Service Rules for the 698-806 MHz Band, Revision of the Commission's Rules Regarding Public Safety Spectrum Requirements, and a Declaratory Ruling on Reporting Requirement under the Commission's Anti-Collusion Rule

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 1, 2, 27, and 90

[WT Docket No. 06-150; CC Docket No. 94-102, WT Docket No. 01-309, WT Docket No. 03-264, WT Docket No. 06-169; PS Docket No. 06-229; WT Docket No. 96-86; WT Docket No. 07-166; FCC No. 07-132]

Service Rules for the 698-806 MHz Band, Revision of the Commission's Rules Regarding Public Safety Spectrum Requirements, and a Declaratory Ruling on Reporting Requirement under the Commission's Anti-Collusion Rule

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Federal Communications Commission (FCC) adopts final rules governing wireless licenses in the 698-806 MHz Band (

i.e.

, the 700 MHz Band). This spectrum is currently occupied by television broadcasters and is being made available for wireless services, including public safety and commercial services, as a result of the digital television (“DTV”) transition.

DATES:

Effective October 23, 2007, except for the amendments to §§ 27.14, 27.15, 27.50, and 90.176 which contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a document in the

Federal Register

announcing the effective date.

FOR FURTHER INFORMATION CONTACT:

Paul Moon at (202) 418-1793,

paul.moon@fcc.gov,

Mobility Division, Wireless Telecommunications Bureau; Peter Trachtenberg at (202) 418-7369, at

peter.trachtenberg@fcc.gov,

Spectrum and Competition Policy Division, Wireless Telecommunications Bureau; Jeff Cohen at (202) 418-0799,

jeff.cohen@fcc.gov,

Public Safety and Homeland Security Bureau.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Second Report and Order, WT Docket No. 06-150; CC Docket No. 94-102, WT Docket No. 01-309, WT Docket No. 03-264, WT Docket No. 06-169; PS Docket No. 06-229; WT Docket No. 96-86; WT Docket No. 07-166; FCC No. 07-132, adopted July 31, 2007 and released August 10, 2007. The full text of the Second Report and Order is available for public inspection on the Commission's Internet site at

http://www.fcc.gov.

It is also available for inspection and copying during regular business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW., Washington, DC 20554. The full text of this document also may be purchased from the Commission's duplication contractor, Best Copy and Printing Inc., Portals II, 445 12th St., SW., Room CY-B402, Washington, DC 20554; telephone (202) 488-5300; fax (202) 488-5563; e-mail

FCC@BCPIWEB.COM

.

Synopsis

In this Second Report and Order, the Commission establishes rules governing wireless licenses in the 698-806 MHz Band (herein, the “700 MHz Band”). This spectrum currently is occupied by television broadcasters in TV Channels 52-69. It is being made available for wireless services, including public safety and commercial services, as a result of the digital television (“DTV”) transition. In passing the Digital Television Transition and Public Safety Act of 2005 (“DTV Act”), Congress accelerated the DTV transition by providing a date certain, February 17, 2009, for the end of the transition.

1

The Commission has been considering rules related to the use of this spectrum in three ongoing proceedings: (1) The 700 MHz Commercial Services proceeding, 71 FR 48506 (2006),

2

(2) the 700 MHz Guard Bands proceeding, 71 FR 57455,

3

and (3) the 700 MHz Public Safety proceeding, 72 FR 1201 (2007); 71 FR 17786 (2006).

4

Recognizing the interrelationship of these proceedings, the Commission recently combined these proceedings and in April 2007 issued a single Report and Order and Further Notice of Proposed Rulemaking (the 700 MHz Report and Order, 72 FR 27688 (2007), and 700 MHz Further/NPRM, FR 24238 (2007), respectively) addressing all three proceedings.

5

Accordingly, the Commission addresses the rules regarding access to 700 MHz Band spectrum and the provision of service across the country, as well as opportunities for broadband service for Public Safety users in this Second Report and Order.

1

See

Deficit Reduction Act of 2005, Pub. L. 109-171, 120 Stat. 4 (2006) (“DRA”). Title III of the DRA is the DTV Act.

2

See

Service Rules for the 698-749, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Revision of the Commission's rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems and Section 68.4(a) of the Commission's rules Governing Hearing Aid-Compatible Telephones, CC Docket No. 94-102, WT Docket No. 01-309,

Notice of Proposed Rule Making

,

Fourth Further Notice of Proposed Rule Making,

and

Second Further Notice of Proposed Rule Making,

71 FR 48506 (2006) (

700 MHz Commercial Services NPRM

).

3

See

Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket Nos. 06-169 and 96-86,

Notice of Proposed Rule Making,

71 FR 57455 (2006) (

700 MHz Guard Bands NPRM

).

4

See

Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, PS Docket No. 06-229, WT Docket No. 96-86,

Ninth Notice of Proposed Rulemaking,

72 FR 1201 (2007) (2006) (

700 MHz Public Safety Ninth NPRM

); Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket No. 96-86,

Eighth Notice of Proposed Rulemaking,

71 FR 17786 (2006) (

700 MHz Public Safety Eighth NPRM

).

5

Service Rules for the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Revision of the Commission's rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102, Section 68.4(a) of the Commission's rules Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309, Biennial Regulatory Review—Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services, WT Docket 03-264, Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's rules, WT Docket No. 06-169, Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band, PS Docket No. 06-229, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket No. 96-86,

Report and Order

and

Further Notice of Proposed Rulemaking,

22 FCC Rcd 8064 (2007) (

700 MHz Report and Order

and

700 MHz Further NPRM,

respectively).

I. Discussion

A. Commercial 700 MHz Band, Including 700 MHz Guard Bands

1. Band Plan

a. Commercial Spectrum (Excluding Guard Bands Spectrum)

1. In the

700 MHz Report and Order,

the Commission determined that a balanced mix of geographic service area licenses—CMAs, EAs, and REAGs—would be appropriate for the commercial 700 MHz Band licenses that will be auctioned. The Commission reaffirms that determination for all of this commercial spectrum except for that associated with the 10-megahertz commercial license (comprised of paired 5-megahertz blocks) which will be auctioned on a nationwide basis for use as part of the 700 MHz Public/Private Partnership with the Public Safety Broadband Licensee. The Commission further determines that a mix of spectrum block sizes, including one large 22-megahertz block (comprised of paired 11-megahertz blocks), is appropriate for the 700 MHz Band licenses that remain to be auctioned.

2. The Commission will license three commercial blocks of paired spectrum—one 12-megahertz block (comprised of paired 6-megahertz blocks) licensed on a CMA basis, one 12-megahertz block (comprised of paired 6-megahertz blocks) on an EA basis, and one 22-megahertz block (comprised of paired 11-megahertz blocks) on a REAG basis—as well as one 6-megahertz block of unpaired spectrum on an EA basis. First, the Commission will license one additional 12-Megahertz Spectrum Block (comprised of paired 6-Megahertz blocks) in the 700 MHz Band on a CMA basis, to be located in the B Block of the Lower 700 MHz Band immediately adjacent to the existing CMA-based licenses. Second, the Commission will license a 22-megahertz block (comprised of paired 11-Megahertz blocks) on a REAG basis located in the C Block in the Upper 700 MHz Band. Third, the Commission will license a 12-Megahertz block (comprised of paired 6-megahertz blocks) on an EA basis located in Block A of the Lower 700 MHz Band. Finally, the Commission adopts EAs for the unpaired 6-megahertz E Block of the Lower 700 MHz Band.

b. Guard Bands Spectrum

3. The Commission adopts a revised band plan for the 700 MHz Guard Bands spectrum and the Upper 700 MHz Band, which includes features of Cyren Call's additional band plan proposal and the July 6, 2007 Guard Bands Proposal. Additionally, the Commission determines that it lacks legal authority to adopt the Broadband Optimization Plan (BOP), Critical Infrastructure Industries (CII), or the Ericsson proposals because they propose a reallocation of commercial spectrum to public safety, and assignment of commercial licenses from the Commission's auction inventory without competitive bidding. The Commission also rejects the most recent Ericsson band plan proposal, as well as the Access Spectrum/Pegasus Alternative Proposal and the Cyren Call proposals to the extent they are inconsistent with the Commission's actions in this Second Report and Order.

(a) Revisions to Upper 700 MHz Band Plan for Guard Bands

4. The Commission adopts the July 6, 2007 Guard Bands Proposal based on the agreement of all Guard Band licensees except PTPMS II, whose two Guard Band B Block licenses the Commission grandfathers, and whose one Guard Band A Block license the Commission repacks into the reconfigured Guard Band A Block. The Commission concludes that the existing Guard Band B Block is no longer needed as a guard band to protect the adjacent 700 MHz public safety users, and to the extent possible, should be consolidated with the remaining commercial spectrum for more efficient and effective use. The Commission finds that the public interest is best served by adoption of features of the Cyren Call and July 6, 2007 proposals because it removes the “repacked” Guard Band A Block from the critical juncture between the Upper 700 MHz D Block and the public safety broadband spectrum, which together will be used as the foundation for the 700 MHz Public/Private Partnership.

5.

Funding for Public Safety Reconfiguration.

The Commission finds that the proximity of the public safety broadband spectrum to the adjacent D block will provide significant benefits to the D Block licensee. Accordingly, the Commission concludes that the D Block licensee must pay the costs of consolidating the 700 MHz public safety narrowband channels to the upper half of the 700 MHz Public Safety Band.

6.

License Modifications.

The Commission finds that the public interest, convenience, and necessity will be served by relocating all existing Guard Band A licenses to the reconfigured Guard Band A Block located at 757-758 MHz and 787-788 MHz. With the exception of PTPMS II, which holds one A Block license and two B Block licenses, the license modifications that the Commission effects today are consensual.

7. These license modifications are consistent with Sections 337 and 309 of the Act, because the 4 megahertz of remaining Guard Bands spectrum remains commercial spectrum subject to auction. Specifically, the 2 megahertz from 746-747 MHz and 776-777 MHz will be added to, and auctioned as part of, the Upper 700 MHz Band C Block in the forthcoming 700 MHz Band auction. The lower portion of the reconfigured commercial Guard Band B Block at 775-776 MHz will provide a necessary guard band between public safety narrowband communications and adjacent commercial services. The Commission will be able to determine other potential uses of this spectrum, and the related portion of the B Block at 805-806 MHz, at a future date.

8.

Spectrum Use Agreements.

Pursuant to Section 309(f) of the Act, the Commission hereby grants Access Spectrum 180-day special temporary authorizations for MEAs 20, 26, 32, 37, 44, and 52 for the current Guard Band A Block (746-747 MHz, 776-777 MHz). In the event that Access Spectrum cannot complete the transition of the CII system during the 180-day period, it may seek an appropriate extension of the STA upon a proper showing. Because the Commission modifies (repack and relocate) the Guard Band A Block MEA licenses held by Access Spectrum, Pegasus, and Dominion upon the effective date of this Second Report and Order, the six STA grants to Access Spectrum will be granted upon the effective date as well.

9.

PTPMS II.

To ensure that critical interoperable public safety communications are uniform throughout the continental United States, the Commission hereby modifies PTPMS II's Guard Band A Block license in Buffalo (MEA 003), pursuant to Sections 316, 301, 303, and 4(i) of the Act, to operate in the same geographic area but in the reconfigured A Block at 757-758 MHz and 787-788 MHz. The Commission also modifies PTPMS II's B Block licenses in Des Moines—Quad Cities (MEA 021) and El Paso—Albuquerque (MEA 039) by shifting them down by 1 megahertz, so that PTPMS II is authorized to operate at 761-763 MHz and 791-793 MHz. These modifications should not burden PTPMS II because it does not have any operations associated with the three licenses.

10. As a result of the foregoing modifications, the new nationwide Upper 700 MHz Band D Block license, at 758-763 MHz and 788-793 MHz, will be authorized in Des Moines—Quad Cities (MEA 021) and El Paso—Albuquerque (MEA 039) on a secondary basis to PTPMS II. As such, the D Block licensee may not cause interference to primary operations of PTPMS II or claim protection from harmful interference from any operations of PTPMS II in those MEAs. The D Block licensee must cease operations on the spectrum assigned to PTPMS II in these two markets if it poses an interference problem to PTPMS II. In the event that PTPMS II, or a successor or an assign of PTPMS II, elects to cancel either of its grandfathered licenses, or if either license cancels automatically, or is terminated by the Commission, then the licensed geographic area will revert, without further action by the Commission, to the D Block licensee. This reversionary interest will include the right to operate under the D Block technical rules.

11. Further, the Commission grandfathers PTPMS II's two B Block licenses without any renewal expectancy, and does not extend the term of its licenses as the Commission has for the reconfigured Guard Band A Block licenses. The Commission will

afford PTPMS II's Guard Band A Block license the modified (less stringent) technical rules that the Commission adopts below for all other Guard Band A Block licenses.

12. Accordingly, pursuant to Section 316 of the Act and Section 1.87 of the Commission's rules, PTPMS II has 30 days from the effective date of this Second Report and Order to protest the foregoing license modifications. Additionally, as stated in their July 6, 2007

Ex Parte,

the other Guard Bands licensees have waived their protest rights.

(b) Broadband Optimization Plan (BOP), Critical Infrastructure Industries (CII) and Ericsson Proposals

13. For the reasons discussed in the

700 MHz Further NPRM,

the Commission denies the BOP and CII proposals. Further, the Commission concludes that the additional Ericsson band plan proposal is not in the public interest.

2. Service Rules

a. Commercial Services (Excluding Guard Bands and Upper 700 MHz D Block)

(i) Performance Requirements

14. In order to better promote access to spectrum and the provision of service, especially in rural areas, the Commission replaces the current “substantial service” requirements for the 700 MHz Band licenses that have not been auctioned with significantly more stringent performance requirements. These requirements include the use of interim and end-of-term benchmarks, with geographic area benchmarks for CMA and EA licenses, and population benchmarks for REAG licenses. Licensees must meet the interim requirement within four years of the end of the DTV transition (

i.e.

, February 17, 2013). Failure to meet the interim requirement will result in a two-year reduction in license term, as well as possible enforcement action, including forfeitures. The Commission also reserves the right to impose a proportional reduction in the size of the license area of a licensee that fails to meet its interim benchmarks. Licensees that fail to meet the end-of-term benchmarks will be subject to a “keep-what-you-use” rule, under which the licensee will lose its authorization for unserved portions of its license area, which will be returned to the Commission for reassignment. They may also be subject to potential enforcement action, including possible forfeitures or cancellation of license. The Commission also imposes certain reporting requirements intended to help the Commission monitor build-out progress during the license term. The Commission expects that licensees will take these construction requirements seriously and proceed toward providing service with utmost diligence. As such, the Commission does not envision granting waivers or extensions of construction periods except where unavoidable circumstances beyond the licensee's control delay construction.

15.

Specific Performance Requirements for CMA and EA Licenses.

The Commission concludes that, for licenses based on CMAs and EAs, licensees must provide signal coverage and offer service to: (1) At least 35 percent of the geographic area of their license within four years of the end of the DTV transition, and (2) at least 70 percent of the geographic area of their license at the end of the license term. In determining the relevant geographic area, the Commission concludes that, in applying geographic benchmarks, the Commission should not generally consider the relevant area of service to include government lands. CMA or EA licensees that fail to meet the interim requirement within their license areas will have their license terms reduced by two years, from ten to eight years, thus requiring these licensees to meet the end-of-term benchmark at an accelerated schedule. For those CMAs or EAs in which the end-of-term performance requirements have not been met, the unused portion of the license will terminate automatically without Commission action and will become available for reassignment by the Commission subject to the “keep-what-you-use” rules described below.

16. To the extent the licensee employs a signal level and provides service to land that is owned or leased by government, the licensee may count this land area and coverage as part of its service area for purposes of measuring compliance with the build-out benchmark, but it also must add the covered government land to the total geographic area used for measurement purposes.

17.

Specific Performance Requirements for REAG Licenses.

The Commission concludes that, for licenses based on REAGs, licensees must provide signal coverage and offer service to: (1) At least 40 percent of the population of the license area within four years, and (2) at least 75 percent of the population of the license area by the end of the license term. Licensees must use the most recently available U.S. Census Data at the time of measurement to meet these population based build-out requirements.

18. In addition, for licenses based on REAGs, the Commission will apply its performance requirements on an EA basis. Accordingly, to meet their benchmarks, REAG licensees must provide signal coverage and offer service to at least 40 percent of the population in each EA in its license area within four years and 75 percent of the population of each of these EAs at the end of the license term. REAG licensees that fail to meet the interim requirement in any EA within their license areas will have their license term for the entire REAG reduced by two years, from ten to eight years, thus requiring these licensees to meet the end-of-term benchmark at an accelerated schedule. In applying the end-of-term coverage requirement to REAG licensees, the Commission will evaluate the licensee's coverage on an EA-by-EA basis. For those EAs in which the end-of-term performance requirements have not been met, the unused portion of the license will terminate automatically without Commission action and will become available for reassignment by the Commission subject to the “keep-what-you-use” regime described below.

19.

Reporting Requirements.

In connection with the performance requirements adopted in this Second Report and Order, the Commission adopts an interim reporting requirement that will obligate licensees to provide the Commission with information concerning the status of their efforts to meet the performance requirements and the manner in which their spectrum is being utilized. In addition, this information will be useful to monitor whether further assessment of the rules or other actions are necessary in the event spectrum is being stockpiled or warehoused, or if it is otherwise not being made available despite existing demand. All licensees will file the first of these reports at the end of the second year following the end of the DTV Transition,

i.e.

, February 17, 2011. Licensees that do not meet their interim benchmarks will file their second report following the sixth year after the end of the DTV Transition,

i.e.

, February 17, 2015, while licensees that do meet their interim benchmarks will have until the end of the seventh year to file,

i.e.

, February 17, 2016. For licensees that do not meet their interim benchmarks and have their license terms reduced, the second report will be filed at the end of the sixth year following the end of the DTV Transition,

i.e.

, February 17, 2015. The information to be reported will include a description of the steps the licensee has taken toward meeting its construction obligations in a timely

manner, including the technology or technologies and service(s) being provided and the areas in which those services are available.

20.

Procedures for Implementation.

Licensees must demonstrate compliance with the Commission's interim and end-of-term construction benchmarks by filing a construction notification with the Commission within 15 days of the relevant benchmark certifying that they have met the Commission's performance requirements or, if they have not met the Commission's performance requirements, they must file a description and certification of the areas for which they are providing service. The information contained in the licensee's construction notification must include electronic coverage maps and other supporting documentation. The Commission recognizes that demonstrations of coverage may vary across licensees. Accordingly, the Commission delegates to the Wireless Bureau the responsibility for establishing the specifications for filing maps and other documents (

e.g.

, file format and appropriate data) needed to determine a licensee's geographic coverage area. The Commission recognizes that coverage determinations may need to be made on a case-by-case basis so as to account for the potentially wide variety of services and technologies that may be offered in the band.

21. The electronic coverage maps must clearly and accurately depict the boundaries of each EA or CMA in the licensee's service territory, and the areas where the licensee is providing signal coverage and offering service. If the licensee's signal does not provide service to the entire EA or CMA, the map must clearly and accurately display the boundaries of the area or areas within each EA or CMA not being served.

22. In addition to filing electronic coverage maps, each licensee must file supporting documentation certifying the type of service it is providing for each EA or CMA within its license service territory and the type of technology it is utilizing to provide this service for each EA or CMA in its service territory. The supporting documentation also must provide the assumptions used by the licensee to create the coverage maps, including the propagation model and the signal strength necessary to provide service with the licensee's technology.

23. When the licensee files its construction notification, including its coverage maps and supporting documentation, the public will be given an opportunity to review and comment on the construction notification, including the maps provided by the licensee and the technical assumptions used to create the maps. After examining the notification and public comments, Commission staff will make a final determination as to what areas within EAs and CMAs are, and are not, deemed “served.” If the Commission determines that a licensee meets the applicable interim benchmark, it will not have its license term reduced by two years. Likewise, if the Commission determines that a licensee meets its applicable end of term benchmark requirement, the licensee will be deemed to have met the Commission's construction build-out requirement.

24. Under the Commission's “keep-what-you-use” rule, if a licensee fails to meet its end of term benchmark, its authorization to operate will terminate automatically without Commission action for those geographic areas in which the licensee is not providing service, and those unserved areas will become available for reassignment by the Commission. The Commission will update its Universal Licensing System records to reflect those geographic areas for which the licensee retains authority to operate, as well as those geographic areas that will be made available for reassignment.

25. For purposes of reassigning these licenses, the Wireless Bureau is delegated authority to announce by public notice that these licenses will be made available and establish a 30-day window during which third parties may file license applications to serve these areas. During this 30-day period, the licensee that failed to serve the area may not file an application to regain the license authorization for that area. Applications filed by third parties that propose areas overlapping with other applications will be deemed mutually exclusive, and will be resolved through an auction. The Wireless Bureau, by public notice, may specify a limited period before the filing of short-form applications (FCC Form 175) during which applicants may enter into a settlement to resolve their mutual exclusivity.

26. Following this 30-day period, the original licensee and third parties can file license applications for remaining unserved areas where licenses have not been issued or there are no pending applications. If the original licensee or a third party files an application, that application will be placed on public notice for 30 days. If no mutually exclusive application is filed, the application will be granted, provided that a grant is found to be in the public interest. If a mutually exclusive application is filed, it will be resolved through an auction. The Wireless Bureau, by public notice, may specify a limited period before the filing of short-form applications (FCC Form 175) during which applicants may enter into a settlement to resolve their mutual exclusivity.

27. A licensee obtaining spectrum that was lost through the Commission's “keep-what-you-use” rule will have one year from the date it is issued a license to complete its construction and provide signal coverage and offer service to the entire new license area. If the licensee fails to meet this construction requirement, its license will automatically cancel without Commission action and it will not be eligible to apply to provide service to this area on the same frequencies at any future date.

28. Under the Commission's “keep-what-you-use” rules, the Commission will determine whether an area is unserved by applying a

de minimis

standard similar to that applied to cellular service, which provides that the geographic service area to be made available to new entrants must include a contiguous area of at least 130 square kilometers (50 square miles). Areas smaller than this will not be deemed unserved by the Commission, because auctioning and licensing smaller areas to new licensees could result in harmful interference to incumbent licensees. Accordingly, unserved areas that are smaller than 130 square kilometers will continue to be a part of the licensee's license area. In those geographic areas that the Commission deems as served, the licensee will retain its exclusive spectrum rights, including the ability to transfer and lease these areas. The licensee also will have the opportunity to expand its service into the unused parts of its original license area.

(ii) Partitioning and Disaggregation

29.

Partitioning.

Under the Commission's modifications of the Section 27.15(d) rules relating to geographic partitioning of new 700 MHz Commercial Services licenses, the Commission establishes two options for partitioners and partitionees with regard to the newly adopted performance requirements discussed above.

30. Under the first option, the partitioner and partitionee must each certify to the Commission that they will share responsibility for meeting the performance requirements for the entire original geographic license area. Under this option, the partitioner, partitionee, or both the partitioner and partitionee working together, can meet the four-year and end-of-term construction benchmarks for the entire geographic

license area. If the parties fail to meet the four-year benchmark, they will each have their license term reduced by two years. If the parties meet the end-of-term construction benchmarks, they will retain the ability to continue to build out the unserved portion of their license areas. Parties that fail to meet the end-of-term benchmarks will be subject to a “keep-what-you-use” rule, under which they will each lose their authorization for unserved portions of their license areas, which will automatically cancel and return to the Commission for reassignment.

31. Under the second option, the partitioner and partitionee must each certify that it will independently meet the applicable performance requirements for its respective partitioned service area. If the partitioner or partitionee fails to meet the four-year build-out requirement for its respective partitioned service area, then its license term will be reduced by two years. If the parties meet the end-of-term construction benchmarks, they will retain the ability to continue to build out the unserved portion of their license areas. Parties that fail to meet the end-of-term benchmarks will be subject to a “keep-what-you-use” rule, under which they will lose their authorization for unserved portions of their license areas, which will automatically cancel and return to the Commission for reassignment.

32.

Disaggregation.

With regard to the rules relating to disaggregation of new 700 MHz Commercial Services Band licenses, the Commission modifies Section 27.15(d) to provide that the disaggregator, disaggregatee, or both the disaggregator and disaggregatee working together, can meet the four-year and end-of-term construction benchmarks for the entire geographic license area. If either of the parties meets the four-year build-out requirement, then this requirement is considered to be satisfied for both parties. If neither of the parties meets the four-year build-out requirement, then each of their license terms will be reduced by two years. Similarly, if either of the parties meets the end-of-term build-out requirement, then this requirement is considered to be satisfied for both parties and they will retain the ability to continue to build out the unserved portion of their license areas. However, parties that fail to meet the end-of-term benchmarks will be subject to an automatic “keep-what-you-use” rule, under which they will lose their authorization for unserved portions of their license areas, which will automatically cancel and return to the Commission for reassignment.

(iii) Open Platforms for Devices and Applications

33. The Commission determines that for one commercial spectrum block in the 700 MHz Band—the Upper 700 MHz Band C Block (700 MHz C Block)—the Commission will require licensees to allow customers, device manufacturers, third-party application developers and others to use or develop the devices and applications of their choice, subject to certain conditions, so long as they meet all applicable regulatory requirements and comply with reasonable conditions related to management of the wireless network (

i.e.

, do not cause harm to the network), as described further below. The Commission concludes, however, that it would not serve the public interest to mandate, at this time, requirements for open platforms for devices and applications for all unauctioned commercial 700 MHz spectrum, or to impose broader openness requirements, such as wholesale or interconnection requirements, for the 700 MHz C Block.

34.

Scope of Requirement for open platforms for devices and applications.

700 MHz C Block licensees subject to this requirement will not be allowed to disable features or functionality in handsets, such as “locking” handsets to prevent their transfer from one system to another, where such action is not related to reasonable network management and protection, or compliance with applicable regulatory requirements. In addition, 700 MHz C Block licensees may not establish network standards that block Wi-Fi access, MP3 playback ringtone capability, or other services that compete with wireless service providers' own offerings. Standards for third-party applications or devices that are more stringent than those used by the provider itself would likewise be prohibited. In addition, 700 MHz C Block licensees cannot exclude applications or devices solely on the basis that such applications or devices would unreasonably increase bandwidth demands. The Commission emphasizes that 700 MHz C Block licensees may not impose any discriminatory charges (one-time or recurring) or conditions on customers who seek to use devices or applications outside of those provided by the licensee. Further, 700 MHz C Block licensees may not deny access to a customer's device solely because that device makes use of other wireless spectrum bands, such as cellular or PCS spectrum. However, in accepting a multi-band device on its network, a 700 MHz C Block licensee is not required to extend the requirement for open platforms for devices and applications to other spectrum bands on which the provider operates.

35.

Reasonable network requirements permitted.

The Commission emphasizes that it is not requiring wireless service providers to allow the unrestricted use of

any

devices or applications on their networks. Wireless service providers may continue to use their own certification standards and processes to approve use of devices and applications on their networks so long as those standards are confined to reasonable network management. For example, providers are free to choose their air interface technology, and to deny service to devices or applications that cannot operate on the same technology, and may restrict particular non-carrier devices and applications on their networks, specifically to ensure the safety and integrity of their networks. In particular, it is reasonable for wireless service providers to maintain network control features that permit dynamic management of network operations, including the management of devices operating on the network, and to restrict use of the network to devices compatible with these network control features. Standards to ensure that network performance will not be significantly degraded would also be appropriate.

36. The Commission does not specify a particular process for 700 MHz C Block licensees to develop reasonable network management and openness standards, but the Commission requires certain minimum steps to ensure that device manufacturers and application developers have the ability to design products for this spectrum in a timely manner. Specifically, a 700 MHz C Block licensee must publish standards no later than the time at which it makes such standards available to any preferred vendors (

i.e.

, vendors with whom provider has a relationship to design products for the provider's network). The 700 MHz C Block licensee must also provide to potential customers notice of the customers' rights to request the attachment of a device or application to the licensee's network, and notice of the licensee's process for customers to make such requests, including the relevant network criteria. These network standards are expected to be non-proprietary, such that the standards would be open to any third party vendors and that the standards applied to third parties will be no more restrictive than those applied to the provider's preferred vendors. Providers must also establish a reasonable process for expeditiously

reviewing requests from manufacturers, application developers and consumers to employ devices and applications on their networks. If a provider denies such a request, it must offer a specific explanation and an opportunity for amendment of the request to accommodate the provider's concerns.

37. The Commission encourages the development of industry-wide standards by an appropriate standards-setting body at the earliest possible date.

38.

Other regulatory requirements continue.

The requirement to provide an open platform for devices and applications the Commission is imposing shall not override wireless service providers' obligations to ensure that their networks and devices comply with applicable regulatory requirements (

e.g.

, power and emission limits, E911, CALEA, etc.). For example, with respect to E911, if a network provider accepts a non-carrier device or application and if the device or application subsequently causes a violation of the Commission's rules, the Commission will apply the same third-party liability provisions as in the wireline context.

39. The Commission finds that a wireless carrier's obligations under its hearing aid compatibility rule, section 20.19 of the Commission's rules, are not affected by the openness obligations for 700 MHz C Block licensees. Under the Commission's rules, the extent of a carrier's compliance with the hearing aid compatibility obligations is not affected by handsets that connect to its network but it does not itself “offer” to its subscribers. Thus, the need to comply with section 20.19 of the Commission's rules would not justify a provider's refusal to connect a device. Further, the Commission declines to alter its hearing aid compatibility obligations to specifically impose an obligation on 700 MHz C Block licensees to ensure the hearing aid compatibility of handsets that are connected to the network but not offered by the provider.

40.

Enforcement processes.

The Commission intends to vigorously enforce the requirement to provide an open platform for devices and applications adopted for 700 MHz C Block licensees. The Commission will take appropriate enforcement action where necessary pursuant to the remedies available under its statutory authority, including forfeitures, license revocations, and cease-and-desist orders. A person or entity who believes a 700 MHz C Block licensee's refusal to attach a proposed device or application is a violation of the open platform rules adopted may file a complaint pursuant to the Commission's enforcement rules, including the Commission's formal and informal complaint processes, where applicable. The Commission sets forth certain presumptions for these complaints. Specifically, once a complainant sets forth a

prima facie

case that the 700 MHz C Block licensee has refused to attach a device or application in violation of the open platform requirements adopted, the licensee shall have the burden of proof to demonstrate that it has adopted reasonable network standards and reasonably applied those standards in the complainant's case. Further, where the 700 MHz C Block licensee bases its network restrictions on industry-wide consensus standards, the restrictions are afforded a presumption of reasonableness. The Commission commits to rule on any complaints filed within 180 days of receipt of such complaints. Interested parties also may file a petition for declaratory ruling where a particular practice has broad market impact. Through review of complaints and other relevant information, the Commission will monitor the ability of consumers, device manufacturers, and application developers to use or develop devices and applications for 700 MHz C Block networks.

(iv) Use of Dynamic Spectrum Management Techniques

41. In response to Google's first request, the Commission affirms that nothing in the Commission's rules generally prohibits 700 MHz licensees from using dynamic spectrum management practices. In response to Google's second suggestion, the Commission declines to mandate the use of dynamic spectrum management practices for 700 MHz Band licensees.

42. The Commission concludes that licensees should retain significant flexibility with regard to the precise mechanisms they utilize when it comes to managing spectrum access to the network and among users. Of course, to the extent any licensee believes that the specific spectrum management mechanisms that Google proposes is appropriate or preferable, it is free to choose to utilize these mechanisms, consistent with the Commission's guidance above.

(v) Protection of 700 MHz Public Safety Operations

43. The Commission shall continue to require Upper 700 MHz Band C Block licensees to meet the 76 + 10 log P and 65 + 10 log P out-of-band emission (OOBE) limits with respect to the public safety bands. However, the Commission will not require the Upper 700 MHz Band D Block licensee to meet OOBE limits with respect to the public safety broadband spectrum.

44. The D Block licensee will still, however, be required to satisfy the 76 and 65 + 10 log P OOBE limits with respect to the narrowband portion of the public safety spectrum. Additionally, the Commission shall not require the D Block licensee and Public Safety Broadband Licensee to coordinate with one another to address potential overload interference, even though such licensees will be authorized on adjacent spectrum, because under the public/private partnership, as discussed above, the D Block licensee and Public Safety Broadband Licensee will be sharing the same infrastructure.

(vi) Licensee Eligibility

45. The Commission declines to impose eligibility restrictions for the licenses in the 700 MHz Band. Given the number of actual wireless providers and potential broadband competitors, it is unlikely that incumbent local exchange carriers (ILECs), cable providers, or large wireless carriers would be able to behave in an anticompetitive manner as a result of any potential acquisition of 700 MHz spectrum.

b. 700 MHz Guard Bands

(i) Treatment of Reconfigured A Block

46. Because the reconfigured Guard Band A Block will now be located at 757-758/787-788 MHz between the Upper 700 MHz Band C and D Blocks, and will no longer be adjacent to public safety narrowband spectrum, the Commission concludes that it is no longer necessary to apply the adjacent channel power (ACP) emissions criteria to the A Block. Instead, the Commission will apply OOBE limits, which are consistent with emission limits applicable to the C Block. Thus, A Block licensees are required to attenuate out-of-band by at least 43 +10log P dB. Further, the Commission finds that heightened OOBE criteria should continue to apply in order to provide adequate protection to public safety. Therefore A Block transmitter power must be attenuated to at least 76 + 10log P dB, in a 6.25 kilohertz bandwidth for base stations at 763 MHz, and 65 + 10log P dB for mobile units at 793 MHz.

47.

Frequency Coordination and the Cellular Architecture Prohibition.

The Commission will no longer apply sections 27.601(d) and 27.2(b) (requiring guard band users to employ frequency coordination procedures in cooperation with 700 MHz public safety coordinators, and prohibiting the use of

cellular architectures in the Guard Bands) to reconfigured A Block licenses.

48.

Removal of the 746-747 MHz A Block Guard Band.

The Commission finds that it is unnecessary to retain the A Block Guard Band at 746-747 MHz to shield Upper 700 MHz Band C Block operations from interference from high power operations allowed in the Lower 700 MHz Band C Block.

(ii) Treatment of Reconfigured B Block

49. The Commission finds that it would not be prudent to make any changes that would introduce the possibility of increased interference to adjacent public safety operations. Any future operations in the Guard Band B Block will continue to be bound by the Commission's existing Guard Bands technical rules requiring frequency coordination and prohibiting the use of cellular system architectures. These continued technical restrictions on the B Block can be fully taken into account as the Commission considers future uses for the block. The Commission will, however, create additional flexibility by providing operations in the reconfigured B Block the option of employing either the existing ACP limits set forth in Section 27.53(d) of the Commission's rules, or the same OOBE limits used by other commercial licensees to protect public safety,

i.e.

, 76 + 10log P dB per 6.25 kHz for base stations, and 65 + 10log P dB per 6.25 kHz for mobile units.

(iii) Treatment of PTPMS II Licenses

50. To ensure interoperability in border areas with Canada, the Commission is modifying the PTPMS II licenses by relocating its Guard Band A Block license to 757-758 MHz and 787-788 MHz along with the “repacked” Guard Band A Block licenses, and by shifting its Guard Band B Block licenses down 1 megahertz to 761-763 MHz and 791-793 MHz. Although PTPMS II has elected to remain under the existing terms of its licenses, the Commission concludes that, for purposes of regulatory parity, the Commission should apply to the PTPMS II A Block licenses the same technical rules that will apply to the reconfigured A Block licenses. The Commission also concludes that the existing B Block technical rules continue to apply to PTPMS II's B Block licenses given their adjacency with public safety spectrum.

(iv) License Terms

51. The license terms for the A Block licenses, including the PTPMS II A Block licenses, shall extend to 10 years after the end of the DTV transition, through February 17, 2019, and subsequent license terms will be 10 years. However, the Commission will retain the existing license terms for the grandfathered PTPMS II B Block licenses, rather than extending them to match the other commercial licensees. Furthermore, the Commission does not provide a renewal expectancy to the PTPMS II B Block licenses, the terms of which will expire in 2015.

3. Auctions-Related Issues

a. Anonymous Bidding

52. The Commission concludes that the public interest will be served if the upcoming auction of new 700 MHz Band licenses for which service rules are established today is conducted using anonymous bidding procedures. The Commission further concludes that implementation of anonymous bidding procedures during the upcoming auction of new 700 MHz Band licenses should not be contingent on a pre-auction measurement of likely competition based on an eligibility ratio. The Commission has delegated to the Wireless Bureau authority to establish auction procedures based on comment solicited shortly prior to the auction. Consistent with that authority, the Commission delegates to the Wireless Bureau the discretion to adopt specific procedures implementing these conclusions, taking into account the further record developed during our standard pre-auction process for establishing auction procedures and the possibility that alternative licenses may be offered at auction as described below.

53. Additionally, the Commission concludes that the record regarding the available 700 MHz Band licenses and the Commission's recent experience with anonymous bidding in other auctions indicate that the Commission's statutory mandates under Section 309(j)(3) of the Act would be better served by adopting anonymous bidding procedures for the upcoming auction of 700 MHz Band licenses. Such procedures should withhold from public release until after the auction closes any information that may indicate specific applicants' interests in the auction, including information such as their license selections and the identities of bidders placing bids or taking other bidding-related actions, such as withdrawals. The Commission further concludes that the implementation of anonymous bidding procedures in the upcoming auction of new 700 MHz Band licenses should not be contingent on the likely level of auction competition indicated by pre-auction bidder eligibility. Accordingly, the Commission directs the Wireless Bureau to propose and seek comment on detailed anonymous bidding procedures for the upcoming auction of the 700 MHz Band licenses consistent with these conclusions, including how anonymous bidding would impact a potential re-auction of one or more spectrum blocks if the reserve prices for the individual blocks are not met, and any additional continuation or alteration to the anonymous bidding rules necessary to preserve the integrity of the subsequent auction.

b. Declaratory Ruling on Anti-Collusion Rule Reporting Requirement

54. To further its policy of preventing collusive behavior in Commission auctions, the Commission clarifies by declaratory ruling and conforming textual edit the obligation that applicants in Commission auctions have to report any communications of bids or bidding strategies that are prohibited by Section 1.2105(c)(1) of the Commission's rules. Pursuant to Section 1.2105(c)(6), any applicant that makes or receives such a communication shall report such communication in writing to the Commission immediately, and in no case later than five business days after the communication occurs. As noted in the Commission's Order adopting Section 1.2105(c)(6), the Commission cannot “take on the impossible task of screening all applicant communications” and, therefore, “the responsibility for identifying potentially unauthorized communications [must fall] on auction applicants.” The reports provided by applicants are essential to the Commission's ability to enforce its rule. Absent such reports, parties might find it easy to evade enforcement for extended periods of time, and possibly altogether.

55. Accordingly, the reporting requirement “obligate[s] parties to notify the Commission of communications that appear to violate the anti-collusion rule and to allow the Commission to determine whether a violation has occurred.” Consistent with this purpose, applicants have a continuous obligation to make such reports extending beyond the five business days after the communication occurs. This declaratory ruling, and the conforming modification of Section 1.2105(c)(6) of the Commission's rules, expressly states the continuing nature of this obligation. The Commission can and will enforce the obligation so long as it remains unfulfilled. The Commission emphasizes the continuing nature of the duty to report to preclude any attempt to evade the obligation by waiting out the expiration of the statute

of limitations applicable for the enforcement of forfeitures and to reinforce the Commission's ability to detect collusion, which is critical to the Commission's ability to enforce and thereby discourage collusive behavior in Commission auctions.

c. Package Bidding

56. The Commission concludes that package bidding with respect to licenses in the Upper 700 MHz Band C Block would serve the public interest by reducing the exposure problem that might otherwise inhibit bidders seeking to create a nationwide footprint. Accordingly, the Commission directs the Wireless Bureau, pursuant to its delegated authority and pre-auction process, to propose and implement detailed package bidding procedures for the auction of the Upper 700 MHz Band C Block licenses, taking into account the goals the Commission has articulated for package bidding and the concerns raised in this record. More specifically, the Wireless Bureau should propose an auction design that includes package bidding for the C Block licenses to facilitate the entry of a new nationwide competitor, without causing undue difficulty for bidders that are not interested in a nationwide license. The Wireless Bureau should also explore the use of package bidding for any blocks subject to re-auction in the event that a reserve price is not met.

57. The Wireless Bureau, consistent with its delegated authority and pre-auction process, may revise its proposal prior to implementation in the auction. In order to facilitate compliance with the statutory deadlines applicable to the auction of 700 MHz Band licenses, the Wireless Bureau has delegated authority to conduct an auction without package bidding for the Upper 700 MHz Band C Block licenses in the event that currently unforeseen difficulties make it impracticable to implement package bidding for the C Block consistent with the goals the Commission has articulated here. Finally, consistent with its conclusions today, the Commission directs the Wireless Bureau to adopt procedures for the auction of licenses in other blocks of 700 MHz Band spectrum without the use of package bidding.

d. “New Entrant” Bidding Credit

58. The Commission concludes that it is not necessary to compound the discounts already offered to small new entrants by existing designated entity bidding credits, or to offer large, nationwide new entrants significant discounts on their bids.

e. Reserve Prices

59. The Commission concludes that it should provide for separate aggregate reserve prices for each block of licenses to promote the Commission's statutory objective of recovering for the public a portion of the value of the public spectrum resource. If the auction results for the licenses in any block satisfy the aggregate reserve for that block, all licenses in the block will be assigned based on the auction results, subject to completion of the licensing process, including review of applicants' qualifications. The separate aggregate reserve prices should, taken together, reflect current assessments of the potential market value of this spectrum based on various factors including, but not limited to, the characteristics of this band and the value of other recently auctioned licenses, such as licenses for Advanced Wireless Services. In addition, the view of Congress as to the value of this spectrum, as reflected by the Congressional mandates for proceeds from the auction, should be given appropriate consideration.

60. In the event that licenses are not assigned because the applicable block-specific aggregate reserve is not met, the Commission provides for a prompt auction of alternative, less restrictive licenses for the A, B, C, and E Blocks, subject to the same applicable reserves. The Commission's rules also provide for the possibility of re-offering the D Block license in a subsequent auction.

61.

Block-Specific Aggregate Reserve Price.

The Commission concludes that the public interest requires a separate aggregate reserve price for each block of the 700 MHz Band licenses subject to competitive bidding in the upcoming auction. The reserve prices will be in addition to, and separate and apart from, any minimum opening bid amounts that may be established for purposes of the upcoming auction. If the aggregate reserve is met for any block, all licenses in that block that receive winning bids will be eligible for licensing subject to the completion of the Commission's review of long-form license applications.

62. The Commission also concludes that it is appropriate to assess interest in licenses in this context on a block-by-block basis. The Commission directs the Wireless Bureau to adopt and publicly disclose block-specific aggregate reserve prices, pursuant to its existing delegated authority and its regular pre-auction process, consistent with the Commission's conclusions. Given the Commission's intent that the reserve prices should maximize the possibility of recovering an appropriate portion of the value of the public spectrum resource while enabling licensing as promptly as possible, the Wireless Bureau should establish the particular amounts of the block-specific aggregate reserves by taking into account a conservative estimate of market value based on auction results for AWS-1 spectrum licenses. More specifically, the Wireless Bureau should consider the following factors when setting the block-specific aggregate reserves. The detailed rules regarding the D Block license, the D Block licensee's required construction of a network to be shared by public safety service users, and the resulting limitations on the flexibility of the D Block licensee, should be given substantial weight in assessing the D Block's value. Based solely on geographic area and spectrum block size, AWS-1 auction results might suggest a D Block reserve of $1.7 billion. However, in light of the D Block license conditions essential to the public safety purpose of the public/private partnership, it might be appropriate to expect the D Block licensee to contribute only about 75 percent to 80 percent of such an amount, or about $1.33 billion. In addition, when determining relative valuation of other blocks, the Wireless Bureau should consider the relative valuation of differing blocks in the recent auction of AWS-1 licenses.

63.

Subsequent Auction of Alternative Licenses.

The Commission recognizes that it is possible that the auction results may not satisfy one or more of the block-specific reserves. In that event, the Commission establishes a process to enable the assignment of alternative licenses for the A, B, C, and E Blocks of the 700 MHz Band as soon as possible in order to promote the speedy deployment of services utilizing 700 MHz Band spectrum. Under the Commission's rules, the license for the D Block may also be re-offered in a subsequent auction..

64. The Commission also establishes a process to enable the assignment of alternative licenses as soon as possible in the event that the relevant block-specific aggregate reserve price is not met when those licenses are first offered. Specifically, the Commission will offer the more flexible, less conditioned licenses described below in the A, B, C, and E Blocks as soon as possible after the first auction. Given the unique character of the D Block license conditions, the Commission leaves open the possibilities of reevaluating those conditions or of promptly offering that license again in a subsequent auction, in the event the D Block-specific reserve is not met.

65. The Commission also provides that the auction of alternative licenses shall be subject to the same applicable reserve prices as the initial auction of licenses. The Wireless Bureau has delegated authority, however, to determine the appropriate means of reapportioning the reserve associated with the C Block in light of the Commission's determination to split the block into two blocks should a re-auction occur. This assures both that any initial and subsequent auctions will be as similar as possible (other than with respect to particular license terms) and also that the final assignment of the licenses will be based only on which licenses are able to serve the statutory goal of recovering a portion of the value of the public spectrum resource fixed in advance of the auction. Therefore, the Commission anticipates that the reserve price for the C Block would be approximately $4.6 billion.

66.

Performance Requirements for Alternative Licenses.

The Commission concludes that a failure of the auction results for the A, B, and E Block licenses to satisfy the applicable block-specific aggregate reserve should result in a prompt offering of alternative licenses for the relevant block(s) that are subject to performance requirements with the population benchmark regime the Commission has adopted for the C Block licenses.

67.

Changes to Alternative C Block Licenses.

The Commission concludes that in the event that auction results for conditioned Upper 700 MHz C Block licenses do not satisfy the aggregate reserve price for the C Block, the Commission will offer as soon as possible licenses for the C Block without the open platform conditions. The Commission will also modify the C Block band plan. The Commission will reconfigure the bandwidth of the licenses to create two paired blocks of 6 and 5 megahertz each, which the Commission will label the C1 and C2 Blocks. Further, the Commission will license the C1 Block based on EAs and the C2 Block based on REAGs.

68.

D Block License.

The Commission concludes that it should not alter the conditions it has adopted today for the D Block license based solely on auction results. The Commission believes that a D Block-specific aggregate reserve of approximately $1.33 billion is appropriate given the Commission's goal of enabling the recovery of a portion of the value of the spectrum while also permitting licensing to proceed as quickly as possible. If, however, the D Block-specific aggregate reserve is not met, the Commission concludes that it should leave open the possibility of re-offering the license on the same terms in a subsequent auction, as well as the possibility of re-evaluating all or some of the applicable license conditions.

69.

Auction Procedures.

The Commission directs the Wireless Bureau to adopt for the auction of 700 MHz Band licenses, consistent with its delegated authority and pursuant to its routine pre-auction process, procedures that will enable a prompt subsequent auction of alternative licenses for any block in the event that the relevant block-specific aggregate reserve price is not met. This order's provisions with respect to the procedures for the initial auction, including with respect to anonymous and package bidding, will continue to apply in any subsequent auction. Furthermore, the same applicable reserve prices for each block of licenses shall apply in both the initial and subsequent auctions, recognizing that the Wireless Bureau will be required to determine how to allocate the block-specific reserve price for the C Block upon reauction under the split block plan. The Commission directs the Wireless Bureau, consistent with its delegated authority to adopt procedures that will comply with this order and preserve the integrity of any necessary reauction.

70. The Commission directs the Wireless Bureau to establish procedures that limit qualified bidders in a subsequent auction of alternative licenses to those bidders that qualify to bid in the upcoming auction offering 700 MHz Band licenses in all of these blocks. Additionally, the Commission finds that the applicable “down payment deadline” for purposes of the Commission's anti-collusion rule shall be the “down payment deadline” established for the subsequent auction. In addition, because licenses for the same spectrum will be offered in both auctions, and the auctions will take place relatively close in time, the Commission concludes that the purpose of the Commission's anti-collusion rule requires that the provisions of that rule continue to apply until the down payment deadline for the subsequent auction. To assure that bidders will have sufficient bidding eligibility to pursue various bidding strategies, the Commission directs the Wireless Bureau to propose and adopt procedures that give applicants an opportunity to obtain bidding eligibility specifically for the alternative licenses, in addition to the initial licenses.

71. The Wireless Bureau also should consider any additional procedures within its delegated authority that may enhance the effectiveness of the Commission's auction of 700 MHz Band licenses in either the initial or subsequent auction. In this regard, the Commission directs the Wireless Bureau to consider what procedures may be appropriate to deter bidders from actions that might thwart the assignment of licenses in either auction.

f. Statutory Deposit Deadline

72. The Commission will deposit payments made by successful bidders towards their respective winning bids for their licenses—including upfront payments, deposits, and final payments held on deposit pending the completion of licensing—as of the deposit deadline, June 30, 2008, even in instances where the licensing process for those licenses has not yet been completed.

B. 700 MHz Public Safety Spectrum

73.

700 MHz Public Safety Spectrum.

The Commission adopts a revised band plan for the 700 MHz Public Safety Band. The Commission designates the lower five-megahertz paired (ten megahertz total) segment of the 700 MHz Public Safety Band for broadband communications. The Commission consolidates the public safety narrowband operations in the upper paired 6-megahertz blocks (twelve megahertz total) of the 700 MHz Public Safety Band. The Commission adopts a one-megahertz paired guard band (768-769/798-799 MHz) between the broadband and narrowband segments. The Commission further concludes that in order to maximize the benefits of the 700 MHz Public/Private Partnership to deploy a nationwide, interoperable broadband communications network, narrowband operations presently in channels 63 and 68 (and the upper one megahertz of channels 64 and 69) must be cleared no later than the DTV transition date.

74. The Commission requires the Upper 700 MHz Band D Block licensee to pay the costs associated with relocating public safety narrowband operations to the consolidated channels, in recognition of the significant benefits that will accrue to the D Block licensee. To facilitate the relocation, the Commission requires every 700 MHz Band public safety licensee, whether holding individual narrowband authorizations or operating pursuant to a State License, to provide the following information: (1) The total number of narrowband mobile and portable handsets in operation in channels 63 and 68, and the upper one megahertz of channels 64 and 69, (2) the total number of narrowband base stations serving these handsets in operation, (3) contact information for each identified set of

handsets and base stations, as appropriate, (4) the areas of operation of the mobile and portable units (such as defined by the jurisdictional boundaries of the relevant public safety departments), and (5) the location, in latitude and longitude, of the base stations, all as of August 30, 2007. This information must be filed with the Commission by October 23, 2007 and must include a certification, signed by an authorized party, stating that the information provided therein is true, complete, correct, and made in good faith. The Public Safety and Homeland Security Bureau will issue a public notice in advance of the effective date announcing the deadline for this certification requirement.

75. The Commission prohibits authorization, whether pursuant to individual license or State License, of any new narrowband operations in channels 63 and 68, or in the upper one megahertz of channels 64 and 69, as of August 30, 2007. The Commission cautions that any equipment deployed in these frequencies subsequent to August 30, 2007 will be ineligible for relocation funding.

76. The Commission requires all Regional Planning Committees with approved plans or plans on file to submit amended plans consistent with the decisions herein by November 23, 2007.

77.

Public Safety Broadband Licensee.

The Commission concludes that the public interest is best served by establishing a single nationwide Public Safety Broadband License for the 700 MHz public safety broadband spectrum. The Commission will assign this license to a single Public Safety Broadband Licensee that will be responsible for implementing the 700 MHz public safety nationwide interoperable broadband network. This network will serve to provide public safety entities access to new broadband technologies across the country. Further, the Commission provides that the Upper 700 MHz D Block Licensee will gain access to the 700 MHz public safety broadband spectrum on a secondary preemptible basis through a spectrum leasing arrangement with the Public Safety Broadband Licensee.

78. The Commission adopts its proposal to license the 700 MHz public safety broadband spectrum as a 10-megahertz block (comprised of paired, 5-megahertz blocks) under a nationwide geographic area license, and the Commission will assign this license to the Public Safety Broadband Licensee. The Commission establishes a variety of eligibility criteria for this entity and sets out a variety of responsibilities, including negotiating the Network Sharing Agreement with the winning bidder of the Upper 700 MHz Band D Block license. The Commission delegates authority to the Chief of the PSHSB to issue a public notice within thirty days of the release of this Second Report and Order soliciting applications for the Public Safety Broadband Licensee. The public notice shall specify the baseline criteria the Commission establishes herein, and describe the procedures and other requirements for submitting applications. The Commission will select the Public Safety Broadband Licensee and grant to it the Public Safety Broadband License consistent with the requirements and considerations set forth herein.

700 MHz Public/Private Partnership

1. Adoption of the 700 MHz Public/Private Partnership

79. The Commission designates the D Block in the Upper 700 MHz Band to be licensed to a commercial entity on a nationwide basis for the purpose of entering into the 700 MHz Public/Private Partnership with the Public Safety Broadband Licensee, and the Commission adopts a number of conditions, requirements, and procedures to safeguard services to public safety entities and address concerns about the success of the partnership, as discussed more fully below.

2. Essential Components of Public/Private Partnership

a. Shared Wireless Broadband Network

80. In order to have a successful public/private partnership with a shared nationwide interoperable broadband network infrastructure that meets the needs of public safety, the Commission adopts certain network requirements. The public/private partnership network will serve as the nation's public safety wireless broadband network infrastructure, so it must meet the requirements of a public safety communications network. Accordingly, the Commission requires that the network incorporate, at a minimum, the following:

• Specifications for a broadband technology platform that provides mobile voice, video, and data capability that is seamlessly interoperable across agencies, jurisdictions, and geographic areas. The platform should also include current and evolving state-of-the-art technologies reasonably made available in the commercial marketplace with features beneficial to the public safety community (

e.g.,

increased bandwidth).

• Sufficient signal coverage to ensure reliable operation throughout the service area consistent with typical public safety communications systems (

i.e.

, 99.7 percent or better reliability).

• Sufficient robustness to meet the reliability and performance requirements of public safety. To meet this standard, network specifications must include features such as hardening of transmission facilities and antenna towers to withstand harsh weather and disaster conditions, and backup power sufficient to maintain operations for an extended period of time.

• Sufficient capacity to meet the needs of public safety, particularly during emergency and disaster situations, so that public safety applications are not degraded (

i.e.

, increased blockage rates and/or transmission times or reduced data speeds) during periods of heavy usage. In considering this requirement, the Commission expects the network to employ spectrum efficient techniques, such as frequency reuse and sectorized or adaptive antennas.

• Security and encryption consistent with state-of-the-art technologies.

• A mechanism to automatically prioritize public safety communications over commercial uses on a real-time basis and to assign the highest priority to communications involving safety of life and property and homeland security consistent with the requirements adopted in this Second Report and Order.

• Operational capabilities consistent with features and requirements specified by the Public Safety Broadband Licensee that are typical of current and evolving state-of-the-art public safety systems (such as connection to the PSTN, push-to-talk, one-to-one and one-to-many communications, etc.).

• Operational controls of the network by the Public Safety Broadband Licensee to the extent necessary to ensure public safety requirements are met.

• The Public Safety Broadband Licensee shall have the right to determine and approve the specifications of public safety equipment that is used on the network, and the right to purchase its own subscriber equipment from any vendor it chooses, to the extent such specifications and equipment are consistent with reasonable network control requirements established in the NSA.

• A requirement, as explained more fully herein, that the Upper 700 MHz D Block licensee make available to the Public Safety Broadband Licensee at

least one handset that would be suitable for public safety use and include an integrated satellite solution capable of operating both on the 700 MHz public safety spectrum and on satellite frequencies.

81. These requirements are to be implemented by the parties through the NSA, which will also include the detailed specifications of the network that the D Block licensee will construct. By allowing the parties to determine specific details, including the technologies that will be used, subject to approval by the Commission, the Commission provides them with flexibility to evaluate the cost and performance of all available solutions while ensuring that the shared wireless broadband network has all the capabilities and attributes needed for a public safety broadband network.

b. Spectrum Use

82. The Commission permits the Public Safety Broadband Licensee to provide access on a secondary and preemptible basis to this spectrum, pursuant to the spectrum lease specified herein, for the purpose of enabling commercial operations within the band devoted to primary public safety broadband use. The Upper 700 MHz D Block licensee will gain access to this public safety broadband spectrum by means of a spectrum leasing arrangement with the Public Safety Broadband Licensee. The Commission also places additional conditions regarding the use of the D Block spectrum, including a requirement that the D Block licensee provide the Public Safety Broadband Licensee with priority access to the D Block license spectrum during emergencies.

83. In addition, the Commission concludes that Section 337(a)(1) does not prohibit the Public Safety Broadband Licensee from entering into the lease for commercial operations, on a limited and preemptible basis as specified herein, of spectrum that is allocated for public safety services. Further, the Commission finds that Section 337(a)(2), which directs the Commission to allocate 36 megahertz “for commercial use,” does not prohibit the Commission from requiring the D Block licensee to provide public safety users with priority access to D Block license spectrum in an emergency. Priority service, although provided to public safety, will still be commercial, and will not appreciably impair the D Block licensee's ability to provide commercial services to other parties.

84.

Commercial Operations in Public Safety Spectrum on a Secondary Basis.

The Commission permits the leasing of the Upper 700 MHz Band spectrum currently allocated for public safety services to commercial providers on a secondary, unconditionally preemptible basis. The Public Safety Broadband Licensee will be required to lease the public safety spectrum for use by the D Block licensee on a secondary basis pursuant to the requirements set forth in the NSA and established in this Second Report and Order. Thus, under the 700 MHz Public/Private Partnership framework adopted here, the D Block licensee will be obligated to construct a broadband network capable of operating on the public safety broadband spectrum for the benefit of the Public Safety Broadband Licensee, and the Public Safety Broadband Licensee will be obligated to permit secondary commercial operations on the public safety broadband spectrum pursuant to the spectrum leasing arrangement.

85. The Commission will require that this spectrum leasing arrangement take the form of a long-term spectrum manager leasing arrangement for the full term of the license. By limiting the D Block licensee's secondary use of the Public Safety Broadband Licensee's spectrum to leased access under a spectrum manager leasing arrangement, subject to the conditions the Commission is placing on the nature of that access, the Commission thus ensures that the Public Safety Broadband Licensee has the regulatory means (and obligation) to preserve the fundamental public safety function of the band. Moreover, the Public Safety Broadband Licensee's ultimate control over the D Block licensee's use of this band, coupled with the operational flexibility accorded the D Block licensee under a spectrum manager leasing arrangement, should provide an appropriate balance between commercial and public safety operations in the public safety broadband spectrum. Specifically, the spectrum manager leasing arrangement permits the D Block licensee to construct a network to serve its business needs, yet preserves the network infrastructure required for primary public safety use in the Public Safety Broadband Licensee's band.

86. As further conditions on the spectrum leasing arrangement authorized here, the D Block licensee's commercial operations in the public safety spectrum must not cause interference to primary users (

i.e.

, public safety users) and must accept interference from primary users at all times. To help ensure that commercial secondary use complies with these limitations, in the public safety broadband spectrum the Commission will require that the network be designed so as to automatically assign priority to public safety users, to the exclusion and/or immediate preemption of any commercial use on a dynamic, real-time priority basis, and that network specifications are sufficient to guarantee that public safety users suffer no harmful interference or interruption or degradation of service due to commercial operations in the public safety broadband spectrum.

87.

Priority Public Safety Access to Commercial Spectrum During Emergencies.

As part of its responsibilities in managing the shared wireless broadband network, the Commission requires the D Block licensee to provide the Public Safety Broadband Licensee with priority access, during emergencies, to the spectrum associated with the D Block license (in addition to the 700 MHz public safety broadband spectrum). In determining what constitutes an emergency, the Commission agrees with Frontline that the definition of an “emergency” for this purpose should be left to negotiation between the parties. The Commission requires the parties to define “emergency” for purposes of priority access to D Block license spectrum as part of the NSA.

88. The Commission recognizes that there may be occasions when the parties are unable to agree that an emergency situation requires priority access to the D Block license spectrum, especially in circumstances that do not clearly fall within the definition of “emergency” negotiated by the parties in the NSA. On these occasions, the Public Safety Broadband Licensee may request that the Commission declare, on an expedited basis, that particular circumstances warrant emergency priority access. In order to facilitate this process and ensure a prompt response, the Commission delegates authority to the Defense Commissioner to decide these requests and amends Section 0.181 of the Commission's rules to reflect this new duty.

89. Under emergency conditions, all public safety entities in the affected area will have real-time access, as needed, to all D Block license spectrum on a priority basis over commercial traffic and will preempt ongoing commercial traffic to the extent necessary. In this regard, the Commission requires the D Block licensee to provide appropriate warnings to its commercial customers about the potential interruption of their service during emergencies due to preemption by public safety users. The NSA should address how the D Block licensee will satisfy this obligation, including, for example, encouraging the

use of devices that can access spectrum other than the D Block. The NSA must also recognize that emergency 911 calls from commercial users also play a critical role in safeguarding public safety and should be accorded some level of priority, which may be lower priority than public safety communications but will not be subject to interruption of ongoing calls by public safety users and will have priority over all other commercial uses.

90.

Secondary Markets Rules.

In permitting the Public Safety Broadband Licensee to enter into this spectrum leasing arrangement subject to the conditions set out in this order, the Commission waives the spectrum leasing policies and rules insofar as they prohibit public safety licensees from entering into spectrum leasing arrangements for commercial operations.

c. Performance Requirements

91. The Commission adopts specific performance requirements that include three population-based build-out benchmarks that cover the nationwide D Block license area. Specifically, the Commission will require the D Block licensee to provide signal coverage and offer service to at least 75 percent of the population of the nationwide D Block license area by the end of the fourth year, 95 percent of the population of the nationwide license area by the end of the seventh year, and 99.3 percent of the population of the nationwide license area by the end of the tenth year. To meet these requirements, the D Block licensee must use the most recently available U.S. Census Data. The Commission concludes that the build-out requirements being imposed will ensure that public safety needs are met.

92. In order to ensure that less populous areas are not neglected in the D Block licensee's build-out efforts, the Commission adopts certain additional measures to encourage coverage in those areas. Accordingly, the Commission requires that the D Block licensee meet the Commission's initial population benchmarks based on a build-out schedule specified in the NSA consistent with the public safety needs. The Commission also requires the D Block licensee to offer at least one handset suitable for public safety use that includes an integrated satellite solution pursuant to the terms, conditions, and timeframes set forth in the NSA.

93. The Commission's three population-based construction benchmarks will take effect beginning on February 17, 2009. This is the statutorily imposed DTV transition date and is the same date that build-out obligations for the other unauctioned commercial 700 MHz Band licensees will begin to take effect. Thus, the Commission's four, seven, and ten year construction benchmarks for the D Block licensee will be calculated as starting from February 17, 2009. Use of this date provides regulatory parity and it recognizes that the DTV transition will not be completed until this date. The Commission notes that the D Block licensee may begin constructing its system prior to February 17, 2009, and may begin operating its system prior to that date so long as it provides appropriate interference protection to incumbent co-channel and adjacent channel broadcasters.

94. The Commission will apply the three population-based construction benchmarks over the nationwide D Block license area. Accordingly, the D Block licensee must employ a signal level sufficient to provide adequate service to the relevant percentage of the population over the nationwide D Block license area. Moreover, the Commission requires that the network and signal levels employed to meet these benchmarks be adequate for public safety use, as defined in the Shared Wireless Broadband Network sub-section herein and further defined by the NSA, and that the services made available be appropriate for public safety entities in those areas. In particular, the Commission requires as a mandatory provision of the NSA that the D Block licensee and Public Safety Broadband Licensee negotiate inclusion into the build-out schedule coverage of major highways and interstates, as well as incorporated communities with a population in excess of 3,000, as suggested by APCO, IACP and IAFC. In addition, to the extent that the D Block licensee chooses to provide commercial services to population levels in excess of the relevant benchmarks, the D Block licensee will be required to make the same level of service available to public safety entities.

95. In certain limited circumstances, the Commission will permit the D Block licensee to modify these population-based construction benchmarks where the D Block licensee and the Public Safety Broadband Licensee reach agreement and the full Commission gives its prior approval for a modification. As with other commercial 700 MHz Band licensees, the D Block licensee will be required to demonstrate compliance with the Commission's adopted benchmarks by filing with the Commission within 15 days of passage of the relevant benchmarks a construction notification comprised of maps and other supporting documents certifying that they have met the Commission's performance requirements. The construction notification, including the coverage maps and supporting documents, must be truthful and accurate and not omit material information that is necessary for the Commission to make a determination of compliance with the Commission's performance requirements. However, unlike the other commercial licenses and because of the nature of the partnership established herein, the D Block licensee will not be subject to a “keep-what-you-use” rule. Rather, the Commission will strictly enforce these build-out requirements and, if the D Block licensee fails to meet a construction benchmark, the Commission may cancel its license, depending on the circumstances.

d. Network Sharing Agreement (NSA) and Mandatory Provisions

96. The Commission establishes that the relationship between the Public Safety Broadband Licensee and the D Block licensee will be governed by the Network Sharing Agreement (NSA) to be negotiated by the parties, and such other separate agreements as the Commission may require or allow, and the Commission provides that compliance with the terms of the NSA shall be a regulatory condition of the D Block license. Breach of this licensing condition may, at the determination of the Commission, result in remedies including, but not limited to, cancellation and subsequent award of the license. The Commission also requires all the parties to negotiate in good faith and finds that many of the details of their agreement are appropriately left to them to negotiate and reach agreement on (subject to ultimate Commission approval of the NSA). In the discussion that follows, certain elements that the Commission requires the parties to address in the NSA are enumerated.

97.

Rights and Obligations Under the Public/Private Partnership.

The NSA must incorporate all of the substantive rights and obligations of the parties that the Commission has established in this Second Report and Order that are relevant to the Public/Private Partnership. Once the NSA is approved by the Commission and executed by the parties, assuming all other licensing requirements are met, the Commission will grant the D Block license to the winning bidder and compliance with the terms and conditions of the NSA will be license conditions for both the D Block license and the Public Safety Broadband License. The Commission

requires the parties to submit an executed NSA within 10 business days of the Commission's approval of the agreement, and if the parties fail to submit the NSA, the Commission will deny granting the D Block license until the NSA is submitted.

98.

Term of Agreement.

The NSA must have a term not to exceed 10 years from February 17, 2009, which coincides with the term of the D Block license established elsewhere in this Second Report and Order. At the conclusion of the initial, and subsequent, term of the agreement, the NSA may be renewed along with the D Block license, subject to Commission approval. The Commission finds it appropriate to ensure that consideration of whether to renew the D Block license and whether to renew or modify the NSA whose performance is a condition of that license should occur at the same time.

99.

Service Fees.

The Commission finds that all service fees for public safety service should be specified in the NSA, including any applicable fees for normal network service and fees for priority access to the D Block in an emergency. The Commission finds that the parties should be left to negotiate reasonable rates in good faith, taking into account all appropriate factors, including but not limited to the public/private nature of the partnership. The Commission expects, however, that the parties will negotiate a fee structure for priority access to the D Block in an emergency that will protect public safety users from incurring unforeseen (and unbudgeted) payment obligations in the event that a serious emergency necessitates preemption for a sustained period. The Commission also encourages the parties to negotiate a fee agreement that incorporates financial incentives for the commercial licensee based on the number of public safety entities and localities that subscribe to the service.

100. The Commission also expects that fees will be such that public safety entities are able to afford the services that they require for their public safety functions, and that the terms will best serve the public interest goals established in this Second Report and Order regarding the public/private partnership. Should it prove necessary, the Commission has established various remedies to resolve disputes over NSA terms, and the Commission can exercise one of these options to ensure that fees charged are reasonable.

101.

Detailed Build-Out Schedule.

The NSA must include a detailed build-out schedule that is consistent with the mandatory national build-out and performance benchmarks that the Commission has established for the D Block licensee elsewhere in this Second Report and Order. The Commission expects the NSA to identify the specific areas of the country that will be built out by each of the construction deadlines that the Commission has established. Because the Commission must ensure that smaller towns and rural areas are not neglected in the D Block licensee's build-out efforts, the Commission requires the D Block licensee to meet the Commission's initial population benchmarks by not exclusively concentrating on building out high population areas. In this regard, the Commission agrees with public safety commenters to the extent that the Commission requires the parties to include in the NSA coverage for major highways and interstates, as well as such additional areas that are necessary to provide coverage for all incorporated communities with a population in excess of 3,000, unless the Public Safety Broadband Licensee and the D Block licensee jointly determine, in consultation with a relevant community, that such additional coverage will not provide significant public benefit. The Commission also requires an estimated cost for each specified area of the build-out, which will assist the Commission in efforts to ensure that the build-out schedule is achieved.

102.

Modifications to the NSA.

The Commission obligates the parties to act in good faith in all dealings with each other and to abide by the terms of the agreement. The NSA must specify that any major modifications to the terms of the NSA, related agreements or documents, or such other agreements as the Commission may require or allow, require not only the agreement of the parties, but also prior Commission approval. All other modifications require prior approval by the Chiefs of the Wireless Bureau and the Public Safety and Homeland Security Bureau on delegated authority.

e. License Term and Renewal Expectancy for the Public/Private Partnership

103. Consistent with the decision made for other commercial licensees in the

700 MHz Report and Order,

the Commission decides that a term not to exceed 10 years from February 17, 2009, should be used for initial authorization in the D Block license. The D Block license would be auctioned as a single, nationwide license to provide for commercial service in the “D Block,” and to build and operate a joint broadband public safety and commercial network for public safety use.

104. At the end of the 10 year term, the D Block licensee will be allowed to apply for license renewal, although its renewal will be subject to its success in meeting the material requirements set forth in the NSA as well as all other license conditions, including meeting the performance benchmark requirements. Because the initial NSA term will expire at the same time, the D Block licensee must also file a renewed or modified NSA for Commission approval at the time of its license renewal application. Given these detailed license renewal requirements, the Commission declines to impose a separate substantial service showing.

105. The material requirements set forth in the NSA are conditions of the D Block license, including the network build-out schedule and satisfaction of the agreed-upon public safety specifications regarding the network construction and operations, in order to obtain a renewal of the license. Regarding the D Block license renewal application, the Commission finds the material requirements in the NSA to be those requirements that are the “essence” of the agreement between the parties, including but not limited to the build-out schedule for the public safety network and other provisions that serve the fundamental purpose of the NSA, as well as any time limits on the performance of those provisions.

f. Public Safety Satellite Support

106. The Commission requires that the D Block licensee make available to public safety users at least one handset that includes a seamlessly integrated satellite solution. The Commission does not require that this handset use any specific technology, only that it be capable of operating both on the 700 MHz public safety spectrum and on the satellite frequency bands and/or systems of the satellite service providers with which the Public Safety Broadband Licensee has contracted for satellite service. The Commission does not, however, require that the D Block licensee incorporate support for satellite communications into the infrastructure of the shared terrestrial network.

107. The Commission expects that the D Block licensee, satellite companies, and handset manufacturers will take steps to facilitate the development of handsets with seamlessly integrated satellite solutions. However, the Commission does not establish an immediate obligation upon the D Block licensee to make satellite-capable handsets available. Rather, the Commission will require the D Block

licensee to begin offering at least one handset suitable for public safety use that includes a seamlessly integrated satellite solution pursuant to the terms, conditions, and timeframes set forth in the NSA.

108. The Commission declines to mandate the incorporation of support for satellite communications by the D Block licensee into the infrastructure of the shared network. The Commission believes that the D Block licensee and the Public Safety Broadband Licensee will be in the best position to determine whether and when satellite support within the terrestrial infrastructure is appropriate, and by what method it should be implemented, such as by negotiating a side-agreement with existing satellite service providers to use their excess capacity for public safety communications.

g. Local Public Safety Build-Out and Operation

109. The Commission concludes that no public safety entity will be required to use the 700 MHz public safety broadband network, and that any participation in the 700 MHz nationwide public safety network by individual public safety entities will be entirely voluntary. The Commission also concludes, however, that the Upper 700 MHz Band D Block licensee should have the exclusive right to build and operate the shared wireless broadband network using the 700 MHz public safety broadband spectrum, except that the Commission permits public safety entities to construct local broadband networks in the 700 MHz public safety spectrum in two limited circumstances subject to conditions specified below. The Commission further concludes that public safety entities should have a limited right to build out wideband networks, again with conditions and restrictions.

110.

Rights to Early Build-out in Areas with a Build-out Commitment.

First, in an area where the D Block licensee has, in the NSA, committed to build out by a certain date, but where a public safety entity wishes a more immediate build-out, the public safety entity may, with the pre-approval of the Public Safety Broadband Licensee, have the network constructed in that area at the public safety entity's own expense. The network must be capable of operating on the shared, interoperable broadband network that operates on both the D Block licensee's commercial block and the public safety 700 MHz broadband spectrum, and must meet all of the same requirements and specifications as the shared network required under the NSA.

111. The Commission authorizes two options for implementing the early build-out of an area of the broadband network at the discretion of the public safety entity. Under the first option, the public safety entity (or the Public Safety Broadband Licensee acting on its behalf) may construct the network in that area. Upon construction, it must transfer the network to the D Block licensee, which shall integrate that network into the shared national broadband network constructed pursuant to the NSA. Under the second option, the public safety entity may require the D Block licensee to construct the network in that area earlier than scheduled, but the public safety entity must provide all funds necessary for the early construction of the network, including any and all additional resource and personnel costs. As with the first option, upon construction, the D Block licensee will operate and manage the network as an integrated part of the larger shared national broadband network.

112. In either case, the Public Safety Broadband Licensee, the D Block licensee, and the public safety entity must, prior to any construction, negotiate an amendment to the NSA regarding this part of the network, specifying ownership rights, fees, and other terms, which may be distinct from the analogous terms governing the shared national broadband network. Absent agreement to the contrary, the amendment must provide that by a date no later than the build-out date specified for that area in the NSA, the D Block licensee will receive full ownership rights and will in turn compensate the public safety entity (or the Public Safety Broadband Licensee, where appropriate) for the construction of the network. The right to compensation for the build-out shall be limited, again absent agreement to the contrary, to the cost that would have been incurred had the D Block licensee constructed the network itself in accordance with the original terms and specifications of the NSA.

113. The Commission points out that early build-out in this scenario is a right to construct only. Operations may not commence on the network until the network is transferred to the D Block licensee. Operations on early build-out networks would then be conducted under the authority of the Public Safety Broadband Licensee's license, in the same manner as any network operations that occur following construction by the D Block licensee under the build-out schedule contained in the NSA.

114. Starting on the date of compensation for build-out, or on the build-out due date of the NSA if there is no specified date of compensation, the D Block licensee may include the early build-out for purposes of determining whether it has met its national build-out benchmarks and the build-out requirements of the NSA.

115. The Commission notes that the National Capital Region (NCR) has commenced construction and operation of a broadband network in the 700 MHz Band pursuant to an experimental license and has been granted a waiver in anticipation of its application for a license to operate such system. The NCR consists of eighteen jurisdictions: The District of Columbia, Montgomery and Prince Georges Counties of Maryland, and the cities of Gaithersburg, Rockville, Takoma Park, Bowie, College Park, and Greenbelt; Arlington, Fairfax, Loudon and Prince William Counties of Virginia, and the cities of Alexandria, Falls Church, Town of Leesburg, Manassas, and Manassas Park. Although NCR cannot now obtain a license, as such license will be held by the Public Safety Broadband Licensee, nothing herein should be construed as preventing or limiting NCR's ability to continue to operate the broadband network they have built within the 700 MHz broadband allocation (subject to NCR properly obtaining a grant of a request for Special Temporary Authority for such continued operation) until such time as the NCR network is integrated into the nationwide, interoperable broadband network in accordance with the build-out plan set forth in the NSA.

116. The Commission advises the Public Safety Broadband Licensee to consult NCR in negotiating the build-out date for the nationwide, interoperable network, as the build-out plan in the NSA should allow NCR a reasonable time to make any modifications necessary to incorporate its network into the nationwide, interoperable broadband network by the date set forth in the NSA for build out of the portion of the nationwide, interoperable broadband network in the NCR. NCR will, of course, be expected to comply with the requirements set forth herein for public safety entities exercising the right to early build out, and NCR shall be entitled to the same rights and compensation as set forth herein for public safety entities electing to exercise their right to early build out.

117. The Spectrum Coalition would have the Commission give local public safety entities, including NCR, the ability to “opt-out” of the national, interoperable broadband network, yet operate individual systems in the 700 MHz Band. The Commission flatly rejects such arguments; local public safety entities do not have to participate

in the nationwide network, but they may not “opt-out” in favor of using the 700 MHz broadband spectrum for individual networks. As a general matter, as we have discussed above, there are numerous benefits to having a single Public Safety Broadband Licensee.

118.

Rights to Build Out and Operate In Areas without a Build-out Commitment.

The Commission acknowledges that, even under the stringent population-based build-out requirements that the Commission is adopting, there will be areas of the nation in which the NSA does not require the D Block licensee to build out the shared broadband network. In such areas, under the policies and procedures discussed below, the Commission provides that a public safety entity may build out and operate a separate, exclusive network in the 700 MHz public safety broadband spectrum at any time, provided the public safety entity has received the approval of the Public Safety Broadband Licensee and operates its independent network pursuant to a spectrum leasing arrangement into which the public safety entity has entered with the Public Safety Broadband Licensee.

119. Under this option, the public safety entity need not obtain any agreement with the D Block licensee. The Public Safety Broadband Licensee must, however, provide the D Block licensee with notice of the public safety entity's intent to construct in that area within 30 days of receipt of a request from a public safety entity wishing to exercise this option, and shall inform the D Block licensee of the public safety entity's anticipated build-out date(s). This affords the D Block licensee the opportunity, in conjunction with the Public Safety Broadband Licensee, to reconsider whether the NSA should be revised to include a commitment to build out the area that the public safety entity has identified. Further, if within 30 days of receiving such notice the D Block licensee certifies in writing to the Public Safety Broadband Licensee that it will build out the shared network in the area, within a reasonable time of the anticipated build-out date(s), as determined by the Public Safety Broadband Licensee, then the public safety entity shall not have the option of building out and operating its own separate exclusive network in the area. Under this circumstance, the D Block licensee, working with the Public Safety Broadband Licensee, must then adopt an appropriate amendment to the NSA, and such commitment would become enforceable against the D Block licensee as part of its build-out requirements. The Commission also notes that, as an alternative in such cases, the public safety entity would be able to complete early build-out under the procedures discussed above.

120. If the public safety entity pursues this option to build out a separate network, the Public Safety Broadband Licensee and public safety entity, as its spectrum lessee, must file a spectrum leasing arrangement with the Commission prior to the public safety entity commencing any operations. The Commission will require that the spectrum leasing arrangement take the form of a spectrum manager leasing arrangement under the Commission's spectrum leasing rules. The Commission will not permit such arrangements to take the form of long-term

de facto

transfer spectrum leasing arrangements. The Commission believes that it is necessary that the Public Safety Broadband Licensee retain not only

de jure

control of all of the spectrum associated with the Public Safety Broadband License, even in areas not scheduled for build-out, but also

de facto

control of the spectrum leased for use by public safety entities. As a result, the Commission finds it essential that, as provided under the spectrum manager leasing rules and as distinguished from the long-term

de facto

transfer leasing arrangement, the Public Safety Broadband Licensee maintain actual oversight and working knowledge of its spectrum lessees' activities in order to ensure compliance with all requirements of the Communications Act, the Commission's rules, and the obligations set forth in this Second Report and Order.

121. In addition to compliance with the Commission's spectrum leasing requirements, the public safety spectrum lessee must ensure that the following conditions are met: (1) The network must provide broadband operations; (2) the network must be fully interoperable with the shared national broadband network required by the NSA; (3) the network must be available for use by any public safety agency in the area; and (4) the network must satisfy any other terms or conditions required by the Public Safety Broadband Licensee. These conditions specifically must be included in the spectrum manager lease agreement entered between the Public Safety Broadband Licensee and the public safety entity. Consistent with Section 90.551 of the Commission's rules, which contains the general 700 MHz public safety spectrum construction requirements, the lease agreement between the parties must specify that the public safety entity must construct and place into operation its network within one year of the effective date of the spectrum manager leasing arrangement, and if not, then the Public Safety Broadband Licensee will terminate the spectrum leasing arrangement pursuant to the Commission's rules. The separate network need not, however, meet the other specifications of the D Block licensee's shared national network. In particular, absent agreement of the public safety entity, the Public Safety Broadband Licensee, and the D Block licensee, the separate network may not operate using any spectrum associated with the D Block license. Finally, as required by the Commission's spectrum leasing rules, the Public Safety Broadband Licensee must notify the Commission of the spectrum manager leasing arrangement as part of the Commission's spectrum manager lease notification procedures. The notice must identify the public safety entity leasing the spectrum and the particular areas of spectrum leased as part of this build-out option.

122. The Commission emphasizes that under no conditions may a public safety entity construct a network using 700 MHz public safety broadband spectrum in an area absent the approval of the Public Safety Broadband Licensee. Nothing in this determination should be construed, however, to prohibit the Public Safety Broadband Licensee from being responsive to requests from localities to opt out and provide separate network services pursuant to a spectrum lease approved by the Public Safety Broadband Licensee and the Commission.

123.

Conditions for Waiver to Allow Limited and Temporary Wideband Operations.

The Commission prohibits wideband operations in the public safety allocation of the 700 MHz Band, subject to the limited exceptions set forth herein. The Commission will require public safety entities seeking to deploy wideband systems to satisfy the following conditions and restrictions.

124. First, wideband operations in the 700 MHz public safety spectrum will be permitted only upon grant of a properly supported request for waiver of the requirement to conform to the band plan the Commission adopts herein,

i.e.

, one that permits only broadband or narrowband operations. In the interests of ensuring the integrity of the public/private partnership for construction of a nationwide broadband, interoperable network, the Commission finds it necessary to consider requests to deploy wideband only in a waiver context. Requests for waiver to conduct wideband operations must be

accompanied by an application for authorization.

125. Second, any petition for waiver must be accompanied by a letter from the Public Safety Broadband Licensee, confirming that the proposed wideband deployment is not inconsistent with the broadband deployment plan for the affected or adjacent service areas. The Commission encourages public safety entities seeking such waivers to cooperate with the Public Safety Broadband Licensee to reach agreement on the conditions, if any, to be placed on any wideband deployment, including the appropriate plan for transition to the nationwide broadband, interoperable network. All requests for waiver must include any agreed-upon conditions and transition plan.

126. Third, except as discussed below, the Commission will restrict grants of waiver to the deployment of a wideband system in the consolidated narrowband spectrum or the internal public safety guard band. The Commission must limit any wideband operations in this manner in order to ensure the full preservation of the broadband segment. The Commission also believes that the regional planning committees will continue to serve an important role in overseeing and crafting appropriate spectrum use; to that end, petitions for waiver in the narrowband spectrum must also include a letter from the appropriate regional planning committee or state licensee confirming that the proposed wideband deployment will not disrupt any regional or state planning efforts that are underway. The Commission encourages the Public Safety Broadband Licensee to coordinate with the applicable regional planning committee or state licensee when these entities are asked to consider any wideband deployment in the narrowband portion of the public safety spectrum, to ensure proper coordination with existing and pending narrowband applications.

127. If there are instances where spectrum in the narrowband segment or internal guard band is unavailable for wideband operations, the Commission will permit submission of request for waiver to operate in the upper 1.25 megahertz of the broadband allocation. The Commission emphasizes, however, that applicants seeking waiver relief to deploy wideband networks in the public safety broadband spectrum face a very high hurdle. As a threshold requirement, the Commission will consider requests for waiver to conduct wideband operations in the broadband allocation only upon submission of a substantially supported, detailed technical showing demonstrating why there is insufficient spectrum in the narrowband allocation or internal guard band to support the desired wideband operations. As with requests to conduct wideband operations in the narrowband segment or internal guard band, any request for waiver to conduct wideband operations in the upper 1.25 megahertz of the broadband allocation must be accompanied by a letter from the Public Safety Broadband Licensee confirming that the proposed wideband deployment is not inconsistent with the broadband deployment plan for the affected or adjacent service areas, and all requests for waiver must reflect any conditions and transition plan agreed upon by the petitioner and the Public Safety Broadband Licensee. The public safety entity seeking to establish wideband operations in the broadband segment must have first issued a request for proposal (RFP) that permitted interested parties to submit broadband proposals that are technically consistent with the Public Safety Broadband Licensee network. Finally, the wideband applicant must include with its waiver request proof that responses to the RFP proposing a broadband network were more costly, provided less coverage as measured by throughput at the network edge, or were otherwise inferior to the accepted wideband proposal.

128. Notwithstanding anything herein to the contrary, the Commission will not entertain any request for waiver seeking to permit wideband operations in the broadband segment in areas scheduled for broadband deployment within the first three years of the build-out plan for the national public safety broadband network. In addition, consistent with the waiver discussion herein, the Commission will not grant any waiver request for any wideband deployment in the broadband segment that does not include a detailed plan, accompanied by attestation, specifying how and by what date the wideband applicant will integrate its proposed wideband system into the national broadband network. The Commission shall condition any waiver relief for wideband operations in the broadband segment upon acceptance of the applicant's integration plan. As a further condition of any wideband operations proposed in the broadband segment, the Commission will require all devices operating on the wideband system to be designed such that they also must be interoperable with the nationwide, broadband network. In order to ensure that the Commission's goals for the deployment of the nationwide broadband network are met, the authority granted for any wideband operations in the broadband segment will expire automatically upon the D Block licensee's initiation of service in areas where wideband has been deployed. Further, any Grandfathered Wideband STA operations or wideband authority granted by waiver in the public safety segment of the 700 MHz Band shall be secondary to primary narrowband or broadband applications, as applicable. Finally, as a condition of the grant of waiver allowing deployment of a wideband system in the broadband segment, a public safety entity must certify in its application and waiver request its acknowledgement that it may not seek reimbursement for any costs involved in converting the wideband system to the national broadband network upon completion of the broadband network in the subject area.

129. License terms for wideband operations granted under waiver—whether they are in the narrowband, internal guard band, or broadband segments of the 700 MHz public safety spectrum—will be limited to no more than five years, and may be granted for less time depending on the particular circumstances presented. The Commission must receive requests for renewal of the license granted pursuant to waiver request not less than 180 days prior to expiration of the license. Renewal requests must include a showing that continued operation of the wideband system is in the public interest. Renewal requests for wideband operations in the broadband segment also must be accompanied by a letter from the Public Safety Broadband Licensee confirming that continuing wideband operations are not inconsistent with the broadband deployment plan for the affected or adjacent service areas. The license term for any renewal of waiver will not exceed three years and a wideband waiver licensee may only receive a single extension. Any renewal of a wideband authorization shall continue to be on a secondary basis only to primary narrowband or broadband applications, as applicable. Finally, in light of the waiver process described above, the Commission finds it unnecessary to adopt any particular wideband interoperability standard.

3. Safeguards Relating to the Public/Private Partnership

a. Rules for Establishment, Execution and Application of the NSA

130. The Commission specifically conditions the D Block license on the following requirements to ensure the establishment and execution of the NSA in a timely manner while safeguarding the public interest.

131.

Approval of NSA as Pre-Condition for Granting the D Block license.

Because the terms of the NSA are critical to the success of the partnership, the D Block license will not be issued until the Commission has approved the NSA and following such approval, the parties execute the NSA and file an executed copy with the Commission.

132. The Commission recognizes that the D Block licensee will be subject to an aggressive build-out schedule, and an applicant for the license may wish to commence certain initial construction activities prior to the grant of an authorization. The Commission does not prohibit the winning bidder of the D Block license from engaging in network build-out during the NSA negotiation period and prior to grant of the license, but to ensure that such build-out does not frustrate the interests of public safety or preempt the negotiations regarding the appropriate build-out schedule, the Commission requires that any such build-out occur only with the approval of the Public Safety Broadband Licensee. Similar to service rules for other spectrum licenses, such construction is conducted at the sole risk of the applicant, is subject to the Commission's authority to provide notification to stop such build-out, and cannot result in commercial operation unless and until the Commission has granted the D Block license.

133.

Timeframe for Negotiation.

The Commission requires the parties to commence negotiations on the terms of the NSA on the date that the winning bidder of the D Block license files its long form application or the date on which the Commission designates the Public Safety Broadband Licensee, whichever is later, and the Commission further requires the parties to conclude negotiations not later than six months after the commencement date. As soon as the parties have reached an agreement on all the terms of the NSA, but not later than five days after the six month period for negotiation has expired, they must submit for Commission approval the NSA together with all agreements and other documents referred to in the NSA, including the agreement reached on the broadband technology standard. The Commission will act on the NSA within 60 days of receipt. If the parties have not reached agreement on all terms of the NSA by the end of the six-month period, they must notify the Commission not later than five days after the expiration of the six-month period of the terms agreed upon, the nature of the remaining issues and each party's position on each issue (whether in the form of final best offers, or a characterization of the parties jointly on the positions of the parties and reason for impasse), whether additional negotiation is likely to produce an agreement, and, if so, a proposed deadline for completing the agreement.

134.

Requirement of Good Faith.

The Commission requires the parties to negotiate in good faith the specific terms of the NSA pursuant to the conditions, requirements, and guidance established in this Second Report and Order. The Commission also requires the parties to act in good faith in the performance of the NSA. To provide additional assurance that negotiations are proceeding in good faith, and except as explicitly set forth herein, the Commission will oversee the negotiation of the NSA, and will play an active role in the resolution of any disputes among the relevant parties (including the winning bidder for the D Block; its wholly owned subsidiary; the D Block licensee; the Operating Company; the Network Assets Holder; and the Public Safety Broadband Licensee), both resulting from the negotiations and once the parties are operating under the terms of the NSA.

135.

Progress Reports During Negotiations.

The winning bidder for the D Block license shall file an initial report within 10 days of the commencement of the negotiations period certifying that active and good faith negotiations have begun, providing the date on which they commenced, and providing a schedule of the initial dates on which the parties intend to meet for active negotiations, covering at a minimum the first 30-day period. The Commission requires that two members of the Commission's staff, one from the Wireless Bureau, and one from the Public Safety and Homeland Security Bureau, be present at all stages of the negotiation of the NSA as neutral observers. The Commission does not intend, however that the staff act as arbitrators. Disputes must still come to the Commission for resolution. Beginning three months from the triggering of the six-month negotiation period, the winning bidder for the D Block license and the Public Safety Broadband Licensee must jointly provide detailed reports, on a monthly basis and subject to a request for confidential treatment, on the progress of the negotiations throughout the remainder of the negotiations. These reports should include descriptions of all material issues that the parties have yet to resolve. The monthly reports will enable the Commission to identify any areas of significant disagreement between the winning bidder for the D Block license and the Public Safety Broadband Licensee. The Commission also reserves the right to require the parties to meet with Commission staff to discuss their negotiations or reports at any time during the negotiation process.

136. If the Commission determines that parties are unlikely to reach an agreement or they violate certain obligations (

e.g.

, good faith negotiation obligations), the Commission (or the Bureaus) may take, on its own motion, actions pertaining to dispute resolution before the NSA approval, described elsewhere in this Second Report and Order, without waiting for the six-month negotiation period to fully elapse.

137.

Resolution of Negotiation Disputes.

Either upon notice of a dispute at the end of the six-month negotiation period, or on their own motion at any time, if the Chiefs of PSHSB and WTB determine that negotiations have reached a likely impasse, the Commission delegates authority to the Chiefs of PSHSB and WTB to take certain actions jointly in the public interest to adjudicate the dispute. As appropriate, these actions may include but are not limited to one or more of the following: (1) Granting additional time for negotiation; (2) issuing a decision on the disputed issues and requiring the submission of a draft agreement consistent with their decision; (3) directing the parties to further brief the remaining issues in full for immediate Commission decision; and/or (4) immediate denial of the long-form application filed by the winning bidder for the D Block license. Remedies shall not, however, include ordering private third-party arbitration. In the event that the long-form application filed by the winning bidder for the D Block license is denied, the winning bidder for the D Block license will be deemed to have defaulted under Section 1.2109(c) of the Commission's rules, it will be liable for the default payment set forth in § 1.2104(g), and the full Commission, at its discretion, shall decide whether to offer a new license for the spectrum to existing or new applicants, offer a new license to the other highest bidders (in descending order) at their final bids, or choose any other process within the Commission's statutory authority to reassign the license, in light of the public interest goals served by the Public/Private Partnership.

138. The Commission believes that it would be inappropriate to have issues regarding the use of public safety spectrum resolved by a private party and precludes that option as a remedy. The Commission finds, however, that

the Commission should not at this time preclude the option of disputes being adjudicated by the Commission. Rather, providing the Commission with discretion to choose from a range of remedies will enable the Commission to choose the most appropriate option in the context of the specific concerns raised by the parties.

139.

Licensing Rules and Procedures Applicable to the D Block license.

Except as provided herein, the Commission's competitive bidding rules applicable to other commercial licenses in the 700 MHz Bands will apply to the winning bidder for the Public/Private Partnership License, including the practices and procedures listed in Part 1 of the Commission's rules. For example, the down payment requirement, the obligation of the winning bidder for the D Block license to file a “long form” license application, and the consequences of a default prior to grant of the license will be in accordance with Sections 1.2104, 1.2105, 1.2106, 1.2107, and 1.2109 of the Commission's rules.

140. If the long form application is denied, the procedures under Section 1.2109 of the Commission's rules will generally apply. The Commission may complete review of the long form application and deny the application without regard to the NSA, if the application is deficient or the grant of the license would otherwise be inconsistent with the Commission's rules. The Commission further clarifies that if the winning bidder for the D Block license fails to comply with the procedures the Commission establishes for negotiation or dispute resolution, fails to receive final Commission approval of an NSA, or fails to execute an approved NSA, (a) it shall be disqualified from holding the D Block license, (b) the license application will be denied, and (c) it will be deemed to have defaulted and will be subject to all payments and obligations under Section 1.2109 of the Commission's rules.

141.

Process for Final Approval.

The Commission will review and approve the NSA. To facilitate our review, the Commission may seek input from the parties, or invite public comment on the proposed NSA, subject to redactions to protect a legitimate need for confidentiality. After conducting its review, the Commission may approve the NSA in its entirety, approve it with modifications, or require the parties to address additional terms or re-draft existing terms within a specified timeframe. Following approval with or without modifications, the parties shall execute the NSA and submit a copy of the executed NSA to the Commission within 10 days of approval.

b. Ongoing Conditions for the Protection of Public Safety Service

142.

Requirements Relating to Organization and Structure of the Public/Private Partnership.

To support continued construction and operation of the shared wireless broadband network by reducing the risk that the D Block license or the network assets will be drawn into a bankruptcy proceeding, the Commission requires the winning bidder for the D Block license to form separate special purpose entities, which will be bankruptcy remote, to hold the D Block license and the network assets, respectively. The Commission also requires the winning bidder of the D Block licensee to form another vehicle that will also be a bankruptcy remote, special purpose entity (Operating Company). The D Block licensee will lease the spectrum rights associated with the D Block license to the Operating Company pursuant to the Commission's spectrum leasing rules. The spectrum leasing arrangement will be for the entire term of the D Block license and will be renewable, provided that the Commission renews the underlying D Block license. These license transactions will occur following the granting of the D Block license and should follow existing Commission procedures applicable to such transactions. The Operating Company will also be leased secondary use rights associated with the primary license held by the Public Safety Broadband Licensee. To ensure that these requirements have been met, the D Block auction winner shall submit the proposed organizational structure to the Commission and demonstrate to the Commission's satisfaction that each of the constituent entities is appropriately bankruptcy remote. Finally, it shall be a condition of the D Block license and the Public Safety Broadband License that all special purpose entities and any leasing or other commercial agreements created to implement the public/private partnership will be subject to the Act and the Commission's rules and regulations, and the parties to the NSA shall acknowledge such regulatory authority in a form acceptable to the Commission.

143. The D Block licensee and other entities authorized and required in this Second Report and Order or the NSA will have the obligation to build out the nationwide, shared interoperable broadband network operating on the spectrum associated with the D Block license and the Public Safety Broadband License.

144. In connection with establishing the bankruptcy remote special purpose entities required hereunder, the Commission requires the issuance of one or more legal opinion letters, at the cost of the winning bidder of the D Block license, from bankruptcy counsel chosen by the winning bidder of the D Block license and acceptable to the Commission, and such other parties as the Commission may designate, that clearly states, subject only to customary assumptions, limitations and qualifications that none of the winning bidder, the Operating Company, or any party to the NSA or other related agreements will be substantively consolidated with any entity. The scope of this opinion letter shall also cover such other opinions as the Commission may request.

145.

Prohibition on Discontinuance of Public Safety Operations.

The Commission prohibits the D Block licensee from discontinuing or degrading the broadband network service provided to the Public Safety Broadband Licensee or to public safety entities unless either at the request of the entity or entities in question or it has first obtained the approval of the Commission. Further, the D Block licensee must notify the affected public safety entity or entities and the Public Safety Broadband Licensee at least 30 days prior to any unrequested discontinuance or degradation of network service.

146.

Failure to Comply with the NSA or the Commission's Rules.

The Commission establishes rules to address how the Commission will remedy failures by either the D Block licensee or the Public Safety Broadband Licensee to comply with the NSA or the Commission's rules. First, with regard to the D Block licensee, the Commission has conditioned the D Block license on compliance with the NSA. Failure to comply with the Commission's rules or the terms of the NSA may warrant cancelling the D Block license, depending on the circumstances, and awarding it to a new licensee. In particular, the full Commission will decide whether to cancel and reassign the D Block license in the event that the D Block licensee either cannot or will not fulfill the critical responsibilities that are being given to it.

147. In the event that the Commission determines that the D Block license must be cancelled consistent with the Act and the requirements herein, an order shall be issued cancelling the license and announcing the process for awarding rights to the spectrum to a new licensee. However, pending the award to a new licensee, the Operating

Company will be issued a special temporary authority (STA) to continue to provide both commercial and public safety service in the Public/Private Partnership spectrum.

148. To further ensure that services to public safety are not threatened by cancellation, or otherwise, the NSA shall require, in a separate agreement, the granting of (a) an irrevocable and assignable right of first refusal if the network and network assets are otherwise to be sold; and (b) an irrevocable and assignable option in favor of the Public Safety Broadband Licensee to acquire the network and all network assets if and whenever the D Block license is cancelled or terminated, by reason of default or for any other reason, for a consideration equivalent to the fair market value (FMV) of the tangible and intangible assets sold. This option shall be senior to, and have priority over, any other right, claim, or interest in or to the network or the network assets. An event of default includes any default of the D Block licensee of a material obligation under the NSA, as determined by the Commission. Valuation will be performed pursuant to a FMV methodology to be agreed upon by the parties and set forth in the NSA. Valuation shall be performed immediately following the occurrence of a triggering event and completed within a reasonable time thereafter. The NSA must further provide that, in the event that the D Block license is awarded to a new entity, the Public Safety Broadband Licensee's right to purchase the network assets shall be reassigned to the new D Block licensee. Thereafter, the Public Safety Broadband Licensee's right to purchase shall be extinguished unless and until a new triggering event described above occurs, as the primary purpose of the right, to enable a smooth transition in the event of a default, would be achieved, and because maintaining the right might adversely impact the incentive of the new D Block licensee to invest in its network.

149. The Commission provides that, in the event that the D Block license is cancelled, the Commission may choose any process within the Commission's statutory authority to reassign the license, in light of the public interest goals served by the Public/Private Partnership. Upon grant of a new license, the Commission, or the Bureaus acting on delegated authority, shall, in coordination with the former licensee and the new licensee, as well as the Public Safety Broadband Licensee, establishes the terms and timing under which the temporary authorization shall be cancelled and the new D Block licensee assume the construction and operation of the network. This decision shall take into account, among other factors, any exercise by the new licensee of its right to purchase the network assets.

150. With regard to the Public Safety Broadband Licensee, in the event that the Public Safety Broadband Licensee fails to adhere to the terms of the NSA, or comply with the Commission's rules or any requirements contained in this Second Report and Order, to an extent giving rise to license cancellation, the Commission delegates authority to the Chiefs, PSHSB and WTB jointly to determine an appropriate remedy. The potential remedies include, but are not limited to, cancelling the license, assigning the license to another entity, directing the Public Safety Broadband Licensee to transfer the assignable option to purchase the assets at fair market value, ordering specific performance, or ordering removal and replacement of individual officers, directors or member organizations of the Public Safety Broadband Licensee.

151.

Resolution of Disputes after Grant of the D Block license.

The Commission finds that the Commission should assume primary responsibility and jurisdiction for adjudicating intractable disputes that arise once the parties are operating pursuant to the terms of the NSA. While the Commission strongly encourages the parties to first attempt to resolve any disagreements themselves through voluntary means, the parties to the NSA may at any time bring a complaint based on a claim that the other party has deviated from the terms of the NSA, or a petition for a declaratory ruling to resolve the proper interpretation of an NSA term or provision. The Commission emphasizes that these shall be the exclusive remedies for claims seeking the interpretation of the NSA in the first instance. The Commission may, however, as an alternative to adjudicating the issues, require the parties to first seek a settlement to the dispute or authorize them to resolve the dispute through litigation or other means, particularly if the dispute is found to involve no significant public concerns, and the Commission will consider any request by the parties to authorize such means.

152. In the event the Commission decides to adjudicate the issues, the Commission provides that the Commission will have full authority to interpret not only the Commission's rules but all of the provisions of the NSA. The Commission further provides that, if the Commission finds a material breach of the NSA, it may apply any remedy or enforcement mechanism within its authority. As with adjudication of disputes during the NSA negotiation process, the Chiefs of PSHSB and WTB are delegated joint responsibility for adjudicating any disputes that arise during performance of the NSA. Bureau level adjudications of NSA disputes must be completed within 45 days. The parties may seek review by the Commission of any bureau-level adjudication. Finally, the Commission establishes that, if a breach of the NSA occurs but is not brought to the Commission for resolution, the Commission retains authority to apply all appropriate remedies on its own initiative at any time after the breach occurs.

153.

Reporting Obligations.

Once the NSA is approved by the Commission and executed by the parties, the parties must jointly file quarterly reports with the Commission. These reports must include detailed information on the areas where broadband service has been deployed, how the specific requirements of public safety are being met, audited financial statements, which public safety entities (

e.g.

, police, fire departments) are using the broadband network in each area of operation; what types of applications (

e.g.

, voice, data, video) are in use in each area of operation to the extent known; and the number of declared emergencies in each area of operation. The Commission anticipates that this information will be readily available from the billing systems used for the shared network, and reserve the right to specify additional information that the quarterly reports must include at a later date. The D Block licensee and Public Safety Broadband Licensee also have joint responsibility to register the base station locations with the Commission, providing basic technical information, including geographic location. Such registrations may be filed with a request for confidential treatment by the Commission. In this regard, the Commission delegates to the Wireless Bureau authority to adopt rules and procedures to implement this requirement, as well as authority to modify ULS to accept such filings and to issue a public notice describing any such modifications and relevant filing procedures. The Commission delegates to the Wireless Bureau the authority to adopt filing rules and procedures not inconsistent with this Second Report and Order to facilitate these reporting obligations.

4. Other Issues

a. Bidding Credits

154. In order to encourage the widest range of potentially qualified applicants to participate in bidding for the D Block license, the Commission will provide eligible bidders for the D Block license with the existing 15 and 25 percent bidding credits, as the credits may be necessary to create incentives for investors to provide innovative small businesses with the capital necessary to compete for the D Block license at auction. Pursuant to the Commission's existing small business size standards, eligible bidders with average attributable gross revenues for the last three years not exceeding $15 million or $40 million, respectively, may be eligible for bidding credits of 25 percent or 15 percent, respectively.

b. License Partitioning, Disaggregation, Assignment, and Transfer

155. The Commission decides to prohibit geographic partitioning and spectrum disaggregation for the D Block licensee. The Public Safety Broadband Licensee is also prohibited from partitioning and disaggregation. The Commission recognizes that the Commission's existing Secondary Markets rules governing transfers and assignments would be applicable to the D Block licensee, providing further flexibility to the licensee. Thus, the D Block licensee would be permitted to assign or transfer its licensee subject to the Commission review and prior approval.

c. Commercial Service Issues

(i) Wholesale and Open Access Proposals

156. The Commission declines to restrict the D Block licensee to operating exclusively on a “wholesale” or “open access” basis. Instead, the Commission provides the D Block licensee with flexibility to provide wholesale or retail services or other types of access to its network that comply with the Commission's rules and the NSA.

(ii) Roaming Proposal

157. The Commission concludes that it should defer to the broader context of the pending roaming proceeding the determination of whether there are public interest benefits in also requiring automatic roaming to be provided by other commercial licensees. The Commission will therefore not at this time impose any special roaming requirements on the D Block licensee.

(iii) Applicability of CALEA, E911, and Other Requirements

158. The Commission declines to categorically exempt services offered by the D Block licensee from E911, CALEA, and other regulatory requirements. Instead, the Commission clarifies that E911, CALEA, and other regulatory requirements will apply to services provided using Public/Private Partnership spectrum to the extent and only to the extent that these requirements apply to similar services provided elsewhere in the 700 MHz Band. The Commission has only recently concluded that the E911 requirements established in Section 20.18 of the Commission's rules will apply to all commercial mobile radio services, including such services throughout the 700 MHz Band, that meet the functional criteria in Section 20.18(a), and the Commission sees no reason to revisit that decision. The Commission defers any further examination of regulatory applicability to a more concrete and particular context,

e.g.

, if service providers seek clarification regarding the applicability of a specific regulatory requirement to their specific service.

159. The Commission also notes that, even though the D Block license for spectrum in the “D Block” band will be issued pursuant to Part 27 of the Commission's rules, the licensee will be required to comply with other rule parts, which are applicable to the other commercial 700 MHz bands, unless otherwise stated in this Second Report and Order. Some of these rule parts will be applicable by virtue of the fact that they apply to all licensees and others will apply depending on the type of services the D Block licensee provides.

II. Procedural Matters

A. Regulatory Flexibility Act

160. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),

6

an Initial Regulatory Flexibility Analysis (IRFA) was included in the

700 MHz Further Notice

7

in WT Docket No. 06-150, WT Docket No. 01-309; WT Docket No. 06-169, WT Docket No. 03-264, CC Docket No. 94-102, PS Docket No. 06-229, and WT Docket No. 96-86.

8

The Commission sought written public comment on the proposals in these dockets, including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

9

6

See

5 U.S.C. 603. The RFA,

see

5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. 104-121, Title II, 110 Stat. 857 (1996).

7

See

Service Rules for the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102, Section 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309, Biennial Regulatory Review—Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services, WT Docket 03-264, Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules, WT Docket No. 06-169, Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band, PS Docket No. 06-229, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket No. 96-86,

Report and Order

and

Further Notice of Proposed Rulemaking,

22 FCC Rcd 8064 (2007) (

700 MHz Report and Order

and

700 MHz Further NPRM,

respectively).

8

See

Service Rules for the 698-749746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102, and Section 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309,

Notice of Proposed Rule Making, Fourth Further Notice of Proposed Rule Making,

and

Second Further Notice of Proposed Rule Making,

21 FCC Rcd 9345, 9394 (2006) (“

700 MHz Commercial Services Notice

”); Former Nextel Communications, Inc. 01-309, Biennial Regulatory Review—Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services, WT Docket 03-264, Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket Nos. 06-169 and 96-86,

Notice of Proposed Rule Making,

21 FCC Rcd 10413, 10440 (2006) (“

700 MHz Guard Bands Notice

”); Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band, PS Docket No. 06-229, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket No. 96-86,

Ninth Report and Order

and

Further Notice of Proposed Rule Making

, 22 FCC Rcd 14837, 14853 (2006) (“8064 (2007) (

700 MHz Public Safety Ninth Report and Order

and

700 MHz Further NPRM

”, respectively).

9

See

5 U.S.C. 604.

161. Although Section 213 of the Consolidated Appropriations Act of 2000 provides that the RFA shall not apply to the rules and competitive bidding procedures for frequencies in the 746-806 MHz Band,

10

the Commission believes that it would serve the public interest to analyze the possible significant economic impact of the proposed policy and rule changes in this band on small entities. Accordingly, this FRFA contains an analysis of this

impact in connection with all spectrum that falls within the scope of this

Second Report and Order,

including spectrum in the 746-806 MHz Band.

10

In particular, this exemption extends to the requirements imposed by Chapter 6 of Title 5, United States Code, Section 3 of the Small Business Act (15 U.S.C. 632) and Sections 3507 and 3512 of Title 44, United States Code. Consolidated Appropriations Act 2000, Pub. L. 106-113, 113 Stat. 2502, Appendix E, Sec. 213(a)(4)(A)-(B);

see

145 Cong. Rec. H12493-94 (Nov. 17, 1999); 47 U.S.C.A. 337 note at Sec. 213(a)(4)(A)-(B).

1. Need for, and Objectives of, the Rules

162. In the

Second Report and Order,

the Commission takes a number of steps to facilitate access to spectrum and the provision of service to consumers, especially those in rural areas, and to simplify and clarify our rules related to the commercial 700 MHz spectrum. It designates a spectrum block in the upper portions of the commercial spectrum for a commercial licensee that will be part of a public/private partnership (the “700 MHz Public/Private Partnership”) with a national public safety broadband licensee for the public safety broadband spectrum (hereinafter, the Public Safety Broadband Licensee). The Commission reconfigures the 700 MHz Public Safety Band, to promote the development of nationwide interoperable broadband services for public safety users. The Commission also changes the location of the existing 700 MHz Guard Band licenses, provides for a one megahertz shift of the other commercial spectrum blocks in the Upper 700 MHz Band and the 700 MHz Public Safety Band, and reduces the size of the Guard Band B Block to make two additional megahertz of commercial spectrum available for auction.

163. The band plan provides a balanced mix of geographic service area licenses and spectrum block sizes for the 62 megahertz of commercial spectrum to be auctioned. The Commission determined that it will auction two 12-megahertz spectrum blocks (comprised of paired 6-megahertz blocks), one licensed by Cellular Market Areas (CMAs) and one by Economic Areas (EAs); one 22-megahertz spectrum block (paired 11-megahertz blocks) by Regional Economic Area Groupings (REAGs); and one 6-megahertz unpaired spectrum block by EAs. It also designates one 10-megahertz spectrum block (paired 5-megahertz blocks), the Upper 700 MHz Band D Block, to be licensed on a nationwide basis and used as part of the 700 MHz Public/Private Partnership between this commercial licensee and the Public Safety Broadband Licensee that will be assigned the public safety broadband spectrum.

164. In addition, the Commission replaces the current “substantial service” requirements for 700 MHz Band commercial licenses that have not been auctioned with significantly more stringent performance requirements, and makes unserved areas available to third parties who wish to provide service to these areas. By adopting these more rigorous requirements, the Commission ensures that the 700 MHz Commercial Services licensees put the spectrum to use throughout the course of their license terms and serve the majority of users in their license areas Additionally, for one commercial spectrum block in the 700 MHz Band—the Upper 700 MHz C Block (700 MHz C Block)—the Commission imposes requirements on those licensees to provide open platforms for devices and applications, and concludes that it would not serve the public interest at this time to mandate broader openness requirements.

165. The

Second Report and Order

also revises the 700 MHz band plan with respect to the Upper 700 MHz Guard Bands, such that all existing A Block licenses relocate to a reconfigured A Block between the C and D Blocks, pursuant to an agreement between all but one of the Guard Bands licensees. As part of this agreement, the existing B Block licenses are relinquished, and the B Block is reconfigured from 4 to 2 megahertz and located immediately above the public safety narrowband spectrum. The reconfigured B Block serves as a guard band to protect the public safety narrowband channels, and remains empty as a commercial allocation at this time. With respect to the Guard Bands licensee that did not participate in the agreement, its one A Block license and two B Block licenses are grandfathered, with minor modifications to facilitate the overall revised band plan. In addition to these band plan issues with respect to the Guard Bands, the

Second Report and Order

also revises the service rules with respect to the reconfigured A Block, bringing it largely into parity with the adjacent Commercial Services spectrum given the new spectral location and its relationship to the rest of the band including the public safety spectrum.

166. Further, the Second Report and Order seeks to achieve broadband communications capabilities consistent with a nationwide interoperability standard for public safety. The Commission expects that modern public safety services will increasingly depend on the advanced communications capabilities afforded by wireless broadband technologies, which should enable first responders to perform their vital safety-of-life and other critical roles. The Second Report and Order re-designates the wideband spectrum to broadband use consistent with a nationwide interoperability standard, and prohibits wideband operations on a going forward basis in the newly designated broadband spectrum. The Second Report and Order also consolidates the narrowband spectrum to the top of the Public Safety Band, locates the broadband spectrum at the bottom of the Public Safety Band, and divides these segments with an internal guard band. This reconfiguration reduces the amount of spectrum necessary to separate and protect the public safety broadband and narrowband allocations, and facilitates partnerships between public safety broadband operations and adjacent commercial broadband technologies, thereby optimizing the 700 MHz public safety band plan. Finally, in order to promote the rapid deployment of a nationwide, interoperable broadband public safety network, the Second Report and Order creates a single nationwide geographic area Public Safety Broadband License which will be administered by a single Public Safety Broadband Licensee.

167. With regard to auctions-related issues, the Commission decides to utilize anonymous bidding to enhance the effectiveness of the auction of 700 MHz licenses, as well as allow package bidding for the Upper 700 MHz Band C Block, and decides not to grant a “new entrant” bidding credit for the 700 MHz Band licenses. The Commission also declines to impose eligibility restrictions for the licenses in the 700 MHz Band. Finally, the Commission will offer bidding credits in the D Block, as described fully below.

2. Summary of Significant Issues Raised by Public Comments in Response to the IRFA

168. No comments specifically addressed the IRFAs from any of the respective proceedings. We have nonetheless addressed small entity issues found in comments in this FRFA.

3. Description and Estimate of the Number of Small Entities to Which the Rules Will Apply

169. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the proposed rules, if adopted.

11

The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.”

12

In addition, the term “small business” has the same meaning as the term “small business concern”

under the Small Business Act.

13

A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

14

11

5 U.S.C. 604(a)(3).

12

5 U.S.C. 601(6).

13

5 U.S.C. 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the

Federal Register

.”

14

15 U.S.C. 632.

170.

Small Businesses

. Nationwide, there are a total of approximately 22.4 million small businesses, according to SBA data.

15

15

See

SBA, Programs and Services, SBA Pamphlet No. CO-0028, at page 40 (July 2002).

171.

Small Organizations.

Nationwide, there are approximately 1.6 million small organizations.

16

16

Independent Sector, The New Nonprofit Almanac & Desk Reference (2002).

172.

Governmental Entities.

The term “small governmental jurisdiction” is defined as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.”

17

As of 2002, there were approximately 87,525 governmental jurisdictions in the United States.

18

This number includes 38,967 county governments, municipalities, and townships, of which 37,373 (approximately 95.9%) have populations of fewer than 50,000, and of which 1,594 have populations of 50,000 or more. Thus, we estimate the number of small governmental jurisdictions overall to be 85,931 or fewer.

17

5 U.S.C. 601(5).

18

U.S. Census Bureau, Statistical Abstract of the United States: 2006, Section 8, pages 272-273, Tables 415 and 417.

173.

Wireless Service Providers.

The SBA has developed a small business size standard for wireless firms within the two broad

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