, we find that APC proposed a strategy of sharing spectrum with microwave users and relocating some microwave users with full cost reimbursement, and only to reliable alter native frequencies -- in its October 1, 1990 comments to the PCS Notice of Inquiry*0 and again in its May 4, 1991 filing in this docket.)4 31. Corporate Technology Partners (CTP) argues that APC has not developed the capabilities or possibilities of a given technology such as narrow channel CDMA. Instead, CTP argues that APC has developed a way that existing technology, through base station siting and propagation analysis, can be used in "gaps" between the fixed micro wave transmission paths. CTP submits that it has done far more than APC to adapt base technologies for frequency sharing. Further, CTP states that APC's claim that it devel oped its FAST concept in March 1990 lacks credibility. CTP notes that in APC's May 1990 experimental license application, APC states that its "proposed CDMA system experiment is not designed to test... interference issues." Moreover, CTP alleges that there is substantial evidence that essential elements of FAST were derived specifically from CTP's prior Interference Sensing Code Division Mul tiple Access (ISCDMA) work.42 32. APC responds that it developed the FAST approach to spectrum sharing and that FAST clearly is distinguish able from CTP's ISCDMA.43 APC argues that a major way in which FAST differs from CTP's proposal is that FAST has been proven to work in practice through on-the-air demonstration, whereas CTP's approach has not been prov en on paper, much less field-tested. APC asserts that the sole technical paper on which CTP relies for the viability of its proposal concludes that "further work is needed" to test the proposal's "reliability in an actual PCS environ ment."44 APC also states that CTP's proposal would not effectively protect incumbent microwave users because CTP's system only "senses" interference at initial call set up and does not continuously monitor and adjust the operating frequency. Additionally. APC states that CTP's proposal would not protect receive-only systems and sys tems that do not utilize an 80 megahertz transmit-receive separation. Finally, APC states that in its May 3, 1990 application for experimental license it disclosed that its experiment was based on frequency avoidance techniques 33 With the addition of the co-channel and adjacent channel transmitter exclusion zones, the number of grid point locations with at least 50 megahertz of spectrum available for PCS dropped from 96.3% to 95.7% in the top 11 markets. 34 Citing SBPC's Quarterly Report Number Three. 35 See APC Reply at L5-16 (March 1, 1993). 36 See APC Reply at 11-12 and Appendix A of the Reply at 1-16 (March 1. 1993). 37 See Tentative Decision, supra note 8, 7 FCC Red at 7797. 38 See APC's Application for Experimental Radio Service Li cense, 1447-EX-PL-9, at page b of the Engineering Exhibit. 3U Id. at 8. 40 See Notice of Inquiry, GEN Docket No. 90-314, 5 FCC Red 3995 (1990). 41 See APC's Petition for Rulemaking at 17. 42 See CTP at 24-38 (January 29, 1993). 43 See APC Reply at 16-25 and Appendix A of the Reply at 19-40 (March 1, 1993). 44 See CTP, Exhibit G at 21 (January 27, 1993). 1342 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 and designed to test interference issues: and that the state ment that CTP quotes refers specifically to PCNA's overlay approach, not APC's avoidance approach. 33. We conclude that APC's FAST is significantly dif ferent from CTP's ISCDMA, particularly in that it contin ues to monitor the channel and can adjust frequency after call set up. We also concur with APC that the technical feasibility of FAST has been demonstrated through an ex periment. 34. In the Pioneer's Preference Report and Order, we stated that "proposals that promise to enable the sharing, or co-use, of allocated spectrum may qualify" for a pref erence.45 The major challenge that we faced in this pro ceeding was to design a specific, comprehensive plan to provide spectrum for PCS. We conclude that APC's devel opment and demonstration of technologies that facilitate spectrum sharing by PCS and microwave systems at 2 GHz is a significant communications innovation of the sort the Commission established the pioneer's preference rules to recognize and that APC meets the criteria established by those rules for a preference. This conclusion is based upon two factors: APC's demonstration of unused spectrum, and APC's system that permits using this spectrum to initiate PCS. 35. APC's analysis and testing demonstrated that unused spectrum exists in the 1850-1990 MHz band sufficient to allow immediate initiation of PCS services with no need to immediately relocate existing licensees. APC's July 1991 FAST Report that convincingly demonstrated the existence of this spectrum changed the focus of attention from relocating the existing licensees to frequency sharing. This study, and the transition plan presented in APC's petition for rule making, have elements in common with the transi tion plan we adopted in ET Docket No. 92-9 to facilitate making available 2 GHz spectrum for emerging technol ogies, including PCS. Further, we conclude that APC dem onstrated that its FAST technology is significantly different from that proposed by other 2 GHz PCS applicants, con stitutes more than traditional frequency management tech niques, and that APC has demonstrated its technical feasibility. In sum, APC has demonstrated that FAST pro vides the means of accomplishing a graceful transition from a fixed service environment to a shared fixed and mobile services environment. 36. For the above reasons, we find that APC has dem onstrated that its FAST technology is innovative, spectrum efficient, and technically feasible. Its proposal builds on prior developments and brings them to a significantly more advanced and effective state, combining new and existing technologies and utilizing them as the basis for a complete system to provide PCS services on spectrum shared with existing fixed microwave operations. APC has demonstrated the technical feasibility of its proposal, including the underlying technology upon which it relies. Additionally, we find that APC has demonstrated that it developed an innovative proposal that will lead to the establishment of a new service within the PCS family. Finally, we find that the rules we have adopted are a reasonable outgrowth of APC's proposal and lend themselves to a grant of a pref erence to APC. The PCS service rules adopted earlier in this proceeding and the transition plan adopted in the emerging technologies proceeding.46 both reflect APC's spectrum sharing study and related submissions. Specifi cally, our allocation of the 1850-1970 MHz. 2130-2150 MHz, and 2180-2200 MHz bands for licensed and unlicensed PCS on a shared basis with existing fixed, mi crowave licensees reflects several APC studies and propos als.47 Further, our licensing of PCS on an MTA basis reflects a proposal made by APC.48 Accordingly, we award APC a pioneer's preference. 37. Cox Enterprises, Inc. (PP-52). Cox requests a pioneer's preference for its having developed and demonstrated the feasibility of using cable facilities to provide backbone communications linking PCS microcells: and for its devel opment of the equipment that permits this use. Cox states that it has pioneered advancements essential to the realiza tion of PCS, including the development of equipment (a "cable microcell integrator" (CMI)) that is a critical com ponent of the cable-PCS infrastructure that it envisions.49 The CMI is an interface, developed under a joint contract with Scientific-Atlanta, that connects individual PCS com munications to multiple types of cable television distribu tion systems. 50 38. Cox states that in its experimental license application submitted on September 20, 1990. it was the first to pro pose three specific design criteria central to the introduc tion of PCS using cable facilities: 1) cable distribution plant as the backbone for a PCS network: 2) centralized instead of distributed modulation; and 3) distributed antennas.51 Cox now states that it has demonstrated the feasibility of all three criteria. It contends that using cable as PCS backbone facilitates the delivery of PCS to the public quickly and in a spectrum efficient manner. Further. Cox states that cen tralizing modulation, which entails placing expensive mod ulation equipment at centralized locations such as cable headends. lowers the overall cost of deploying PCS because of the lower equipment costs for each microcell. Finally. Cox contends that using distributed antennas, which are small, inexpensive, passive antennas that relay the received signals to a central location, lowers the cost of equipment at microcell locations and increases cell coverage areas. 39. On February 12, 1992, Cox employed cable plant to carry a PCS phone call over an operating cable system. To accomplish this, Cox developed, tested, and used its CMI that receives radio voice channels and modulates and mul tiplexes the channels onto the cable plant. Cox claims that its equipment permits acquiring a 1.544 megabit per sec ond channel using existing cable plant. The signals can be sent in either direction over the cable plant (to the cable headend or to a PCS microcell). and downconverted to voice channels. According to Cox. its microcell is suitable for placement in the outside pole-mounted cable plant, and includes both a transmitter/receiver and antenna integrated with the CMI. Cox states that this equipment can be used in fiber, copper, or hybrid fiber/copper cable distribution systems. 45 See note 2 supra. 6 FCC Red at 3492. 46 See note 27, supra. 47 See note 20, supra, and APC's Request for Separate and Expedited Treatment of "Existing Pioneer Preference" Issues, at note 8 (October 28, 1993). 48 See APC's Supplement to Petition for Rule Making at 27-34 (May 4. 1992). 41) See Cox Pioneer's Preference Request at 21 (May 4. 1992). 50 Id. at 10. 51 Id. at 4. 1343 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 40. Cox states that in March 1992 it successfully dem onstrated cell-to-cell handoff using an operating cable sys tem to connect microcells operating with 2 GHz equipment. SCS Mobilecom, Inc.'s (SCSM's) broadband 1850-1990 MHz equipment was used to communicate be tween two cells connected to the cable headend. As the mobile handset moved between cells it received signals from both until the handset signaled the headend and cell base stations to switch to the stronger signal.52 41. Cox also states that it successfully demonstrated op eration of centralized modulation during the March 1992 tests. As explained by Cox, a 2 GHz CDMA signal was received, converted to an intermediate frequency, and transmitted over cable plant to a headend. At the headend the signal was demodulated and connected into the public switched telephone network (PSTN). This, Cox claims, demonstrated the feasibility of centrally locating modula tion electronics at the headend and deploying smaller, less expensive equipment at microcells to lower network costs by sharing equipment.53 42. Responding to Cox's preference request, CTP ac knowledges that Cox has performed significant work on a fiber optic-PCS interface, but states that Cox has not ad dressed PCS radio technology.54 GTE argues that Cox's efforts are similar to other experiments, and therefore are not innovative or pioneering.5 43. Pacific Telesis Group (PacTel) argues that Cox's pro posal to adapt its cable infrastructure to PCS does not merit a preference because Cox's demonstration of an ac tual call could have been made using any one of a number of current systems being tested. Additionally, PacTel con tends that Cox does not address spectrum sharing at 2 GHz.56 Viacom International. Inc. (Viacom), while not disagreeing that Cox warrants a preference, states that it is the only cable entity that addresses sharing 2 GHz spec trum with incumbent microwave users.57 44. In response to CTP, Cox argues that it tested radio technology by conducting propagation and over-the-air tests with 902-928 MHz and 1.8 GHz equipment, and that this constitutes development of radio-based service. Further. Cox argues that objections based on the development of radio equipment would limit preference awards to equip ment manufacturers.58 In response to PacTel. Cox argues that it addressed spectrum sharing issues in its filings in the PCS proceeding; and that in any event, although spectrum sharing proposals are eligible for pioneer's consideration, the Commission has never implied that spectrum sharing is an essential or necessary component of a preference show ing.5" 45. We concur with Cox that it has addressed appro priately PCS radio technology and spectrum sharing issues in its filings. In the Tentative Decision we proposed to award Cox a pioneer's preference for its proposal to use the cable television plant for connecting PCS microcells and its subsequent development and demonstration of equipment capable of interfacing PCS microcells with cop per, fiber, and hybrid copper/fiber cable plant. 46. In response to the Tentative Decision, Nextel Commu nications, Inc. (Nextel), PCNA, Tel/Logic, Inc. (Tel/Logic), and Viacom express support for granting Cox a pioneer's preference. Additionally, Cablevision Systems Corporation (Cablevision) and Time Warner Telecommunications, Inc. (Time Warner) explicitly do not object to a preference grant to Cox, although each contends that its own proposal is equally or more deserving of a preference. 47. However, Cable USA, Inc. (Cable USA), CTP, Pacific Bell, and Satcom, Inc. (Satcom) contend that Cox should not be granted a preference. These parties argue that Cox was not the first entity to propose using cable television plant to provide PCS and that Cox otherwise does not meet the pioneer's preference criteria.60 Cable USA, CTP, PacTel, and GTE all take issue with our conclusion that Cox's request demonstrates innovation. Cable USA claims that Cox tested the same equipment that Rogers Cantel (Rogers) had previously tested in Canada. Pacific Bell states that Manitoba Telephone Service demonstrated the use of cable plant to carry telephone signals in the 1980's.61 GTE submits that Cox's demonstration used Omnipoint equip ment designed to operate in the 902-928 MHz band and therefore should not be attributed to Cox nor considered for a 2 GHz award; and that the CMI was designed by Scientific-Atlanta and appears to be no more than a modulator/demodulator transmitting and receiving voice over a fiber optic cable. GTE also asserts that Cox's distrib uted antenna/remote antenna driver (RAD) technology was developed in Canada. Finally, CTP states that Tele-Commu nications, Inc. (TCI) has been carrying phone calls for the military over cable systems for many years. 48. In reply. Cox states that the equipment tested in Canada proved inadequate to meet Cox's requirement for a full-featured PCS system. Cox states that the CT-2 type service tested by Rogers could provide overlapping cov erage areas but not call handoff.62 Further, Cox maintains that the Rogers system connected directly to the PSTN and had no independent switching capabilities. Cox states that from early discussions with potential PCS equipment sup pliers it concluded that linking microcells by two-way ca ble TV systems had not been considered, and that suppliers were focusing on radio technology for the backhaul. Cox asserts that it tested cable and fiber backhaul, both broadband and narrowband, and that readily available modems could not support testing multi-backhaul configu rations and multi-PCS links. Therefore, in June 1991 Cox states that it approached Scientific-Atlanta with the CMI concept to provide flexibility for network reconfiguration and connection to various types of PCS radio equipment.63 49. We conclude th, : although CT-2/Cable TV tests were conducted in Canada, Cox was the first to propose using cable for backbone purposes and begin testing actual equip- 52 53 54 55 56 57 58 See Cox Report at 3 (June 25, 1992). Id. at 2. See CTP at 1 (June 10, 1992). See GTE at 16 (June 10. 1992). See PacTel at 26 (June 10, 1992). See Viacom at 3 (June 10, 1992). See Cox Reply at 4 (June 25, 1992). 59 Id. at 8. 60 See Cable USA at 6-7, CTP at 19-20, Pacific Bell at 15, and Satcom at 6 (January 29, 1993). 61 See Pacific Bell at 15 (January 29, 1993). 62 See Cox Reply at 32 (March 1, 1993). 63 Id. at Exhibit D, 5-7. 1344 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 ment to demonstrate whether or not the theoretical synergies of PCS and cable systems could be realized through a cost-effective integration of aspects of both net works. We further find that Cox did not merely copy other CT-2/Cable tests having limited capabilities, but rather de signed, developed, and tested multi-backhaul configurations and multi-radio PCS systems that incorporated hand-off capability, centralized modulation, and distributed antenna configurations. These capabilities were realized through its design and development work and brought to fruition by the CMI it developed in conjunction with Scientific-At lanta.64 50. Cox has demonstrated the technical feasibility of its concepts by, among other things, initiating a phone call over its system and interfacing PCS microcells with copper, fiber, and hybrid copper/fiber cable plant. Using the exist ing cable plant in PCS network design permits economical and rapid deployment of PCS systems and substitution of existing infrastructure for increasingly scarce spectrum. Cox has demonstrated that it has "developed the capabil ities or possibilities of the technology or service" and has "brought them to a more advanced or effective state""5 as required by our rules by developing and demonstrating the cable/PCS interface equipment. The efforts of Cox ad vanced PCS system design by demonstrating the feasibility of integrating cable networks with full-featured PCS sys tems to offer a spectrum efficient service in a timely, cost effective manner. Finally, the rules adopted in the Second Report and Order are a reasonable outgrowth of Cox's proposal and reflect Cox's experimental cable/PCS efforts in the 1850-1990 MHz band. We note that the PCS Second Report and Order declined to allocate PCS support spec trum, as proposed by several parties, because "many of these support operations can be provided through facilities such as fiber optics, wireline telephone services and coaxial cable, that do not require use of radio.""6 Cox's early efforts in demonstrating how cable facilities can be used in place of additional spectrum to connect PCS microcells was an important component of this decision. Accordingly, we award Cox a pioneer's preference. 51. Omnipoint Communications, Inc. (PP-58). Omnipoint requests a pioneer's preference for its design, development, miniaturization, and deployment of the first 1850-2200 MHz handheld phone. Its equipment utilizes spread spec trum technology with associated CDMA, TDD. and fre quency division multiple access (FDMA). Omnipoint claims that its spread spectrum equipment can provide a variety of voice, data, and video services using microcell technology. Omnipoint's equipment was designed to be independent of a specific network architecture and there fore can be used with systems such as Advanced Intelligent Network (AIN), cable television, private branch exchanges (PBXs), and Centrex. Omnipoint claims that the design of its equipment results in less interference to incumbent microwave operations than that of other proposed PCS equipment, and that this permits greater spectrum sharing. Omnipoint's handsets can switch from licensed PCS bands at 2 GHz to unlicensed frequencies at 2.4 GHz. Omnipoint proposes a Common Air Interface (CAI) that will permit its mobile equipment to operate with different network topologies (including one-way, two-way, PSTN, Central Of fice based networking, AIN, and cable television). 52. Omnipoint contends that operation of its proposed PCS equipment can coexist with other users and fixed microwave operations on the same frequencies with mini mum disruption and maximum flexibility. Omnipoint states that these attributes derive from utilizing spread spec trum for its phone instruments, which allows for exclusion zones around microwave towers that are 10 to 100 times smaller than the exclusion zones of equally-powered narrowband systems. Omnipoint argues that other CDMA systems have multiple users transmitting on the same fre quency at the same time, which increases the level of interference, while its system is distinguished by its use of TDD to separate users in time. According to Omnipoint, only one unit is transmitting at any one time on a channel, and therefore the unit can operate at lower power and cause less interference. Omnipoint also states that its sys tem has less potential of interfering with microwave oper ations than a narrowband CDMA system because its system spreads its transmission across 5 or 10 megahertz. Addition ally, Omnipoint says that its TDD equipment allows the user to transmit and receive on one 5 or 10 megahertz channel and that its equipment is frequency agile. Omnipoint asserts that using 10 megahertz channels per mits its system to match the fixed microwave channeliza tion scheme and the frequency agility permits the system to minimize interference by utilizing unused spectrum. 53. Omnipoint maintains that its coding scheme permits using high data rates per frequency channel and to separate users within a cell by time. Omnipoint states that its system uses frequency offsets and codes to separate cells and that it can operate at a frequency reuse factor of three, or with a frequency reuse factor of one with less capacity. Omnipoint states that its system has flexibility in the number of time slots per user per second used, which permits flexibility in the number of simultaneous users and types of service. Specifically, it says that its TDD technology allows voice and data transmissions on the same frequency. Omnipoint asserts that it does not require precision adjustable power control and continuous soft handoff because its system does not overlay multiple users on the same frequency at the same time, which it contends gives it an advantage over CDMA-only systems.67 54. Omnipoint states that its handsets can switch between the proposed PCS band at 1850-1990 MHz to the existing unlicensed spread spectrum band at 2400-2485 MHz. Ac cording to Omnipoint, this capability allows the user to access a base station using unlicensed frequencies while at home or in the office, and to access the PCS network when away from the base station. 64 Both Cox and Scientific-Atlanta appear to have played key roles in developing the CMI, but apparently under the direction of Cox. As detailed herein, Cox also performed substantial addi tional work in demonstrating the feasibility of using cable facili ties to provide PCS, and in this proceeding Scientific-Atlanta does not dispute Cox's responsibility for the CMI. 65 See 47 C.F.R. § 1.402(a). 66 See Second Report and Order, note 10 supra, 8 FCC Red at 7741. h7 Omnipoint states that soft handoff, which permits a mobile to communicate on one frequency to multiple cells at the same time, reduces capacity, and that automatic power control is an added expense. 1345 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 55. In the Tentative Decision we proposed to award Omnipoint a preference for having developed 2 GHz equipment that utilizes innovative techniques that may fa cilitate the development and implementation of PCS ser vices and technologies. We acknowledged Omnipoint's efforts in the areas of: 1) radio frequency engineering and related spread spectrum product design, development, min iaturization, and deployment of equipment; 2) system ar chitecture that facilitates coexistence with other users of the same frequencies: and 3) design and development of a base station interface that is compatible with advanced features of the PSTN. 56. We were persuaded that Omnipoint merited a tenta tive preference because it was the first to produce practical, working 2 GHz equipment for PCS. Omnipoint's equip ment uses direct sequence spread spectrum access tech niques in a 5 or 10 megahertz channel.68 We recognized that there likely will be a number of equipment designs for PCS, some of them significantly different from that devel oped by Omnipoint in terms of access technique, bandwidth, or size. Nevertheless, we found that the original work of Omnipoint had contributed significantly to the development and testing of PCS services and design con cepts. 57. We also stated that the concepts and technological developments pioneered by Omnipoint will facilitate the implementation of PCS in the 2 GHz band and permit sharing with fixed microwave licensees. We tentatively con cluded that Omnipoint's design, development, manufac ture, and demonstration of spectrum-efficient innovative concepts as set forth in its request for pioneer's preference and its experimental file demonstrate the feasibility of its concepts. 58. In comments to the Tentative Decision GTE argues that Omnipoint did not develop its spread spectrum equip ment for PCS systems, but rather used the PCS proceeding to translate its technology development into a spectrum authorization.69 Similarly, GTE and PageMart, Inc. (PageMart) assert that the Commission previously deter mined that equipment manufacturers generally should not be eligible for a preference unless their technology is linked to a specific service, and according to GTE. Omnipoint's handsets were not developed in association with a licensable service, but rather were developed for unlicensed operations in the Industrial. Scientific, and Medical (ISM) bands (902-928 MHz and 2 4-2.4835 GHz).70 GTE also asserts that Omnipoint initiated development of its spread spectrum products four years before the May 1991 release of the Pioneer's Preference Report and Order and should not be awarded a pioneer's preference for past innovation. 59. In response to GTE. Omnipoint states that it drew from previous experiences to design a system specifically for PCS and made substantial innovations specifically re lated to PCS. It contends that while it has been involved with spread spectrum research for some time, it has spent millions of dollars to bring to fruition its PCS innovations. and that these efforts were spurred by the Commission's adoption of the pioneer's preference rules. Omnipoint also argues that GTE's timing arguments have no legal basis because there is no Commission requirement that a pio neer conduct its entire work within any specific time.' 1 Re garding GTE's and PageMart's assertions that the preference rules do not extend to innovative technology or equipment development but only to service innovators, Omnipoint responds that its equipment facilitates an in novative service, and that creating a dichotomy between technology and service misconstrues the Commission's pio neer's preference rules.72 60. We conclude that Omnipoint has demonstrated that its PCS equipment uses innovative technology that relates specifically to provision of PCS at 2 GHz. Omnipoint has demonstrated the capability of its equipment and has devel oped a flexible technology that other entities can imple ment in establishing their PCS systems. We disagree with GTE's argument that Omnipoint's equipment is not asso ciated with a licensable service. Omnipoint as well as other experimental licensees that have used Omnipoint's equip ment have demonstrated that Omnipoint's equipment may be used in either a licensed or unlicensed service. Further, the use of dual mode phones that permit the use of unlicensed frequencies while in business or residential en vironments and licensed PCS frequencies in public or mo bile environments is itself a potential benefit by making efficient use of the available spectrum and providing for equipment use without airtime charges. Further, we dis agree with GTE's arguments concerning the timing of Omnipoint's developments relative to our establishment of pioneer's preference rules. Omnipoint has demonstrated that it performed significant new work related to 2 GHz PCS after adoption of the pioneer's preference rules. 61. GTE further contends that the Commission failed to explain why Omnipoint's request should receive a pref erence in light of deficiencies identified in Omnipoint's two other requests.73 GTE argues that the Commission's tentative denials of these two requests is inconsistent with the tentative approval of this request because the three filings use the same basic architecture and equipment. 62. Omnipoint replies that the pioneer's preference rules do not provide for a grant to all who use the same technol ogy, but only to those who innovate and do significant work with the technology that leads to a service. Omnipoint asserts that its tentative award. PP-58. should not be linked with the tentatively denied requests. PP-59 and PP-60. because there are obvious fundamental differ ences among the three proposals. For one. Omnipoint argues that each proposal dealt with a completely different service concept. 63. We conclude that there are substantial differences between Omnipoint's request in PP-58 and the two re quests that we tentatively denied. In PP-59 Omnipoint. Oracle, and McCaw proposed a data broadcast service, and in PP-60 Omnipoint Mobile Data Company proposed two- way data communications to mobile devices such as porta- 68 See Omnipoint's Semi-Annual Experimental License Progress Report, August 1993, at 7. 6" See GTE at 15-18 (January 29, 1993). 70 Id. at 15; see also PageMart at 4-5 (January 29, 1993). 71 See Omnipoint Reply at 17 (March 2, 1993). ' 2 Omnipoint argues that its work will lead to the establish ment of low cost, wireline quality voice, data, and video services, delivered wirelessly, to pocket-size devices, for use in public and private environments, with a minimum of disrup tion to Fixed microwave users. 73 Omnipoint filed a pioneer's preference request jointly with Oracle Data Publishing, Inc. and McCaw Cellular Communica tions, Inc. (PP-59); and Omnipoint Mobile Data Company also filed a preference request (PP-60). 1346 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 ble computers. We proposed to deny the requests in both PP-59 and PP-60 because the applicants did not demon strate successfully the technical feasibility of their propos als, or their specific responsibilities for development of identifiable and innovative PCS technologies or services. By contrast, in PP-58 Omnipoint requests a preference for developing 2 GHz spread spectrum equipment that it dem onstrated to be capable of being used to provide voice, data, and PCS video services. Omnipoint also demonstrated on the record its responsibility for specific identifiable innovations, as discussed above. 64. Bell Atlantic also disagrees with our tentative ap proval of Omnipoint's request, stating that Omnipoint's system is based on well-known spread spectrum techniques that have been used in both military and commercial equipment for over twenty years.74 Therefore, Bell Atlantic argues, neither the concept nor the demonstration of op eration at 2 GHz by Omnipoint is innovative. Bell Atlantic adds that SCSM, Digital Spread Spectrum Technologies, Inc. (DSST), and Qualcomm also manufacture 2 GHz CDMA equipment. Bell Atlantic also argues that European companies have designed TDMA PCS systems in the 2 GHz range, and further claims that Omnipoint's TDD/CDMA/FDD is a compilation of existing technologies. Finally, Bell Atlantic asserts that Omnipoint's request lacks substantial field or experimental data to demonstrate oper ational multicell feasibility. 65. Regarding Bell Atlantic's comments that Omnipoint's equipment is based on well-known spread spectrum tech niques, Omnipoint asserts that the spread spectrum tech nologies and military projects to which Bell Atlantic refers are completely different from its technology. Omnipoint states that its engineers worked on each of the military projects mentioned by Bell Atlantic and that this did pro vide experience with spread spectrum technology, but that none of these military projects form the basis for a PCS system. 75 Omnipoint asserts that some of the differences are that the military equipment is much heavier than PCS equipment, is not duplex, uses frequency hopping rather than direct sequence techniques, and is high power. Omnipoint also asserts that Bell Atlantic glosses over the significant differences between its system and those of SCSM, Qualcomm, and DSST. Omnipoint claims that it was the first to miniaturize its phone and that it is respon sible for integrating TDD with CDMA. 66. Concerning Bell Atlantic's assertion that Omnipoint has not demonstrated an operational system. Omnipoint asserts that several other parties in this proceeding use Omnipoint's equipment and that this demonstrates its tech nical feasibility. Further, Omnipoint maintains that it has fully demonstrated the systems's operation itself. ft 67. Based on the record, we conclude that Omnipoint's equipment is innovative and substantially different from that of SCSM, DSST, Qualcomm. and the various military projects for which Omnipoint also developed equipment. We are not aware of any other entity proposing or building 2 GHz PCS equipment that allows for both transmit and receive on the same frequency channel (TDD) and mul tiple users on the same frequency channel (TDMA) while also providing for multiple cells on the same frequency channel by using spread spectrum and associated CDMA technology or by using different frequency channels (FDMA) with CDMA. This combination of FDMA and CDMA is used to provide diversity from one channel to the next. We are not convinced that developments in any of the mentioned military projects are capable of being used for pocket phone PCS. Additionally, we believe that not only has Omnipoint demonstrated the feasibility of multicell operations, but that other entities have used Omnipoint's equipment in various configurations that sup port our finding of feasibility. 68. Pacific Bell concedes that Omnipoint has made sig nificant contributions to PCS, but argues that Omnipoint's proposed system is inferior to that developed by Pacific Bell.77 Pacific Bell contends that Bell Atlantic tested both Omnipoint's and Pacific Bell's equipment and the results indicated that Pacific Bell has more sensitive receivers and that its TDMA technology has twice the coverage area and could operate at lower transmitter power. 69. In response to Pacific Bell, Omnipoint states that Pacific Bell's own data do not support its claims when subjected to the same analysis as Omnipoint's system. Ad ditionally, Omnipoint asserts that the test upon which Pa cific Bell relies was but one of many at this site, that the site was chosen because of its unusual propagation prop erties, and further, that Omnipoint's equipment used for the particular test in question contained experimental as pects not part of its current design.78 We conclude that the record does not support Pacific Bell's claim. 70. Qualcomm claims that Omnipoint has not filed the results of an experiment or tests that validate the perfor mance of its system. 79 Qualcomm also claims that Omnipoint failed to provide a detailed description of its system. It further argues that Omnipoint's interference to microwave facilities analysis is flawed and that a proper analysis would show that there is no significant difference in exclusion zone radius between Omnipoint's system and a narrowband system. Qualcomm states that Omnipoint erred by using average, rather than peak, powers in its calculations of interference to microwave operations, and argues that if Omnipoint's system transmitted the same number of speech bits over the same channel using the same antenna as a CT-2 system, its average power would be comparable to that of the CT-2 system. 71. Qualcomm also asserts that many technical details were omitted from Omnipoint's material, but that given the parameters provided, it appears that Omnipoint's sys tem can provide only eight calls in each cell, using 10 megahertz of spectrum. Qualcomm further maintains that Omnipoint has not developed a working system and there fore would have to use a third party's equipment in order to capitalize on its pioneer's preference.80 72. Omnipoint responds that it has demonstrated a func tional system, and provides statements from Ameritech, American Portable Telecommunications, Inc. (APT), Cox, SBPC, and Time Warner that each have tested Omnipoint's system. With respect to Qualcomm's assertion that Omnipoint's system cannot coexist with microwave oper- 74 75 76 See Bell Atlantic at 13 (January 29, 1993). Id. at 21.5 Id. at 23. '_' See Pacific Bell at 12 (January 29, 1993). 78 Id. at Appendix 1. 79 See Qualcomm at 19 (January 29, 1993). 80 Id. at 24. 1347 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 ations, Omnipoint replies that experiments with SBPC dis prove this claim.81 Further, Omnipoinit maintains that Qualcomm's assertion that Omnipoint uses average power in its interference analysis is incorrect. Omnipoint states that peak power is used in all of the calculations and coexistence tests. 73. We find no basis to question Omnipoint's interfer ence analysis. Additionally, Omnipoint has demonstrated the technical feasibility of its system. Finally, we do not agree with Qualcomm's assertion that a preference ap plicant must use only its own equipment for a complete system. 74. Accordingly, we conclude that Omnipoint meets the standard specified in our rules for grant of a pioneer's preference. Omnipoint has demonstrated its role in devel oping PCS by designing and manufacturing innovative spread spectrum/time division equipment. Omnipoint's handsets also have enabled other entities to develop PCS experimental systems, thereby facilitating experimentation and establishment of this new service. Omnipoint also has proposed a viable service with the flexibility to be imple mented in a variety of environments and with capabilities useful to subscribers. Two of these capabilities are the flexibility in assigning time slots to mobile units so that long data messages can be transmitted in a short time, and the ability to switch from licensed PCS frequencies to unlicensed frequencies, thereby permitting subscribers to use the handsets in residential or office environments in a manner similar to that of a cordless telephone. Finally, the rules we are adopting are a reasonable outgrowth of Omnipoint's proposal and reflect Omnipoint's develop ment of equipment in the 1850-1990 MHz band. The tech nical standards adopted in the PCS Second Report and Order are consistent with experiments performed by Omnipoint and those of several other parties using Omnipoint's equipment. Accordingly, we award Omnipoint a pioneer's preference. License Block 75. In the Second Report and Order the Commission allocated seven blocks of spectrum for licensed PCS en compassing 120 megahertz at 1850-1890. 1930-1970, 2130-2150, and 2180-2200 MHz.82 We also adopted regional and local PCS service areas based upon MTAs and Basic Trading Areas (BTAs). 76. APC, Cox, and Omnipoint argue that a 30 megahertz MTA grant is necessary to permit their implementation of the systems they have proposed.83 APC states that the 10 megahertz BTA blocks at 2130-2200 MHz are too small, expensive, and time-consuming to clear, and require equip ment that is costly and not yet available. APC explains that equipment to operate in the 2130-2200 MHz band will not be available until 1997. APC further contends that the crowded nature of the 2130-2200 MHz band precludes the use of some technologies, including CDMA. APC also ar gues that the 20 megahertz BTA block at 1880-1890/1960-1970 MHz is inadequate in many cities be cause of congestion. Finally, without regard to the amount of spectrum, APC argues that the economic integrity of the Washington/Baltimore market for which it has applied for a preference would be impaired by granting it any of the BTA blocks because Washington and Baltimore are in different BTAs. According to APC, using current technol ogy, a 20 megahertz BTA block could not be combined with a 10 megahertz block in the 2130-2200 MHz band. APC concludes that grant of only a single 10 or 20 megahertz BTA block would prevent it from implementing the service it pioneered and would be inconsistent with its preference request. 77. Cox contends that preferences should not be awarded in the 2130-2200 MHz band because those specific fre quencies have not been the subject of any preference ap plicant's tests; and that a 20 megahertz BTA grant would preclude fully developing its service in the 1850-1990 MHz band. Cox states that it performed studies of microwave congestion in the 1850-1990 MHz band and contends that from these studies it determined that 40 megahertz is the minimum necessary to bring a fully functional range of PCS to the public.84 Further, Cox maintains that given the nature of the mobile communications market, wide service areas such as MTAs will best serve customers. Finally. Cox states that Commission award of a preference other than a 30 megahertz MTA would not ensure enough spectrum for an innovator to provide service. 78. Omnipoint asserts that the 2130-2200 MHz band is virtually unusable with its system design; and that its sys tem is optimized for use at 1850-1990 MHz with a total of 30 megahertz or more per operator. Omnipoint states that in its June 25, 1992 filing with the Commission it specified that it required such a spectrum assignment. It maintains that its system has been designed to co-exist with 5 and 10 megahertz microwave links at 1850-1990 MHz, rather than 800 and 1600 kilohertz links at 2130-2200 MHz: and argues that all of the key RF components in its equipment would have to be different to operate at 2130-2200 MHz. Omnipoint states that while its system can operate in the 2400-2483 MHz Part 15 unlicensed band, as well as in the 1850-1990 MHz PCS band, it is not designed to operate between 1990-2400 MHz. Further, it states that its system is designed to be used in a three frequency reuse pattern to obtain the economic benefits of its innovations, and that such a reuse pattern requires at least 30 megahertz. 79. Cablevision, Southwestern Bell Corporation (SBC), and Fidelity Investments and Cylink Corporation (Fidel- ity/Cylink) disagree that a 30 megahertz MTA license should be awarded pioneers.85 Cablevision contends that the Commission's challenge is to fit pioneer's preference awards into the PCS structure, rather than accommodating 81 Id. at 26. 82 See Second Report and Order, supra note 10. 83 See APC letter of September 27, 1993 to Chairman Quello and Commissioners Barren and Duggan; Cox letter of Septem ber 28, 1993 to Chairman Quello and Commissioners Barrett and Duggan; and Omnipoint letter of September 29, 1993 to Acting FCC Secretary William F. Caton. 84 Cox notes that 2 GHz PCS licensees may aggregate spectrum up to 40 megahertz in a geographic area; see Second Report and Order, supra note 10, 8 FCC Red at 7813. 85 See Cablevision letter of October 5, 1993 to Chairman Quello and Commissioners Barrett and Duggan; SBC letter of October 14, 1993 to Chairman Quello and Commissioners Bar rett and Duggan; and Fidelity/Cylink letter of October 8, 1993 to Acting FCC Secretary William F. Caton. Cablevision filed a pioneer's preference request in this proceeding, see PP-H). and subsidiaries of SBC and Fidelity/Cylink also filed pioneer's pref erence requests, see. respectively, PP-17 and PP-42. 1348 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 the desires and expectations of the preference grantees. According to Cablevision. this can best be accomplished by awarding pioneers the 20 megahertz BTA block at 1880-1890/1960-1970 MHz. Cablevision maintains that a 10 megahertz block at 2130-2200 MHz would unfairly marginalize the contribution made by the grantees at 1850-1990 MHz, but that a 20 megahertz BTA block would permit the grantees to use the band in which they have conducted experiments, while not conveying a windfall 30 megahertz MTA block that could have a preclusive effect on other licensees. SBC concurs, stating that a 20 megahertz BTA block would be enough spectrum to pro vide adequate PCS service.86 80. We find the arguments of APC, Cox, and Omnipoint persuasive. Each applicant conducted experiments in the 1850-1990 MHz band, not in the 2130-2200 MHz band. An award in the lower band is appropriate and will ensure that the grantees can implement the services they have pro posed. While we continue to believe that the upper band has the potential to provide a variety of important PCS services, APC, Cox, and Omnipoint have designed their systems and conducted their experiments in the 1850-1990 MHz band. Further, we are not convinced that a 20 megahertz BTA grant would be adequate, given the nature of the systems proposed.87 Accordingly, we are awarding each pioneer a 30 megahertz MTA block in the area each requested. If otherwise qualified, APC will be licensed to use Channel Block A in the MTA that includes Washing ton, D.C. and Baltimore. Maryland; Cox will be licensed to use Channel Block A in the MTA that includes San Diego, California; and Omnipoint will be licensed to use Channel Block A in the MTA that includes northern New Jersey.88 Pioneer's Preferences Denied 81. American Portable Telecommunications, Inc. (PP-7). APT requests a pioneer's preference for having integrated traditional paging service with a proposed PCS service providing CT-2 type voice communications with one-way alpha-numeric messaging. APT names its service Enhanced Personal Message Service (EPMS). APT states that EPMS is designed to provide: 1) improved control by users over incoming and outgoing messages; 2) enhanced functions, including call forwarding and redirecting of calls; 3) im proved spectrum efficiency over existing and proposed PCS systems; and 4) cost savings over existing and proposed PCS systems. APT also states that its system will take advantage of digital compressed voice in combination with EPMS to provide additional services. 82. In APT's proposed system the customer would re ceive a paging message on a 900 MHz paging channel. The customer could acknowledge the page by making a connec tion over a PCS channel, or have the EPMS redirect the call. APT maintains that its proposal constitutes a new service because it combines digital communications using PCS with a two-way messaging or acknowledgement capa bility. APT calls this its "message back" feature.89 APT claims that its proposal is innovative because its enhanced messaging service would permit users to exercise control over incoming and outgoing message traffic. 83. In comments on APT's pioneer's preference request, GTE states that the request should be denied because it is grounded in outdated CT-2 technology. GTE states that APT's proposed PCS system will be capable only of provid ing two-way voice communications near microcell base stations. As such, according to GTE, the paging device is a necessary component because it is the only device which is powerful enough to reach the subscriber and make the initial contact. 84. In reply, APT contends that GTE did not offer any justification for arguing for denial, given that APT is con tinuing to conduct its experimental program.91 APT re quests that the Commission hold open the record until its tests are completed. 85. In our Tentative Decision we proposed to deny APT's request because APT had not demonstrated the feasibility of its technology or that it had developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state.92 86. In its comments APT argues that it has demonstrated its key role in developing its proposed EPMS, which it argues is significantly innovative compared to existing and proposed PCS services in that EPMS gives control of the call to the subscriber and is spectrum efficient in its use of 86 Fidelity/Cylink argue that a 10 megahertz BTA block at 2130-2200 MHz would be adequate because such a block would enable the provision of full-featured PCS, as well as many specialized PCS services. Fidelity/Cylink contend that the para mount technical challenge in the design of PCS spread spec trum radios is the development of the digital baseband, and not the design of the radio frequency segment, and accordingly use of the 2130-2200 MHz band is not a substantial limiting factor. Fidelity/Cylink state that while design of a common antenna to serve both the 1850-1990 MHz and 2130-2200 MHz bands would require significant technical effort, this effort is not insur mountable. Further, according to Fidelity/Cylink. a common antenna is not necessary to realize the benefits of an allocation at 2130-2200 MHz. Fidelity/Cylink assert that a 10 megahertz block in this band can, with the use of emerging technologies such as Synchronous CDMA/FDMA/TDD, achieve greater sys tem capacity than an existing 25 megahertz cellular radio block. 87 Additionally, we note that in our Notice of Proposed Rulemaking on competitive bidding we proposed to set aside the 20 megahertz BTA block for small businesses, rural telephone companies, and businesses owned by minorities and women. See Implementation of Section 309(j) of the Communications Act Competitive Bidding, PP Docket No. 93-253, Notice of Proposed Rule Making, 8 FCC Red 7635 at 7655 (1993). 88 To provide certainty to other parties that may be preparing analyses for 30 megahertz MTA channel blocks we are designat ing the specific spectrum and geographic areas for the pioneers. Each grantee, if otherwise qualified, will be licensed for Chan nel Block A, 1850-1865 and 1930-1945 MHz, in the MTAs noted supra. The existing pioneer's preference rules will apply to these license grants, see note 2 supra. The existing pioneer's pref erence rules do not contemplate payment for the value of the spectrum awarded, see 47 CFR § 1.402; First Report and Order, ET Docket No. 93-266, supra note 2, at note 23. Therefore APC, Cox, and Omnipoint will not be required to pay any spectrum- based charge for the grants. 89 APT defines "message back" technology as that which pro vides a two-way acknowledgement of a page and its "meet me" concept as that which allows immediate connection between the person initiating the page and the user. 90 See GTE at 10 (January 24, 1992). 91 See APT Reply at 7 (February 18, 1992). 92 Our pioneer's preference rules require that an applicant demonstrate the technical feasibility of its system either through a technical showing or by results from experiments. See Pio neer's Preference Report and Order and Pioneer's Preference Recon. Order, supra note 2, 6 FCC Red at 3493 and 7 FCC Red at 1809, respectively. 1349 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 paging channels for the initial contact.93 APT states that it originated and developed its proposed service that inte grates PCS voice communications with two-way messaging capability. According to APT, its proposed service puts control of the incoming call in the hands of individual wireless service customers through its handheld unit and provides the ability of redirecting an incoming call in many ways not currently available in the wireline service. APT asserts that these new capabilities allow the subscriber to screen and control the call, include taking a message and forwarding or redirecting it to another location. APT also maintains that using a paging frequency for the incom ing contact results in significant efficiencies in spectrum use and that this translates to a reduction in user costs.94 87. In addition, APT asserts that it first proposed its service concept in July 1991, long before any other partici pant in this proceeding. It contends that this timing con firms its responsibility for development and demonstration of its proposed new service. Also, APT claims that market projections and user surveys indicate public demand for its proposed service. Finally, APT argues that the Commission should consider service innovation aspects of its proposal, not just the technology, and that in the Tentative Decision the Commission ignored proposals that enhance services. 88. We find that integrating two-way voice service with a paging service is not innovative and that APT also has not demonstrated innovation in developing new communica tions technology. APT's proposed system relies on older technology to provide a service that is not a significant enhancement of existing services. While APT states that its system -will use digital compressed voice, it does not define this term nor indicate what role APT played in the devel opment of this technology. Accordingly, we deny APT's pioneer's preference request.95 89. Associated PCN Corporation (PP-8). Associated re quests a pioneer's preference for its proposal to provide a PCS service that would provide voice and data mobile services and share the 1850-1990 MHz band by avoiding interference with incumbent fixed microwave operations through what Associated contends is an innovative use of technology.96 This technology would combine frequency hopping and direct sequence CDMA spread spectrum, and would be capable of providing "spot capacity" on demand by hopping over 13 different 5 megahertz CDMA channels in each direction (transmit and receive), thus requiring a total of 130 megahertz (5 megahertz times 13 channels in each direction). Associated states that the key advantage of its proposed system is its ability to be implemented imme diately without displacing existing 2 GHz users. This capa bility would be achieved by mapping existing channel usage and by using extensive software to select channels that are not in use. Thus, Associated argues its system can be overlayed on an existing service without affecting that service. The service would provide both digital voice and data messaging channels on demand. Associated claims it deserves a pioneer's preference because it was the first 93 See APT at 2 (January 29, 1993). Id. 95 Although we tentatively denied APT's pioneer's preference request for failing to demonstrate technical feasibility, after a complete review of the record, we conclude that APT fails the test of not demonstrating a new or innovative contribution to communications technology. entity to combine direct sequence spread spectrum, fre quency hopping, and frequency management concepts into a PCS system. 90. Associated states that its system would feature small microcells of between .5 to 5 miles in radius: small base stations that are inexpensive and can be mounted in var ious locations including on poles or buildings; careful fre quency planning and sophisticated software in the portable units to allow intelligent spectrum sharing with other sys tems; the capability to accurately locate each mobile; and multi-channel usage that allows additional service and low er rates. 91. Associated contends that its proposal is innovative because: 1) it was the first to combine direct sequence spread spectrum, frequency hopping, and frequency man agement into one system for interference avoidance; 2) it uses microcell technology employing cells of .5-5 miles in radius resulting in 10 times the number of voice channels as traditional cellular radio systems; and 3) it features a frequency sharing concept developed prior to that of APC.97 92. In comments to Associated's pioneer's preference request, APC maintains that Associated's attempt to de velop a cellular-type PCS that uses frequency hopping is not innovative and does not warrant a pioneer's preference.98 APC asserts that Associated's system does not provide interference avoidance as does the APC system and also contends that Associated has never tested a complete PCS system nor demonstrated the technical feasibility of its approach. PacTel also argues that Associated has not dem onstrated the feasibility of its proposed system,"9 Finally, Rockwell International Corporation (Rockwell) maintains that Associated's proposed system may cause interference to existing microwave systems. 100 Rockwell states that narrowband systems such as that of Associated, when used in tall buildings, cannot prevent interference to microwave systems unless global planning is done, resulting in reduc tion of the capacity of the system. Further, Rockwell states that narrowband systems can be potentially more complex due to the fact that the narrowband interference has higher power and less white RF noise (random noise) than wideband systems and will affect more distant microwave users. 93. In the Tentative Decision, we found that the pioneer's preference request filed by Associated constituted a com pilation or aggregation of existing communications technol ogies or systems or did not constitute a unique or innovative technology or service. Therefore, we tentatively denied Associated's request. 94. In comments filed in response to the Tentative De cision, Associated contends that the Commission proposed to award APC a pioneer's preference rather than Asso ciated because we concluded that APC had commenced activities prior to Associated. Associated asserts that such a basis for award of a pioneer's preference is illegitimate, but 96 See Associated's pioneer's preference request at 4-2 (August 13, 1991). 97 Id. at 2-4 through 4-2. 98 See APC reply, appendix at 11 (February 18, 1993). 99 See PacTel at 9 (January 24, 1992). 100 See Rockwell at 2 (June 24, 1992). 1350 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 that in any event, it preceded APC both with respect to the proposal of a frequency agile spectrum sharing technology and the field testing of this technology. Additionally, Asso ciated maintains that its system is superior to that of APC, which it maintains uses mostly CT-2 technology and off- the-shelf hardware. Associated contends that it has devel oped a true PCS system that utilizes custom equipment including sophisticated frequency mapping software. 95. In reply comments to the Tentative Decision, APC argues that the entire scope of Associated's developmental activity lies in its attempt to develop a cellular-style hand- off technique for PCS using frequency hopping, as opposed to APC's frequency management system. 1"1 Further, APC maintains that Associated has not deployed a working PCS system to demonstrate its approach. 96. Associated's proposed system would require each li censee to be assigned 130 megahertz of spectrum and there fore is incompatible with the rules we adopted in the PCS Second Report and Order. wl Further, Associated has not demonstrated that its system will avoid interference to ex isting fixed microwave licensees. Finally. Associated's ap proach is a frequency overlay scheme, and as such, is not new and innovative technology. Accordingly, we deny As sociated's request for a pioneer's preference. 103 97. Atlantic Cellular Company, L.P. (Atlantic) (PP-9). At lantic filed a pioneer's preference request seeking to use microwave facilities to be integrated with currently existing PBX and cellular technology to provide a low cost PCS network that would allow switching from the handset be tween the microwave and cellular system at the discretion of the user. However, Atlantic does not provide technical design details of its system. 98. In comments on Atlantic's proposal, PacTel states that insufficient detail is provided by Atlantic to dem onstrate the feasibility of its system. 1"4 In its comments, GTE argues that Atlantic's band switching technique has been in practice for years and is deployed in Japan and ELurope and as such does not warrant a preference. 105 99. In our Tentative Decision we proposed to deny Atlan tic's pioneer's preference request for failure to submit ei ther the preliminary results from an experiment or a sufficient showing of technical feasibility. Atlantic did not respond to the Tentative Decision. Accordingly, we deny Atlantic's pioneer's preference request. 100. Cablevision Systems Corporation (PP-10). Cablevision proposes to provide a range of PCS services including voice and interactive data and video by using cable television facilities to interconnect microcells. It re quests a preference for its proposal to use Cable Television Relay Service (CARS) frequencies on a secondary basis for the provision of mobile to base PCS communications. Cablevision claims that it was the first to outline in detail the possibilities of utilizing cable television facilities for PCS. It states that it plans to use CDMA modulation tech niques and that subscriber units will include dynamic pow er control circuitry. It proposes to use a distributed antenna system that uses remote antenna drivers connected to microcells to form a seamless coverage area. Cablevision contends that its "star architecture" enables efficient spec trum reuse by utilizing multiple trunk outputs emanating from the cable headend. Cablevision also claims to use centralized intelligence to achieve call handoff between microcells in a cost effective manner, and states that it has demonstrated handoff at vehicular speeds in its PCS experi ments. 101. In comments to Cablevision's pioneer's preference request, GTE asserts that Cablevision did not demonstrate the feasibility of its technology. 106 PacTel concurs, contend ing that Cablevision's request is "speculative and prema ture," and that Cablevision's concepts are vague and the information supplied is insufficient to enable the Commis sion to judge the merits of the proposal. 107 However, Asso ciated disagrees, stating that Cablevision has met most of the requirements for a preference and that its technical discussion appears complete. 108 102. In reply comments, Cablevision asserts that GTE and PacTel ignored the unique applications that could stem from using cable television facilities to carry PCS. 109 Cablevision states that it has made major progress towards demonstrating the feasibility of its proposal in its pioneer's preference request and quarterly reports, and that GTE's and PacTel's analysis ignore its accomplishments. 103. Cablevision's request was tentatively denied in the Tentative Decision for failure to develop and demonstrate its proposed PCS technology and also for failure to dem onstrate its specific contributions to the technology and equipment used in its experiments. We further stated that Cox had preceded Cablevision and other cable entities in its cable/PCS development. In comments to the Tentative Decision, Cablevision replies that it filed its experimental PCS application in September 1990. prior to initiation of Canadian trials and efforts to develop cable-based CT-2 equipment, and that this application contained critical con cepts absent from Cox's experimental application. 110 Cablevision acknowledges that the Nexus Engineering Corp. (Nexus) developed RAD technology for CT-2 im plementation, but maintains that it and Nexus worked together to convert this technology to provide PCS to subscribers at vehicular speeds. Cablevision claims that pri or to this enhancement, a subscriber could not move from one RAD area to another. Cablevision asserts that no other party has made comparable contributions to enhancement of cable-based RAD or distributed antenna technology. Cablevision also asserts that its experiment demonstrated the feasibility of its star architecture. 104. We note that several entities have proposed cable- based PCS systems in this proceeding. We believe that Cablevision has established itself as a contributor to cable- 101 See APC reply at 11 (March 1. 1993). 102 We are not permitting PCS licensees to have an ownership interest in more than 40 megahertz in a geographic area; see Second Report and Order, supra note 10, 8 FCC Red at 7813. 103 As discussed in para. 30, supra, since there are substantive differences between the pioneer's preference requests of Asso ciated and APC, there is no need to consider their filing timetables. 104 105 106 107 108 109 110 See PacTel at 14 (January 24, 1992). See GTE at 7 (January 24, 1992). See GTE at 16 (January 24, 1992). See PacTel at 15 (January 24, 1992). See Associated at 7. 10, 12, 15 (January 24, 1992). See Cablevision Reply at 8-10 (February 18, 1992). See Cablevision at 6 (January 29, 1993). 1351 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 based PCS, but we believe that it has failed to meet the threshold of innovativeness necessary to qualify for a pio neer's preference. Specifically, the developments that Cablevision appears to be responsible for are: I) the use of CARS frequencies for PCS service, 2) the establishment of PCS in a star architecture, and 3) the enhancement work with Nexus to permit its RAD to handoff at vehicular speeds. Regarding the first development, we cannot give a preference for the proposal to use CARS frequencies for PCS because we did not adopt this proposal in the Second Report and Order. Regarding the second development, oth er entities have also proposed the use of a star architecture for their cable plant. This architecture may enhance PCS operation over that of a tree/branch architecture,111 but it is a component of the cable television network and not a development created for the implementation of PCS on the network. Therefore it does not qualify as a PCS innovation. Hence, the single contribution for which Cablevision ap pears to be partially responsible is its work with Nexus' RAD technology to permit handoff at vehicular speeds. However, Cablevision has not clearly defined its own spe cific role in developing this technology. Also, we note that at lower frequencies vehicular handoff was achieved many years ago by cellular radio providers. Accordingly, we deny Cablevision's pioneer's preference request. 105. Linkatel Communications, Inc. (LCl) (PP-12). LCI requests a pioneer's preference to provide PCS service using a fiber optic ring network that would carry digital voice and data signals to various locations in a ring con figuration and hand-off individual voice signals to any point in the ring. LCI states that it plans to use direct sequence spread spectrum CDMA for providing high qual ity PCS but does not specify the bandwidth or other tech nical specifications of its spread spectrum design. 106. PacTel and GTE comment that the LCI proposal is quite vague and does not appear to be innovative because many parties began work on use of CDMA for spectrum sharing before LCI. 112 In the Tentative Decision, we pro posed to deny LCFs request for failure to demonstrate the technical feasibility of its proposal. LCI did not respond to the Tentative Decision. Accordingly, we deny LCI's pio neer's preference request. 107. LiTel Telecommunications Corporation (LiTel) (PP- 13). LiTel requests a pioneer's preference for its proposal to use point-to-point Part 15 spread spectrum communica tions links to provide backbone or infrastructure support for PCS. 113 LiTel maintains that it is a leader in the devel opment of PCS and the first to seek authority to test a Part 15 spread spectrum system in the 2.4-2.4835 and 5.725-5.85 GHz (2.4 and 5.8 GHz) bands. LiTel asserts that this infra structure could be used as part of the infrastructure of a PCS network. It states that it plans to test spread spectrum transmission in the 2.4 and 5.8 GHz bands for point- to-point applications. 114 108. In comments on LiTel's request, PacTel states that deficiencies in the request should lead to its denial. 115 PacTel maintains that LiTel's request is vague and lacks details of its proposed service and innovation. GTE also argues that the Commission should deny the LiTel request because, GTE asserts, it is focused on planned research, devoid of actual development, and fails to demonstrate the technical feasibility of its proposed system. Associated also questions whether LiTel's proposal warrants a preference. 109. In reply comments, LiTel counters that it has brought PCS technology to a more advanced and effective state by its testing of Part 15 point-to-point spread spectrum devices at the 2.4 and 5.8 GHz ranges to supplement PCS systems. 116 According to LiTel, its development of these devices will reduce the spectrum needed for PCS. 110. In our Tentative Decision we proposed to deny LiTel's request for a preference because LiTel had not demonstrated the feasibility of its proposed technology or that it had developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. 111. LiTel responds that its three years of developmental testing demonstrate the technical feasibility of Part 15 point-to-point spread spectrum systems that can be used to support PCS systems. Further, LiTel states that it has dem onstrated technical feasibility by successfully testing equip ment. Specifically, it states that it has successfully transmitted voice over a 3-mile link and transmitted com posite data over back-to-back links of one and 8.6 miles. Further, LiTel asserts that it brought out the capabilities of a specific PCS technology by developing a family of mobile radio communications services that could provide services to individuals and businesses and be integrated with a variety of competing networks using Part 15 equipment that would not interfere with existing users. 11 112. LiTel maintains that its technology will support PCS by connecting base stations using Part 15 point-to-point wireless links rather than cable or licensed microwave links, and will permit operators to construct mobile net works quickly and inexpensively. It argues that its proposed system would permit economical and rapid deployment of PCS services and substitution of existing infrastructure for spectrum. 113. LiTel's pioneer's preference request is based upon its claimed innovation in developing spread spectrum point-to-point communications in the unlicensed Part 15 bands at 2.4 and 5.8 GHz for use as backbone for a dedicated PCS system. LiTel's technology and backbone service already is authorized at these frequencies by our rules. Insofar as LiTel argues that its fixed technology may be used to support PCS, it has developed but one of a number of methods available to support the service. LiTel has not demonstrated that its fixed technology is an integral part of a specific PCS system or PCS systems in general. With regard to the family of PCS services that LiTel argues 111 The tree/branch architecture consists of a main trunk that distributes the signal from the headend to an area and branches off the main trunk that distribute the signal to individual subscribers. This distribution architecture requires multiple am plifiers in series to transmit a signal from the headend to the end of a branch. 112 See PacTel at 16 and GTE at 8 (January 24, 1992). 113 See Pioneer's Preference Request at 2 (October 10, 1991) and experimental license application, 1947-EX-PL-91, exhibit 2 (April 25, 1991). These bands already are designated for use under Part 15, which allows point-to-point spread spectrum operations. 115 See PacTel at 16 (January 24. 1992). 116 See LiTel Reply at 2 (February 14, 1992). 117 See LiTel at 4 (January 29, 1993). 1352 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 it has developed, it has not specified what these services are or what its role has been in their development. Thus, LiTel has not demonstrated by way of a technical showing or through experimental test results a specific contribution to 2 GHz PCS. Accordingly, we deny Litel's pioneer's pref erence request. 114. PCN America, Inc. (PP-15). PCNA requests a pio neer's preference for its proposal to implement PCS in the 2 GHz fixed microwave bands using microcells that it claims can co-exist with the current fixed users through the use of broadband CDMA spread spectrum at 1850-1990 MHz. Its request is based upon small, inexpensive, pocket- sized handsets that communicate with cells that are consid erably smaller than those used in the cellular industry today. PCNA states that in November 1989 it was first to propose rules to authorize a personal communications net work; originate a cellular concept that could co-exist with current users of the 2 GHz band; conduct extensive tests using spread spectrum techniques that demonstrate the spectrum sharing capabilities of its system; demonstrate public demand for PCS through a nationwide survey: and coordinate industry-wide PCS initiatives involving other PCS experimental licensees, including making its technol ogy available to others. 118 115. Specifically, PCNA proposes to use direct sequence spread spectrum and spread the signal over 48 megahertz for transmitting between handsets and microcells." 9 The base stations would automatically adjust the power of each handset so that the power received by the base station from each handset is the minimum required to complete the transmission without interference. 116. In comments to the PCNA pioneer's preference request, PacTel states that PCNA has demonstrated substan tial developmental work in the area of 2 GHz PCS but has not submitted sufficient information to warrant a pref erence. 120 Both PacTel and PCNS-NY assert that PCNA has not demonstrated the technical feasibility of its system. 121 GTE concedes that PCNA has presented a colorable claim for a preference, but argues that the request should be denied because it is based solely on an assertion that PCNA was the originator of the PCS spectrum sharing concept. 122 GTE also maintains that PCNA's experimental data lacks the information necessary to support its claim that spec trum sharing is feasible. 117. In the Tentative Decision we found that although PCNA had devoted substantial effort and resources in de veloping and demonstrating a broadband spread spectrum proposal, its system did not comply with the Commission's channelization proposal for the 2 GHz band as outlined in the Notice of Proposed Rule Making (Notice) in this pro ceeding. 123 We also concluded that PCNA had not dem onstrated that broadband spread spectrum operations could be used successfully to avoid interference to existing fixed users. Accordingly, we proposed to deny PCNA's request. 118. In comments responding to the tentative denial, PCNA contends that it merits a preference because it is responsible for the fundamental concepts that underlie the Commission's vision of PCS. It maintains that it was tenta tively denied a preference because of a single element of its proposal that was not adopted by the Commission, 124 the use of two 48 megahertz channels for broadband spread spectrum. It asserts that it outlined the initial idea and substantially the entire regulatory scheme for PCS to the Commission. It further argues that its November 1989 peti tion for rule making first recommended locating PCS in the 2 GHz band and that it was the first to propose sharing this band with incumbent microwave users on a co-pri mary basis. Finally, PCNA maintains that it conducted the first significant demand study of PCS, as well as propaga tion and interference tests in the 2 GHz band. 125 While it expresses support for the grants of pioneer's preference awards to APC, Cox, and Omnipoint, it argues that it first advanced many of the concepts credited to these com panies. 119. In reply comments to the Tentative Decision, PCNA contends that no company in the proceeding contributed to PCS as much as it did. It reiterates that it was first to: 1) petition for a rule making to allocate PCS spectrum; 2) focus attention on the need for spectrum at 1850-1990 MHz; 3) propose sharing the band with the incumbent microwave users and to perform extensive interference test ing; 4) demonstrate that fixed microwave use was light in the band; 5) demonstrate the demand for PCS; and 6) propose the advantages of CDMA for microcell mobile communications. 126 120. Although we recognize that PCNA filed the petition that contributed to initiating our PCS proceeding and made a substantial effort to develop technology to facilitate the service, PCNA does not meet the pioneer's preference cri teria set forth in our rules. After PCNA's petition, the concepts and proposed services envisioned for PCS have expanded substantially and there have been a large number of other entrepreneurs that, like PCNA, obtained experi mental licenses and performed extensive experiments. In adopting the pioneer's preference rules the Commission observed that an otherwise qualified innovating party would risk that the Commission might not accept its pro posal. 127 The PCS Second Report and Order adopted rules that provide for the implementation of PCS based upon an entirely different technological concept than proposed by PCNA, and to which it devoted its technical development 118 See PCNA Reply at 2 (February 18. 1992). 119 See PCNA at 16 (August 7, 1991). However, later PCNA proposed testing a system that spread over 40 megahertz of contiguous spectrum using TDD for transmission of the spread spectrum signal in both the transmit and receive mode in the same 40 megahertz. See PCNA letter to Chief Engineer, Federal Communications Commission, File No. 1343-EX-PL-90, at 3 (May 20, 1992). Based on the comments received in this pro ceeding regarding the likelihood of interference to fixed micro wave users from a broadband spread spectrum system, the Commission did not approve the experimental testing of the 40 megahertz TDD system proposed by PCNA and concluded that broadband overlay type spread spectrum systems were not viable for avoiding interference to the 2 GHz fixed microwave users. 120 See PacTel at 10 (January 24, 1992). 121 Id. See also PCNS-NY Reply at 10 (February 18, 1992). 122 See GTE at 17 (January 24, 1992). 123 See Notice of Proposed Rule Making and Tentative Decision. GEN Docket No. 90-314 and ET Docket No. 92-100, 7 FCC Red 5676(1992). 124 See PCNA at 5-6 (January 28, 1993). 125 See PCNA at 2 (January 28, 1993) and Reply at 10 (March 1, 1993). 126 See PCNA Reply at 3-6 (March 1, 1993). 127 See Pioneer's Preference Report and Order, supra note 2, 6 FCC Red at 3492. 1353 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 efforts. Our rules provide maximum spectrum assignments of 40 megahertz per licensee (20 megahertz paired with a second non-contiguous 20 megahertz). This spectrum plan precludes use of PCNA's system without regard to whether using PCNA's system would cause interference to existing microwave systems. Most importantly, PCNA's broadband spread spectrum system requires a total of 40 to 100 megahertz of contiguous spectrum. Accordingly, we deny PCNA's request for a pioneer's preference. L21. Personal Communications Network Services of New York, Inc. (PP-16). PCNS-NY requests a pioneer's pref erence for developing a microcell broadband CDMA sys tem capable of sharing spectrum with fixed microwave services, proposing the use of Digital Termination Service (DTS) for PCS backbone communications, proposing a plan for migrating existing microwave operations to other frequencies, and developing its service to operate in what it asserts is the unique and harsh radio environment of New York City. It proposes to provide a service that entails delivering voice, data, and image transmission services to users in high density environments, such as multi-story buildings, between such buildings, and from public access locations. It proposes broadband CDMA microcells sharing spectrum with existing microwave operations and using DTS frequencies at 10 and 18 GHz to provide backbone communications between microcells. 128 122. PCNS-NY asserts that it is the sole party to propose and develop an innovative plan for migrating existing mi crowave users in the 1850-1990 MHz band to higher fre quencies and to propose that this relocation be accomplished through use of voluntarily negotiated agree ments. It also claims that it is unique in proposing that existing users be relocated to higher frequencies at no cost to existing users and in a manner that minimizes the potential for disruption to the operations of the existing users. 123. In comments to PCNS-NY's pioneer's preference request, Cox asserts that PCNS-NY should not receive a preference because "the mere tendering of an experimental license application and the claim that the results will some how assist the Commission is an insufficient basis for an award." 129 Similarly, PacTel claims that PCNS-NY's only innovation is the idea to use DTS frequencies to connect base stations, and that this is insufficient for a preference award. 130 PacTel also asserts that technical feasibility has been shown only in a controlled environment and that a more realistic showing of feasibility is needed. GTE main tains that use of DTS frequencies is not innovative and that until verifiable data on PCNS-NY's sharing technology can be reviewed, no demonstration of feasibility can be claimed. 131 124. In reply, PCNS-NY asserts that opposing comments reflect flawed analysis of its preference request. It argues that comments stating that it has not demonstrated tech nical feasibility are unsupported and that, in any event, the Commission's rules do not require such demonstration if the applicant has commenced an experiment. It claims that Cox ignored the substantial testing and extensive progress reports that it provided to the Commission. 125. In the Tentative Decision we found that PCNS-NY's proposal appeared to be a compilation or aggregation of existing communications technologies or systems. Addition ally, we tentatively found that PCNS-NY failed to dem onstrate that its proposal constitutes a unique or innovative technology or service proposal. Therefore we proposed to deny PCNS-NY's request. 126. In comments filed in response to the Tentative Decision, PCNS-NY states that the Commission failed to apply the pioneer's preference rules in a reasonable man ner by singling out the innovations of only three applicants when the Notice contains aspects that also are the reason able outgrowth of proposals developed and demonstrated by PCNS-NY and other applicants. 133 Specifically, PCNS- NY argues that the Commission failed to account or credit it for proposing relocation of the existing microwave users through negotiations. Further, PCNS-NY asserts that the Commission failed to provide a case-by-case analysis of the preference requests it tentatively denied and failed to pro vide an adequate basis for distinguishing the tentative grants from the tentative denials. It also states that not sufficiently articulating specific reasons for the tentative denials prevents parties from making meaningful com ments and leads to speculation as to the reason for denial. 127. PCNS-NY further maintains that the Commission erred in denying its request and incorrectly credits APC with its innovation. PCNS-NY claims that it. and not APC, is the pioneer of procedures to negotiate voluntary agree ments with microwave users to relocate to higher fre quencies on terms favorable to the microwave users. PCNS-NY claims that it was the first to demonstrate the widespread acceptance of its relocation procedure through its experimental efforts and that this innovation contri buted to the Commission's establishment of PCS and its proposed rules. It asserts that the Commission has recog nized the spectrum sharing innovations of Omnipoint and APC, but has not credited PCNS-NY for its negotiations proposal, which it claims is a spectrum management tool that remains a fundamental aspect of providing spectrum for PCS. PCNS-NY claims that its migration proposals preceded all other such proposals; therefore, its request cannot be denied as constituting a compilation or aggrega tion of existing communications technologies or systems. 128. APC responds that its proposal of "(i) sharing spec trum with microwave users and (ii) relocating some microwave users-with full cost reimbursement, and only to reliable alternative frequencies-formed the basis for the Commission's decision in ET Docket 92-9." 134 It states that it proposed this general approach as early as October 1, 1990 and that PCNS-NY's plan from the outset was not spectrum sharing, but rather band clearing. 128 PCNS-NY initially tested SCSM's broadband CDMA equip ment, but stated in a 1992 experimental report that it would use Qualcomm's narrowband CDMA equipment. See PCNS-NY Re port at 1 (September 30, 1992). 129 See Cox at 2-3 (January 24, 1992). On March 17, 1992, Cox requested that its January 24 comments that address the PCNS- NY preference request be dismissed and stated that Cox takes no position on the merits of the PCNS-NY request. ' 30 See PacTel at 17 (January 24, 1992). 131 See GTE at 17 (January 24, 1992). 132 See PCNS-NY Reply at 8 (February 18, 1992). 133 See PCNS-NY at 8-9 (January 29, 1993). 134 See APC Reply at 15 (March 1, 1993). 1354 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 129. We disagree with PCNS-NY's argument that it de serves a pioneer's preference for proposing a migration of 2 GHz fixed operations based upon negotiations, and that the adopted relocation scheme is an outgrowth of its proposal. The rules adopted in ET Docket No. 92-9 providing for fixed microwave migration from the 2 GHz band are the result of a rule making proceeding in which numerous comments were filed and considered and of which the results are not totally consistent with PCNS-NY's proposal; e.g., we did not propose to relocate all microwave oper ations or to restrict microwave relocation to existing com mon carrier microwave bands, as recommended by PCNS-NY, but instead provided for sharing of the 2 GHz band and implemented a plan that provides for a variety of relocation alternatives, including non-radio media, private microwave bands, and common carrier microwave bands. Moreover. PCNS-NY's negotiation proposal is relevant to PCS only in the broadest sense; it is a spectrum planning design, not a "technology" or "service" contemplated by the pioneer's preference rules. 130. We also disagree that the Commission failed to provide a case-by-case analysis of each request or an ade quate basis for distinguishing the tentative grants from the tentative denials. The Commission analyzed each applica tion on a case-by-case basis and articulated the criteria necessary to be granted a tentative preference. While many tentative denials were grouped together, this is appropriate because they had similar deficiencies. After the additional opportunity provided the applicants and the public to com ment upon our tentative conclusions, we now address each application individually. We note that our Tentative De cision clearly spelled out the attributes that are necessary to be granted a preference. 135 131. We also conclude that PCNS-NY's proposal to use 10 and 18 GHz DTS frequencies for PCS backbone com munications is not innovative. There are a number of bands that may be used for such communications, and our recent decision in the emerging technologies proceeding has reallocated the 10 GHz band from DTS to point- to-point microwave use. 136 Further, merely identifying bands that may be used to support PCS is not innovative in the sense intended to be recognized by the pioneer's pref erence rules. 132. Finally, PCNS-NY's proposal for the development of a service to operate in the New York metropolitan radio environment does not qualify as an innovation warranting a pioneer's preference. PCNS-NY contracted with SCS Mobilecom to test SCSM's CDMA mobile equipment, but it is unclear what innovation PCNS-NY contributed to this test. PCNS-NY also fails to specify any innovations for which it is responsible that would differentiate the tests done for it by SCSM from the tests that SCSM performed for other preference applicants. Accordingly, we deny PCNS-NY's pioneer's preference request. 133. Southwestern Bell Personal Communications, Inc. (PP-17). SBPC requests a pioneer's preference based upon its proposal to utilize spectrum between existing microwave systems for PCS made possible by its Intelligent Multiple Access Spectrum Sharing approach. SBPC's IMASS ap proach consists of microwave signal level monitoring, data base look-up of microwave systems, information processing, and PCS channel assignment. The microwave signal levels are periodically measured across the frequency band in a given area. A database search then identifies the microwave frequencies being used and calculates the potential interfer ence from a PCS base station or portable to the microwave receiver. This information provides a list of available fre quencies within that specific measurement area. 138 In addi tion, SBPC proposed to demonstrate the use of intelligent networking to provide features such as personal number service, call alerting by pager, inter-network call routing, and call screening. These features would be delivered across multiple networks, including the PSTN and cellular, paging, and portable communications networks in a seam less fashion by experimenting with alternative interfaces between the network switch, PCS switch, and applications processor. 134. In comments on SBPC's proposal, GTE states that the proposal is not innovative insofar as it offers intelligent network features such as Caller ID and Selective Call Screening that are already available. Further, GTE states it is premature to award SBPC a pioneer's preference until SBPC demonstrates the proposal's technical feasibility. 140 Similarly, PacTel argues that SBPC's proposal is speculative and premature, and that its technical feasibility has not been demonstrated. PacTel also states that others tested similar concepts prior to SBPC. 14 ' Associated maintains that SBPC does not specify exactly what aspect of its pro posal is original or innovative. 142 135. SBPC replies that GTE fails to identify the experi ments or vendors that are proposing to offer the same capabilities. 143 Additionally, SBPC claims that no other experimenter has proposed as detailed or as broad a pro gram of experimentation combining new network services and innovative radio technology. SBPC also maintains that it demonstrated technical feasibility in its experimental ap plication and that while field results may be desirable, they are not a prerequisite for a pioneer's preference. In re sponse to Associated, SBPC states that the originality of its proposal has been demonstrated and Associated has chosen to ignore the showings that SBPC has filed. 144 135 See Tentative Decision, supra note 8, 7 FCC Red at 7795-96. 136 See Second Report and Order, ET Docket No. 92-9, 8 FCC Red 6495 (1993), recon. pending. 137 We note that initially PCNS-NY requested a preference for its implementation of broadband CDMA equipment in New York City. However, the rules adopted in the PCS Second Report and Order do not permit using broadband CDMA. PCNS-NY's broadband technology proposals therefore are in consistent with our PCS rules. More recently, PCNS-NY pro posed to test Qualcomm's CDMA equipment in New York City. Although Qualcomm's equipment could be used consistent with our rules, proposing use of this equipment is not an innovation attributable to PCNS-NY. 138 See SBPC Quarterly Progress Report Number One at 3-9 (June 17, 1992). 139 See SBPC request for Pioneer's Preference at 3-4 (October 22, 1991). 140 See GTE at 18 (January 24, 1992). 141 See PacTel at 18 (January 24, 1992). 142 See Associated at 8 (January 24, 1992). 143 SBPC Reply at 2 (February 18, 1992). 144 Id. at 8. 1355 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 136. In the Tentative Decision we proposed to deny SBPC a preference because its proposal constitutes a compilation or aggregation of existing communications technologies or systems or otherwise does not constitute a unique or in novative technology or service proposal. SBPC responds that it was the first to develop and define an active interfer ence avoidance approach to spectrum sharing and that the IMASS system is not a compilation or aggregation of exist ing communications technologies or systems. According to SBPC, the IMASS algorithm that is the heart of its pro posal required development of a new communications sys tem by a third party vendor. 145 137. In reply to SBPC's comments, APC states that SBPC has not quantified spectrum availability in the 2 GHz band using its IMASS approach in any market or proven that IMASS receivers can improve PCS spectrum availability. APC raises further questions concerning the number of receivers necessary to cover a wide area and states that SBPC has not proven that the IMASS receivers are prac tical and cost effective. 146 138. SBPC bases its preference request upon the IMASS system for spectrum snaring and its proposed delivery of advanced calling features by interconnecting various net works. Experimental work by SBPC includes fixed micro wave signal measurements in the Houston area, development of a prototype IMASS system that is still being refined, a test of the IMASS algorithm, and deploy ment of two PCS service trials in medical environments. However, SBPC has not demonstrated the technical fea sibility of using the IMASS system to share spectrum with existing fixed microwave systems, nor that its system can be used to deploy PCS in a real world environment. Addition ally, SBPC's proposal to offer advanced calling features by interconnecting existing networks does not justify a pref erence because similar calling features already are offered the public. Accordingly, we deny SBPC's pioneer's pref erence request. 139. Tel/Logic, Inc. (Tel/Logic) (PP-I8). Tel/Logic re quests a pioneer's preference based on its overall contributions to PCS system design and service concepts that focus on providing PCS to the medical community. Tel/Logic states that its innovations include specifying key functionality requirements and operating characteristics, identifying a mechanism for the coordination and control of multiple micro cells, developing an intelligent feature set needed to ensure full user functionality, and setting user and alternative mobile service integration and inter operability design objectives. Tel/Logic states that it plans to test a distributed and hierarchical control system that per mits local control and interconnection; a distributed an tenna system to provide effective, widespread radio propagation within buildings; and an intelligent signalling interface to provide flexible, useful, and non-intrusive call control to mobile users. Tel/Logic states that in designing its PCS service it will use equipment and technology devel oped by others. 140. GTE opposes Tel/Logic's request for a pioneer's preference, stating that its proposal is no more than a concept or design and thus is not innovative. GTE also argues that Tel/Logic is not making a serious development effort. 147 141. In reply, Tel/Logic asserts that its status as an innovator is evidenced by the press attention it has received for its approach to medically-based PCS. 148 Tel/Logic asserts that its developmental efforts have been serious, although limited by lack of resources. It suggests that the Commis sion reiterate the philosophy incorporated in the pioneer's preference rulemaking, which requires neither actual test ing of all experimental aspects of an applicant's proposal, nor demonstrations of immediate financial capacity. Tel/Logic also suggests that the Commission recognize the decentralized nature of PCS development, and for smaller companies in particular, assess the contribution, not nec essarily the completeness, of each pioneer's effort in rela tionship to its resources. 142. In the Tentative Decision we proposed to deny Tel/Logic a preference for failure to submit either the preliminary results from an experiment or a sufficient showing of technical feasibility. Tel/Logic responds that the technical feasibility of its proposal was adequately dem onstrated in its original preference request, which it main tains clearly demonstrated the analogous use of related technologies in other communications applications. 14'* It also maintains that its subsequent developmental work pro vides more than sufficient support for a claim of the significant innovation and technical feasibility of its system requirements as initially proposed. Tel/Logic concludes that its subsequent experimental efforts are fully documented in its quarterly progress reports, and that no arguments were received questioning the feasibility of its technical innova tions. 143. We find that Tel/Logic has not clearly demonstrated the technical feasibility of its proposed concept and system design, and has not provided any additional information to demonstrate an innovative contribution in PCS technology to warrant the grant of a pioneer's preference. Although in its application for a preference it stated that it had devel oped a method of coordination and control of micro-cells and developed intelligent features that are new and innova tive, it did not describe these features with particularity nor demonstrate the new and innovative nature of them either in its application or in later filings with the Commission. Further, Tel/Logic states that its technical proposal is anal ogous to other proposed systems. We conclude that Tel/Logic has not demonstrated a working PCS system that incorporates new or innovative communications technol ogies. Accordingly, we deny Tel/Logic's request for a pio neer's preference. 144. US West NewVector Group, Inc. (,\'ewVector)(PP-19). In its pioneer's preference request. NewVector states that based on its experience with PCS-type systems in the Unit ed Kingdom it could provide valuable data to the Commis sion. In particular, NewVector argues that a shared 145 See SBPC at 4-6 (January 29, 1993). 146 See Attachment A of APC Reply at 47-48 (March 1, 1993). 147 See GTE at 8 (January 24, 1992). 148 See Tel/Logic Reply at 8 (February 7, 1992). 149 See Tel/Logic Reply at 5 (January 29, 1993). 1356 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 infrastructure with another PCS provider is the basis for a cost effective PCS system. However, NewVector does not describe a specific PCS proposal in its preference request. 145. PacTel comments that the NewVector preference request discusses no technology, requests no spectrum band, describes no service, and merely states that NewVector has gained some experience in the United Kingdom. In our Tentative Decision we proposed to deny NewVector's request, stating that NewVector did not dem onstrate the feasibility of its technology or demonstrate the capabilities or possibilities of a specific identifiable PCS technology or service or brought it to a more advanced or effective state. NewVector did not respond to the Tentative Decision. Accordingly, we deny NewVector's request for pioneer's preference. 146. Vanguard Cellular Systems, Inc. (Vanguard) (PP-20). Vanguard requests a pioneer's preference based on its use of microcell technology in the context of multiple, con nected switches serving wide-area cellular markets. Van guard states that it would use spread spectrum technology to achieve spectrum efficiency and argues that its focus on smaller markets is innovative in comparison with other proposals for large metropolitan areas. 147. PacTel state that others have done work similar to that of Vanguard's and that Vanguard should not be award ed a preference since it has not demonstrated an innovative system. 150 We proposed to deny Vanguard a pioneer's pref erence request in the Tentative Decision because of Van guard's failure to demonstrate the technical feasibility of its proposed system. Vanguard did not respond to the Tenta tive Decision. Accordingly, we deny Vanguard's request for pioneer's preference. 148. Sharecom-Austin, L.P. (Sharecom-Austin) (PP-26). Sharecom-Austin requests a pioneer's preference for pro posing to interconnect a PCS system with a shared tenant system, such as in a high density office building. However, Sharecom-Austin does not offer any technical specifics of its system, but merely indicates its goal of testing the interface. 149. In the Tentative Decision, we proposed to deny Sharecom-Austin's request for pioneer's preference for fail ing to submit either the preliminary results from an experi ment or a sufficient showing of technical feasibility. Sharecom-Austin did not respond to the Tentative Decision. Accordingly, we deny Sharecom-Austin's request for pio neer's preference. 150. Time Warner Telecommunications, Inc. (PP-27). Time Warner requests a pioneer's preference for its pro posal to combine cable television facilities with an in tegrated radio overlay in the 2 GHz band. Time Warner states that it is entitled to a pioneer's preference based on its signal propagation tests, experiments with remote an tenna drivers, and experiments with digital transport car rier (DTC) systems using existing "live" cable facilities. 1 " 151. Time Warner conducted tests of the Nexus 800 MHz RAD, tests of a DTC system to transport signals back to the headend, and 2 GHz propagation tests. The RAD tested is a CT-2 system in which a base station located at the cable headend communicates or "drives" remote antennas con nected to cable lines. The same frequency is used in all microcells with no handoff between them. DTC tests ex plored communicating between a PCS base station and the cable headend by modulating digital signals. The DTC method converts analog telephone voice signals to digital, multiplexes them with other control and communications signals, and modulates them onto RF carriers. This method increases capacity between the PCS base station and cable headend by digitally combining multiple signals. Time Warner's propagation tests were conducted to verify that 2 GHz frequencies could support wireless services and to determine achievable coverage areas. While tests confirmed that 2 GHz frequencies could support wireless service, they indicated that higher power base stations may be required to achieve coverages equivalent to those of 800 MHz cel lular service. 152 152. In comments to Time Warner's pioneer's preference request, GTE argues that Time Warner's showing of tech nical feasibility is insufficient. GTE further claims that Time Warner is basing its preference request on the unsupported assumption that cable television facilities would be cost-effective for the backhaul of CT-2 commu nications. 153 PacTel also questions the technical feasibility of Time Warner's proposal and additionally argues that developments that pertain only to the cable industry do not merit a preference. 153. Time Warner objects to GTE's and PacTel's char acterizations that cable-related proposals are undeserving of a preference on the grounds that proposals to use existing infrastructures are not innovative. Time Warner argues that its remote antenna proposal merits a preference because implementation of the proposal will reduce the need for numerous high-powered base stations. 155 Further, Time Warner argues that its proposal meets the Commission's standard for a preference because, inter alia, it would pro vide added functionality and reduced costs. 156 154. In the Tentative Decision we proposed to deny Time Warner a preference, finding that its proposal did not appear to be innovative. Time Warner responded to the Tentative Decision, stating that the Commission failed to recognize the pioneering importance of its experimental work. Time Warner claims that although other companies developed PCS/cable plant interfaces, its combination of work in PCS/cable integration has been superior. It claims credit for being the first to test the remote antenna system concept on live, pre-existing subscriber hybrid fiber/coaxial cable facilities and the first to test and demonstrate alter native cable-based transport configurations combining broadband remote antenna and narrowband DTC architec tures on live, pre-existing subscriber hybrid fiber/coaxial cable facilities. 150 See PacTel at 20 and GTE at 8 (January 24, 1992). 151 See Time Warner Reply at 40 (June 25, 1992). 152 See Time Warner Supplement to Request for Pioneer's Preference at 8 (May 4, 1992). 153 154 155 156 157 See GTE at 21 (June 10, 1992). See PacTel at 23 (June 10, 1992). See Time Warner Reply at 17 (June 25, 1992). Id. at 18. See Time Warner at pp. i-ii (January 29, 1993). 1357 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 155. In its reply comments, Time Warner argues that no party disputes its claim to being the first to test and modify the Nexus RAD system. Further, it states that the Commis sion should reject arguments that preference awards be based on filing dates of experimental licenses. 158 156. Time Warner's work with propagation testing, the remote antenna concept, and DTC appear to have consisted of planning and integration of existing equipment and car rier modulation methods with the cable infrastructure. Time Warner does not identify any specific development for which it is responsible except for 2 GHz propagation tests that appear to be little different from those performed before it by numerous parties. Time Warner has not iden tified or explained any specific innovation or development that merits a preference. The concept of using the cable infrastructure as a backbone for PCS in and of itself does not merit a pioneer's preference; nor does performing propagation tests or tests of existing equipment. Time Warner does not argue that its testing of the Nexus CT-2 RAD system led to a significant modification, service en hancement, or added capability. Accordingly, we deny Time Warner's pioneer's preference request. 1 157. Adelphia Communications Corp. (Adelphia) (PP-41). Adelphia requests a pioneer's preference for its efforts to develop "Neutral Networks." According to Adelphia. these networks will allow a cable coaxial plant to be modified for bi-directional signal transmission to provide PCS. 158. In comments to Adelphia's preference request, PacTel argues that this concept is not innovative. Similarly, GTE contends that Adelphia's proposal does not advance the radio portion of PCS technology. 160 We proposed to deny Adelphia a preference, concluding in the Tentative Decision that its proposal was preceded by the efforts of Cox in proposing integration of cable facilities and PCS. Adelphia did not respond to the Tentative Decision. Ac cordingly, we deny Adelphia's pioneer's preference request. 159. Advanced MobileComm Technologies, Inc. (AMT) and Digital Spread Spectrum Technologies, Inc (PP-42). In a consolidated filing, AMT and DSST each request a separate pioneer's preference for their proposal of an "open entry" architecture in which any PCS applicant that meets certain requirements may gain access to a block of spectrum. 1 " 1 This architecture would provide each licensee one 5 megahertz channel for exclusive access, with the remaining channels (also 5 megahertz) being dynamically available to all licensees in real time on an FDMA basis. DSST's equip ment uses Direct Sequence CDMA. which it calls Synchro nous CDMA (S-CDMA), to emphasize the synchronization of the inbound and outbound signals that is necessary because its inbound and outbound signals use TDD on the same channel. AMT and DSST assert that they deserve a preference for their open entry architecture combined with FDMA/S-CDMA/TDD equipment in a microcell and picocell environment. AMT and DSST's proposed services include cordless phone, private branch exchanges (PBXs), and wireless local area networks (LANs). 160. Qualcomm states that DSST utilizes orthogonal spreading codes that were pioneered by Qualcomm 1 and that DSST's use of lower orthogonal signaling to preserve the orthogonal space will result in loss of demodulation efficiency. Qualcomm also claims that DSST's system has at least three times lower capacity than Qualcomm's be cause Qualcomm uses a higher rate speech coder. Qualcomm further contends that DSST omits the use of forward error correction codes in the base-to-mobile link and that this omission lowers the link's capacity and qual ity. Qualcomm also asserts that DSST's system is designed for pedestrian use. but that DSST's slower power control may not be adequate for such systems. 161. GTE states that AMT's proposals are unproven and lack a sufficient showing of technical feasibility, particu larly with respect to interference with existing microwave users. 1"3 PacTel asserts that AMT's and DSST's work is still in a preliminary stage and is for non-licensed Part 15 service, and therefore does not merit a preference. 1"4 CTP asserts that DSST's "open entry" proposal for PCS is not new -- rather, both CT-2 in the U.K. and CT-2 Plus in Canada provide for multiple entrants with dynamic chan nel allocation. 165 162. AMT and DSST respond to Qualcomm's comments, asserting that the criticisms are flawed because they are based on Qualcomm's technical choices for its digital cel lular system. 166 They assert that the needs for a PCS market will be different than those for a digital cellular market and that accordingly, different technical choices must be made. 16 ' AMT and DSST maintain that they chose their 5 megahertz channeling scheme because it is more suited to spectrum sharing with fixed microwave systems. They also disagree that they derived their technology from CTP and assert that GTE and PacTel offer only unsupported and erroneous claims. 163. In the Tentative Decision, we tentatively denied AMT and DSST a preference because: 1) AMT had just begun to initiate preliminary tests of British equipment and DSST had performed only computer simulations and spectrum studies, and neither party had developed 2 GHz PCS technology to the point of field testing: and 2) The spectrum scheme proposed in the PCS Notice was substan tially different from the AMT/DSST open entry proposal. 164. In comments to the Tentative Decision AMT and DSST assert that they have commercially available spread spectrum equipment that operates in the 900 MHz. 2.4 GHz, and 5.7 GHz ISM bands. DSST indicates that it is still developing its S-CDMA technology that will operate in the 2 GHz band, but states that the technology will be similar to that being commercially used by DSST customers in the 158 See Time Warner Reply at in (March 1, 1993). 159 While we concur with Time Warner that pioneer's pref erences should not be granted based on experimental license filing dates per se, we do consider it appropriate to consider timing when differences are significant. We base preference grants on demonstrated accomplishments, and adhere to this policy in the instant proceeding. 160 See PacTel at 24 and GTE at 16 (January 24, 1992). 161 See AMT/DSST at 2-3 (May 1, 1992). 162 See Oualcomm at 7-10 (June 10, 1992). 163 See GTE at 12 (June 10, 1992). 164 See PacTel at 28 (June 10, 1992). 165 See CTP at 15 (June 10, 1992). 166 See AMT/DSST Reply at 7 (June 25, 1992). 167 For example, AMT and DSST state that Qualcomm's sys tem was designed for large cells with high speed handoffs from users traveling at vehicular speeds, while AMT's and DSST's proposed service is microcellular-based to provide low cost ser vice in densely populated areas to subscribers at pedestrian speeds. 1358 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 ISM bands at 900 MHz and 2.4 GHz.168 AMT and DSST also assert that their open entry spectrum proposal may be different from that proposed in the Notice but that it is compatible. They contend that S-CDMA will function well within other licensing regimes and that the Commission is penalizing them because they request a 5 megahertz fre quency assignment rather than a 30 megahertz assignment. In reply comments to the Tentative Decision AMT and DSST assert that they are the only preference applicant to describe efforts focused on the development of a PCS ar chitecture suitable for deployment of wireless PBXs and LANS. 165. It appears that AMT's and DSST's proposals contain two possibly innovative developments: 1) open entry ar chitecture and 2) use of FDMA/S-CDMA/TDD equipment at 2 GHz. However, in the PCS Second Report and Order we did not adopt their open entry architecture proposal, and we find that this proposal is inrompatible with the spectrum scheme adopted because only one license per spectrum block per service area may be granted. 166. With respect to AMT's and DSST's 2 GHz equip ment, at the time of the Tentative Decision we found that AMT and DSST had failed to demonstrate the technical feasibility of this equipment. We continue to believe that AMT and DSST have failed to demonstrate the equipment's technical feasibility. Further, no additional information has been submitted by AMT and DSST that they have made significant modifications to their technology to provide PCS services at 2 GHz. Accordingly, we deny AMT's and DSST's pioneer's preference requests. 167. American Telephone and Telegraph (AT&T) (PP-43). AT&T proposes to use the 6 GHz band to provide PCS. In the Tentative Decision, we proposed to deny this request since the 6 GHz band is not the subject of this proceeding. AT&T did not respond to the Tentative Decision. In our PCS Second Report and Order we did not allocate spectrum for PCS at 6 GHz. Accordingly, we deny AT&T's pioneer's preference request. 168. American TeleZone (TeleZone) (PP-44). TeleZone proposes a wideband CDMA PCS system that will include sharing with other PCS subscribers utilizing a Part 15 (unlicensed) spectrum approach to support its system. In comments to Telezone's pioneer's preference request, PacTel and GTE object to a grant of a preference to Telezone due to failure to demonstrate a technically fea sible system. 169 169. The Commission found in its Tentative Decision that TeleZone's system did not comply with the proposed PCS rules and thus was not eligible for a preference because the system would require a total bandwidth of 80 megahertz. TeleZone did not respond to the Tentative Decision. Since the rules adopted in the PCS Second Report and Order do not permit 2 GHz PCS licensees to use more than 40 megahertz of spectrum in a geographic area.170 the rules are inconsistent with the TeleZone proposal. Accordingly, we deny TeleZone's pioneer's preference request. 170. Ameritech (PP-45). Ameritech requests a pioneer's preference for having developed an open network interface between the PSTN and a PCS provider that it contends is innovative because it is independent of transmission tech nology, employs "intelligent" handset/base station interac tion, and offers PCS providers a range of features to offer their customers. 171 The proposed system supports two-way voice and data communications and handoff between the handsets and the cellular base stations connected to the existing PSTN. In addition, Ameritech claims credit for innovation for the first comparative testing of sharing spec trum between fixed microwave operations in the 2 GHz PCS band using FDMA, CDMA, and TDMA technologies; implementing "frequency agile" spectrum sharing; and de veloping new PSTN capabilities and technologies to facili tate PCS. Ameritech further asserts that its contract with Omnipoint, which was tentatively granted a preference, initiated the development of the first 2 GHz PCS handsets using FDMA, CDMA, and TDMA technologies. 172 171. In comments on Ameritech's request, PacTel argues that Ameritech has not demonstrated innovation. PacTel asserts that Ameritech has borrowed from others, but has not demonstrated that it has contributed significantly to the development or refinement of PCS. 173 Further, PacTel states that Ameritech has merely contributed specifications to Motorola for handset development. 174 For these reasons, PacTel concludes that Ameritech does not merit a pref erence. GTE concurs, stating that although Ameritech has been testing technology and conducting market tests for over a year, Ameritech's contributions to PCS are incon clusive. 175 172. In reply, Ameritech states that its market/technical trial design, open network interface approach, related de velopments to the PSTN, commissioning of PCS handsets, and wide-scale market test demonstrate its merit for a preference.176 It argues that it has carefully detailed its proposal in its license application, experimental reports, and pioneer's preference request.177 173. In our Tentative Decision we proposed to deny Ameritech a preference, finding that its proposal appeared to constitute a compilation or aggregation of existing com munications technologies or systems, or did not constitute a unique or innovative technology or service proposal. 174. In response to the Tentative Decision, Ameritech argues that its proposed system is not a compilation or aggregation of existing technologies, but rather is a "new and open network system architecture" that: 1) employs distributed intelligence between base station, handset and switching system to allow the base station and handset to direct the PSTN to handoff calls and 2) can utilize existing PSTN network technologies in new ways as elements of the PCS system. 178 Further, Ameritech claims credit for help ing Omnipoint develop its 1900 MHz handset because it provided the general specifications for the manufacturing contract and allowed Omnipoint to develop handsets under Ameritech's experimental license. 179 Ameritech contends 168 See DSST Report at 2 (January 11, 1W3). 169 See PacTel at 20 and GTE at 12 (January 24, 1992). 170 See Second Report and Order, supra note 10, 8 FCC Red at 7813. 171 See Ameritech Request at 8 (May 4, 1992). 172 Id. Si 2. 173 See PacTel at 21 (June 10, 1992). 174 Ameritech contracts with both Omnipoint and Motorola for handsets. 175 See GTE at 8 (June 10, 1992). 176 See Ameritech Reply at 3 (June 25, 1992). 177 Id. at 5. 178 See Ameritech at 6 (January 29, 1993).179 Id. ai7. 1359 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 that its unbundled PSTN structure is a significant commu nications innovation because it allows PCS providers access to the functionalities of the PSTN. 180 175. We conclude that Ameritech has not demonstrated that it is employing other than existing technology for its system and that it has not demonstrated its responsibility for a specific innovation. Ameritech has not demonstrated how its claimed enhancements to the PSTN and develop ment of an open network interface differs from the capabil ities of the existing PSTN. In addition, Ameritech has not submitted results of comparative testing of PCS radio access technologies. Further, although Ameritech refers to fre quency agile handsets and base stations, its documentation lacks technical details and explanation. Finally, while Ameritech states that it "provided general specifications" to Omnipoint and Motorola for the design of 1900 MHz handsets,181 it does not explain with particularity its innova tive contribution to the design of those handsets. From the record we are unable to ascertain whether Ameritech de veloped a specific functionality that Omnipoint or Motorola implemented in their handsets or defined specific criteria for a universal interface. Accordingly, we deny Ameritech's request for a pioneer's preference. 176. Bell Atlantic Personal Communications, Inc. (PP-46). Bell Atlantic requests a pioneer's preference based on two independent but complementary proposals for PCS systems that it names the "Personal Line" system and "Beacon telepoint" system. As described by Bell Atlantic, the Per sonal Line system employs one personal number and one handset that is usable in multiple environments: home/office, pedestrian, and vehicular. 182 Bell Atlantic states that its handset is capable of initiating calls and employs a built-in pager to notify the user of incoming calls. Bell Atlantic's proposed system consists of private base stations, PBXs, public microcells, and public macrocells. Personal Line would route outgoing calls using technology that scans for the nearest base station, then microcell, then macrocell, depending on the handset's loca tion. According to Bell Atlantic, the key to Personal Line is its Locator Service that provides person-centered, rather than location-centered, communications. I8i 177. The Locator Service (Beacon) telepoint system pro poses to overcome the problems that Bell Atlantic contends exist with current telepoint systems, such as locating an operating site within which a handset may function. 184 The Beacon telepoint transmits a signal (at powers as high as 5 watts) to enable the network to signal on an alphanumeric display the nearest telepoint. 185 The Beacon system consists of a low power signal at the telepoint. and a high power signal with a range of approximately 10 miles. 18" 178. In comments to Bell Atlantic's pioneer's preference request, PacTel states that the Personal Line proposal should be considered carefully because it can bring a ru dimentary form of PCS to the public in the near future and that the Beacon system is an innovative enhancement of a CT-2 system that solves the problem of locating a base station to place a call. 187 However, GTE asserts that Bell Atlantic's PCS integration efforts have not yet been tested successfully, and argues that system technical feasibility has not been demonstrated. 188 PageMart asserts that Bell Atlan tic's proposal: (1) contemplates a massive increase in infra structure investment; 189 (2) is not compatible with cordless telephones and does not support a universal handset usable while traveling from home to office; 190 (3) maximizes air- time by delivering calls over the radio spectrum;191 and (4) utilizes a massive database that registers the user's location, raising privacy concerns. 192 179. In reply comments, Bell Atlantic argues that it provided a technical feasibility showing in its original fil ing. 193 Further, Bell Atlantic states that PageMart's com ments are misplaced because: (1) infrastructure investment will be required regardless of whether Locator Service is offered; 194 (2) Personal Line supports a universal handset that operates with base stations superior to present cordless phones, and the handset may be used with microcells for pedestrian speeds and in the existing cellular environment for vehicle speeds; 195 (3) Personal Line minimizes air-time because calls are delivered by the wireless network if the recipient is within a wireless environment; otherwise, if the user is registered with the wireline network calls are deliv ered via wireline; and (4) the exact location of the user is known only in wireline registration and in wireless net works only the cell or microcell that the user is utilizing is known to the database. Bell Atlantic states that the latter technique is the same one used by cellular radio systems and therefore should not raise privacy concerns. 196 180. In the Tentative Decision we proposed to deny Bell Atlantic's request for a preference, finding that its proposal constitutes a compilation or aggregation of existing com munications technologies or systems or does not otherwise constitute a unique or innovative technology or service proposal. Bell Atlantic responded to the tentative denial, requesting clarification as to why it was denied a pref erence for and argues that neither reason given is an accurate assessment of its proposal. Bell Atlantic asserts that Personal Line is innovative and merits a preference because it is the first time that the intelligence and signalling of the public network have been combined with the portability of a wireless network to create a person- centered communications system. 19 Further, it argues that its Locator Service (Beacon) also merits a preference be cause it allows customers to maintain a single personal phone number and employs sophisticated call-routing capa bilities. 198 180 181 182 183 184 185 186 187 188 189 Id. at 8. See Ameritech Request at 12 (May 4, 1992). See Bell Atlantic Request at 7 (May 4, 1992). Id. at 5. Id. at 18. Id. at 19. Id. at 26. See PacTel at 10 (June 10, 1992). See GTE at 8 (June 10, 1992). See PageMart at 8 (June 10, 1992). 190 191 192 194 195 196 197 198 Id. at 9. Id. Id. at 10. See Bell Atlantic Reply, note 1 (June 25. 1992). Id. MS. Id. at 6. Id. at 7. See Bell Atlantic at 4 (January 29. 1993). Id. 1360 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 181. We agree with PacTel that the Beacon telepoint system potentially could improve existing CT-2 systems; however, we find that it does not constitute an innovative proposal for PCS. Further, if Bell Atlantic's Personal Line system provides ubiquitous coverage as Bell Atlantic states it will, its Beacon system appears unnecessary. 199 In any event, Bell Atlantic has not demonstrated the technical feasibility of its Personal Line system. Bell Atlantic's pio neer's preference request and experimental reports indicate that this system is only in the developmental stage. The record lacks critical technical details such as spectrum requirements, modulation technique, power levels of handsets and microcells, ability to coexist with existing fixed operational microwave users, and channeling scheme. Bell Atlantic has not explained the specific aspects of its system of base stations, microcells, and macrocells that it states differ significantly from the proposals of other par ties, why those aspects are innovative, nd what Bell Atlan tic's contribution is for having designed or developed the equipment that results in those functions being available. Accordingly, we deny Bell Atlantic's pioneer's preference request. 182. Broadband Communications Corporation (Broadband) (PP-47). Broadband requests a pioneer's pref erence for a PCS system designed to provide service over fixed links to residential and small business using wideband CDMA technology and a fast packet overlay that it calls multiple division multiple access (MDMA). Broadband's proposed system requires 140 megahertz of spectrum (70 megahertz spread spectrum in each direction). 183. In comments to Broadband's pioneer's preference request, PacTel contends that Broadband does not deserve a preference because its proposal will merely replace the exchange carrier's local loop and will not provide mobile service. Further. PacTel argues that Broadband is propos ing a wideband service that does not comply with the Commission's rules.200 GTE states that the Broadband pro posal does not offer sufficient detail to justify a preference. In the Tentative Decision we proposed to deny Broadband's preference request, concluding that Broadband did not demonstrate the technical feasibility of its system or that it had developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. Broadband did not respond to the Tentative Decision. Because Broadband has not provided sufficient information to demonstrate the technical feasibility of its proposed PCS or MDMA con cept, and also because its wideband system is inconsistent with the spectrum plan we adopted in the PCS Second Report and Order, we deny its pioneer's preference request. 184. Cable USA, Inc. (PP-48). Cable USA requests a pioneer's preference for its proposal to utilize Multipoint Distribution Service (MDS) spectrum and MDS and cable television facilities as a network distribution infrastructure for PCS.201 It argues that this approach will promote spec trum efficiency, enhance both PCS and MDS systems, and bring PCS to areas that lack traditional network facilities. It claims that its proposal would provide affordable PCS to customers through its novel MDS-based approach, particu larly in small markets. In Cable USA's PCS system, MDS would serve as the backbone for linking microcells. Within microcells, RADs would provide coverage to specific local areas and microcell extenders would expand coverage. 185. In comments on Cable USA's request, GTE argues that Cable USA has not demonstrated the technical feasibil ity of its proposal.202 PacTel notes that in small markets typically there is ample spectrum available; likely there will be low demand for PCS in these areas: and that in any event backhaul is only a small part of a complete PCS system in these low density population areas.203 Cable USA responds that it expects to submit test results in the near future and that use of the cable and wireless cable infra structure is particularly well-suited for rural PCS use be cause of inherent economies of scale.204 186. In the Tentative Decision we proposed to deny Cable USA a pioneer's preference for failure to submit either the preliminary results from an experiment or to demonstrate technical feasibility. In response to the tentative denial, Cable USA argues that the pioneer's preference rules re quire only that an experimental license application be filed, not that results be reported, and states that it com plied with this requirement by filing an experimental li cense application in 1991. Cable USA contends that it received the license, revised and finalized its plans for testing MDS and cable wire systems for PCS infrastructure, hired a PCS test coordinator, filed a preliminary progress report, and renewed its license in November, 1992. 187. We find that while Cable USA filed an experimental license application it did not file preliminary results from this experiment or an adequate showing of technical fea sibility, as is required by our rules.205 At the time of the Tentative Decision, Cable USA had neither acquired equip ment nor tested its network design.206 188. In addition. Cable USA has not with specificity proposed a new or innovative service or technology, nor its responsibility for any specific aspect. While it is the only pioneer's preference applicant to propose using MDS spec trum as a backbone for PCS. we did not provide for this use in the PCS Second Report and Order and note that large numbers of applications for MDS licenses are pend ing for non-PCS "wireless cable" services. Additionally, we note that thousands of microwave links that can serve as PCS backbone systems are located above the channels al located to MDS.207 Accordingly, we deny Cable USA's pioneer's preference request. 189. Cellular Service, Inc. (Cellular) (PP-49). Cellular seeks a pioneer's preference for a narrowband digital per sonal communications service based on the European "Digital Communications Service 1800" technology. 199 Id. 200 See PacTel at 16 (June 10. 1992). 201 See Cable USA Request for a Pioneer's Preference (May 4, 1992). 202 See GTE Comments at 18 (June 10. 1992). 203 See PacTel at 25 (June 10, 1992). 204 See Cable USA Reply at 2 (June 25, 1992). 205 See 47 C.F.R. § 5.207. 206 See Cable USA Progress Report, filed June 18, 1992. 207 In the emerging technologies proceeding, we reallocated for use by private and common carrier fixed microwave systems the 3.7-4.2 GHz band, and reallocated and rechannelized for such use the 5.925-6.425, 6.525-6.875, 10.565-10.615/10.630-10.680, and 10.7-11.7 GHz bands. See Second Report and Order, ET Docket No. 92-9, supra note 136. These and other existing fixed micro wave bands above 11.7 GHz are available for various types of fixed microwave use, including PCS backhaul. 1361 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 190. In comments on Cellular's pioneer's preference re quest, PacTel argues that Cellular has not developed a new service but merely duplicated an existing service.208 In the Tentative Decision we proposed to deny Cellular's pro posal's because it is a compilation, of existing communica tions technologies or systems. Cellular did not respond to the Tentative Decision. Accordingly, we deny Cellular's pio neer's preference request. 191. Comcast PCS Communications, Inc. (Comcast) (PP- 50). Comcast requests a pioneer's preference for its proposed integration of cellular, cable, and PCS networks. Comcast proposes to provide low cost PCS service by inter facing its cellular switching office with its cable television headend via a cellular/PCS base station, and to utilize fiber for backhaul between its PCS remote antenna sites. Comcast states that its cable facilities will provide the back bone infrastructure, locations for microcells, and access technology for signal transportation. Its cellular facilities would provide switching, billing, roaming, automatic call delivery, and customer services. Further, Comcast states that the existing cellular service can be accessed to provide macrocell coverage when not within PCS microcell range.209 192. In comments on Comcast's pioneer's preference request, GTE claims that Comcast's experimental efforts do not demonstrate innovation deserving a preference.210 PacTel states that Comcast's proposal does not merit a preference because its proposed system limits PCS to cel lular carriers with access to cable company fiber.-" Fur ther, PacTel asserts that Comcast's frequency sharing scheme limits technologies to those that lend themselves to Comcast's specific channelization scheme. Finally, PacTel argues that Comcast could provide its proposed service within its existing authorizations as a cellular carrier. Bell Atlantic contends that various cable company proposals, including Comcast's, are only novel to the cable industry and are not innovative from an overall telecommunications perspective.212 193. In its reply comments, Comcast responds to GTE, stating that its proposal is to use its cable network as a backbone for telecommunications links to PCS and that its proposal to use modified cellular base stations for microcell coverage are an innovative use of this infrastruc ture and meet the pioneer's preference criteria for advancing technology or services. Comcast also addresses the arguments of PacTel, stating that its system does not limit PCS to existing cellular carriers, but demonstrates one way that a cable/cellular interface can advance PCS. Comcast further argues that its use of a wideband ca ble/cellular interface does not fall within its current cel lular authorizations, and that it would provide a unique non cellular service. Comcast concludes that its PCS system demonstrates enhancements to cellular service and would be a new use for spectrum.213 194. In our Tentative Decision we proposed to deny Comcast a preference because, although the request pro poses efficient use of cable facilities to provide PCS. Cox appears to have first proposed such cable/PCS integration, developed the necessary hardware, and conducted at least preliminary field trials with actual hardware. 195. In response to the Tentative Decision Comcast ar gues that we did not address its integration of existing cellular services with cable TV, innovative PCS achieve ments, or associated experimentation with wireless/wireline interface. Comcast argues that the combined cable/cellular infrastructure provides the ideal environment for cost-effec tive PCS. Further, Comcast asserts that its experiments at cellular frequencies demonstrate the feasibility of its PCS system because its concept for PCS involves the sharing of the cellular and PCS infrastructures by a PCS licensee. Finally, Comcast claims that a five-way, intrastate, inter state, and trans-Atlantic conference call linking three cities on September 10, 1992, proves its technology as an alter native to using local exchange carriers.214 196. We find that Comcast has not demonstrated the feasibility of its system or demonstrated innovation with respect to PCS. Comcast has demonstrated enhancements to its cellular system by interfacing its cellular network with the fiber network used by its cable facilities. While Comcast's experimental reports address propagation tests at 2 GHz, it has submitted no information related to experi ments with PCS or other equipment at 2 GHz. Rather, Comcast appears to rely upon microcell and picocell tests using cellular equipment operating in the 800 MHz range. Many of Comcast's claimed PCS achievements relate to cellular service, rather than PCS service at 2 GHz, and appear to demonstrate that fiber interface can be provided without access to additional spectrum. Under Comcast's proposal, cable facilities would provide the backbone infra structure and access technology for PCS, and cellular facili ties would provide the billing, switching, macrocell coverage, roaming, call delivery, and customer services. We conclude that fiber interface by itself is not innovative and does not merit a preference. Accordingly, we deny Comcast's pioneer's preference request. 197. Corporate Technology Partners (PP-51). CTP requests a pioneer's preference for its Interference Sensing CDMA technology that it claims is the adaptation to narrow chan nel CDMA of its interference sensing developed for CT-2 Plus. ISCDMA combines narrow-channel CDMA technol ogy with interference sensing dynamic channel allocation. In ISCDMA the base station scans available channels and selects those that have signal levels below a set threshold. The base station then sends a list of the channels that have sufficiently low noise to the mobile unit, and the mobile unit scans the channels on the list and from the list selects a channel with an appropriately low noise level for com munications with the base station. The mobile and the base station also can dynamically switch channels if interference appears on the selected channel. CTP claims that ISCDMA increases channel capacity while avoiding interference to fixed microwave operations and other PCS users. It states that ISCDMA can be implemented with minor software modifications to available CDMA equipment and that this technology permits PCS operations on a secondary basis to existing microwave operations, instead of PCS displacing 208 209 210 See PacTel at 21 (January-24, 1992). See Comcast Request at 22 (May 4, 1992). See GTE at 16 (June 10, 1992). 211 212 213 214 See PacTel at 25. See Bell Atlantic at 11 (June 10, 1992). See Comcast Reply at 2, 4 (June 25, 1992). See Comcast at 3 et seq. (January 29, 1993). 1362 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 microwave incumbents. CTP also claims that its interfer ence sensing is innovative because to avoid interference both the base stations and handsets scan a channel before using it.215 It proposes PCS services that include two-way voice and data transmissions in an architecture that in cludes wireless local loop, cordless residential telephone, wireless PBX, and public base station services. 198. CTP maintains that it is the first company to pursue PCS development in the United States by its formation of ELasyphone, Inc. with Bell Canada Enterprises (BCE) in the Fall of 1989.216 However, CTP states that in August 1991 it conveyed to BCE its ownership interest in Easyphone and its frequency sharing CT-2 invention.217 CTP contends that ISCDMA was invented in November 1990, which it says is before other applicants proposed similar approaches. CTP states that the factors essential for utilization of its interfer ence sensing approach are basic components of existing CT-2 and CT-2 Plus systems, and that adoption by the Canadian Department of Communications of CT-2 Plus as a national Canadian standard for the first generation of rnicrocellular PCS has confirmed the feasibility of the in terference sensing approach.218 199. Qualcomm asserts that CTP did not invent the CDMA system for which it claims credit and that Qualcomm has several patents covering this system. 219 Qualcomm further states that while CTP may have devel oped techniques to monitor interference and dynamically allocate frequency channels, others have developed similar ideas. 200. PacTel states that ISCDMA potentially is a useful development, but that no experimental tests have been done, that technical feasibility is not demonstrated, and that the proposal otherwise is undistinguished.220 PacTel concludes that a preference should not be given for a single untested idea. Similarly, GTE states that CTP's pro posal is a combination of proven and promised functionality that has not been shown to be technically feasible.221 GTE also asserts that there has not been a showing of significant investment of effort, either in terms of experimentation or demonstration of technical feasibil ity. 201. Viacom states that CTP's proposal is based on highly questionable propagation reciprocity that incorrectly assumes that instantaneous propagation measurements from microwave transmitters represents the propagation condi tions to microwave receivers that often are separated by 80 megahertz.222 Viacom asserts that such measurements do not accurately represent interference to microwave oper ations. Viacom also asserts that CTP incorrectly assumes that measurements from an elevated, high gain antenna at a fixed PCS base station is pertinent with regard to the propagation situation for randomly distributed PCS mo biles in the vicinity. 202. In its comments, CTP states that AMT/DSST, APC, Associated. Pacific Bell and others all derived their propos als from the its work.223 CTP also argues that it performed innovative work in PCS/passive fiber optic interfaces and PCS/coaxial television interfaces. In its reply comments. CTP argues that its scanning of channels to find a low signal level will protect microwave operations if the thresh old level is calculated correctly.224 203. In the Tentative Decision, we proposed to deny CTP a preference because we found no evidence that APC or others derived their proposals from that developed by CTP. We concluded that APC's FAST technology differs from that of CTP in substantial ways and therefore there was no need to investigate who filed first. 204. In its response to the Tentative Decision, CTP states that it should be awarded a preference because its ISCDMA technology is superior to other interference avoidance pro posals submitted in this proceeding and because it devel oped ISCDMA before APC developed FAST.225 CTP also asserts that even if the Commission perceives FAST to be superior to ISCDMA, this is not a valid basis for denying CTP's pioneer's preference request.226 Further. CTP argues that it merits a pioneer's preference for its work on inter facing PCS with fiber optic and coaxial cable-based net works. , 205. APC argues that CTP's approach is unworkable and that CTP's own technical paper concludes that "further work is needed" to test the proposal's "reliability in an actual PCS environment."227 APC asserts that ISCDMA would not protect microwave users from interference from PCS licensees and argues that ISCDMA will permit mo biles to use a microwave frequency when the signal is obstructed by terrain or buildings. APC contends that when a subscriber moves from behind a building the mi crowave operator would suffer interference because while ISCDMA senses interference at call set-up, it does not continuously monitor and adjust frequency use. APC also claims that ISCDMA does not protect microwave oper ations that use other than an 80 megahertz frequency sepa ration and does not protect receive-only microwave stations. Finally, APC asserts that CTP cannot take credit for the technical filings of Easyphone. Northern Telecom, and Bell Northern Research.228 206. CTP claims that its innovations have been entirely original.229 It also asserts that it is as near to deployment of PCS as the three tentative preference grantees and that a 215 CTP'J base stations would scan available channels to detect the signal level on each. Channels that have an energy level below a certain threshold, as determined by TIA bulletin 10D and IOE and other factors, would be sent to the mobile. The mobile then would scan the channels and pick the best channel for communications with the base station. 216 See CTP Request at 6 (May 4, 1992). 217 Id. at 7. 218 Id. at 13. 219 See Qualcomm at 5-6 (June 10, 1992). 220 See PacTel at 28 (June 10, 1992). 221 See GTE at 12 (June 10, 1992). 222 See Viacom at 10, 19 (June 10, 1992). 2:3 See CTP comments (June 10, 1992). 224 See CTP Reply at 13 (June 25, 1942). 225 See CTP at 25 (January 29. 1993). 2-6 We agree with CTP that finding one technology to be superior to another is not a basis for denial of a pioneer's preference. However, it does serve as a measure of innovativeness. In any event, as noted below, the conflicting information in the record and lack of demonstrated develop ments provides an independent basis to deny CTP's request for a pioneer's preference. 22 ' See APC Reply at 17 (March 1, 1943). 228 Id. at 19-20. 229 See CTP Reply at 1-4 (March 1, 1993). 1363 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 decision on awarding a preference should be based on progress toward a workable system, not on how much public experimentation has occurred. 207. While CTP may have played a role in the develop ment of interference avoidance technology, we agree with parties who argue that CTP has not demonstrated the fea sibility of its proposal. While CTP has provided a theoreti cal discussion of its technology, it has yet to test its ISCDMA concept or demonstrate whether using it will be effective in preventing interference with existing fixed mi crowave operations. Additionally, CTP's theoretical discus sion concludes that "[f]urther work is needed... to test their reliability in an actual PCS environment."230 Therefore we do not grant CTP a pioneer's preference for its interference avoidance technology. 208. With regard to CTP's request for a preference for its work on interfacing PCS with fiber optic and coaxial cable- based networks, we note that this was not part of CTP's original request but raised later in its filings on other applicants' requests. In those comments, CTP states that it has engaged in substantial work in the area of fiber optic and coaxial cable interfaces. CTP gives a brief description of work it says it is performing in this regard. However, we find that it has pursued the concept of cable PCS well after other entities and that its filings do not propose or dem onstrate responsibility for any new or innovative concept or technology. 209. In conclusion, it appears that CTP has developed only a concept of interference avoidance that it Claims can be implemented with any system infrastructure. We find no support for CTP's argument that it developed its interfer ence sensing approach prior to that of other interference avoidance proposals. Its proposed ISCDMA is a compila tion of CT-2 Plus concepts and Qualcomnvs equipment and lacks innovativeness. CTP maintains that it is the only applicant that has entirely original PCS technology; how ever, it also states that its interference sensing concept is well established due to its use in CT-2 and CT-2 Plus operations,231 and that it has conveyed its ownership in its CT-2 invention to another company. Accordingly, for the reasons stated herein, we deny CTP's pioneer's preference request. 210. Nextel Communications, Inc.232 (PP-54). Nextel re quests a pioneer's preference based on its Digital Mobile technology that it currently is implementing for Enhanced Specialized Mobile Radio (ESMR) service. Nextel proposes to use its technology to provide voice and data services using low-power base stations and handsets. It claims that Digital Mobile technology provides six times the capacity of analog technology on a 25 kilohertz frequency, and is capable of increasing SMR capacity by at least 15 times.233 Nextel contends that its Digital Mobile technology repre sents advances in system capacity, power control for mobile and handheld units, frequency agility, subscriber assisted 230 See CTP at Exhibit G, page 21 (January 29, 1993). 231 (37.2 pi us refers to the addition of a pager to CT-2 service. CTP asserts that CT-2 Plus design would use an interference avoidance technique in which its mobiles would scan a channel for interference before using that channel. 232 Nextel was formerly known as Fleet Call, Inc. 233 See Nextel at 2 (May 4, 1992). 234 Id. at 15. 235 Id. at 3. handoff, integration of disparate services, and seamless in frastructure.2 Further, Nextel argues that while the initial development and implementation of this technology is in the ESMR service, its full realization can be achieved in the broader PCS service.235 211. GTE asserts that Nextel's request for a preference based on advances it is implementing in an existing service, ESMR, is inappropriate in the instant proceeding because its effort and risk was not undertaken for the purpose of PCS.236 PacTel also opposes Nextel's request, concurring with GTE that Nextel already has been rewarded for its work by ESMR license approval. Further, PacTel argues that Nextel has not demonstrated a contribution to the development of PCS in the 2 GHz band under consider ation in this docket.237 212. In reply comments, Nextel argues that the technol ogy discussed in all the PCS pioneer's preference requests was developed for other services, and that its development of Digital Mobile technology for the ESMR service should not exclude it from obtaining a PCS preference.238 213. In our Tentative Decision we proposed to deny Nextel a preference because the proposal constitutes a com pilation or aggregation of existing communications technol ogies or systems or otherwise does not constitute a unique or innovative technology or service proposal. In response, Nextel contends that the Commission did not consider its proposal separately and in detail and failed to state in dependent reasons for the tentative denial. It argues that its Digital Mobile technology is innovative and would provide an optimum platform for a wide array of new PCS services.239 It further argues that the Commission's tentative denial contradicts our Waiver Order,2*0 in which we found implementation of Nextel's technology within the SMR service to be innovative and unique. Further. Nextel claims that implementation of its technology in the 800 MHz SMR bands validates its feasibility as a platform for 2 GHz PCS.242 214. We disagree that Nextel's pioneer's preference re quest was not independently evaluated in the Tentative Decision. While we grouped the reason for Nextel's tenta tive denial with others, all were independently evaluated. We find that its preference request is a description of the technology and services it has designed and implemented within the SMR service. While Nextel discusses advances it has made to SMR services, it does not explain or otherwise demonstrate how it plans to use Digital Mobile technology for PCS in ways different from ESMR, or how its technol ogy would result in different services. Specifically, while Nextel broadly states that if awarded a preference it will use its technology for microcell applications for in-building and pedestrian services, it does not define specific services, demonstrate by experimentation or technical showing the feasibility of providing these services in the spectrum range proposed for PCS, or explain what advantages its PCS 236 See GTE at 18 (June 10, 1992). 237 See PacTel at 17 (June 10, 1992). 238 See Nextel Reply at note 8 (June 10, 1992). 23() See Nextel at 9 (January 29, 1993). 240 See Waiver Order, 6 FCC Red 1533; recon. denied. 6 FCC Red 6989 (1991). 241 See Nextel at 11 (January 29, 1993). 242 See Nextel Reply at 7 (March 1, 1993). 1364 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 proposal at 2 GHz will provide relative to its existing ESMR operations at 800 MHz. Merely transferring essen tially the same technology and infrastructure from 800 MHz to 2 GHz does not qualify as innovative within the pioneer's preference context. 215. Our statements regarding Nextel's technology in the Waiver Order are inapplicable to the instant proceeding. In the Waiver Order, we found the enhancements to SMR to be innovative when compared to existing services. How ever, Nextel's PCS proposal is little different from the now-existing ESMR service. Further, Nextel's proposed PCS services, including two-way voice and data with handoff capability and automatic power control, are similar to those many other applicants are proposing. Nextel has not addressed how it may provide these services in the 2 GHz band, where propagation, technology, and existing services present a significantly different environment. Ac cordingly, we deny Nextel's request for a pioneer's pref erence. 216. Freeman Engineering Associates, Inc. (Freeman) (PP-55). Freeman requests a pioneer's preference for devel oping digital switching equipment that could be interfaced with PCS equipment. Freeman states that use of its digital switch will enhance PCS by allowing "total integration of PCN, cellular, dispatch, wireless PBX, LAN data networks, wide area data networks, paging and voice messaging, along with enhancements to allow access by regular telephone subscribers to deaf subscribers and vice versa." Freeman claims that its proposal will increase spectrum efficiency by increasing control over screening and routing of telephone calls. It also claims that this control will result in reduced air time.243 217. PacTel argues that Freeman is proposing existing technology that does not appear to be innovative.244 Both PacTel and GTE also state that Freeman has not completed any experiments.245 In addition. GTE maintains that Free man bases its request on its efforts to develop switching equipment specifically for PCS, but that its application provides little information to judge why compared to exist ing designs its switching design would be considered in novative. 218. In response to GTE's comments. Freeman states that its switch is only one component of its proposal, and that it has proposed a new. usable, and innovative system. 246 In response to PacTel's comments. Freeman states that it proposes to combine elements of existing technology in a new and innovative way to provide a new and spectrally efficient service and argues that the pioneer's preference criteria recognize use of existing technology in new and innovative ways.24 ' 219. In the Tentative Decision, we proposed to deny Freeman a preference because the technical showing or preliminary result did not demonstrate the feasibility of the technology, or that Freeman had not demonstrated devel opment of the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. 220. Responding to the tentative denial of its request, Freeman argues that under the pioneer's preference rules it is entitled to sufficient time to complete tests pursuant to its experimental license before the Commission determines whether its application for a preference should be granted or denied.248 Further, Freeman claims that its most recent report shows that it has developed the capabilities or pos sibilities of PCS and brought it to a more advanced and effective state. 221. We find that the progress report Freeman refers to does not demonstrate that it has completed its tests. Rather, the report indicates that Freeman merely has performed limited testing of switches and has concentrated mainly on the software aspects of those switches.249 Freeman does not provide any additional detail to clarify what it has accom plished that is innovative for PCS nor demonstrated the feasibility of its proposal. Accordingly, we deny Freeman's request for a pioneer's preference. 222. Grand Broadcasting Corporation (Grand) (PP-56). Grand proposes a two-way PCS service but does not pro vide specific details of its system. In comments on Grand's request, GTE states that Grand's proposal relies on many existing technologies and is not innovative. 250 PacTel states that Grand does not demonstrate the proposal's technical feasibility. 251 223. In the Tentative Decision we proposed to deny Grand a pioneer's preference because Grand did not dem onstrate the technical feasibility of its proposed PCS system or the capabilities of a specific identifiable PCS technology. Grand did not respond to the Tentative Decision. Accord ingly, we deny Grand's pioneer's preference request. 224. Iowa Network Services, Inc. (Iowa) IPP-57). Iowa proposes to use fiber optic infrastructure as backbone for PCS and to provide wireless centralized equal access for PCS. GTE contends that Iowa has not addressed the radio portions of PCS and therefore should be denied a pref erence.252 225. In the Tentative Decision we proposed to deny Iowa a preference because Iowa failed to submit either the pre liminary results from an experiment or a sufficient show ing of technical feasibility. Iowa did not respond to the Tentative Decision. Accordingly, we deny Iowa's pioneer's preference request. 226. Omnipoint Corporation, Oracle Data Publishing, Inc., and McCaw Cellular Communications, Inc. (Omnipoini Ora cle) (PP-59). Omnipoint Oracle proposes a Data Broadcast Service (DBCS) or high speed, high volume information "superhighway." that it describes as a one-way data trans mission service using spread spectrum techniques. In com ments to Omnipoint Oracle's pioneer's preference request. 243 See Freeman Request for a Pioneer's Preference (May 4, 1992). 244 See Pacific Bell at 21 (June 10. 1992). 245 Id. See also GTE at 18 (June 10. 1992). 246 See Freeman Reply at 3 (June 25, 1992). 247 Id. 248 See Freeman Comments and Supplemental Information (January 29. 1993). 24() See Progress Report at 1-2 (March 19. 1993). 250 See GTE at 19 (June 10, 1992). 251 See PacTel at 13 (June 10, 1992). 252 See GTE at 17 (June 10, 1992). 1365 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 PacTel argues that this service is not directly relevant to PCS. GTE states that Omnipoint Oracle has not made a sufficient showing of technical feasibility. 25-' 227. In the Tentative Decision, we proposed to deny Omnipoint Oracle's request because its request did not demonstrate the technical feasibility of its proposal or that the requester has developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. Omnipoint Oracle did not respond to our tentative denial. Accord ingly, we deny Omnipoint Oracle's pioneer's preference request. 228. Omnipoint Mobile Data Company (Omnipoint Mo bile) (PP-60). Omnipoint Mobile has proposed a service it calls asymmetrical two-way wireless network (ATWN). ATWN is designed to deliver two-way data communications to mobile computing devices such as portable terminals and new pen-based computers. In comments to Omnipoint Mobile's pioneer's preference request, PacTel supports the general concept of a mobile-data service but argues against a preference for Omnipoint Mobile without further in formation being submitted that describes its system.234 GTE states that the proposal is extremely theoretical and does not demonstrate the technical feasibility of an innovation in communications technology.255 229. In the Tentative Decision we proposed to deny Omnipoint Mobile's request because its request did not demonstrate the technical feasibility of its proposal or that the requester has developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. Omnipoint Mobile did not respond to the Tentative Decision. Accord ingly, we deny Omnipoint Mobile's pioneer's preference request. 230. Pacific Bell (PP-61). Pacific Bell requests a pioneer's preference based on its development of "Universal Digital Personal Communications Service" (UDPCS) and for spec trum sharing techniques developed by its sister company. Telesis Technologies Laboratory (TTL). Pacific Bell claims UDPCS provides low-cost service, easy implementation, and personalized communications. It also claims that its spectrum sharing techniques are innovative because the cell design permits automatic frequency coordination among contiguous cells, avoiding costly and time consum ing frequency coordination. Specifically, according to Pa cific Bell. TTL developed an approach for it that is based upon spatial sharing, or the sharing of the same radio resource at the same time but in a different area. Further, Pacific Bell maintains that its use of existing telephone company wireline interfaces simplifies the design criteria for handsets and radio ports, and its use of existing infra structure creates an economical wireless access system. 231. In comments to Pacific Bell's pioneer's preference request, GTE states that Pacific Bell has not shown an innovation in communications technology but merely ad vocates connecting well-understood radio technologies to pre-existing wireline technology involving transport and network intelligence.256 However, PacTel maintains that both it and Pacific Bell have made substantial contribu tions to PCS development.257 232. In the Tentative Decision, we proposed to deny Pacific Bell a preference because the proposal constitutes compilations or aggregations of existing communications technologies or systems or otherwise does not constitute a unique or innovative technology or service proposal. 233. Responding to the Tentative Decision, Pacific Bell contends that its proposed system is not a compilation of existing technologies and that it has been active in its development through joint ownership of Bellcore. Pacific Bell states that it and other Bell Operating Companies (BOCs) funded and directed Bellcore to explore low power digital wireless radio in 1984 and that it and another BOC funded and directed Bellcore to develop a PCS Framework Technical Advisory Group. Pacific Bell maintains that while this was shared research, the sharing aspect does not minimize its claim of innovation. Pacific Bell contends that it is the only owner of Bellcore to combine its research with that of its sister company, TTL. 234. Pacific Bell commissioned Comsearch to compare its preference request with others and Comsearch con cluded: "By comparison to other Pioneer Preference Re quests, the Pacific Bell proposal reads like a text-book profile of a pioneering innovative applicant . . . Pacific Bell has developed a spectrum sharing strategy that is signifi cantly more innovative than FAST." 2" According to Comsearch, FAST assumes ideal and not real world con ditions and thus is prone to a high level of interference between PCS and existing microwave users, whereas TTL has developed an approach for Pacific Bell that is based upon spatial sharing. Also in contrast to FAST, according to Comsearch, TTL's spectrum sharing technique takes into consideration one-way links and links that vary from an 80 megahertz spread, resulting in less interference. 235. We find that Pacific Bell has not demonstrated a new or innovative technology. On the contrary, its pro posal consists of equipment and technology that existed before and is merely reconfigured. When the Commission developed its pioneer's preference rules, it emphasized that to warrant a pioneer's preference an applicant must present an innovation that involves a substantial change from that which existed prior to the time the preference is requested and demonstrate its responsibility for the innova tion.259 Pacific Bell's "spatial sharing" approach appears to be indistinguishable from the traditional frequency man agement approach of geographically separating stations. Ac cordingly, we deny Pacific Bell's pioneer's preference request. 236. PacTel Corporation (PP-62). PacTel bases its pio neer's preference request on work it and its subsidiary, Telesis Technologies Laboratory, have performed with re spect to PCS spread spectrum technology. In comments on PacTel's request, GTE argues that other parties have made similar contributions, and that there is nothing innovative about PacTel's request.260 253 254 255 256 257 See PacTel at 14 and GTE at 12 (June 10, See PacTel at 29 (June 10, 1992). See GTE at 19 (June 10, 1992). Id. at 9. See PacTel Reply at 22 (June 25, 1992). 1992). 258 See PacTel Reply at 7 (January 29, 1993). 259 See Pioneer's Preference Report and Order, supra note 2, 6 FCC Red at 3494. 260 See GTE at 9 (June 10, 1992). 1366 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 237. In the Tentative Decision, we proposed to deny PacTel's pioneer's preference request, finding that its pro posal was a compilation or aggregation of existing commu nications technologies or systems, or otherwise did not constitute a unique or innovative technology or service proposal. PacTel did not respond to the Tentative Decision. Accordingly, we deny PacTel's pioneer's preference re quest. 238. PageMan, Inc. (PP-63). PageMart requests a pio neer's preference in ten major markets based on its proposed Personal Radio Telephone Service (PRTS). The proposed service would employ a 3-tier hierarchy of citywide, building, and picocell coverage and allow two- way voice and data, but without handoff capability. PageMart's handset would operate as a conventional cordless telephone (CT-1 type) at home and a CT-2 type telephone outside the home and would have "public" and "private" modes of operation that could determine the least expensive communications route. "Public mode" would allow access to public cells and could use PRTS airtime whereas "private mode" could initiate and receive calls only from private cells that are connected to the existing wireline network. Calls from public cells, while in private mode, would be received as a page. The PRTS would first attempt to route calls over private cells to avoid airtime costs, with unsuccessful calls routed over public cells. PageMart estimates that the monthly cost of PRTS would be a $10-15 access fee and 10-15 cents/minute for airtime.261 239. In comments to PageMart's pioneer's preference request, PacTel states that PageMart has not demonstrated innovation.262 GTE maintains that PageMart has not dem onstrated the technical feasibility of its technology, includ ing the necessary coordination of public and private microcells. Further, GTE claims that PageMart's proposal requires an excessive amount of spectrum and that its cost assumptions are suspect.263 Viacom argues that PageMart does not justify its request for ten markets to amortize investment in PCS and states that its own economic analy sis indicates that the investment can be amortized over a single geographic area. 264 240. In reply comments , PageMart argues that it merits a preference because its PRTS system will be more ubiq uitous, comprehensive, and cost effective than any compet ing PCS proposal. In response to PacTel, PageMart states that its request is based upon its contribution of an innova tive hierarchical network design and simulcast signaling that is independent of any single modulation approach.2" In response to GTE's arguments, PageMart states that: (1) coordination of public and private microcells can be done by broadcasting channelization information in each cell so that the subscriber unit will always know which channel to seize for call initialization or completion: (2) low cost service can be provided due to increased system capacity with demand; and (3) GTE equates spectrum efficiency with size of bandwidth rather than quantity of transmitted information. Finally, in response to Viacom, PageMart as serts that limiting a preference to one geographic area provides insufficient incentive for a pioneer to bring its ideas to the Commission, and would restrict the use of advanced technology by forcing communications to be pro vided in the least expensive manner to recover cost of investment.2"6 241. In the Tentative Decision, we proposed to deny PageMart's request for a preference because PageMart had not demonstrated the feasibility of the technology or that it had developed the capabilities or possibilities of a specific identifiable PCS technology or service or had brought it to a more advanced or effective state. 242. In its comments to the Tentative Decision, PageMart reiterates that it deserves a preference because it has pio neered an innovative technique of network design and performance that requires little infrastructure investment. In addition, PageMart states that PRTS is worthy of a preference because it uses one universal, lightweight, in expensive handset and accommodates cordless home tele phones, wireless in-building communications, and portable telecommunications: all to a single, personal telephone number.267 243. After reviewing the record, we conclude that PageMart has not demonstrated the technical feasibility of its PRTS system and that the PCS rules we have adopted are inconsistent with PageMart's proposal. PageMart stated in its May 4. 1992 Request for Pioneer's Preference that its experimental efforts will enable it to confirm the feasibility of the key elements of PRTS. However, PageMart does not have an experimental authorization at 2 GHz.2"8 We cannot conclude from the record that its PRTS technology is feasible. Further, PageMart has not substantiated its claims with technical details concerning its ability to accomplish and implement its proposal; i.e., handset and cellular tech nologies, modulation type, and frequency coordination. In addition, PageMart has not explained the basis for the cost of service figures on which it relies in its request. Finally. PageMart's request for 60 megahertz is inconsistent with the rules adopted in the PCS Second Report and Order. Accordingly, for the above reasons, PageMart's request for pioneer's preference is denied. 244. Panhandle Telephone Cooperative, Inc. (Panhandle) (PP-64). Panhandle requests award of a pioneer's pref erence for proposing to provide PCS to rural locations in Oklahoma. However, it does not provide specific technical details of its proposed system. In comments to Panhandle's pioneer's preference request, GTE contends that since Panhandle has not tested its proposal, it should not be awarded a preference.269 245. In the Tentative Decision, the Commission proposed to deny Panhandle's request for pioneer's preference, con cluding that Panhandle had failed to submit either the preliminary results from an experiment or a sufficient 261 See PageMart Request at 3 (May 4, 1992). 262 See PacTel at 22 (June 10, 1992). 263 See GTE at 13 (June 10, 1992). 264 See Viacom at 20 (June 10, 1992). 265 See PageMart Reply at 5 (June 25, 1992). 266 Id. at 7. 267 See PageMart at 3 (January 29, 1993). 268 PageMart has four experimental licenses at 930-931 MHz. PageMart states that through its experiment at 930-931 MHz it will verify and refine key system elements and analyze areas of potential trade-offs in a related technology called Personal In formation Messaging System (P1MS). 2M See GTE at 17 (June 10, 1992). 1367 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 showing of technical feasibility. Panhandle did not respond to the Tentative Decision. Accordingly, we deny Panhandle's pioneer's preference request. 246. PCN Communications, Inc. (PCNC) (PP-65). PCNC proposes a PCS system using 50 megahertz of bandwidth utilizing shared PBX technology interfaced with a proposed PCS network. In comments to PCNC's pioneer's preference request, PacTel argues that SCSM and Ericsson Corpora tion are more worthy of a preference than PCNC for this proposed innovation and recommends denying the request.270 GTE contends that PCNC's alleged innovation is merely a compilation of other's efforts.271 247. In the Tentative Decision, the Commission tenta tively rejected PCNC's pioneer's preference request because PCNC's wideband approach was inconsistent with the rules proposed in the Notice. PCNC did not respond to the Tentative Decision. Accordingly, we deny PCNC's pioneer's preference request. 248. PerTel, Inc. (PerTel) (PP-66). PerTel requests a pio neer's preference for its proposal to investigate using CDMA techniques for PCS. In comments on PerTel's pio neer's preference request, PacTel and GTE object to the grant of a preference to PerTel because it has not dem onstrated an innovative proposal.2 ' 2 249. In the Tentative Decision we proposed to deny PerTel's request on the basis that its proposed system was a compilation or aggregation of existing communications technologies or systems, or otherwise did not constitute a unique or innovative technology or service proposal. PerTel did not respond to the Tentative Decision. Accord ingly, we deny PerTel's pioneer's preference request. 250. Pulson Communications Corporation (Pulson) (PP- 67). Pulson plans to provide PCS using "impulse radio" - a technology it says that it purchased from Time Domain Systems, Inc. However, Pulson offers only a sketchy de scription of what impulse radio is. In comments to Pulson's pioneer's preference request, both PacTel and GTE object to awarding a preference to Pulson because it has not demonstrated the feasibility of its proposed system. 2 ' 3 251. In the Tentative Decision, we proposed to deny Pulson's request for a preference because it had not dem onstrated the feasibility of the technology, or that Pulson was responsible for developing the capabilities or possibili ties of a specific identifiable PCS technology or service or for bringing it to a more advanced or effective state. Pulson did not respond to the Tentative Decision. Accordingly, we deny Pulson's pioneer's preference request. 252. Qualcomm Incorporated (PP-68). Qualcomm re quests a pioneer's preference for its development of a digi tal voice and data system that uses CDMA technology in 1.25 megahertz channels. It contends that its narrowband CDMA system can use spectrum not used by existing fixed microwave operations, and therefore that use of its technol ogy would alleviate the necessity to relocate existing users of the 2 GHz band. Qualcomm argues that FDMA, TDMA, and wideband CDMA will not be able to provide the flexibility required to operate under the technical con straints present in this band. 253. Qualcomm states that its system includes use of a database of existing microwave paths that aids in assigning channels that will not interfere with fixed microwave sys tems.2 4 It asserts that CDMA permits frequency reuse of N = l. Qualcomm also proposes a distributed antenna sys tem to deploy picocells in strings connected to the CDMA base stations to provide ubiquitous coverage. The result of these innovations, Qualcomm claims, is that its digital voice and data service is capable of providing ten times the capacity of analog cellular services in the same bandwidth. Qualcomm also asserts that its system is designed to op erate in all environments, ranging from densely populated pedestrian to fast-moving vehicular. 254. Qualcomm developed its system for 800 MHz digital cellular applications, but says that it has modified its 800 MHz system to operate in the 1800 MHz range. Qualcomm states that it has tested 1800 MHz CDMA equipment in a wireless local loop application.275 Qualcomm adds that in the future it will perform interference tests at 1800 MHz to "provide the basis for implementing software changes to the basic CDMA system so that coexistence' criteria can be used in PCS operations."276 255. In comments filed on Qualcomm's request, GTE asserts that Qualcomm does not satisfy the Commission's requirements for a technical demonstration.2 '' Viacom states that the only way Qualcomm's proposed system can share 2 GHz spectrum with existing users and adhere to interference criteria is by not allowing co-channel CDMA transmissions.2 '8 Viacom contends that coexistence will re quire a frequency sharing and coordination scheme to prevent CDMA signals from interfering with microwave operations, and asserts that Qualcomm did not adequately address this topic in its filing. Therefore, Viacom asserts that Qualcomm does not merit a preference because it failed to adequately address spectrum sharing and failed to demonstrate the technical feasibility of its proposal. 256. AMT/DSST also oppose granting a preference to Qualcomm. arguing that Qualcomm designed its system for the 800 MHz cellular service.27<* They claim that Qualcomm has announced publicly that its system was developed to be the standard for digital cellular systems and that the CDMA architecture it proposes for PCS differs only in frequency from its proposal for digital cellular. Finally, AMT/DSST assert that the technological choices Qualcomm made to meet the needs of cellular systems operating in the 800 MHz range are not optimal for PCS applications. For example, they maintain that Qualcomm's system was designed for large cells and subscriber units that 270 See PacTel at 14 (January 24. 1992). 271 See GTE at 19 (January 24, 1992). 272 Id. See also PacTel at 22 (January 24, 1992). 273 See GTE at 13 and PacTel at 29 (January 29, 1992). 274 Qualcomm proposes to apply the interference criteria of Bulletin 10E and perform extensive interference tests to deter mine exclusion zones around microwave receivers. It states that its automatic power control will permit its mobiles to operate at the minimum power necessary, thereby reducing interference. It also proposes to use soft handoff, which permits a mobile to stay on one frequency, but switch the cell if interference occurs in the original cell. It further proposes to use hard handoff, which permits a mobile to change frequencies if interference occurs on the original frequency. Qualcomm claims that im plementation of these techniques in conjunction with the spreading characteristics of CDMA will permit its PCS network to coexist with microwave systems. 275 See Qualcomm at 6 (June 10, 1992). 276 See Qualcomm Request at 9 (May 4, 1992). 277 See GTE at 9 (June 10, 1992). 278 See Viacom at 17 (June 10, 1992). 27Q See AMT/DSST Reply at 7 (June 25, 1992). 1368 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 are often mounted or carried in vehicles that move at high speed. AMT/DSST argue that the large cells cause greater multipath problems than small cells and that the mobile speeds require technical complexity to realize cell-to-cell handoff at high speed. 257. Several parties, including PacTel and Bell Atlantic, support Qualcomm's preference request, based on what they maintain is its innovative work in narrowband CDMA.280 PacTel states that Qualcomm was the first to do this work and show that narrowband CDMA is feasible. Bell Atlantic states that no one disputes Qualcomm's claim of having pioneered the use of CDMA for mobile cellular applications.281 258. Qualcomm's reply comments state that Viacom does not fully understand Qualcomm's system. Qualcomm states that it has demonstrated the feasibility of its system and that the system avoids interference by taking advantage of power control, hand-off, frequency agility, digital control channel capabilities, and other features. 259. In the Tentative Decision, we proposed to deny Qualcomm's request for a pioneer's preference. We con cluded that Qualcomm's PCS system appeared essentially to be identical to that which it had developed for the 800 MHz cellular bands. We found no evidence that Qualcomm had developed and tested its system at 2 GHz, nor that it was designed or could work in a spectrum sharing arrangement at 2 GHz. We therefore tentatively concluded that Qualcomm did not merit a preference for merely proposing that its existing 800 MHz CDMA system be converted to work at 2 GHz. 260. Responding to the Tentative Decision, Qualcomm states that the Commission misunderstood the innovative nature of its proposal.282 Qualcomm claims that it does not seek a preference for the radio frequency engineering tech niques used to operate its CDMA system in the 2 GHz band. Rather, Qualcomm claims it merits a preference for conceiving, designing, constructing, and testing an end- to-end communications system with unique, patented fea tures including advanced coding and signal processing subsystems, a power control system to reduce mobile pow er requirements, and a receiver that facilitates soft hand-off and mitigates the harmful effects of multipath. 283 Qualcomm argues that its coding and processing technol ogy permits it to offer frequency sharing and multiple services from a single platform to ensure successful devel opment of PCS, and that it has tested and validated a working 2 GHz PCS system. 261. Qualcomm states that while it did not invent the idea of CDMA, it added significantly to the technology by developing new hardware and software to solve many of the propagation and spectrum sharing problems that have plagued CDMA's use in mobile communications. Qualcomm asserts that it solved the "near-far" problem by using its patented power control system that includes both open and closed loop subsystems and that its signal design and receiver technology mitigate the negative effects of multipath. 284 262. Qualcomm argues that the Commission's tentative denial of its request, based upon its technology being iden tical to its cellular CDMA technology, is not germane. It asserts that it should not be penalized for developing a versatile CDMA system that can be used at different fre quency bands. Qualcomm argues that because its system was adapted first for cellular use at 800 MHz does not negate the innovative nature of using its system at 2 GHz for PCS. It contends that the Commission did not penalize the other applicants awarded a tentative pioneer's pref erence for building on and improving existing technologies. Qualcomm also claims that in addition to its work in the traditional cellular configuration, it has implemented microcells, low power picocells, large microcells, and a distributed antenna system to provide ubiquitous coverage. It maintains that its system will provide service to persons in a mobile, pedestrian, and in-building environment pro viding any combination of voice and data. 263. Qualcomm also states that it has developed distrib uted antenna and microcell systems for its PCS system.285 It asserts that its distributed antenna is designed to increase multipath and signal diversity and that it will permit exten sive in-building coverage without cell-to-cell handoff, thus providing a low cost and high quality service. Qualcomm also asserts that it has developed a microcell extension of the CDMA base station that permits concentrated CDMA coverage in high density or shadowed areas. Qualcomm argues that it has developed hardware and software for base stations, switching, and subscriber equipment that operates in the 1850-1990 MHz band, and states that it has devel oped its exclusion zone proposal around microwave oper ations in this band. 264. GTE and CTP offer some support for Qualcomm's comments. GTE argues that the tentative grant to APC without one to Qualcomm is not consistent or logical, given that APC used Qualcomm's equipment in its experi mental work.286 CTP states that it will test Qualcomm's equipment because it is the "simplest, most elegant adapta tion that would preserve the innate cost and capacity ad vantages of CDMA while providing maximum capability for frequency sharing with fixed microwave." 287 265. In the Tentative Decision, we agreed with AMT/DSST that Qualcomm did not qualify for a pref erence because many of its innovations were designed for implementation at cellular frequencies. We proposed to deny Qualcomm's request because its narrowband CDMA system essentially is identical to that which it already has developed for use in the 800 MHz cellular bands. This includes the advanced coding, signal processing subsystems, power control system, and receiver, not merely the radio frequency engineering techniques. 266. We continue to believe that most of the technical developments and patents associated with Qualcomm's pro posal were developed for implementation of its 800 MHz digital cellular system, and we disagree that adapting this work to the 2 GHz PCS band is innovative. Additionally, the services that Qualcomm proposes are already permitted 280 See PacTel at 10, PerTel at 5, and Pulson at 4 (June 10, 1992). 281 See Bell Atlantic at 16 (January 29, 1993). 282 See Qualcomm at 2-4 (January 29, 1993). 283 Id. at 3-4. 284 In a CDMA system, a mobile that is far away from the base station must have the same signal level at the base station as a mobile that is close. In order for a CDMA system to stack multiple users on the same channel with different codes, the users' power levels need to be equalized or the system's capacity is limited. 285 See Oualcomm Report at 3 (November 4, 1992). 286 See GTE at 3 (January 29, 1993). 287 See CTP at 17 (January 29, 1993). 1369 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 in the cellular bands. While Qualcomm has done work at 2 GHz on exclusion zones around microwave towers, the use of smaller cells, and remote antennas, after extensive review we have been unable to identify a specific signifi cant aspect of this work that is innovative and for which Qualcomm is responsible. Therefore, while Qualcomm's equipment appears viable for the provision of PCS services, it does not qualify Qualcomm for a preference. Accord ingly, we deny Qualcomm's pioneer's preference request. 267. Satcom, Inc. (Satcom) (PP-70). Satcom requests a pioneer's preference for developments related to using ca ble infrastructure in conjunction with cell "stretching" technology288 to make feasible provision of PCS in less populated and low density areas. 9 Satcom maintains that its innovations are important to the introduction of affordable PCS to rural America. It states that its proposal will: 1) utilize existing cable plant, and thereby minimize the net capital costs of PCS microcell technology; 2) utilize roamer corridors in low-density rural areas to minimize capital investment in base stations and software necessary for call hand-offs; and 3) promote novel business arrange ments with long distance carriers to achieve cost-savings. 268. Specifically, Satcom proposes to link microcells using what essentially are repeaters connected to the cable plant, as opposed to installing separate base stations for each microcell. Satcom states that when two or more re peaters (RADs), operate in close proximity and are con nected to the same cable plant a distributed antenna pattern (DAP) is formed. According to Satcom, RADs can be linked together along cable plants forming DAPs. Link ing DAPs in turn creates what Satcom calls roamer cor ridors, which link antenna patterns. 269. Satcom states that the primary benefit of roamer corridors is that a user can move within the coverage zone of the RADS/DAPs without call handoff. It maintains that call handoff involves complexity and cost that will be needed only when two roamer corridors adjoin. 270. In comments on Satcom's pioneer's preference re quest, GTE states that Satcom appears to have established "a colorable claim" to a pioneer's preference, but that the equipment Satcom proposes for its handset is not available and that its request is not supported by a showing of technical feasibility.290 PacTel asserts that Satcom's pro posed cable infrastructure lacks necessary switching capa bility and standard interfaces.291 Further, PacTel contends that merely modifying cable infrastructure should not qualify for a preference. 271. In reply comments, Satcom states that it is now using equipment that is readily available and has dem onstrated its technical feasibility. Further, it maintains that its claim to innovation is not the handset technology, but its proposed CATV-PCS architecture. Satcom also main tains that PacTel's comments do not consider that using the cable infrastructure was but one facet of the Satcom tech nical proposal and that PacTel takes no account of Satcom's proposed cell stretching that will facilitate provi sion of affordable PCS in low density population areas. 272. In the Tentative Decision we proposed to deny Satcom's pioneer's preference request because, while the proposal may have demonstrated an efficient plan to use cable facilities to provide PCS, Cox appeared to have first proposed such integration, developed the necessary hard ware, and conducted at least preliminary field trials with actual hardware. In responding to the Tentative Decision, Satcom argues that it is the only cable-based PCS propo nent to examine and test PCS in rural settings, and that its proposal complements other cable-based PCS proposals by facilitating provision of low-cost PCS in low density areas that differ, both economically and technically, from the test sites of other applicants in major metropolitan areas. Satcom claims that it meets each of the tests specified in the pioneer's preference rules and that its contribution is virtually indistinguishable from that of Cox; i.e, it has proposed, developed, and tested an efficient PCS network by utilizing existing cable infrastructure. 273. We find that, despite Satcom's characterization of its proposal as innovative, other parties have made similar proposals. In particular. Satcom's proposal uses the cable infrastructure as an integral part of the PCS system to maximize efficiency and reduce cost, and uses the RAD concept. Further, while Satcom has described its stretching technology using cable infrastructure, it has not fully de scribed the PCS system that it plans to connect with the cable plant. For example, no details regarding bandwidth, transmitting power, and type of services to be provided are given. Additionally, Satcom's proposed cell-stretching is in herent in the use of the cable infrastructure for PCS in all areas, and roamer corridors are inherent in the use of the cable infrastructure for PCS in rural areas. Therefore, we cannot conclude that Satcom has developed a PCS technol ogy that is innovative. Finally, novel business arrangements are not relevant to award of a PCS pioneer's preference. Accordingly, for these reasons, we deny Satcom's pioneer's preference request. 274. SM Tek, Inc. (SM Tek) (PP-72). SM Tek requests a pioneer's preference based on its efforts to use frequencies higher than 2 GHz to provide PCS. PacTel and GTE oppose SM Tek's pioneer's preference request, stating that SM Tek has failed to demonstrate the technical feasibility of a new and innovative technology. 275. In the Tentative Decision we proposed to deny SM Tek's request for a pioneer's preference on the basis that its proposed system was a compilation or aggregation of exist ing communications technologies or systems, or otherwise did not constitute a unique or innovative technology or service proposal. SM Tek did not respond to the Tentative Decision. Accordingly, we deny its pioneer's preference request. 276. Spatial Communications Inc. (SCI) (PP-73). SCI pro poses to provide PCS using a technology it labels "Spatial- Division Multiple Access" (SDMA). SCI claims SDMA will increase spectrum efficiency by a factor of ten by identify ing the location of PCS subscribers, permitting directional transmissions. In comments to SCI's pioneer's preference request, PacTel states that SCI's proposal is technically 288 Cell stretching is the term used by Satcom to describe the use of existing CATV systems to increase the service area of PCS cells. 289 See Satcom's Pioneer's Preference Request at 2 (May 4, 1992). 290 See GTE at 10 and 13 (June 10, 1992). 291 See PacTel at 26 (June 10, 1992). 1370 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 elegant and intriguing and shows great promise. However, both PacTel and GTE maintain that SCI has not dem onstrated the technical feasibility of its system. 277. In the Tentative Decision, we proposed to deny SCI's request for a preference because it had not demonstrated the feasibility of the technology, or that SCI was responsi ble for having developed the capabilities or possibilities of a specific identifiable PCS technology or service or for bringing it to a more advanced or effective state. SCI did not respond to the Tentative Decision. Accordingly, we deny SCI's pioneer's preference request. 278. Suite 12 Croup (Suite 12) (PP-74). Suite 12 requests a pioneer's preference for its proposal to use patented technology that it developed for 28 GHz Local Multipoint Distribution Service (LMDS) to implement PCS at 2 GHz. Suite 12 states that its technology can be used for intra- and inter-building wireless communications and to provide a backbone system for PCS.292 According to Suite 12, its technology enables two-way communications and frequency reuse in both adjacent cells and within a cell. Suite 12 states that it should be granted a pioneer's preference be cause it has developed a new technology that can provide PCS. 279. Wireless Cable Association International. Inc. (WCA), PacTel, and GTE oppose to Suite 12's pioneer's preference request.21B WCA questions the ability of Suite 12's technology to accommodate PCS, and also notes that an affiliate of Suite 12, Hye Crest Management, Inc.. al ready has received the equivalent of a pioneer's preference through grant of a waiver to operate in the 28 GHz band. PacTel states that Suite 12's approach raises significant technical questions, including the lack of coverage, delay spread, and scattering, particularly in urban areas. GTE argues that the patented 28 GHz technology proposed for PCS backbone infrastructure by itself does not qualify for a preference to offer PCS service at 2 GHz. Finally, both PacTel and WCA note that Suite 12's innovative claims are already under consideration in the LMDS proceeding294 and WCA argues that no entity should receive more than one pioneer's preference.295 280. In reply comments, Suite 12 states its PCS system can operate at 28 GHz or it can operate as a backbone for PCS operations on other frequencies. With regard to GTE's comments. Suite 12 argues that its proposal is a com prehensive service that can be used in the following ways: 1) as a transport for PCS: 2) as individual multiple mini- cells within a major cell; 3) as a local area network for buildings that cannot be penetrated by typical line of sight frequencies with long wavelengths: 4) as a "last mile dis tribution" system for cable or fiber networks; 5) as a transport system; or 6) as a fixed or mobile (with interfaced frequencies) system with fiber optic bandwidth capacity. In addition, Suite 12 claims that its system is capable of interfacing with the PSTN: with systems at 900 MHz and 2 GHz; and with cordless telephones. It also claims that its system is capable of interfacing with systems employing data rates greater than one gigabit and that demonstrations of its system at the David Sarnoff Laboratories have illus trated the feasibility of carrying up to 400,000 simultaneous telephone conversations in a cell. 281. With regard to the technical questions raised by WCA and PacTel, Suite 12 states that it has demonstrated all aspects of its system, most of which have been verified by experiments at the David Sarnoff Laboratories.296 Suite 12 also states that its request for a pioneer's preference for PCS involves different technological advancements than those relied upon in its pending request for a pioneer's preference for LMDS. Specifically, the technology de scribed in the LMDS pioneer's preference request is for a fixed, two-way video, voice, and data service; whereas the PCS request results from further research, development, and enhancement of Suite 12's technology. According to Suite 12, these enhancements permit an intra-of- fice/inter-office PCS service, a mobile service with an inter faced frequency such as 2 GHz, and a service in which each subscriber has an individual number which can be used in any cell.297 Finally, Suite 12 asserts that to prohibit an entity from receiving more than one pioneer's pref erence defeats the entire purpose of the rules. Suite 12 states that technological innovation and development can not be limited just because an applicant develops multiple technological and service enhancements. 282. In the Tentative Decision, we proposed to deny Suite 12 a preference because the frequency band requested is not related to the spectrum under consideration. In reply comments, Suite 12 maintains that we mistakenly assumed that its pioneer's preference request was for 28 GHz. Suite 12 states that although its system could operate in other spectrum, it seeks a preference at 2 GHz. .It also states that it has researched, developed, and enhanced its LMDS tech nology to accommodate mobile PCS operations at 900 MHz and 2 GHz. Suite 12 argues that it was only after the preference requests were filed that the Commission an nounced its intention to utilize 900 MHz and 2 GHz frequencies and contends that to dismiss an application for a preference because the application is for the wrong fre quency band when the Commission had not yet specified the band is inappropriate. 283. Suite 12 further argues that its proposal is function ally identical to Cox's and that it provides a solution to the most troublesome drawback of PCS - the reliable transport of a large volume of information from cell-to-cell (back bone). It compares its solution of using patented wireless communications technology in the 28 GHz band with Cox's solution of using existing cable facilities, arguing that unlike Cox, Suite 12 actually conceptualized and developed the technology that underlies its proposal. 284. We find that there are significant differences be tween the requests of Suite 12 and Cox. Cox was awarded a preference for not only proposing a CATV system interface 292 See Suite 12 Request for Pioneer's Preference (May -I, 1992). 293 See June 10, 1992 filings; GTE Opposition, PacTel Com ments, and WCA Opposition. 294 See Notice of Proposed Rule Making, Order, Tentative De cision and Order on Reconsideration, CC Docket No. 92-297, 8 FCC Red 557 (1993) (pioneer's preference tentatively awarded to Suite 12).295 Id. 296 Suite 12 states that it conducted tests in 1991 to ascertain the feasibility of interfacing 900 MHz mobile and 2 GHz PCS band modulators/demodulators with 28 GHz equipment. It says that these tests were witnessed by numerous individuals, includ ing staff of federal regulatory agencies. See Suite 12 Reply at 5 (March 1, 1993). 297 See Suite 12 Reply at 7 (June 25, 1992). 1371 FCC 93-550 Federal Communications Commission Record 9 FCC Red No. 6 with PCS, but also for acquiring the interface equipment, proposing a combined PCS system and CATV facility, and demonstrating the combined system under its experimental test authority. Further, the Cox proposal is an innovation that conserves spectrum because it uses CATV facilities instead of radio without diminishing use of these facilities for CATV. By contrast, the Suite 12 system uses dedicated 28 GHz spectrum for its backbone system. Further, Suite 12 has not demonstrated that its system is technically fea sible. Finally, Suite 12 provides no evidence that it has performed tests using 2 GHz equipment. Accordingly, for these reasons, we deny its pioneer's preference request.298 285. Tele-Communications, Inc. (PP-75). TCI requests a pioneer's preference based on its proposal to integrate PCS and CATV systems. In comments filed to TCI's pioneer's preference request, PacTel and GTE objected to the grant of a pioneer's preference on the grounds that TCI has not demonstrated an innovative technology.299 286. In the Tentative Decision we proposed to deny TCI a pioneer's preference because, while the proposal may have demonstrated an efficient plan to use cable facilities to provide PCS, Cox appeared to have first proposed such integration, developed the necessary hardware, and con ducted at least preliminary field trials with actual hard ware. TCI did not respond to the Tentative Decision. Accordingly, we deny TCI's pioneer's preference request. 287. Telmarc Telecommunications (Telmarc) fPP-76). Telmarc requests a pioneer's preference based on various planned tests including adaptive network management, gateway RF digital front ends, CDMA networks, co-located distributed switch access, and adaptive beam-forming array antennas. However, Telmarc does not describe an identifi able PCS system in its request for a preference. In com ments to Telmarc's pioneer's preference request. GTE states that Telmarc's proposal is not innovative and is based on the work of other proponents. 288. In the Tentative Decision we proposed to deny Telmarc's request, finding that Telmarc failed to submit either the preliminary results from an experiment or a sufficient showing of technical feasibility. Telmarc did not respond to the Tentative Decision. Accordingly, we deny Telmarc's pioneer's preference request. 289. TRX Transportation Telephone Co. (TRX) (PP-77). TRX proposes to develop a "Nationwide Transportation Radiotelephone Service" (NTRS) that would provide for the communications needs of the U.S. trucking industry and be located only at truck stops and rest areas. TRX proposes to provide two-way voice, two-way mobile data, vehicle location reporting, advanced messaging services, voice mail, mobile facsimile, information services and fi nancial transactions. The TRX network would consist of base stations located at truck stops and rest areas; in-truck equipment; a network central processor; and a satellite delivery system.300 290. TRX proposes to use as a signaling protocol for its system the U.S. standard that emerges for PCS. Base sta tions in truck stops and rest areas would provide commu nications capabilities around each area. The driver would access the network when within the coverage zone to com municate from anywhere within the zone using a wireless handset. The central processor would handle and route information throughout the network and would be inter connected to each base station by satellite links or data packet networks. Satellite links would be provided by Very Small Aperture Terminals (VSATs) located at the base stations. 291. In comments to TRX's pioneer's preference request, GTE argues that the proposal is not innovative because virtually all aspects of it can be realized using existing services and Part 15 devices.301 TRX replies that GTE offers no support for its conclusion that the service could be accomplished using existing radio devices. TRX states that no current system can provide the array of services pro posed for its system and that the cost of obtaining the same services from multiple providers would exceed the rates TRX contemplates charging for its service.302 292. In the Tentative Decision we proposed to deny TRX a preference, concluding that the proposal constitutes a compilation or aggregation of existing communications technologies or systems or otherwise does not constitute a unique or innovative technology or service proposal. In response to the Tentative Decision, TRX states that its pro posal combines existing technologies and communications systems; however, it maintains that it would establish an innovative and economical service offering a comprehen sive, high quality, nationwide network connecting truck stops and rest areas that is not available from any single provider and that meets an important public need by en abling improved timing, efficiency, and quality of informa tion transfer for the American trucking industry. TRX appears to agree that its proposal does not address new technology, but argues that the Commission cannot deny an otherwise meritorious pioneer's preference request on that basis. 303 293. We conclude that TRX's proposed integration of existing services does not constitute a substantial enhance ment to an existing service or an added functionality pro vided to a broader group of customers, nor does it utilize a new or innovative technology. In addition, the rules to govern PCS adopted in the PCS Second Report and Order do not provide for service areas based upon truck stops or other small, separated areas.304 Accordingly, we deny TRX's pioneer's preference request. 298 With respect to Suite 12's argument that it was only after PCS preference requests were filed that the Commission an nounced its intention to utilize 900 MHz and 2 GHz frequencies for PCS, the PCS Notice of Inquiry, adopted on June 14, 1990, specifically discussed use of both of these frequency ranges. It further noted that "mobile communications are only feasible on frequencies below 3000 MHz with current technology," and sought "comment on the feasibility of relocating the microwave licensees in the bands 1850-1990 MHz, 1990-2110 MHz, and 2110-2200 MHz." See Notice of Inquiry, GEN Docket No. 90-314, supra note 40, at 3997-98. 299 See PacTel at 27 and GTE at 16 (January 24, 1992). 300 See TRX Pioneer Preference Request at 37-42 (May 4, 1992). 301 See GTE at 21 (June 10, 1992). 302 See TRX Reply at 34 (June 25, 1992). 303 See TRX pp. 15-19 (December 24, 1992). 304 JRX may find, however, that it can provide its proposed service using existing technology and Part 15 or cellular ser vices, or in concert with PCS providers licensed to use the 2 GHz band. 1372 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 294. Viacom International, Inc. (Viacom) (PP-78). Viacom's request for a pioneer's preference is based upon a spectrum sharing technique it proposes called "Spectral Zone Coordination" (SZC) and for its proposed "Power Density Principle" (POP).305 Its spectrum sharing technique consists of defining a "spectral zone", or specific range of frequencies, around each microwave receiver within which PCS transmissions would be excluded to avoid interference to the microwave receivers. Viacom states that SZC tech nology merits a preference because "it is a substantial, innovative advancement of recognized spectrum sharing technology that will enhance the capacity to efficiently and economically institute a PCN service capable of prompt nationwide deployment."306 295. Additionally, Viacom claims to have developed a method of quantifying the maximum potential interference of PCS systems to incumbent microwave operators by com bining propagation laws, cellular cell-splitting concepts, and adaptive power control. Viacom states that its Power Density Principle explains that an initial PCS system will be designed with large cells using maximum power and antenna heights and as traffic grows new cells will be added using lower power. According to Viacom, the interference potential of the expanded system will never exceed that of the initially deployed system.307 Viacom claims that the POP merits a preference award because "it constitutes the first and only recognition that there actually exists a pre dictable, finite point at which the worst case harmful inter ference from a PCS system will occur."308 296. Using its SZC and POP, Viacom proposes to implement a system to provide voice, medium speed data, short messaging, personal numbers, smart cards, and ad ministrative features based upon the DCS-1800/Global Sys tem for Mobile Communications (GSM) digital cellular system standard developed in the United Kingdom. The GSM standard is the pan-European digital cellular standard and Viacom states that it is now, or shortly will be, widely supported by equipment vendors in the United States. 297. In comments to Viacom's pioneer's preference re quest, GTE states that the proposal is based upon models and assumptions that have not been tested. GTE therefore asserts that Viacom has not demonstrated the technical feasibility of its proposal.309 PacTel argues that since Viacom uses a European standard it has not advanced PCS technology and also agrees with GTE that Viacom has failed to show technical feasibility.J ' 298. In reply comments, Viacom responds to PacTel, arguing that its preference request is not based on the European DCS-1800/GSM standard but instead on Viacom's spectrum sharing methodology. In their reply comments, APC, PacTel, and Time Warner raise additional objections to various aspects of Viacom's proposal. APC and Time Warner suggest that Viacom does not merit a preference because its SZC methodology was developed by Impulse Telecommunications Corporation (Impulse). PacTel raises technical objections, contending that Viacom's proposal: 1) does not consider peak power of mobiles or base station;3 " 2) uses spreading bandwidth to calculate an average power density per grid point, indepen dent of frequency;312 and 3) calculates exclusion zones incorrectly.313 Time Warner argues that Viacom's study has several weaknesses, such as using extremely optimistic cri teria for determining whether sufficient spectrum is avail able in a region and failing to recognize the need for frequency reuse.314 299. Viacom responds that it has a cooperative relation ship with Impulse pursuant to which spectrum sharing technical expertise is provided by Impulse and Viacom provides the cable expertise and financial support. 315 Viacom also maintains that the technical assumptions in the SZC models are biased towards worst case conditions and were developed to analyze sharing feasibility, not to engineer cell sites. In conclusion, Viacom states that "none of these criticisms find important faults with the Spectral Zone Coordination approach or its implementation". 316 300. In the Tentative Decision we proposed to deny Viacom a preference because its proposal constitutes a compilation or aggregation of existing communications technologies or systems or otherwise does not constitute a unique or innovative technology or service proposal. Viacom responded to the tentative denial, stating that its SZC and POP proposals merit a preference because they facilitate spectrum sharing between PCS and microwave systems. 301. We find that Viacom has not demonstrated its re sponsibility for developing a unique or innovative technol ogy or service. Based upon the information in the record, SZC and POP appear to be compilations of existing tech nologies. Accordingly, we deny Viacom's pioneer's pref erence request. PROCEDURAL INFORMATION 302. Accordingly. IT IS ORDERED that the requests for pioneer's preference filed by American Personal Commu nications; Cox Enterprises, Inc.: and Omnipoint Commu nications, Inc. ARE GRANTED. IT IS FURTHER ORDERED that the relevant licensing bureau shall impose the following conditions on the licenses received by Ameri can Personal Communications; Cox Enterprises, Inc.: and Omnipoint Communications. Inc. pursuant to their pio neer's preference awards: 1) Each licensee must build a system that substantially uses the design and technologies upon which its preference award is based: and 2) Each licensee must hold its license for a minimum of three years or until the construction requirements applicable to the five-year build-out period specified in Section 99.206 of the Commission's Rules have been satisfied, whichever is ear lier. IT IS FURTHER ORDERED That the requests for pioneer's preference filed by Adelphia Communications Corp.; Advanced MobileComm Technologies, Inc. and Digital Spread Spectrum Technologies. Inc.: American Por- 305 See Viacom Request for Pioneer's Preference (May 4, 1992). 306 Id. at 3. 307 See Viacom at pp. 6-9 (January 28, 1993). 308 Id. at 2. 309 See GTE at 13 (June 10, 1992).310 Id. 311 312 313 314 315 316 See PacTel Reply at 7 (June 25. 1992). Id. at 8. Id.. See Time Warner Reply at 26 (June 25. 1992). See Viacom Further Reply at pp. 2-6 (July 8, 1992). Id. at 9. 1373 FCC 93-sso Federal Communications Commission Record 9 FCC Red NO. 6 table Telecommunications, Inc.; American Telephone and Telegraph; American TeleZone; Ameritech; Associated PCN Corporation; Atlantic Cellular Company, L.P.; Bell Atlantic Personal Communications, Inc.; Broadband Com munications Corporation; Cable USA, Inc.; Cablevision Systems Corporation; Cellular Service. Inc.; Comcast PCS Communications, Inc.; Corporate Technology Partners; Freeman Engineering Associates; Grand Broadcasting Cor poration; Iowa Network Services, Inc.; Linkatel Commu nications, Inc.; LiTel Telecommunications Corporation; Nextel Communications, Inc.; Omnipoint Corporation, Oracle Data Publishing, Inc., and McCaw Cellular Com munications, Inc.; Omnipoint Mobile Data Company; Pa cific Bell; PacTel Corporation; PageMart, Inc.; Panhandle Telephone Cooperative, Inc.; PCN America, Inc.; PCN Communications, Inc.; PerTel, Inc.; Personal Communica tions Network Services of New York; Pulson Communica tions Corporation; Qualcomm Incorporated; Satcom. Inc.; Sharecom-Austin, L.P.; SM Tek. Inc.; Southwestern Bell Personal Communications, Inc.; Spatial Communications; Suite 12 Group; Tele-Communications, Inc.: Tel/Logic Inc.; Telmarc Telecommunications: Time Warner Telecommuni cations, Inc.; TRX Transportation Telephone Co.: US West NewVector Group, Inc.: Vanguard Cellular Systems, Inc.; and Viacom International, Inc. ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary 1374 9 FCC Red NO. 6 Federal Communications Commission Record FCC 93-sso Separate Statement of Commissioner James H. Quello In the Matter of Amendment of the Commission's Rules to Establish New Personal Communications Services I support the decision to award a pioneer's preference to American Personal Communications (APC), Cox Enterprises, Inc (Cox), and Omnipoint Communications, Inc. (Omnipoint). Each'of these entities have contributed significantly to the development of Personal Communications Service (PCS) technology. Awarding these pioneer's preferences will facilitate the deployment of PCS services to the public. Since the initiation of the personal communication service docket, Congress has changed the rules on the procedures the Commission may use to award licenses, in addition to comparative hearings and lotteries, Congress gave the Commission the authority to license PCS and other services through competitive bidding (auctions) and the Commission has determined that competitive bidding will be used to award PCS licenses. Additionally, the Commission sought comment on how the issue of pioneer's preference should be addressed in a competitive bidding environment. a Today's decision to award three pioneer's preferences in the personal communications service is one of several options the Commission could have taken. For example, the Commission could have awarded the 20 MHz Basic Trading Area (BTA) to the tentative selectees; however, such action would have limited rural telephone companies, small businesses and businesses owned by women and minorities from participating in the offering of PCS services in the New York, Washington, D.C., and Los Angeles areas. Another approach would have had the Commission divide one of the Major Trading Areas (MTA) into BTAs and award the BTAs to the tentative selectees. Such an approach would have been inconsistent with the Commission's PCS allocation scheme and would likely have required another rulemaking. Alternatively the Commission could have determined that under the competitive bidding scenario the tentative selectees pay a discounted price for spectrum, an option that the Commission may want to consider prospectively. Finally, the Commission could have determined that with competitive bidding, there is no longer a need for pioneer's preferences in the PCS proceeding. Today's decision is one of fairness and equity. The tentative selectees have invested significant sums of money to further the development of PCS. Furthermore, the tentative 1375 FCC 93-550 Federal Communications Commission Record 9 FCC Red NO. 6 Separate Statement of Commissioner Andrew C. Barrett Re: Third Report and Order in Pioneer Preference for Broadband Personal Communications Services This Third Report and Order terminates the pioneer preference decision in the Commission's broadband Personal Communications Services [PCS] docket. I support this item because I believe the Commission has a responsibility to fulfill its regulatory responsibilities after creating rules to implement regulations such as pioneer preference. Going forward, I believe the record in the review of our pioneer preference supports the retention of pioneer preference rules in future dockets. To date, I believe our pioneer preference rules have spawned innovative efforts from smaller companies, who might otherwise be precluded by the delay and expense of our experimental licensing and rulemaking processes. Small companies continue to provide innovation in every aspect of our efforts to implement new wireless services and competitive network alternatives. Thus, I believe these rules should be retained, and modified where appropriate, in order to ensure that companies, large and small, engage in a full public dialogue on the innovative services or technologies which they propose to the FCC and the consumer public. The net gain to our public policy and regulatory decisions provided by our pioneer preference rules outweighs the risks identified by various parties in this proceeding. 1376 9 FCC Red No. 6 Federal Communications Commission Record FCC 93-550 Separate .Statement of Commissioner Ervin S. Ouggan Re: Review of the Pioneer's Preference Rules, ET Docket No. 93- 266, First Report and Order; Amendment of the Commission's Rules to Establish New Personal Communications Services, GEN Docket No. 90-314 et al., Third Report and Order. It is no secret that I have long been a skeptic about the wisdom of the FCC's pioneer's preference policy. In this review docket, which sought to confront concerns about whether the pioneer's preference policy made sense in connection with our new auction authority, the proponents of pioneer's preferences have convinced me that the policy has indeed spurred innovation and investment in new technology. I therefore support retaining the pioneer's preference policy, at least for existing tentative selectees. If sparingly awarded, such preferences should help generate the technological innovation that the Commission hoped for when it created the policy. I always granted that the pioneer's preference policy was noble in concept. My concerns have been limited to the practical difficulties that could arise in implementing the policy. At the outset, I identified several potential dangers: the danger of politicizing awards; the danger of making difficult, hair splitting decisions about what constitutes true innovation; and finally, the danger of being caught up in endless litigation, which obviously might slow, rather than speed, the commercial advent of new technologies.1 The commenters in this proceeding and our actual experience, however, suggest to me that the benefits of the pioneer's preference policy outweigh the dangers it may threaten, at least with respect to those proceedings in which the FCC already has reached tentative or final decisions. And I grant that a decision to award preferences here is Lirue to the expectations that the Commission created when it established the pioneer's preference scheme: that innovators would be rewarded with the grant of a license enabling them to use and profit from their innovations. Amendment of the Commission's Rulos t-.o Establish N^w Personal Communications Services (CRN Docket No. 00 -314), Tentative Decision and Memorandum Opinion and Ord'-i . / F<"<" Red 7794, 7815 (1992); Establishment of Procedures to L-rovide a Preference to Applicants Proposing an Allocation for New Servicon (GEN Docket No. 90-217). Report and Ordor. f, FCC Red 3488, 1500 (1991) . 1377