Shared Commercial Operations in the 3550-3650 MHz Band
Federal RegisterJun 23, 2015
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 0, 1, 2, 90, 95, and 96
[GN Docket No. 12-354; FCC 15-47]
Shared Commercial Operations in the 3550-3650 MHz Band
AGENCY:
Federal Communications Commission.
ACTION:
Final rule.
SUMMARY:
In this document, the Federal Communications Commission (FCC or Commission) adopts rules to establish a new Citizens Broadband Radio Service in the 3550—3700 MHz band. This document implements a three-tiered spectrum authorization framework in the 3550-3700 MHz band to facilitate a variety of small cell and other broadband uses of the band on a shared basis with incumbent federal and non-federal users.
DATES:
Effective July 23, 2015, except for §§ 96.17(d), 96.21(a)(3), 96.23(b), 96.29, 96.33(b), 96.35(e), 96.39(a), 96.39(c)-(g), 96.41(d)(1), 96.43(b), 96.45(b), 96.45(d), 96.49, 96.51, 96.57(a)-(c), 96.59(a), 96.61, 96.63, and 96.67(b)-(c) which contain information collection requirements that are not effective until approved by the Office of Management and Budget. The FCC will publish a document in the
Federal Register
announcing the effective date for those sections.
FOR FURTHER INFORMATION CONTACT:
Paul Powell, Mobility Division, Wireless Telecommunications Bureau, at (202) 418-1613 or by email at
paul.powell@fcc.gov.
SUPPLEMENTARY INFORMATION:
This is a summary of the Commission's Report and Order in GN Docket No. 12-354, FCC 15-47, adopted April 17, 2015 and released April 21, 2015. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW., Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, (202)488-5300, facsimile (202) 488-5563, or via email at
fcc@bcpiweb.com.
The full text may also be downloaded at:
www.fcc.gov.
Alternative formats are available to persons with disabilities by sending an email to
fcc504@fcc.gov
or by calling the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
The Commission will send a copy of this Report & Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
Ex Parte Presentations
This proceeding shall continue to be treated as a “permit-but-disclose” proceeding in accordance with the Commission's
ex parte
rules.
1
Persons making
ex parte
presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral
ex parte
presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the
ex parte
presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers w where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during
ex parte
meetings are deemed to be written
ex parte
presentations and must be filed consistent with section 1.1206(b).
2
In proceedings governed by section 1.49(f)
3
or for which the Commission has made available a method of electronic filing, written
ex parte
presentations and memoranda summarizing oral
ex parte
presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (
e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's
ex parte
rules.
1
47 CFR part 1, subpart H.
2
47 CFR 1.1206(b).
3
47 CFR 1.49(f).
We note that our
ex parte
rules provide for a conditional exception for all
ex parte
presentations made by NTIA or Department of Defense representatives.
4
This proceeding raises significant technical issues implicating federal and non-federal spectrum allocations and users. Staff from NTIA, DoD, and the FCC have engaged in technical discussions in the development of this Report and Order and we anticipate these discussions will continue after this Report and Order is released. These discussions will benefit from an open exchange of information between agencies, and may involve sensitive information regarding the strategic federal use of the 3.5 GHz Band. Recognizing the value of federal agency collaboration on the technical issues raised in this Report and Order, NTIA's shared jurisdiction over the 3.5 GHz Band, the importance of protecting federal users in the 3.5 GHz Band from interference, and the goal of enabling spectrum sharing to help address the ongoing spectrum capacity crunch, we find that this exemption serves the public interest.
4
See
47 CFR 1.1204
Comment Filing Procedures
Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).
See Electronic Filing of Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS:
http://fjallfoss.fcc.gov/ecfs2/.
• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any
envelopes and boxes must be disposed of
before
entering the building.
Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.
People with Disabilities:
To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to
fcc504@fcc.gov
or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980,
5
the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) and an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules adopted and proposed in this document, respectively. The FRFA is set forth in Appendix B. The IRFA is set forth in Appendix C. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments filed in response to this
Report and Order
as set forth on the first page of this document, and have a separate and distinct heading designating them as responses to the IRFA. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of this
Report and Order,
including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).
6
In addition, the
Report and Order
and FRFA (or summaries thereof) will be published in the
Federal Register
.
7
5
See
5 U.S.C. 603-04.
6
See
5 U.S.C. 603(a).
7
See id.
Paperwork Reduction Act
The Report and Order contains new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new information collection requirements contained in this proceeding.
Congressional Review Act
The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act (CRA),
see
5 U.S.C. 801(a)(1)(A).
Synopsis of the Report and Order
I. Introduction
With this
Report and Order
(
Report and Order
or
R&O
), we adopt rules for commercial use of 150 megahertz in the 3550-3700 MHz band (3.5 GHz Band), and in so doing open a new chapter in the history of the administration of one of our nation's most precious resources—the electromagnetic radio spectrum. Wireless broadband is transforming every facet of American life. We live in a world of wirelessly connected people, apps, and things. The 3.5 GHz Band has physical characteristics that make it particularly well-suited for mobile broadband employing small cell technology. The creation of our new Citizens Broadband Radio Service in this band will therefore add much-needed capacity to meet the ever-increasing demands of wireless innovation. As such, it represents a major contribution toward our collective goal of making 500 megahertz newly available for broadband use.
Advances in radio and computing technologies provide new tools to facilitate more intensive spectrum sharing. Our new rules use these tools to dissolve some age-old regulatory divisions, between commercial and federal users, exclusive and non-exclusive authorizations, and private and carrier networks. Starting from some of the recommendations of the President's Council of Advisors on Science and Technology (PCAST), these rules incorporate a wide range of viewpoints and information collected through three rounds of notice and comment. Over time, some of the approaches we advance in the 3.5 GHz “innovation band” could lead to greater productivity in other parts of the radio spectrum.
The
R&
O establishes a roadmap for making the entirety of the 3.5 GHz Band available for commercial use in phases. The 3550-3650 MHz band segment is currently allocated for use by Department of Defense (DoD) radar systems. The National Telecommunications and Information Administration (NTIA) first proposed making the band available for shared use in its 2010 “Fast Track Report.” Based on technical assumptions available at the time, NTIA's analysis showed that large exclusion zones would be required to protect the DoD radar systems. Last year's
Further Notice of Proposed Rulemaking
(
FNPRM
or
3.5 GHz FNPRM
) (79 FR 31247, June 2, 2014) sought comment on the Fast Track exclusion zones, but mentioned ongoing discussions among federal agencies on ways to reevaluate the zones. On March 24, 2015, NTIA filed a letter recommending a framework that would reduce the geographic area of the zones by approximately 77 percent. NTIA's letter also recommended the use of sensor technology to permit commercial use inside the zones, providing a roadmap to full nationwide commercial use of the band.
This federal/non-federal sharing arrangement is part of a broader three-tiered sharing framework enabled by a Spectrum Access System (SAS). Incumbent users represent the highest tier in this framework and receive interference protection from Citizens Broadband Radio Service users. Protected incumbents include the federal operations described above, as well as Fixed Satellite Service (FSS) and, for a finite period, grandfathered terrestrial wireless operations in the 3650-3700 MHz portion of the band. The Citizens Broadband Radio Service itself consists of two tiers—Priority Access and General Authorized Access (GAA)—both authorized in any given location and frequency by an SAS. As the name suggests, Priority Access operations receive protection from GAA operations. Priority Access Licenses (PALs), defined as an authorization to use a 10 megahertz channel in a single census tract for three years, will be assigned in up to 70 megahertz of the 3550-3650 MHz portion of the band. GAA use will be allowed, by rule, throughout the 150 megahertz band. GAA users will receive no interference protection from other Citizens Broadband Radio Service users.
Our new rules advance a potential solution to a long-standing problem in spectrum policy: how to select the most appropriate commercial authorization or licensing mechanism for a new band. The record has brought us back to first principles. We have considered ideas from three major traditions in spectrum management: flexible-use geographic licensing, site-based frequency coordination, and unlicensed authorization. Ultimately, we adopt a hybrid framework that selects, automatically, the best approach based on local supply and demand. Where competitive rivalry for spectrum access is low, the GAA tier provides a low-cost entry point to the band, similar to unlicensed access. Where rivalry is high, an auction resolves mutually
exclusive applications in specific geographic areas for PALs. Finite-term licensing facilitates evolution of the band and an ever-changing mix of GAA and Priority Access bandwidth over time. The SAS serves as an advanced, highly automated frequency coordinator across the band. It protects higher tier users from those beneath and optimizes frequency use to allow maximum capacity and coexistence for both GAA and Priority Access users.
This regulatory adaptability should make the 3.5 GHz Band hospitable to a wide variety of users, deployment models, and business cases, including some solutions to market needs not adequately served by our conventional licensed or unlicensed rules. Carriers can avail themselves of “success-based” license acquisition, deploying small cells on a GAA basis where they need additional capacity and paying for the surety of license protection only in targeted locations where they find a demonstrable need for more interference protection. Real estate owners can deploy neutral host systems in high-traffic venues, allowing for cost-effective network sharing among multiple wireless providers and their customers. Manufacturers, utilities, and other large industries can construct private wireless broadband networks to automate processes that require some measure of interference protection and yet are not appropriately outsourced to a commercial cellular network. Smart grid, rural broadband, small cell backhaul, and other point-to-multipoint networks can potentially access three times more bandwidth than was available under our previous 3650-3700 MHz band rules. All of these applications could share common wireless technologies, providing economies of scale and facilitating intensive use of the spectrum.
In specifying rules for the SAS—the lynchpin of the Citizens Broadband Radio Service—we balance a need for clear definition of its role, purposes, and functions against a desire to allow market forces and industry standards to inform the specifics of implementation. We will open a process by which multiple entities can apply for certification to operate as SAS Administrators. Through this approval process, applicants will demonstrate their ability to perform the enumerated SAS functions. Because the regime depends on a high degree of interaction among different users, the approval process will be designed to confirm the ability of an SAS to ensure that lower tiers do not transgress the rights of higher tiers. This will be especially important with respect to incumbent military users of the band. A similar approach will also apply to the authorization and operation of the Environmental Sensing Capability (ESC).
This
Report and Order
initiates a comprehensive regulatory scheme to promote development of innovative technologies and services in the 3.5 GHz Band. Nonetheless, there are a few, highly technical areas where we have concluded that additional record development would provide beneficial clarity or consensus to shape some specific parts of the rules.
II. Background
A. Policy Context
America's appetite for wireless broadband service is surging. According to Cisco, North American mobile traffic grew 63 percent in 2014 and will continue to grow at a near-50 percent compound annual growth rate over the next five years. In this context, the FCC, NTIA, and federal agencies have worked collaboratively to make additional spectrum available to meet demand.
In March 2010, the
National Broadband Plan
recommended that the Commission make 500 megahertz available for broadband use by 2020, with 300 megahertz suitable for mobile use by 2015. It supported the development of opportunistic technologies to enable dynamic shared access to spectrum. The National Broadband Plan also recommended that the Commission and NTIA work together to identify spectrum that can be made available for wireless broadband use, on an exclusive, shared, licensed, and/or unlicensed basis.
On June 28, 2010, President Obama released a Presidential Memorandum entitled “Unleashing the Wireless Broadband Revolution,” which directed NTIA to collaborate with the FCC to make available 500 megahertz of spectrum available for commercial wireless services while ensuring no loss of critical government capabilities.
Pursuant to this Presidential Memorandum, in October 2010, NTIA released its “Fast Track” Report, which identified 3550-3650 MHz as one of several federal bands that could be made available for commercial wireless broadband by 2015. As discussed below, this band has long been allocated for use by military radar systems. Based on a preliminary electro-magnetic compatibility analysis, the Fast Track Report included significant restrictions on broadband use to protect existing DoD radars from commercial systems and vice-versa.
In July, 2013, PCAST released its report. Given the increasing demand for commercial wireless spectrum and the continuing critical needs of federal users, the report concluded that the best way to increase the availability of broadband spectrum is to promote spectrum sharing between federal and commercial users through the use of new technologies. PCAST recommended that shared spectrum be organized into three tiers. The first tier would consist of incumbent federal users. These users would be entitled to full protection for their operations within their deployed areas, consistent with the terms of their assignments. The second tier would consist of users that would receive short-term priority authorizations to operate within designated geographic areas. Secondary users would receive protection from interference from third tier users but would be required to avoid interference with and accept interference from Federal Primary users. Third tier users would be entitled to use the spectrum on an opportunistic basis and would not be entitled to interference protection. Coordination among different tiers would be accomplished through a database-driven SAS. The use of low-power small cells for broadband would facilitate spectral reuse and sharing, increasing overall efficiency. PCAST recommended that the Federal Government identify 1,000 megahertz of federal spectrum for shared use under this system to create the first “shared use spectrum superhighways.”
On June 13, 2013, President Obama released another Presidential Memorandum entitled “Expanding America's Leadership in Wireless Innovation.” Echoing the PCAST report, this second Memorandum directed the executive branch to increase broadband access to spectrum through sharing with federal users (78 FR 37431, June 20, 2013).
B. Spectrum Environment
1. 3550-3650 MHz Band
The 3550-3650 MHz band is allocated to the Radiolocation Service (RLS) and the Aeronautical Radionavigation Service (ARNS) (ground-based), on a primary basis for federal use (47 CFR 2.104(h)(4) and 2.1(c)). Footnote G59 states that all federal non-military RLS use of the 3500-3650 MHz band shall be on a secondary basis to military RLS operations (47 CFR 2.106, note G59). Footnote G110 states that federal ground-based stations in the ARNS may be authorized in the 3500-3650 MHz band when accommodation in the 2700-2900 MHz band is not technically
and/or economically feasible (47 CFR 2.106, note G110).
Both fixed and mobile high-powered DoD radar systems on ground-based, shipborne, and airborne platforms operate in this band. These radar systems are used in conjunction with weapons control systems and for the detection and tracking of air and surface targets. The U.S. Navy uses the band for radars on guided missile cruisers. The U.S. Army uses the band for a firefinder system to detect enemy projectiles. The U.S. Air Force uses the band for airborne radar Station Keeping Equipment throughout the United States and Possessions to assist pilots in formation flying and to support drop-zone training.
The 3500-3600 MHz and 3600-3650 MHz bands are allocated to RLS on a secondary basis for non-federal use (47 CFR 2.106).
The 3600-3650 MHz band is also allocated to the FSS (space-to-Earth) on a primary basis for non-federal use and, per footnote US245, use of this FSS downlink allocation is limited to international inter-continental systems and is subject to case-by-case electromagnetic compatibility analysis. The Commission has licensed primary FSS earth stations to receive frequencies in the 3600-3650 MHz band in 35 cities. Airbus DS SatCom Government, Inc. operates two gateway earth stations (located northeast of Los Angeles and New York City) that provide feeder links for Inmarsat's L-band mobile-satellite service system.
2. 3650-3700 MHz Band
The 3650-3700 MHz band is also allocated for terrestrial non-federal use. In March 2005, the Commission adopted a Report and Order that amended Part 90 by adding new Subpart Z—Wireless Broadband Services in the 3650-3700 MHz Band (
3.65 GHz Order,
70 FR 24712, May 11, 2005). Such service is authorized through non-exclusive nationwide licenses and requires the registration of individual fixed and base stations. All stations operating in this band must employ a contention-based protocol (47 CFR 90.1305). Base and fixed stations are limited to 25 watts per 25 megahertz equivalent isotropically radiated power (EIRP) and the peak EIRP power density shall not exceed 1 watt in any 1 megahertz slice of spectrum; mobile and portable stations are limited to 1 watt per 25 megahertz EIRP and the peak EIRP density shall not exceed 40 mW in any 1 megahertz slice of spectrum (47 CFR 90.1321). Base and fixed stations may only be located within 150 kilometers of an FSS earth station if the licensee of the earth station agrees to such operation (47 CFR 90.1331). Requests for base or fixed station locations closer than 80 kilometers to three Federal Government radiolocation facilities are only approved upon successful coordination by the Commission with NTIA. Mobile and portable stations may operate only if they can positively receive and decode an enabling signal transmitted by a base station; airborne operations are prohibited (47 CFR 90.1333).
The 3650-3700 MHz band is allocated for primary use by the federal RLS at three designated sites (47 CFR 2.106, note US348). The 3650-3700 MHz band is also allocated for use by ship stations located at least 44 nautical miles from shore in offshore ocean areas on a non-interference-basis (47 CFR 2.106, note US349).
3. Adjacent Bands
Below 3550 MHz.
Several of the allocations discussed above extend below 3550 MHz. Of particular relevance to this proceeding are the primary allocations for shipborne, airborne, and ground-based radars operated by DoD.
Above 3700 MHz.
FSS, which has a co-primary allocation at 3600-3650 MHz, also makes extensive use of the 3700-4200 MHz band (C-Band) in the United States and globally in order to provide video distribution, mobile voice and data backhaul, retail services, aeronautical applications, and other uses, to commercial and government customers. Terrestrial microwave services licensed under Part 101 of the Commission's rules also operate in this band (
See
47 CFR 101.17 and 101.101).
C. Procedural History
1. 3.5 GHz NPRM
The
3.5 GHz NPRM
furthered the Commission's ongoing efforts to address the growing demand for fixed and mobile broadband capacity by proposing to make an additional 100 megahertz (or up to 150 megahertz under a supplemental proposal) of spectrum available for shared wireless broadband use. Specifically, the NPRM proposed to create a new Citizens Broadband Radio Service under Part 95 of the Commission's rules. The proposed service built on our existing TVWS rules (
See
47 CFR 15.701,
et seq.).
First, technical rules would focus on the use of low-powered small cells to drive increases in broadband capacity and spectrum reuse. Second, an SAS would coordinate multiple tiers of commercial use.
The
NPRM
proposed that the SAS would accommodate three service tiers: (1) Incumbent Access; (2) Priority Access; and (3) General Authorized Access. Incumbent Access users would include authorized federal and grandfathered FSS users currently operating in the 3.5 GHz Band. These users would have protection from harmful interference from all other users in the 3.5 GHz Band. In the Priority Access tier, the
NPRM
proposed that the Commission authorize certain users with critical quality-of-service needs (such as hospitals, utilities, and public safety entities) to operate with some interference protection in portions of the 3.5 GHz Band at specific locations. Finally, in the GAA tier, the
NPRM
proposed that users be authorized to use the 3.5 GHz Band opportunistically within designated geographic areas. GAA users would be required to not cause interference to, and accept interference from Incumbent and Priority Access tier users. The
NPRM
also included a supplemental proposal to expand the proposed licensing and authorization model to an additional adjacent 50 megahertz of spectrum in the 3650-3700 MHz band, making up to 150 megahertz available for shared wireless broadband access.
The
NPRM
noted that the technical characteristics of the 3.5 GHz Band and the existence of important incumbent operations in the band in many areas of the country make the band an ideal platform to explore innovative approaches to shared spectrum use and small cell technology. NTIA's Fast Track Report recommended, based on technical assumptions typical of traditional macrocell deployments of commercial wireless broadband technology, that new commercial uses of the band occur outside of large “exclusion zones” to protect Federal Government operations. Given that the exclusion zones would cover approximately 60 percent of the U.S. population and because of limited signal propagation in the band, the band did not appear to be well-suited for macrocell deployment. However, the
NPRM
stated that these very disadvantages could be turned into advantages if the band were used to explore spectrum sharing and small cell innovation.
We received 65 comments and 26 reply comments in response to the
NPRM.
These comments, and those received in subsequent rounds, are summarized and referenced in this
Report and Order
where appropriate.
2. Licensing Public Notice
In November 2013, in response to record comments received up to that point, the Commission released the
Licensing PN
(78 FR 73794, December 9, 2013), which described a Revised Framework that elaborated upon some of the licensing concepts and alternatives set forth in the
NPRM.
The Revised Framework retained the three-tier model proposed in the
NPRM
but expanded eligibility for access to the Priority Access tier with competitive bidding for assigning licenses within that tier. Like the
NPRM'
s main proposal, the Revised Framework cited the unique capabilities of small cell and SAS technologies to enable sharing among users in the Priority Access and GAA tiers. Specifically, the Revised Framework contained the following core concepts:
• An SAS to dynamically manage frequency assignments and automatically enforce access to the Priority Access and GAA tiers;
• Expansive eligibility for Priority Access tier use;
• Granular, but administratively streamlined licensing of the Priority Access tier;
• Exclusive spectrum rights for Priority Access subject to licensing by auction in the event of mutually exclusive applications;
• A defined “floor” of GAA spectrum availability, to ensure that GAA access is available nationwide (subject to Incumbent Access tier use);
• Additional GAA access to unused Priority Access bandwidth, as identified and managed by the SAS, to maximize dynamic use of the unutilized portion of the band and ensure productive use of the spectrum;
• Opportunities for Contained Access Users to obtain targeted priority spectrum use within specific facilities (such as buildings) meeting certain requirements to mitigate the potential for interference to and from Incumbent Users and other Citizens Broadband Radio Service users; and
• A set of baseline technical standards to prevent harmful interference and ensure productive use of the spectrum.
We received 35 comments and 27 reply comments in response to the
Licensing PN.
3. Workshops
We convened two workshops to discuss technical issues related to this proceeding. The first workshop, held on March 13, 2013, explored broad issues that emanated from the original
NPRM.
The second workshop, held on January 14, 2014, further explored the technical requirements, operational parameters, and architecture of the proposed SAS (SAS Workshop). A group of engineers representing industry stakeholders, trade associations, and academia submitted technical papers in advance of the workshop and participated in panels throughout the day.
4. Further Notice of Proposed Rulemaking
In April 2014, the Commission released the
3.5 GHz FNPRM,
proposing specific rules for a new Citizens Broadband Radio Service in the 3.5 GHz Band to be codified in a new proposed Part 96. The
FNPRM
built upon the concepts and proposals set forth in the
NPRM
and the
Licensing PN
and reflected the extensive record generated in the proceeding. Notably, the
3.5 GHz FNPRM
proposed to:
• Implement the three-tier authorization model proposed in the
NPRM;
• Establish Exclusion Zones based on recommendations set forth in the Fast Track Report to ensure compatibility between incumbent federal operations and Citizens Broadband Radio Service users;
• Create an open eligibility authorization system for Priority Access and GAA operations;
• Establish granular, exclusive spectrum rights for the Priority Access tier, consistent with parameters discussed in the
Licensing PN;
• Set a defined “floor” for GAA spectrum availability, to ensure that GAA access is available nationwide (subject to Incumbent Access tier use);
• Set guidelines to allow Contained Access Users to request up to 20 megahertz of reserved frequencies from the GAA pool for use within their facilities;
• Establish baseline technical rules for fixed or nomadic base stations operating in the 3.5 GHz Band;
• Set guidelines for the operation and certification of SASs in the band.
The
FNPRM
also sought comment on: (1) Protection criteria for Incumbent Users; (2) potential protection of FSS earth stations in the C-Band; (3) competitive bidding procedures for resolving mutually exclusive applications for PALs; and (4) the possible extension of the proposed rules to include the 3650-3700 MHz band.
III. Discussion
A. Allocation
Background.
In the
NPRM,
the Commission requested comment on the allocation structure that should be used to accommodate the Citizens Broadband Radio Service at 3550-3650 MHz. Specifically, the
NPRM
proposed to retain the primary allocation for existing federal radar systems, and also allocate that band for non-federal fixed and mobile use. In addition, the
NPRM
proposed to restrict primary non-federal FSS earth station use in the upper half of the band (3600-3650 MHz) to the FSS earth stations licensed or applied for as of the effective date of the
Report and Order
in this proceeding. The Commission noted the existence of primary federal allocations for aeronautical radionavigation service and ground-based radars, and stated that the Commission would work with NTIA regarding the continued need for those allocations. The
NPRM
sought comment on the potential for interference to and from existing and future international FSS operations in the 3.5 GHz Band. In the
NPRM,
the Commission noted its belief that its proposed framework met the requirements for allocation of flexible use spectrum under Section 303(y) of the Act. In this regard, it noted that a non-federal Fixed and Mobile allocation is consistent with international allocations for use of the 3.5 GHz Band, that the proposed framework would spur innovation and investment in new wireless technologies with little to no impact on incumbent uses, and that the framework was structured to prevent interference between users through the SAS and technical and operational rules proposed therein.
In the
FNPRM,
the Commission refined the proposals initially made in the
NPRM.
The Commission proposed to add non-federal fixed and land mobile allocations to the 3550-3650 MHz band on a primary basis to permit commercial use of the band consistent with the Commission's accompanying licensing and service rule proposals. Additionally, the Commission proposed to remove the secondary radiolocation service allocation from the 3550-3650 MHz band in the non-Federal Table, and to add three US footnotes to: (1) Permit non-federal stations in the radiolocation service that were licensed or applied for prior to the effective date of this
Report and Order
to continue to operate on a secondary basis until the end of the equipment's useful lifetime; (2)(a) limit primary FSS use of the 3600-3650 MHz band to earth stations authorized prior to, or granted as a result of an application filed prior to, the effective date of this
Report and Order
and constructed within 12 months of initial authorization; (2)(b) specify that FSS use of the 3600-3650 MHz band for all other earth stations will be on a secondary basis to non-federal stations in the fixed and land mobile services; and (3) specify provisions for federal use of the aeronautical radionavigation
(ground-based) and radiolocation services and for non-federal use of the fixed and land mobile services in the 3550-3650 MHz band. The Commission sought comment on these proposals. The
FNPRM
also sought comment on whether federal fixed and mobile operations should be permitted in the 3.5 GHz Band, and what the implications would be of such federal use on non-federal use of the band.
A small number of commenters addressed these allocation proposals. The Utilities Telecom Council, Edison Electric Institute, and National Rural Electrical Cooperative Association (Utility Groups) and Motorola Mobility support the proposals for non-federal fixed and mobile allocation of the 3550-3650 MHz band, and for the restrictions on the primary FSS earth station use to those earth stations licensed or applied for as of the effective date of the
Report and Order
in this proceeding. Motorola Mobility argues that this limitation will result in more robust use of the band for the Citizens Broadband Radio Service, and for this same reason, argues that the Commission should not permit federal fixed and mobile operations in the 3.5 GHz Band. On the other hand, the Satellite Industry Association (SIA) opposes a primary allocation for the Citizens Broadband Radio Service, but argues that if the Citizens Broadband Radio Service is granted primary status, such status should not preclude future FSS deployment because it would be contrary to the Commission's stated premise that the FSS and Citizens Broadband Radio Service can share spectrum. SIA contends that the proposal to relegate future FSS operations to secondary status would unnecessarily limit the much-needed flexibility of satellite network operators and strand existing investment in 3600-3650 MHz space stations, harming satellite operators, their customers, and their investors.
As detailed in Section III(G)(1), NTIA generally supports the FCC's proposal to add a co-primary, non-federal fixed and mobile allocation to the band. NTIA describes a phased approach to implementing protection criteria of federal operations, including the approval of an ESC to detect signals from federal radar systems. The ESC input would be used by the SAS to direct Priority Access licensees and GAA users to another portion of the 3.5 GHz Band or, if necessary, to cease transmissions to avoid potential interference to federal radar systems. NTIA also encourages the Commission to retain the federal allocation for airborne radar systems subject to the same type of approach used in the AWS-3 proceeding (
i.e.,
commercial operations will accept interference from federal airborne systems), including a clear statement in the rules that the airborne radars will not seek protection from Citizens Broadband Radio Service Devices (CBSD). NTIA also requests that the Commission reinstate the protections for a site in Pascagoula, MS in the 3650-3700 MHz band. NTIA asserts that the DoD informed NTIA that it still has an active assignment in use at that location on a regular basis.
Discussion.
After review of the record, we adopt allocation proposals largely consistent with the
FNPRM
proposals, as amended to reflect the NTIA Letter. The allocations are appropriate to permit both robust development of the Citizens Broadband Radio Service and protection of Incumbent Users. We believe that the Citizens Broadband Radio Service has the potential to provide a valuable new service to address broadband capacity shortages. Accordingly, we are adding primary fixed and mobile except aeronautical mobile allocations to the 3550-3650 MHz band in the non-federal table. We are also limiting the primary FSS operations in the band to those authorized prior to, or granted as a result of an application filed prior to the effective date of this
Report and Order,
and constructed within 12 months of the initial authorization. We are also removing the non-federal radiolocation allocation and agreeing to continued federal use of airborne radars in the band based on the NTIA Letter. Finally, we sunset the freeze we imposed on new earth station applications in the
NPRM.
The freeze will expire on the effective date of this
Report and Order,
which replaces the freeze with a rule making such facilities secondary to non-federal stations in the fixed and land mobile services.
We also find that these changes to the Table of Allocations are made consistent with the Commission's authority under Section 303(y) of the Communications Act. We adopt our tentative conclusion and find that: (1) the allocations are in the public interest; (2) new and revised uses of the band would not deter investments in communications services and systems or technology development; and (3) new and revised uses of the band would not result in harmful interference among users of the band. Adding non-federal co-primary fixed and mobile (except aeronautical mobile) allocations in the 3550-3650 MHz band will add much needed capacity to meet the rapidly increasing demands of wireless innovation, and promote investment in new services and technologies for use in that band. In addition, the allocation plan we adopt today will create a system for shared use of the band with incumbent federal users in a way that maximizes efficient use of spectrum through the combination of small cell technology and more sophisticated spectrum management techniques through the SAS designed to prevent harmful interference. Moreover, we note that these allocations are consistent with the ITU Region 2 Allocation Table.
The non-federal co-primary fixed and mobile except aeronautical mobile allocations will allow for shared use of the band between Citizens Broadband Radio Service and incumbent federal Radiolocation and Aeronautical Radionavigation and non-federal FSS services. These allocations are consistent with prior Commission actions to repurpose certain bands for new broadband uses. To ensure that essential federal radiolocation systems operating in the band continue their operations without impact from the sharing arrangements, we are prohibiting CBSDs from causing harmful interference to, or claiming protection from, federal stations aboard vessels (shipborne radars) and at designated ground-based radar sites. In addition, authorized users of CBSDs must not claim protection from airborne radars and airborne radar receivers must not claim protection from CBSDs operating in the Citizens Broadband Radio Service. We therefore establish rules to protect federal radar systems from Citizens Broadband Radio Service operations as described below. These rules are reflected in footnote US433 to the Table of Allocations. Also, we will take such actions as are necessary to amend the Commission's rules to reflect any modification to the list of sites designated by NTIA where federal radar systems will operate.
We will continue to permit primary operations in the 3600-3650 MHz band for those FSS earth stations authorized prior to, or granted as a result of an application filed prior to, the effective date of this
Report and Order,
and constructed within 12 months of their initial authorization. However, we will not accept applications for modifications to existing FSS earth station facilities after the effective date of the
Report and Order,
except for changes in polarization, antenna orientation, or ownership. We will also allow modifications to increase the antenna size to mitigate interference from new services. In addition, we will consider reasonable waiver requests from existing FSS licensees to accommodate additional modifications, including facility relocation, on a case-
by-case basis. Any new FSS earth stations in the 3600-3650 MHz band, applied for following the effective date of the
Report and Order,
will be authorized on a secondary basis to non-federal stations in the fixed and land mobile services. These provisions are reflected in footnote US107 to the Table of Allocations. We believe these changes to the Table of Allocations are necessary to ensure the ongoing stability of the band and ensure its availability for mobile broadband services. We will also coordinate with the border countries as necessary to ensure that the Citizens Broadband Radio Service does not cause harmful interference to international FSS operations in the band as set forth in Section III(G)(3).
While we appreciate SIA's concerns that the proposed allocation changes may impact existing FSS growth and the investment in the band, these changes are consistent with Commission policies adopted more than 14 years ago for sharing in the adjacent 3650-3700 MHz band, wherein existing FSS earth stations were grandfathered on a primary basis and new FSS earth stations were permitted to operate on a secondary basis.
8
Further, as noted above, there is a co-primary FSS allocation in the 3700-4200 MHz band that can be used to accommodate future FSS earth station growth that cannot be accommodated in the 3600-3650 MHz band (47 CFR 2.106). We also disagree with SIA that these changes are contrary to the Commission's stated premise that the FSS and Citizens Broadband Radio Service can share spectrum. The purpose of the 2012 freeze was to “ensure a stable spectral ecosystem for the proposed Citizens Broadband [Radio] Service.” Moreover, there will continue to be FSS use of the 3600-3650 MHz band, with grandfathered operations on a co-primary basis with the Citizens Broadband Radio Service and new uses on a secondary basis to the Citizens Broadband Radio Service.
8
See
Amendment of the Commission's Rules With Regard to the 3650-3700 MHz Government Transfer Band, ET Docket No. 98-237, RM-9411; The 4.9 GHz Band Transferred from Federal Government Use, WT Docket No. 00-32;
First Report and Order and Second Notice of Proposed Rule Making,
65 FR 69451(November 17, 2000) (
3650-3700 MHz First R&O
) (allocating the 50 megahertz of spectrum in the 3650-3700 MHz band to fixed and mobile services on a primary basis to facilitate the provision of a broad range of services, including traditional voice telephony and broadband data and video services; while “grandfathering” existing primary FSS earth stations and permitting new secondary FSS earth station use of that band). While allowing existing sites to freely relocate could cause instability in the band and endanger spectrum access for Citizens Broadband Radio Service users, we acknowledge that such relocations may occasionally be necessary. Therefore, to accommodate what SIA represents would be the “quite rare” need for “[r]elocation or addition of an FSS earth station,” as when a licensee is unable to extend its lease at any existing site or when that site is damaged, we will entertain applications for waivers for site relocations within 16.1 km of existing facilities.
See
SIA
FNPRM
Comments at 19-20.
We emphasize that CBSDs are prohibited from causing harmful interference to any FSS earth stations authorized prior to the effective date of this
Report and Order,
as those earth stations will retain primary status. The approach we adopt in the 3600-3650 MHz band is similar to the one we adopted in the 3650-3700 MHz band and will permit the FSS to continue to make productive use of that band, without increasing impairments to the new Citizens Broadband Radio Service use.
In addition, we will eliminate the non-federal radiolocation allocation in the 3550-3650 MHz band. There are a number of other bands available for non-federal radiolocation use, and we see no need to continue to authorize use for such radiolocation services in the 3550-3650 MHz band, especially considering the impact of potential interference to Citizens Broadband Radio Service. However, we will continue to permit non-federal radiolocation stations that were licensed or had filed an application for authorization prior to the effective date of this
Report and Order
to continue to operate on a secondary basis until the end of the equipment's useful lifetime. These provisions are reflected in footnote US105 to the Table of Allocations.
No commenting party addressed the potential addition of a federal fixed and mobile allocation for the 3.5 GHz Band in response to the
NPRM
and
FNPRM'
s request for comment on federal Citizens Broadband Radio Service use of the band in addition to non-federal use. At this time we will not include a federal fixed and mobile allocation in the 3.5 GHz Band. However, if and when federal agencies determine they may benefit from use of Citizens Broadband Radio Service equipment, we will work with NTIA to ensure use by the federal agencies is consistent with the rules adopted herein.
We will continue to allow federal airborne radar use in the band, with some qualifications. As NTIA noted, in the AWS-3 proceeding, we allowed federal airborne radar use to continue in the band and required commercial systems to accept interference from these systems. Unlike the AWS-3 band, there are no federal airborne radar systems currently operating in the 3550-3650 MHz band. However, NTIA recommends an approach that would allow federal incumbent users to retain the flexibility to deploy radar systems in the band. We do not believe that the potential future deployment of federal airborne radar systems will significantly impact the commercial viability of the Citizens Broadband Radio Service. Accordingly, we adopt NTIA's recommendation for preserving the allocation allowing federal airborne radar systems in the 3550-3650 MHz band, with the proviso that such systems shall not be entitled to interference protection from Citizens Broadband Radio Service users in the band. As described below in Section III(G)(1)(b), Citizens Broadband Radio Service users will also have to accept the risk of interference from airborne systems.
Finally, in the 3650-3700 MHz band, footnote US 109 establishes an 80 kilometer protection zone around two federal government radiolocation facilities at Saint Indigoes MD and Pensacola FL (47 CFR 2.106, note US109). As specified in 47 CFR part 90.1331, commercial fixed and mobile operations within the protection zone must be coordinated with NTIA (47 CFR 90.1331). Prior to 2012, an additional site located in Pascagoula, MS had also been protected in the band. That site was removed in the 2012
Notice of Proposed Rulemaking and Order
implementing the results of the 2007 WRC (WRC-07) (77 FR 76250, December 27, 2012). The NTIA Letter notes that DoD has an active frequency assignment at the Pascagoula, MS location that regularly uses the 3650-3700 MHz portion of the band. Therefore, we revise footnote US 109 to include the Pascagoula, MS site and protect it from harmful interference consistent with other protected federal radiolocation sites in the band.
B. Access Model and Bandplan
We adopt an access model for the 3.5 GHz Band consistent with the proposals set forth in the
NPRM, Licensing PN,
and
FNPRM.
We also adopt the supplemental proposal to include the 3650-3700 MHz band in the authorization framework. We will immediately effectuate three-tiered sharing, with Priority Access Licenses authorized in the bottom 100 megahertz of the combined band. By adopting a flexible access model across the entire band, we aim to create a versatile 150 megahertz band for shared wireless broadband use that can adapt to market and technological opportunities.
1. Three-Tier Access Model
Background.
In the
FNPRM,
we proposed to implement the three-tier
authorization framework originally described in the
NPRM
and further discussed in the
Licensing PN.
Under this framework, existing primary operations—including authorized federal users and grandfathered FSS earth stations—would make up the Incumbent Access tier and would receive protection from harmful interference consistent with the proposed rules. The Citizens Broadband Radio Service would be divided into Priority Access and GAA tiers of service, each of which would be required to operate on a non-interference basis with the Incumbent Access tier. GAA users would also be required to operate on a non-interference basis with respect to Priority Access Licensees. We also proposed that any party that meets basic eligibility requirements under the Communications Act be eligible to hold a PAL or, when authorized, operate a CBSD on a GAA basis in the Citizens Broadband Radio Service. In addition, we proposed to apply the three-tier authorization model across the entire 3.5 GHz Band. We sought comment on these proposals and encouraged commenters to consider the costs and benefits of any alternative proposals.
We received a varied record on this topic, with many commenters supporting the immediate implementation of the three-tier approach and others arguing for a “transitional” approach. Numerous commenters supported the use of a three-tier framework. This group included BLiNQ, Dynamic Spectrum Alliance, Federated Wireless, Google, Interdigital, Motorola Mobility, PISC, White Space Alliance, the Wireless Innovation Forum, and WISPA. In a joint filing, PISC, the White Space Alliance, and the Dynamic Spectrum Alliance contend that immediate adoption of a three-tier framework would benefit the economy by enabling intensive use of the band, promoting additional broadband development in rural areas, and lowering the barriers to entry for a diverse range of users.
Federated Wireless asserts that delaying implementation of the three-tiered authorization model—even temporarily—would reduce spectral and economic efficiency and introduce uncertainty into the band, reducing network deployments. Federated also contends that SAS-based sharing between GAA and Priority Access users is conceptually no different than sharing between Priority Access and Incumbent Users. Therefore, according to Federated Wireless, the perceived risk of GAA interference should not pose an impediment to three-tier sharing or the development of a full functional SAS capable of managing three-tiers of users.
Google agrees that the three-tier framework would meet the Commission's goals more effectively than the two-tier or “transitional” approaches advocated by other commenters. Google also argues that the SAS can effectively manage three-tiers of service without any negative effects on Priority Access networks and that some features of the SAS could help promote efficient use of the band by Priority Access Licensees. Google contends that moving immediately to a three-tier sharing framework for the entire 3.5 GHz Band will promote investment and the deployment of innovative broadband technologies in the band. Google recently demonstrated a prototype SAS, which it asserts is capable of managing three tiers of authorized users in the 3.5 GHz Band.
Other commenters, including 4G Americas, Alcatel-Lucent, AT&T, CTIA, Ericsson, Mobile Future, Qualcomm, PCIA, and Verizon argue for a “transitional” band plan that would divide the 3.5 GHz Band between two-tier and three-tier authorization models, at least initially, or phase in GAA use only after an SAS is tested and proven. While these commenters differ on the specific bandplan that should be adopted, they generally argue that the SAS, as proposed, is a complex system that will require extensive testing and development prior to deployment. They believe that the inclusion of GAA use in the band increases this complexity significantly. They therefore argue in favor of more traditional exclusive licensing in a portion of the band before the eventual transition to a three-tier framework.
Verizon believes that moving to a three-tier framework is ultimately desirable, but that the Commission should designate a portion of the band for short-term deployment of existing technologies for a fixed period of time. Verizon proposes that the band should initially be divided into three segments: (1) The “transitional band” for Priority Access and Incumbent Users only; (2) the “experimental” band for the Commission's three-tiered sharing approach; and (3) a portion of the band for GAA and Incumbent Use only. According to Verizon, the two-tier model is a proven technology and designating a portion of the band for this use would promote near term investment and deployment of LTE networks while allowing industry to develop technology to support the three-tier framework in the “experimental” portion of the band. Verizon argues that its proposed framework would ultimately lead to a fully developed unified band without sacrificing short-term investment.
AT&T argues that the Commission should initially divide the band into licensed and unlicensed segments, with a significant amount of spectrum reserved for both types of users. In its view, licensed users should be afforded longer license terms with a renewal expectation and reasonable performance requirements to provide licensees with the regulatory certainty necessary to encourage investment. During the “transition” period, AT&T argues that users should not be permitted to use channels assigned to licensed users on an opportunistic basis, though such use could be allowed after the “transition” window.
Some network equipment and technology providers, including Nokia Solutions and Networks (NSN) and Qualcomm, continue to argue for the merits of a two-tier Licensed Shared Access (LSA) framework, whereby, in portions of the band assigned to Priority Access users, no GAA use would be allowed. They contend that two-tier sharing technology has already been proven to be effective in other markets and that adoption of a two-tier model would allow for rapid Priority Access development in the band. The proposals are consistent with the two-tier sharing model advocated by Verizon, AT&T, and others for the exclusively licensed portion of the band during the “transition” period.
As described in detail in Section III(J), the record divides over whether to include the 3650-3700 MHz band in the proposed Citizens Broadband Radio Service authorization framework. Many commenters support the proposal to create a 150 megahertz contiguous block of spectrum for the Citizens Broadband Radio Service. Others oppose changing the existing framework for the 3650-3700 MHz band. Still others suggest that if we decide to include 3650-3700 MHz in the Citizens Broadband Radio Service we must do so in a manner that sufficiently protects existing investment in the band. These commenters propose that we adopt additional protections for 3650-3700 MHz band incumbents in order to mitigate any impact on existing operations.
Discussion.
After thorough review of the record, we generally adopt the three-tier authorization model proposed in the
NPRM
and
FNPRM
for the 3550-3650 MHz band. We conclude that moving immediately to a three-tier authorization model, rather than adopting a “transitional” approach to the band, is technologically feasible and will promote innovation and investment in
the band. We also conclude that the 3650-3700 MHz band should be included in the Part 96 authorization regime, subject to the conditions set forth in Sections 90.1307, 90.1311, 90.1338 and 96.21, but that the 3650-3700 MHz band should be reserved for GAA users and Grandfathered Wireless Broadband Licensees at this time. As we explain in detail in Section III(J) below, we find that including the 3650-3700 MHz band for these uses and subject to these conditions will further the development of the Citizens Broadband Radio Service while respecting the investments that current licensees have made in the band.
We agree with numerous commenters that immediately adopting the three-tier access model for the 3550-3650 MHz band will best serve the public interest, encourage innovation, and spur investment in the band. Indeed, as Federated Wireless notes, “[m]ovement away from the three tier model. . .will reduce spectral and economic efficiencies, and temporarily adopting two sets of rules for the band will introduce regime uncertainty, reducing deployments.” Even commenters advocating “transition” plans agree that a three-tier access model would be advantageous as soon as it becomes technically feasible. We believe that a three-tier framework is technically feasible in the near term, while adopting an “interim” plan could create more challenges to any eventual transition to a three-tier model. We also observe that we cannot predict with certainty what the demand for spectrum will be for use of the spectrum by PALs at any given location and over time. A three-tiered approach will better ensure that use of the spectrum can adapt to market and user demands. Therefore, the public interest will best be served by launching the Citizens Broadband Radio Service with the three-tier model in place from the outset.
While we appreciate the creative “transition plans” put forth by various commenters, we are not convinced that this approach is necessary or desirable. We disagree with commenters that argue that the three-tier framework entails untested and unproven sharing elements that will require significant testing and development—beyond that which would be required for two-tier sharing—prior to commercial deployment. Rather, we agree with the Dynamic Spectrum Alliance, Federated Wireless, Google, PISC, Spectrum Bridge, the White Space Alliance, WISPA, and other commenters who have argued that the development of an SAS capable of managing three-tiers of authorized users will not be an impediment to rapidly deploying service across three tiers of service in the band. Indeed, several current TVWS database providers support the Commission's proposal and believe that, while the SAS will be a more complex system than the TVWS databases, the technology already exists to effectively manage the three tiers of users in the band. Notably, as mentioned above, Google claims that it has already developed a prototype SAS capable of managing three tiers of users in the band to the specifications proposed by the
FNPRM.
We believe that the technological development of an SAS capable of managing a “transitional” bandplan would not be significantly less burdensome than the development of a fully functional SAS. Even a two-tier or “transitional” approach would require Commission review and approval of some form of SAS to manage interactions between Incumbent Users and a variety of Priority Access Licensees prior to initial commercial deployment. Using the “proven” technologies available for two-tier sharing would entail some period of testing, development, and review prior to the issuance of PALs in the context of our proposed Citizens Broadband Radio Service. To ensure that a three-tier authorization model is developed, a two-tier sharing system would likely need to be designed from the outset to later accommodate a third tier after the transition period. Therefore, we adopt the three-tier approach for the entire 3550-3650 MHz band to encourage the development of fully functional SASs without delay. While we acknowledge that the development and approval of a fully functional SAS may take some time, as described in Sections III(H)(1) and III(H)(3)(b), we are convinced that the technology to implement the three-tier authorization framework exists or is in late-stage development and that the public interest benefits of moving directly to this model significantly outweigh any possible risk of delay. These benefits include the promotion of wide-scale investment and deployment based on assured availability to both PAL and GAA users, as well as the critical need to provide for the most efficient use of the spectrum by providing users with the simultaneous option of bidding at auction for priority PAL use in areas where they need and are willing to pay for it, while obtaining shared use on a GAA basis in all other scenarios.
We are also unconvinced by arguments that a portion of the band must be, at least temporarily, set aside for more traditional licenses to encourage investment in the band. We address the specific elements of these licensing proposals in more detail below. For now, we note that implementation of the “transition” plans advocated by AT&T, Verizon, Ericsson, CTIA, and others could effectively prevent the three-tier authorization model from ever taking hold in the “transitional” portion of the band. The combination of fixed channel assignments for PALs and indefinite license renewals could permanently prevent GAA use of certain portions of the band, particularly in regions of high commercial interest, even after the “transition” period concludes. These proposals could also preclude investment from a newer generation of Priority Access Licensees in the future. Indeed, any plan that rests upon the assumption that a licensee will be able to renew a license for a fixed channel assignment in perpetuity can hardly be called “transitional.” In addition, the record includes substantial evidence from commenters that are interested in investing in a three-tier band and, as such, we do not believe that it is in the public interest to delay or compromise its implementation. Moreover, our framework depends on providing potential PAL bidders with simultaneous economic choices of bidding for higher priority PAL licenses in areas where such priority is critical to their needs and relying on shared GAA use where it is not.
However, while we decline to subdivide the 3550-3650 MHz band, nothing in the rules we adopt should be read to preclude industry agreement on a common bandplan, so long as the bandplan complies with the rules, including the band-wide operability requirements described in Section III(F)(2)(c). We acknowledge that SAS Administrators, potential licensees, and other industry stakeholders will need to develop various implementation details to facilitate development of the Citizens Broadband Radio Service. As described elsewhere in this
Report and Order,
we believe that many of these issues can be addressed during the SAS Approval Process and through the efforts of a multi-stakeholder group. For example, a bandplan similar to the one shown in Figure 1 could promote efficient use of the band and simplify coordination between SAS Administrators. If industry stakeholders do not develop such a convention, the Commission may revisit this issue in the future.
2. Frequency Assignment
a. Apportionment Between Priority Access and GAA Tiers
Background.
In the
FNPRM,
we proposed to adopt rules governing frequency assignments that would balance the needs of Priority Access Licensees and GAA users. To foster a robust GAA ecosystem, a meaningful amount of the 3.5 GHz Band must be reserved for GAA use in any given geographic area. To that end, we proposed to reserve for GAA use a minimum of 50 percent of the 3.5 GHz Band in any given census tract—after accounting for any frequencies used by Incumbent Access tier operators in the area—with the remainder to be assigned as PALs. We sought comment on this proposed apportionment of spectrum between the GAA and Priority Access tiers.
Some commenters, including NSN and PCIA contend that the proposed GAA floor is too high. NSN argues that the proposed 50 percent floor will not provide sufficient spectrum to encourage potential Priority Access Licensees to invest in the band. T-Mobile argues that a minimum of 40 megahertz of spectrum should be reserved for Priority Access Licensees in each license area as well as 50 percent of any additional available spectrum. Verizon asks that the Commission confirm that the 50 percent GAA floor will not remain static if Priority Access Licenses have been assigned in a given area and Incumbent Users later make use of a portion of the spectrum. According to Verizon, in such cases, Priority Access Licensees should be assigned channels before GAA users.
Others, including WISPA, the Wi-Fi Alliance, UTC, the American Petroleum Institute, Motorola Mobility, and Shared Spectrum Company support reserving at least 50 percent of available frequencies in any given area for GAA use. Motorola Solutions supports the proportional assignment approach proposed by the Commission but proposes that 60 percent of available frequencies be reserved for GAA use. Others support the proposed GAA floor but contend that users should have at least a fixed minimum amount of the band available instead of utilizing a proportional approach. Notably, PISC and Microsoft ask that the Commission reserve the greater of 50 megahertz or 50 percent of available spectrum for GAA use.
Discussion.
We continue to believe that ensuring that a stable and significant quantity of spectrum is available for both Priority Access Licensees and GAA will foster innovation, encourage efficient use of the band, and create an environment conducive to a wide array of potential users and uses. However, we modify the proposed approach to better serve the public interest in this band. We recognize that the proportional frequency assignment method proposed in the
FNPRM
could create uncertainty in the marketplace, particularly in areas where the band may be partially used by Incumbent Users. Therefore, we conclude that a maximum of 70 megahertz may be reserved for PALs in any given license area at any time and the remainder of the available frequencies should be made available for GAA use.
This approach will benefit Priority Access Licensees and GAA users alike. Priority Access Licensees will have more predictable access to spectrum. GAA users will potentially have access to all 150 megahertz in the band in areas where there are no PALs issued or in use and up to 80 megahertz where all PALs are in use. We note, however, that both PAL and GAA spectrum access will necessarily be constrained by the need to protect Incumbent Users throughout the band. We believe that moving from proportional frequency reservations to fixed frequency reservations—coupled with opportunistic access to spectrum for GAA users across 150 megahertz—will increase band access, stability, and predictability for all Citizens Broadband Radio Service users.
We agree with those commenters who contend that a percentage-based reservation for GAA use in any given area could cause confusion and lead to uncertainty regarding the amount of available spectrum in any given area. As Verizon points out, under the
FNPRM
proposal, if the amount of available spectrum in a given area were to be reduced due to Incumbent Access use, Priority Access Licensees could lose access to capacity that they had been assigned through auction. While the need to protect Incumbent Users makes it impossible to completely avoid this risk, moving to a non-proportional Priority Access reservation model should minimize it substantially.
While we agree with PISC and Microsoft that GAA users should have access to a significant amount of spectrum, we do not agree that 50 megahertz of the band should
always
be reserved for GAA use. The presence of Incumbent Users could affect the amount of spectrum available for both GAA and PAL users. Circumstances may occur where incumbent use of the band leaves less than 50 megahertz available for GAA (or PAL) use in a given location. Nevertheless, we believe that the policies we adopt in this order, including the ability to access “unused” channels assigned to Priority Access Licensees, will ensure that substantial spectrum capacity is available in all geographic areas for GAA use.
With regard to the amount of spectrum available for GAA and Priority Access use, we believe that reserving a maximum of 70 megahertz—
i.e.,
seven channels—for Priority Access Licensees in any given license area appropriately balances the needs of these two types of access. Seven PAL channels represent an increase from the five PAL channels that would have been available under the baseline
FNPRM
proposal (
i.e.,
3550-3650 MHz) while providing a greater degree of certainty for potential licensees. This increase in Priority Access spectrum availability will likely encourage more licensees to enter the band in any given area or allow more licensees to pursue higher bandwidth applications (through channel aggregation). Considered alongside the inclusion of the 3650-3700 MHz band, the bandplan and frequency assignment model we adopt herein would generally provide all users with more and greater spectrum availability than they would have had under our proposal in the
FNPRM.
Where the band is not utilized by Incumbent Access users or Grandfathered Wireless Broadband Licensees, GAA users will have access to a minimum of 80 megahertz, more than the proportional 50 percent of the band proposed in the FNPRM. Thus, both Priority Access Licensees and GAA users will benefit from our revised approach to the assignment of frequencies in the band.
b. Opportunistic Access to Priority Access Licenses
Background.
In the
NPRM
and
FNPRM
we proposed to allow GAA users access to frequencies not yet assigned to PALs—or where assigned bandwidth is not in actual use by Priority Access Licensees—on an opportunistic basis. We sought comment on whether to allow opportunistic access to channels assigned to Priority Access Licensees and, if so, how to determine whether such channels are actually “in use.”
Commenters offered varied opinions on whether opportunistic use of Priority Access channels should be permitted and proposed a variety of ways to determine whether such channels are actually “in use.” Commenters including the Dynamic Spectrum Alliance, Federated, Interdigital, Microsoft, PISC, Shared Spectrum Company, White Space Alliance, Wi-Fi Alliance, and WISPA support the
proposal to allow opportunistic access to Priority Access channels by GAA users. Some others, like Ericsson, contend that opportunistic GAA use should not be permitted after network facilities have been deployed by Priority Access Licensees in a given channel and license area. CTIA contends that further study is needed before the Commission determines that it is feasible to allow opportunistic access to licensed spectrum.
Other commenters support opportunistic access, with certain caveats. AT&T argues that GAA use of channels assigned to Priority Access Licensees should only be permitted if, at the end of a license term, there is spectrum or geography not in actual use by the Priority Access Licensee. According to AT&T, the Commission should utilize 3GPP standards for TD-LTE channel occupancy to determine channel usage. Verizon contends that the definition of “use” should not be limited to actual operations. For example, Priority Access Licensees should be permitted to use all or some of a given license area as a guard band to protect its network from interference. T-Mobile asserts that GAA users should only be permitted to use channels assigned to PALs until the licensee notifies an SAS that such channels are in operation. WISPA proposes a technical definition of use based on the specific number of data “packets” received by any CBSD within a five minute period.
TIA contends that the Commission's proposal would effectively make GAA rights in the band superior to Priority Access rights by allowing GAA users to access channels assigned to Priority Access Licensees without allowing Priority Access Licensees to do the same. The Wi-Fi Alliance counters that this is not the case since GAA users will always be prohibited from using channels assigned to Priority Access Licensees when they are in actual use and, as such, Priority Access rights will always be superior to GAA tier rights under the Commission's proposed framework.
Discussion.
We find that permitting opportunistic access to unused Priority Access channels would maximize the flexibility and utility of the 3.5 GHz Band for the widest range of potential users. By allowing GAA users to access bandwidth that is not used by Priority Access Licensees, we can ensure that the band will be in consistent and productive use. We believe the record demonstrates the benefits of allowing GAA users some degree of opportunistic access to “unused” Priority Access channels.
We disagree with AT&T's contention that GAA use of PAL channels should only be allowed if the licensee is not using a portion of its assigned spectrum or geography at the end of its license term. This proposed model is incompatible with the three-tier authorization framework adopted herein and would undermine the Commission's objectives for more efficient spectrum use in this band. Under AT&T's model, channels assigned to PALs would effectively lie fallow until the Priority Access Licensee chooses to deploy its network in a given area, precluding opportunistic use of the spectrum and limiting the scope of potential GAA deployments. Thus, AT&T's suggested policy could encourage spectrum warehousing and disincentivize efficient use of the band. We believe that it is in the public interest to ensure that the 3.5 GHz Band is made widely available to Citizens Broadband Radio Service users—regardless of their operational tier—and that Priority Access Licensees should not be permitted to exclude other authorized users unless and until their networks are in use.
c. Frequency Assignment by SAS
Background.
In the
FNPRM,
we proposed that, in place of fixed channel assignments, the SAS would assign bandwidth within given geographic areas to Priority Access Licensees and GAA users. Under this proposal, the SAS would ensure that Priority Access Licensees have access to 10 megahertz channels and that GAA users would have access to the remaining portions of the band. However, the exact frequencies defining any given authorization, whether Priority Access or GAA, would not be fixed. For example, a licensee might have Priority Access rights for a single PAL, but the specific channel location assigned to that user would be assigned by the SAS and could be reassigned from time to time (
e.g.,
from 3550-3560 MHz to 3630-3640 MHz). Individual GAA users would be assigned available bandwidth of a size and frequency range determined by the SAS. The SAS would assign and maintain appropriate frequency assignments and ensure that lower tier users do not interfere with higher tier users. To the extent that some level of regional or national consistency of assignment facilitates the provision of service, SAS providers would be free to agree upon a common assignment convention. However, such a convention was not specified in the proposed rules, in order to allow the greatest degree of operational flexibility. We sought comment on these proposals.
The record reflects a sharp division between those who favor the assignment of frequencies by the SAS and those who prefer static frequency assignments. Commenters including PISC, White Space Alliance, Dynamic Spectrum Alliance, Federated Wireless, Interdigital, Google, Shared Spectrum Company, Spectrum Bridge, and the Wireless Innovation Forum support the Commission's proposal to allow the SAS to dynamically assign frequencies in the band for both Priority Access Licensees and GAA Users. Google asserts that SAS-directed spectrum sharing will ensure that Citizens Broadband Radio Service users will have access to the best available channel in any given spectral environment and that dynamic frequency assignment is a necessary component of any sharing regime that requires secondary users to change their operations in response to higher tier users. Similarly, PISC states that frequency assignment through the SAS will confer a number of public interest benefits, including: (1) Better accommodation of Incumbent Access Users; (2) more intensive and productive use of the band; and (3) improved coexistence of small cell and higher power uses. Federated Wireless contends that static frequency assignments for PALs: (1) Are inconsistent with the efficient, SAS-driven spectrum assignment model the Commission proposes; (2) would threaten interoperability in the band; and (3) are unnecessary for incumbent protection.
Other commenters, including AT&T, CTIA, Ericsson, 4G Americas, HKT Limited, NSN, and UK Broadband oppose the Commission's proposal and argue that Priority Access Licensees should be given static frequency assignments. Many of these commenters contend that static frequency assignments are the simplest and most effective way to license PALs to wireless broadband providers. AT&T and T-Mobile argue that dynamic frequency assignment would undermine carriers' essential network management functions, frustrate their ability to plan network deployments, and discourage investment in the band. T-Mobile asserts that current network technology does not support dynamic frequency assignment.
Google disagrees and states that SAS management of frequency assignments is wholly compatible with LTE system architecture. Indeed, Google asserts that dynamism in frequency assignment would provide greater certainty to Priority Access Licensees since the loss of any specific channel in a specific license area would not necessarily result
in the loss of Priority Access functionality. Google also stresses that reassignment should only be used to avoid situations where PALs might otherwise lose access to assigned PAL frequencies.
Seeking to balance concerns on both sides of the issue, Verizon notes that SAS-based frequency assignment has potential benefits and drawbacks. As a result, Verizon contends that additional information on incumbent frequency use is needed to perform a complete and accurate cost-benefit analysis of the Commission's proposals.
Discussion.
After review of the record, we conclude that frequencies in the 3.5 GHz Band will be assigned by an SAS. This approach is consistent with the Revised Framework and the proposals set forth in the
FNPRM
. We believe that flexible band management is essential to effective spectrum sharing between the three tiers of authorized users in the band. However, we also acknowledge commenters' concerns about frequency predictability and stability. To address these concerns, we adopt provisions to ensure that Priority Access channel assignments remain as stable and consistent as possible for licensees holding multiple channels within the same license area or in contiguous license areas.
We agree with commenters who assert that SAS-controlled frequency assignment is an essential component of the three-tiered authorization framework adopted in this
Report and Order
. Notably, automated frequency assignment is necessary to ensure consistent spectrum access for Citizens Broadband Radio Service users and to ensure protection of Incumbent Users. Under the framework described in Section III(B)(1), Incumbent Access users have superior spectrum rights at all times and in all areas over Priority Access Licensees and GAA Users. As such, all Citizens Broadband Radio Service users must be capable of discontinuing operation or changing frequencies at the direction of the SAS to protect Incumbent Users. If PAL assignments were entirely static, as AT&T and others propose, Priority Access Licensees would have no choice but to discontinue operations when an Incumbent User begins operating on its assigned channel in a given license area. Indeed, as PISC notes, the need to protect Incumbent Users coupled with static channel assignments could require Priority Access Users to shut down indefinitely or even permanently. For example, assume that a Priority Access Licensee is given a fixed channel assignment of 3550-3560 MHz in a designated License Area. If an Incumbent User begins using those frequencies, the Priority Access Licensee would lose access to the channel. Without the ability to reassign channels dynamically, the Priority Access Licensee would lose the use of a channel it had acquired at auction for the duration of the Incumbent User's operations. Thus, static channel assignments for Priority Access Licensees would lead to unpredictable spectrum availability, undermining the very stability that commenters claim is needed to encourage investment in the band. However, with automated frequency assignment, Priority Access Licensees could be relocated to unencumbered channels and allowed to continue providing service.
We also find that SAS-based frequency assignments will increase the flexibility and utility of the 3.5 GHz Band. We agree with PISC's assertion that automated frequency assignment will allow more users to access spectrum in a given geography, leading to more productive and intense spectrum use by both Priority Access Licensees and GAA users. Coupled with the requirement that CBSDs be capable of operating across the entire 3.5 GHz Band, SAS-controlled assignment will ensure that individual users are provided with flexible, stable access to the band and that Citizens Broadband Radio Service users as a whole are able to access as much spectrum as possible at any given time and place.
We are not convinced that frequency assignment by the SAS is incompatible with wireless broadband network planning as T-Mobile, AT&T, and CTIA claim. We realize that operators traditionally have planned their networks with certain static assumptions about frequency assignments, reflecting the exclusive-use licenses they hold in other bands. However, we do not agree that static assignments are always necessary to plan and operate a network—particularly a network with “islands” of small cell clusters—or that utilizing a flexibly assigned band would disrupt network deployments. To the contrary, as explained above, we believe that automated assignment will benefit wireless broadband providers by providing an additional measure of resiliency and flexibility.
We believe that our SAS rules will ensure a stable spectral environment for Priority Access Licensees and GAA users alike while providing the flexibility needed to accommodate and protect Incumbent Access users. To address the concerns raised by AT&T, Verizon, and others, the SAS will be responsible for ensuring that Priority Access Licensees are provided with consistent channel authorizations across contiguous geographic areas and contiguous channels within the same geographic area where feasible. We address these rules in greater detail in Sections III(H)(2)(c) and III(c)(2)(a).
Contrary to some of the arguments made in the record, SAS-based frequency assignment is compatible with international harmonization to achieve ecosystem scale and permit global roaming. In considering this issue, we believe it is necessary to distinguish air interface compatibility—the primary focus of international standards efforts, including those within 3GPP—from channel assignment. Indeed, irrespective of the method of channel assignment, we expect that any standardized device that uses the new 3.5 GHz Band would be able to tune across the band (and, in fact, we mandate such capability with a band-wide operability requirement). Automated channel assignment by an SAS will simply involve instructions to these devices to use a specific channel, at a specific place and time, within this tuning range. As noted above, the rules contain provisions to promote stability of the spectral environment. Therefore, based on the record before us, it is our predictive judgment that SAS-mandated channel changes, guided by the requirement to preserve consistency and contiguity for PAL spectrum assignments where feasible, will generally occur relatively infrequently rather than on a millisecond-by-millisecond basis as some commenters fear.
This mode of automated frequency assignment is consistent with most prevalent networking standards. Indeed, modern networks typically have control features that allow for automated or managed channel selection. Finally, we note that unlike many other countries that have fully reallocated the 3.5 GHz Band for commercial broadband uses, we must accommodate a spectral environment that includes, and will continue to include, extensive use of the band by military radar systems. Many of the policies we adopt in this
Report and Order
are intended to address this unique situation and ensure that the band is made available for commercial use while protecting important incumbent operations. As such, industry standards may need to evolve to accommodate some of the policies we adopt herein. We believe that standardization should be addressed, at least in part, during the SAS approval process and may be informed by the work of a multi-stakeholder group as
described in Sections III(K) and III(H)(3)(b).
C. Priority Access Tier
1. Eligibility
Background.
Based on comments received in response to our original
NPRM
and
Licensing PN,
we proposed in the
FNPRM
to make eligibility for PALs open to any prospective licensee who meets basic FCC qualifications, rather than to a more limited group of “mission critical” users. The record we received in this proceeding generally supports expanding eligibility to the Priority Access tier to a broader class of users than we proposed in the
NPRM
.
Discussion.
The Commission has broad authority to prescribe “citizenship, character, and financial, technical, and other qualifications” for its licensees (47 U.S.C. 308(b)). Based on the record in this proceeding, and for the reasons we have previously outlined in a number of other wireless broadband services, we determine that it is in the public interest to allow any entity that is eligible to hold an FCC license to also be eligible to apply for, and hold, a PAL. All applicants for PALs must demonstrate their qualification to hold an authorization and demonstrate how a grant of authorization would serve the public interest (
See
47 U.S.C. 303, 307, 309, 310). Qualifications include those under Section 310 of the Act regarding foreign ownership (
See
47 U.S.C. 310(b)) as well as the bar on participation in spectrum auctions with respect to any person “who has been, for reasons of national security, barred by any agency of the Federal Government from bidding on a contract, participating in an auction, or receiving a grant (47 U.S.C. 1404; 47 CFR 1.2105(a)(2)(xii)).”
For the same reason that we have determined to expand the size of the tier, we conclude that expanded eligibility for access to the Priority Access tier will promote more intensive use of the 3.5 GHz Band. The increasing growth in demand for wireless broadband service has led to increasing demands for spectrum to accommodate that growth. As T-Mobile explains, many entities besides mission critical users seek access to the type of “quality assured” spectrum that PALs provide. The Consumer Electronics Association notes that “[c]ommercial operations benefit from reliable, prioritized access to spectrum and a predictable quality of service, which will support investment and innovation in the 3.5 GHz Band.” Google states that “[o]pening the Priority Access tier will encourage deployment of systems that require reliable access to spectrum to deliver higher quality service.” Accordingly, subject to the qualification rules discussed above, any entity, is eligible to be a Priority Access Licensee.
2. PAL Configuration
a. Frequencies
Background.
We proposed to authorize PALs as 10 megahertz unpaired channels. With this proposal we intended to balance several objectives. First, as we have concluded in other services suitable for wireless broadband deployment, 10 megahertz channels are well suited for high data rate technologies both in terms of deployment and scalability. Second, 10 megahertz channels divide evenly into either the 100 megahertz (10 channels) or 150 megahertz of spectrum (15 channels) that would be available in either our main proposal or the supplemental proposal to include 3650-3700 MHz. Third, 10 megahertz channels will allow us to license multiple Priority Access users in each geographic area, particularly where protection of incumbents limits the amount of spectrum available for commercial use. Fourth, 10 megahertz licenses would provide useful “building blocks” for licensees that might wish to aggregate larger amounts of spectrum in a given area. We sought comment on the appropriate bandwidth for PALs.
Discussion.
Based on the general consensus in the record, we adopt our proposal to authorize PALs to operate over 10 megahertz unpaired channels. Ten megahertz channels provide a flexible, scalable, and practically deployable bandwidth for high data rate technologies, permitting multiple Priority Access Licensees to operate in the same geographic area. We agree with T-Mobile, that 10 megahertz blocks “strike the appropriate balance between permitting multiple entities access to licensed 3.5 GHz Band spectrum and ensuring that the blocks are large enough to support customer traffic.” Further, some commenters see beneficial consistency with the 3GPP Bands 42 and 43 channelization scheme. Such alignment should encourage investment in and development of new equipment for this innovation band.
Although a few commenters advocated for larger or smaller channels, the record generally supports our proposal to utilize 10 megahertz channels for PALs with the ability to aggregate multiple channels. Spectrum Bridge, for example, notes that 10 MHz channels are compatible with broadband technology and operations. NSN and T-Mobile also point out that 10 MHz licenses would harmonize with the worldwide use of existing global 3GPP Bands 42 and 43 for Long Term Evolution Time Division Duplex use. As NSN further explains, “[b]and class harmonization helps achieve economies of scale, enables global roaming, reduces equipment design complexity and improves spectrum efficiency.”
As discussed in Section III(C)(2)(a), all channels will be assigned by the SAS. The exact frequencies of specific assigned channels, however, may be changed by the SAS, if necessary. To the extent feasible, we will require the SAS to assign multiple channels held by the same Priority Access Licensee to contiguous channels in the same license area. The SAS may temporarily reassign individual PALs to non-contiguous channels only to the extent necessary to protect Incumbent Users from harmful interference or if necessary to perform its required functions. However, while a Priority Access Licensee may initially request a particular channel or frequency range, any particular request will not be guaranteed. Nevertheless, SAS administrators would be required to maintain consistent and contiguous frequency assignments for licensees with multiple PALs in the same or adjacent license areas whenever feasible. Thus, our rules aim to create a flexible, responsive spectral environment while retaining much of the stability of traditional static channel assignments.
b. Area
Background.
In the
FNPRM,
we proposed to authorize PALs at the census tract level and to permit geographic aggregation across license areas. As we explained, census tracts offer a variety of benefits, including geographic sizes varying by population density, nesting into other political subdivisions including city lines, and aligning with other natural features that track population density. Under our proposal, PAL applicants could target specific geographic areas in which they need additional coverage and avoid applying for areas that they do not intend to serve. Our proposal reflected the unique technical characteristics of small cells to promote a high degree of spectral and spatial reuse while facilitating flexible, targeted deployment of CBSDs.
We received a diverse record in response to our proposal to use census tracts as a licensing area. Some commenters agree with our proposal. Others argue that census tracts are inappropriate because the borders of census tracts frequently divide streets and their relatively small size would
make license administration and co-channel coordination between Priority Access Licensees more difficult. Other commenters suggest that even smaller geographic areas, such as census block groups would allow for granular and demand-focused assignments. Still others proposed larger, more traditional license areas such as Economic Areas (EAs), Cellular Market Areas (CMAs), or counties. Google suggests license boundaries be based on proposed network parameters and actual contours, as determined and enforced by the SAS, rather than fixed geographic areas. Google further maintains that small license areas which “track the radiofrequency characteristics of proposed deployments or rely on a pixel-based approach, will maximize use of the licensed spectrum in the 3.55 GHz band.”
Discussion.
We adopt census tracts as the appropriate geographic license size for PALs. Among our goals in this proceeding is to establish the geographic component of PALs in a way that allows flexible and targeted network deployments, promoting intensive and efficient use of the spectrum, but also allowing easy aggregation to accommodate a larger network footprint. We find that licensing PALs at the census tract level will serve the public interest and provide a middle ground between commenters who sought license areas larger than census tracts and those who supported even smaller license areas.
Census tracts will provide a number of other benefits. Currently, there are over 74,000 census tracts in the United States targeted to an optimum population of 4,000. Census tracts vary in size depending on the population density of the region, with tracts as small as one square mile or less in dense urban areas and up to 85,000 square miles in sparsely populated rural regions. Census tracts generally nest into counties and other political subdivisions. In turn, they nest into the standardized license areas commonly used by the Commission (
e.g.,
CMAs, EAs, and Partial Economic Areas). Census tracts also generally align with the borders of political boundaries (
e.g.,
city lines) and often to natural features, which may affect population density (
e.g.,
rivers). Census tracts, therefore, may naturally mirror key considerations in targeted deployment by service providers, such as tracking existing customers, plant, and permits or rights-of-way. In addition, the inclusion of census tracts in census geospatial databases may ease the incorporation of geographic and demographic data into an SAS.
Census tract-level licensing also aligns well with small cell deployment. Due to their low power and small size, small cells can provide broadband coverage and capacity in targeted geographic areas. This applies whether small cells are used to offer independent broadband service, supplemental coverage for a macrocell network, or private network functions. PAL authorization in a highly localized fashion,
i.e.,
at the census tract level, will promote the use of the band for clusters of small cells.
In our view, other proposals in the record have limitations. Like Spectrum Bridge, we believe that geographic license areas significantly smaller than census tracts will “significantly increase the complexity and data management requirements [in the band], with diminishing and no obvious improvement in spectral efficiency.” Regarding Google's proposal to assign licenses according to interference protection requirements rather than by fixed geographic areas, we believe that such a proposal adds unnecessary uncertainty and complexity to the licensing process and would complicate the competitive bidding process by creating irregular “lots” for auction. Google subsequently proposed a “pixel-based” approach to Priority Access licensing but we believe the enormous volume of licenses that would result would be challenging to administer. We agree with WISPA that proposals to assign licenses based on point/radius methodology will result in license areas that do not conform to natural boundaries and will “complicate[] mutual exclusivity determinations.”
As noted above, some commenters argue that to encourage investment in this shared band, we should license PALs in larger geographic areas such as those used in other licensed mobile bands. These commenters argue that introducing a new license scheme in the band will create uncertainty and delay deployment in the band. We disagree. As noted above, the mandate of Section 309(j) strongly supports our goal, particularly in “prescrib[ing] area designations (47 U.S.C. 309(j)(4)(c)),” of providing economic opportunity to a wide variety of applicants. That mandate is particularly compelling in light of the opportunities for participation with much lower capital investment requirements associated with smaller service areas, as we have previously recognized in other services in trying to address the substantial challenges faced by new entrants. The larger, traditional license areas favored by some commenters are inconsistent with our desire to promote innovative, low power uses in this band, such as small cells, which align well with small, targeted geographic areas such as census tracts. Further, traditional licensing areas will not allow users of the band to acquire PALs only for those specific geographic areas they intend to serve. Divesting large, unwanted swaths through secondary markets transactions could impose significant transactions costs. On the other hand, should users of the band desire to provide service within traditional geographic license areas, they can aggregate multiple contiguous census tracts, which as discussed above, nest into the standardized license areas commonly used by the Commission.
We continue to believe that census tracts are the appropriate middle ground among the competing proposals developed in the record and provide an equitable means of achieving the Commission's public interest goals consistent with our statutory mandates. As WISPA stated, “[t]he range of views suggests that, while not perfect, census tracts probably strike the appropriate balance with regard to size and are therefore the best alternative.” Census tracts are sufficiently granular to promote intensive use of the band and are large enough, either on their own or in aggregate, to support a variety of use cases, including small cell base stations and backhaul. As Cantor Telecom states, “census tracts may offer certain benefits such as geographic sizes varying by population densities which would allow PAL applicants to target specific areas that they intend to serve.” Moreover, by defining license areas in a granular fashion and allowing geographic aggregation, operators should be able to acquire enough PALs to cover their desired network footprint without having to over-acquire licenses. Accordingly, each PAL shall consist of a single census tract as defined, initially, in the 2010 census.
c. Term
Background.
In the
FNPRM,
we proposed that PALs would have a one year, non-renewable term. PALs would automatically terminate after one year and would not be renewed. We reasoned that a one-year term, while shorter than the 10- or 15-year terms typically associated with geographic area-licensed wireless services, would be appropriate for this band. First, licensees would be permitted to aggregate up to 5 consecutive 1-year terms to replicate the predictability of a longer-term license while providing the flexibility inherent in shorter-term spectrum authorizations. Second, the use of a shorter, non-renewable license
term could simplify the administration of the Priority Access tier by obviating the need for renewal, discontinuance, and performance requirements typically associated with longer-term licenses. Third, shorter terms would allow for a wider variety of innovative uses and encourage efficient use of spectrum resources. Fourth, short term licenses could promote greater fungibility and liquidity in the secondary market. Finally, allowing applications for multiple years of PALs would provide Priority Access Licensees with the certainty they may need to make capital investment in PALs. We sought comment on the appropriate duration of PALs and our aggregation proposal and invited commenters to suggest other proposals.
Commenters differed on the appropriate term for PALs. Some commenters supported one-year terms for PALs with the option to aggregate multiple years. Others argued for license terms shorter than one year, while Microsoft agreed with the one-year proposal but argued for a prohibition on term aggregation. Alternatively, numerous commenters including Ericsson, NSN, and Qualcomm supported a more traditional licensing model with longer license terms. These commenters argue that short, one-year licenses will not provide operators with sufficient certainty to invest the necessary resources in the band. Instead, commenters argue, longer, more traditional license terms will make the spectrum more attractive for investment. AT&T for example states that “a one-year, non-renewable license is insufficient assurance to spark investment in the 3.5 GHz band [and may] raise the possibility of stranded investment.”
Commenters also differed on the appropriate temporal aggregation limit for PALs. For example, WISPA suggests a four-year aggregation cap, Public Knowledge and the New America Foundation suggest a three-year cap, Motorola Solutions suggests only two years, and Microsoft suggests we not permit term aggregation (effectively a one-year availability in the licensing window). AT&T, by contrast, suggests that licensees be permitted to retain their authorizations indefinitely for areas in which they have deployed equipment and provided service within one year.
Discussion.
Based on the record in this proceeding, and in the context of our particular regulatory scheme for this band, we adopt a longer license term than originally proposed: three-year rather than one-year terms. At the end of its three-year license term, a PAL will automatically terminate and may not be renewed. However, solely during the first application window, we will permit an applicant to apply for up to two consecutive three-year terms for any given PAL available during such first application window, for a total of six years. During subsequent regular application windows, only the next three-year license term will be made available for any given PAL. If sufficient interest is expressed by prospective Priority Access Licensees, we will also open interim filing windows for unassigned PALs, in which case any newly auctioned PAL term will expire at the end of the three-year period associated with previously auctioned PALs, so that all PALs will be made available for bidding in the next regular window. This practice will avoid staggered PAL terms.
Among our goals in this proceeding is to promote more efficient wireless network architectures and innovative approaches to spectrum management. To this end, we identified the 3.5 GHz Band as “an ideal `innovation band,' well suited to exploring the next generation of shared spectrum technologies, to drive greater productivity and efficiency in spectrum use.” In our view, the flexibility inherent in shorter license terms should allow for a wider variety of innovative uses in the band and encourage efficient use of scare spectrum resources. Commenters in this proceeding, however, hold widely varying views on the appropriate license terms for PALs. While some commenters support our initial proposal for one-year terms, many others argue that longer license terms will best spur investment in this repurposed band.
We believe that three-year non-renewable license terms—with the ability to aggregate up to six years up-front—strike a balance between some commenters' desire for flexibility with other commenters' need for certainty. This belief is consistent with our goal of creating greater opportunities for new and innovative uses to secure the priority benefits associated with PAL licenses governed by the mandates of Section 309(j) described above. As recognized by OTI/PK, shorter, non-renewable licenses “will promote deployments by a wide range of service providers.” Further, OTI/PK reasons that the cost of such short duration licenses covering small geographic areas “will dramatically lower the barriers to entry for innovation and competition in the band.” At the same time, we acknowledge that a license term longer than one year “will foster more robust deployment and strengthen innovation.” We believe our rule appropriately addresses the competing public interest concerns expressed in the record.
We believe that, as part of the overall set of rules established for the Citizens Broadband Radio Service, time-limited PAL terms will promote investment by traditional and non-traditional providers of wireless broadband service. We are not persuaded by arguments put forth by AT&T, T-Mobile, and others that non-renewable PALs will diminish investment in the band. Several considerations jointly and severally weigh in this determination. In our view, these considerations applicable to the 3.5 GHz Band do not support traditional justifications for renewal expectancies appropriate in exclusively licensed bands.
9
9
Such justifications include: (1) Rewarding proven performance over much longer license terms; (2) encouraging investment; or (3) avoiding haphazard restructuring of the industry.
See generally Central Florida Enterprises, Inc.
v.
FCC,
683 F.3d 503, 507 (D.C. Cir. 1982).
First, we expect that Citizens Broadband Radio Service users will have similar incentives to invest under the GAA rules as unlicensed users in other bands. Ample experience with tens of millions of unlicensed wireless devices deployed under our non-exclusive Part 15 rules demonstrates that significant investment can occur under a non-exclusive use authorization. Moreover, unlike the traditional exclusive licensing regime in which the Commission has established renewal expectancies, even a PAL licensee who does not obtain PAL rights for the succeeding three-year term retains the ability to use the same equipment in the same area as a GAA licensee. The investment is thus not stranded. In this context, PALs simply provide additional economic incentives, over and above GAA authorizations, for those users seeking greater interference protection in specific locations for a specific three-year period.
Second, return-on-investment determinations for PALs in the 3.5 GHz Band likely involve a lower cost hurdle than in other bands permitting higher-power transmissions. The economics and upgrade cycles for the (predominant) small cell use case, applied in the context of census tract license areas over three-year license terms, may resemble those for enterprise and carrier Wi-Fi deployments rather than traditional macro cell deployments common to other bands.
Third, where a prospective user of the band does require a PAL as a predicate to investment, our rules do permit the user to bid for and acquire, as a
condition to its investment, at the time of the initial PAL auctions, two successive three-year licenses. A Priority Access Licensee would also have subsequent opportunities to participate in auctions assigning PALs for subsequent three-year terms, or secondary market transactions. Moreover, the non-fixed frequency assignment model and band-wide equipment operability rule we adopt herein increase the substitutability of PALs in a given area. This model also substantially reduces the risk to a Priority Access Licensee of not winning a comparable license in a subsequent auction. Additionally, it is possible that a Priority Access Licensee with a proven business case that depends on access to Priority Access tier channels could value a subsequent PAL in the same license area more highly than a new entrant in that area, further increasing the incumbent's odds of winning a new PAL.
10
In a service in which we have determined to permit shared (albeit prioritized) uses of the same technology, it seems more appropriate to tie prioritized use to the ongoing desire to pay for it at auction.
10
We recognize that a new entrant using new technologies or business practices may outbid an incumbent Priority Access Licensee. Such an instance is precisely when it makes economic sense for a new licensee to replace the old. Moreover, we believe that combining term-limited PALs with the kind of renewal expectancy traditionally awarded to commercial wireless licenses (with longer terms and higher capital costs) would not be consistent with our statutory responsibility to promote “efficient and intensive use of the electromagnetic spectrum.” 47 U.S.C. 309(j)(3)(D).
Finally, industry structure may adapt in ways that obviate any remaining perceived risks associated with term-limited licensing in this band. For example, “neutral host” business models common to the distributed antenna systems (DAS) industry may also apply to small cell networks operating in the 3.5 GHz Band. A venue network operator (
e.g.,
an enterprise, facilities owner, or their agent) could install small cell equipment and provide service directly or pursuant to agreements with several different wireless carriers. In this situation, this venue operator may be the lowest-cost provider of service, as it brings to the table some of the key inputs (mounting points, backhaul, etc.) and the ability to coordinate network sharing inside its facility (which further reduces costs). A venue operator inhabiting the underlying real estate will therefore likely be a party to any provision of small cell service in the area. As a consequence, it has incentives to invest in network infrastructure regardless of who holds the local PALs at any given time.
For similar reasons, we believe our rules prescribing three-year, non-renewable license terms for PALs, coupled with the absence of a renewal expectancy, will operate in combination with our rules permitting opportunistic GAA use and the relatively inexpensive deployment costs in this band to ensure that winning bidders for PAL licenses at auction will have sufficient incentive to deliver service so as to avoid the need for prescribing any further performance requirements. Bidders who purchase PALs at auction will likely have an interest in putting the spectrum into productive use.
3. Spectrum Aggregation Limits
Background.
In the
FNPRM,
we proposed to allow licensees to hold up to three out of an anticipated five PALs in one census tract at one time (
i.e.,
30 megahertz in one census tract at any time). We indicated that, given the unique circumstances of this band, a specific aggregation limit applicable to all PAL licensees would promote access to the band.
Several commenters advocate for the adoption of a spectrum aggregation limit on the number of PALs that can be held in each license area. WISPA and Cantor Telecom support the proposed limit of 30 megahertz of PALs in each license area, with caveats. Motorola Mobility suggests that the actual cap should be the larger of either the 30 megahertz fixed limit or a percentage of Priority Access spectrum, such as 55 percent. PISC, Sony Electronics, and Motorola Solutions contend that a 20 megahertz limit on PALs would be more appropriate to allow future entrants and new competitors to enter the marketplace.
Verizon Wireless and AT&T oppose any cap on Priority Access channel aggregation. Verizon argues that adopting a spectrum cap will harm consumers by impeding the development and deployment of innovative services in the 3.5 GHz Band, particularly given that providers require large contiguous blocks of spectrum to deliver broadband service. AT&T also claims that the Commission has not identified any public interest harm associated with allowing licensees to aggregate as much spectrum as they require.
Discussion.
In this
Report and Order,
we adopt an aggregation limit, as proposed, but increase the limit to allow licensees to hold no more than four PALs in one census tract at one time (
i.e.,
40 megahertz out of 70 megahertz allocated to PALs in one census tract at any time). We find that, on balance, the potential public interest benefits of adopting a limitation on the aggregation of PALs outweigh the potential public interest harms of such limits.
11
In particular, we conclude that a limit of 40 out of the maximum of 70 megahertz of PALs that may be available in each license area will facilitate competition, innovation, and the efficient use of the 3.5 GHz Band, ensuring that it is assigned in a manner that serves the public interest, convenience, and necessity.
12
11
While we adopt a band-specific limit on the aggregation of PALs, we do not find that PALs are suitable and available for the provision of mobile telephony/broadband services in the same manner as other spectrum bands that currently are included in the Commission's spectrum screen as applied to secondary market transactions.
See
Policies Regarding Mobile Spectrum Holdings Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions, WT Docket No. 12-269, GN Docket No. 12-268,
Report and Order,
79 FR 39977 (July 11, 2014) (“
Mobile Spectrum Holdings Report and Order
”). We make this finding based on the combination of the unique characteristics of this band—multiple tiers of many users including Federal incumbents, sophisticated rules for sharing that include dynamic access for PALs, the short license terms and very small license areas for PALs, and the range of technologies and heterogeneous business models that may operate in this environment. Accordingly, we do not include 3.5 GHz spectrum in the spectrum screen, and we will not evaluate secondary market acquisitions of this spectrum relative to existing holdings of other spectrum bands included in the screen.
12
Section 309(j)(3) of the Communications Act provides that, in designing systems of competitive bidding, the Commission must “include safeguards to protect the public interest in the use of the spectrum,” and must seek to promote various objectives, including “promoting economic opportunity and competition and ensuring that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants,” and promoting the “efficient and intensive use” of spectrum. 47 U.S.C. 309(j)(3).
We evaluate the potential benefits and costs of a spectrum aggregation limit in the context of the licensing framework that we adopt for the 3.5 GHz Band, which would make available up to 80 megahertz of GAA spectrum when PALs are assigned and accordingly, up to 70 megahertz of PAL spectrum. In considering whether to adopt a mobile spectrum holdings limit for the licensing of a particular band through competitive bidding, as well as what type of limit to apply, the Commission assesses how such a limit would likely affect the quality of communications services or result in the provision of new or additional services to consumers. In its consideration, the Commission evaluates whether the public interest could potentially be negatively affected if multiple licensees would not have access to sufficient spectrum to be able to compete
robustly.
13
The framework adopted in this
Report and Order
is designed to facilitate spectrum sharing and innovation in an environment with many tiers of users, including commercial and private users with heterogeneous business models.
13
This evaluation is based on several factors, including, but not limited to, the total amount of spectrum to be assigned, the extent to which competitors have opportunities to gain access to alternative bands that would serve the same purpose as the spectrum licenses at issue, the characteristics of the spectrum to be assigned, the timing of when the spectrum could be used, and the specific rights being granted to licensees of the spectrum.
See Mobile Spectrum Holdings Report and Order
.
A spectrum aggregation limit of 40 megahertz will ensure availability of PAL spectrum to at least two users in those geographic areas where there is the greatest likelihood of high demand for such spectrum. We recognize that in geographic areas where PALs are issued, multiple users may wish to try out different business models or technologies in this unique and highly innovative marketplace. And while the census tracts used to license PALs are small by comparison to most commercial wireless license areas in other bands, multiple small cell users may want to pursue different business models in census tracts covering densely populated areas or areas with significant commercial activity. Allowing one licensee to acquire all seven PALs would limit choices to users interested in applications that would benefit from PAL access. Given the many potential scenarios and the nature of demand for PALs, as described, we believe the spectrum aggregation limit is appropriate, as it will likely foster competition and innovation in both PAL and GAA uses.
This spectrum aggregation limit provides a minimum degree of diversity among commercial and private users that likely will be operating in this band. Such diversity is important to encourage innovation in technologies and business models that include access to shared spectrum in a multi-user environment. The 3.5 GHz Band will provide a very significant opportunity for the development of innovative approaches to spectrum sharing. We believe that some of the resulting business models and technologies developed in the 3.5 GHz Band may well lead to positive spillovers in the development of other spectrum bands in the future.
We anticipate that the potential costs of such a spectrum aggregation limit will be low. We disagree with AT&T and Verizon Wireless that such a limitation will impede the development of innovative services to consumers. On the contrary, as explained above, we believe this spectrum aggregation limit will promote competition and innovation by ensuring at least two parties have access to PALs in those areas where sophisticated approaches to sharing are most needed and most likely to develop. In addition, we note that, in Census tracts where seven PALs are issued, one entity would have access to up to 40 megahertz of PAL spectrum, as well as up to 80 megahertz of GAA spectrum—or 120 megahertz out of the total of 150 megahertz of spectrum available in the 3.5 GHz Band. Under these circumstances, we find it unlikely that this spectrum aggregation limit would curtail potential business models and use cases in the band. We also disagree with those commenters who suggest a smaller aggregation limit, such as 20 megahertz as opposed to 40 megahertz, due primarily to the nascent state of the marketplace and the need in these circumstances to balance the foregoing goals against the potential benefits of developing innovative services with larger contiguous blocks. For all the reasons discussed, the 40 megahertz limit strikes the appropriate balance between ensuring a diversity of users and allowing for applications that require larger blocks of spectrum.
4. Competitive Bidding Procedures
Under the licensing scheme we adopt, PALs will be assigned by competitive bidding. The geographic area licensing approach we adopt for PALs will permit the filing and acceptance of mutually exclusive applications, which we are required to resolve through competitive bidding. Thus, as detailed below, we adopt rules to govern the use of a competitive bidding process for assigning PALs in the 3550-3650 MHz band.
We will conduct any auction of PALs in the 3550-3650 MHz band in conformity with the general competitive bidding rules set forth in part 1, subpart Q of the Commission's rules (47 CFR part 1, subpart Q), and substantially consistent with the competitive bidding procedures that have been employed in previous auctions, except as otherwise provided in this
Report and Order
. Below, we explain that PALs will be assigned through competitive bidding only where we receive multiple competing applications in a geographic area that seek PALs that exceed the available supply. If PAL applicants for a specific geographic area do not seek PALs that exceed the available supply, we will not assign any PALs in that license area. Instead, we will cancel the auction with respect to that license area and the spectrum will remain available for GAA use under our license-by-rule framework until the next application filing window for PALs in the 3.5 GHz Band is opened either for unassigned PALs or otherwise in advance of the expiration of the prior three-year license term.
We also discuss in this Section our decision not to offer bidding credits to small businesses or Critical Infrastructure Industry (CII) entities due to the unique characteristics and nature of the Citizens Broadband Radio Service. In addition, we discuss our public notice process by which we will develop the auction design and procedures for an auction of PALs.
a. PAL Applications Subject to Competitive Bidding
Background.
In the
NPRM,
the Commission proposed a license-by-rule framework for assigning licenses in the Citizens Broadband Radio Service, including the Priority Access tier. The Commission suggested that a license-by-rule licensing framework would allow rapid deployment of small cells by a wide range of users, including consumers, enterprises, and service providers, at low cost and with minimal barriers to entry. Commenters were divided on whether a license-by-rule regime was appropriate for PALs.
Under the Revised Framework outlined in the Commission's
Licensing PN,
and in response to many comments, we proposed to open eligibility for PALs for flexible use, beyond only “mission critical” uses. We sought comment on “approaches to spectrum assignment and auction that could be used to productively manage use of the Priority Access tier while allowing SAS authorized opportunistic use of the GAA tier as described in the NPRM.” In proposing auctions to assign PALs “where there are mutually exclusive applications pending,” the Commission sought comment on its proposed auction and licensing mechanisms, including their economic and technical viability, and in particular on whether its approach “[w]ould . . . properly incentivize targeted use of the Priority Access tier by a diverse group of users,” as well as on alternative licensing and authorization mechanisms.
In the
FNPRM,
the Commission proposed to open an application window for PALs annually, with each PAL authorized at the census tract level. This approach would permit the filing and acceptance of mutually exclusive applications for PALs and would require the Commission “to resolve such applications through competitive bidding consistent with the mandate of
Section 309(j) of the Communications Act.” The
FNPRM
proposed that “[c]onsistent with the Commission's approach in other spectrum auctions, mutual exclusivity would be triggered when more applications are submitted than can be accommodated geographically, temporally, and spectrally.”
AT&T, PISC, Wireless Innovation Forum, and WISPA agree that if the Commission adopts its geographic area licenses for the Priority Access tier, it would have to resolve mutually exclusive applications through competitive bidding. Google argues that the Commission can avoid mutual exclusivity in the Citizens Broadband Radio Service band by limiting the number of PAL licenses available in the relevant geographic area, giving priority to spectrally efficient operators, and SAS-based interference avoidance could minimize mutually exclusive applications.
A number of utilities oppose the Commission's proposal to adopt a licensing scheme that could result in mutually exclusive applications for PALs. Several utilities express concern that CII entities have not been successful at competing with commercial carriers for spectrum. UTC/EEI said that its members are concerned about the “cost and difficulty of competing with commercial carriers for Priority Access Licenses.” They also express concern about the uncertainty of PAL renewals year-to-year, potential interference to GAA operations, and interference with utilities' incumbent systems. ENTELEC suggested that the Commission utilize a lottery-based system should “two or more applicants file applications on the same day and request the same PAL frequency block.”
Discussion.
The Communications Act, as amended, requires the Commission to use competitive bidding to assign licenses when “mutually exclusive applications are accepted for any initial license,” subject to specified exemptions not applicable here (47 U.S.C. 309(j)(1)-(2), (j)(6)(e)). Section 309(j)(1) provides the Commission with the obligation to conduct competitive bidding when all applicants to participate in bidding on particular licenses cannot be granted the subject licenses because at the time of application submission, the applicants seek the same license or different licenses that would interfere with each other (Benkelman Tel. Co. v. FCC, 110 F.3d 601, 603 n.2 (D.C. Cir. 2000)), or when the requests for interchangeable channels exceed the available supply. The Commission has such authority irrespective of whether each of the parties applying to bid for a license subsequently bids for the subject license (See Benkelman Tel. Co., 220 F.3d at 605-606).
As an initial matter, we disagree with ENTELEC's proposal to utilize a simple lottery-based system to resolve mutually exclusive applications. This would violate the Commission's mandate under the Communications Act. Nor do we believe that the public interest will be served by avoiding mutual exclusivity in the manner advocated by Google.
In awarding initial PALs in the 3.5 GHz Band, when multiple applicants select to bid on more licenses than are available in a geographic area, we find that mutual exclusivity exists (See Benkelman Tel. Co., 220 F.3d at 605-606). When the mutually exclusive applications are accepted the Commission will, consistent with its statutory authority, assign the licenses through competitive bidding. Consistent with previous spectrum auctions, mutual exclusivity will be determined based upon the Commission's acceptance of competing applications. Also consistent with our previous spectrum auctions, applicants to participate in an auction of PALs in the 3.5 GHz Band, will have an opportunity to select across some or all of the available license areas the lesser of the maximum number of PALs that may be available in a license area or the maximum number or PALs they are permitted to hold in a license area under our spectrum aggregation limit. Once mutual exclusivity has been established by competing accepted applications seeking to acquire more PALs than are available in a particular geographic area, the PALs in that area will be assigned by competitive bidding, without regard to the number of applicants that ultimately decide to bid or the actual number of PALs for which they place bids.
14
14
See DIRECTV,
110 F.3d at 827-28. Although our determination that mutual exclusivity exists within a particular geographic area will not be based on the number of applicants for PALs in that area, because we adopt an aggregation limit that allows licensees to hold no more than four PALs (
i.e.,
40 megahertz) in one census tract at one time,
see supra
Section III.C.2.a, this necessarily means that for mutual exclusivity to exist we will have accepted at least two applications for PALs in a given census tract.
Under this approach, when there are two or more applicants for PALs in a given census tract for a specific auction, we will make available one less PAL than the total number of PALs in that tract for which all applicants have applied, up to a maximum of seven. Determining availability in this way is in the public interest because it promotes the underlying principle for this band that while GAA should be easy to access and sufficient for many applications in this service, PALs should be available for applications that require greater certainty as to interference protection because they would suffer in a congested use environment. We therefore conclude that we should make available one less PAL, up to a maximum of seven, than the total selected by two or more applicants to assure that our licensing scheme for PALs meets the needs of such potential users.
Because of the “generic” nature of PAL frequency assignments, when total PAL applications exceed the PAL bandwidth available in a license area, PAL applications are mutually exclusive because granting one application would create conflict with another application. This will assure that there is mutual exclusivity between any two applications in the same license area and enable us to assign PALs by competitive bidding. As we explain further below, we conclude that assigning PAL licenses in the 3.5 GHz Band on a non-auctioned basis would not result in as efficient an assignment of the spectrum as licensing the spectrum for shared GAA use. However, by reducing the available PAL inventory when there are competing demands for less than the maximum number of PALs, interested applicants may bid for PALs to ensure access to exclusive usage rights. In contrast, when there is only one applicant for one or more PALs in a given census tract, we will neither proceed to an auction nor assign any PAL for that license area.
This determination is consistent with Commission precedent. In establishing its competitive bidding rules in 1994, the Commission recognized that the Act does not permit the award of initial licenses through competitive bidding in the absence of mutually exclusive applications (See
Competitive Bidding Second Report and Order,
59 FR 22980, May 4, 1994). Thus, if the Commission receives only one application acceptable for filing with respect to a particular license, “mutual exclusivity would be lacking and the Commission would be prohibited from using competitive bidding to award the license.” The Commission noted that to handle such situations it “[g]enerally” would intend to adopt procedures for conducting auctions that provided in such a situation for “cancelling [of] the auction for this license and establishing a date for the filing of a long-form application [by the lone applicant], the acceptance of which would trigger the relevant procedures permitting petitions to
deny.” However, it noted that the Commission “may decide in the future to alter some or all of the procedures” detailed therein, “or to tailor them to specific service rules, after we have had an opportunity to assess their effectiveness.”
Additionally, we conclude that, with respect to Priority Access licensing, where there is only a single applicant seeking PALs in a geographic area, and therefore no mutual exclusivity (and hence we have no auction authority), the best way to discharge our statutory mandate to “encourage the larger and more effective use of radio in the public interest (47 U.S.C. 303(g))” is to provide access to such spectrum via shared GAA use. If we do not accept competing applications seeking in total more PALs than the number of PALs available in a particular geographic area, we will not assign any PAL for that license area. Instead, we will cancel the auction with respect to that geographic area and allow the spectrum to remain accessible solely for shared GAA use under a license-by-rule framework until the next filing window for competitive bidding of PALs.
While we could issue PALs for these areas on a non-auctioned basis, we conclude that doing so in this band would not result in as efficient an assignment of the spectrum as licensing the spectrum for shared GAA use. Given the fact of more than 74,000 census tracts throughout the country, we believe there is a substantial likelihood that in many of these areas, at least initially, there would not be applicants for more than seven PALs—thereby precluding mutual exclusivity for these initial licenses. Because it does not appear that the incidence of areas without mutually exclusive applications under the approach we describe above for the 3.5 GHz Band will be isolated events, we predict that licensing at most a handful of PAL licenses would likely have the widespread effect of substantially restricting extensive deployment of a wide range of innovative GAA uses in the 70 megahertz reserved for PALs.
We do not believe that using a “first come, first served giveaway” (
See Kay
v.
FCC,
393 F.3d 1339, 1344 (D.C. Cir. 2005) as a licensing mechanism in this scenario would ensure the most efficient and intensive use of the spectrum, or be consistent with the goals served by more extensive GAA use as demonstrated by the record. The 3.5 GHz Band is designed to allow new, innovative operations access to flexible, fungible spectrum. The small cell deployment envisioned for the 3.5 GHz Band should enable tremendous spatial reuse and coexistence among users. The small license size will allow for targeting of network deployments, with GAA users able to coordinate actual use of the spectrum through the SAS. In areas where genuine local scarcity exists, interested applicants may apply for PALs to ensure access to exclusive usage rights. This reliance on economic incentives, and not performance requirements, will prevent spectrum warehousing and ensure continued innovation. By ensuring widespread GAA use of any spectrum for which we have not received mutually exclusive PAL applications, we ensure that the spectrum will be put to a use for which we have identified a clear public interest need, including by those who have filed PAL applications as well as others.
At the same time, we note that the determination of mutual exclusivity of PAL applications is not a one-time event for this band. Because PALs are licensed for three-year, non-renewable terms, we will periodically open application windows for new PALs that take effect upon expiration of previously assigned PALs. Additionally, if sufficient interest is expressed by prospective PAL users, we will open interim filing windows to accept applications for unassigned PALs,
i.e.,
PALs that could be made available for auction, before the expiration of an ongoing three-year PAL term. In the pre-auction public notice process by which the Commission first seeks comment on and subsequently announces the procedures for the first auction of PALs in the 3.5 GHz Band, we will consider the process by which we will determine whether there is sufficient interest by prospective Priority Access Licensees in participating in an interim auction of PALs prior to expiration of an ongoing three-year PAL term. These procedures are designed to ensure that we continue to provide opportunities to satisfy any further demand for higher priority PAL use as the 3.5 GHz Band service matures.
In accordance with Section 309(j), we have established an auction process that promotes “efficient and intensive use” of this spectrum and the “development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas,” that “recover[s] for the public . . . a portion of the value of the public spectrum resource made available for commercial use, and achieves the other goals of the statute described above (47 U.S.C. 309(j)(3), 309(j)(4)). Providing for both GAA and PAL operations allows the Commission to create a band “well suited to exploring the next generation of shared spectrum technologies, to drive greater productivity and efficiency in spectrum use.
Our licensing approach to address any absence of mutually exclusive applications is supported by the commenters urging greater reliance on shared use in the particular circumstances of this 3.5 GHz Band. We have employed shared use rather than exclusive licensing as a spectrum management approach in other services where appropriate, both licensed and unlicensed, even without any initial reliance on a competitive bidding mechanism for assignments from among mutually exclusive applicants. Accordingly, we exercise our established rulemaking authority to enable GAA uses of the entire 3.5 GHz Band in any census tract where we are unable to use our auction authority to issue PAL licenses from among mutually exclusive applicants.
15
Nothing in the auction provisions of the Communications Act was intended to affect this broad spectrum management authority (
See
47 U.S.C. 309(j)(6)(A), (B), (C), (E)), particularly where we conclude our licensing approach will best serve the public interest. We conclude that our decision best accords with the Communications Act, as amended, while still affording the flexibility needed for the three-tiered spectrum sharing framework.
15
See
47 U.S.C. 307; 47 CFR 1.945. The Commission is also not precluded “from establishing threshold standards to identify qualified applicants.”
Hispanic Information & Telecommunications Network, Inc.
v.
FCC,
865 F.2d 1289, 1294 (D.C. Cir. 1989).
See also United States
v.
Storer Broadcasting Co.,
351 U.S. 192, 202, 205 (1956).
b. Application of Part 1 Competitive Bidding Rules
Background.
For those mutually exclusive applications that will be subject to competitive bidding, the Commission proposed to employ its general competitive bidding rules to conduct an auction of PALs in the 3.5 GHz Band. Commenters generally support the Commission's proposed use of its general competitive bidding rules. WISPA supports our proposal to adopt our general competitive bidding rules. AT&T cautions that the Commission's traditional auction framework “may not be appropriate with respect to PALs.” AT&T warns that the Commission's Section 1.2105(c) prohibited communications rule would be inappropriate due to the “high-volume of auction activity on a regular basis.” Other commenters express views on topics that are generally considered after
the adoption of service rules, during the pre-auction process for establishing procedures for conducting a PAL auction. For example, some parties state their positions on auction design and the use of package bidding for any auction of PALs, with some in favor and some opposed. Likewise, other commenters recommend that the Commission make certain changes to its auction procedures concerning payment and default issues.
Discussion.
Except as noted below, we adopt our proposal to conduct any auction of PALs in conformity with the general competitive bidding rules in part 1, subpart Q, including any modifications that the Commission may adopt for its Part 1 general competitive bidding rules in the future. We believe that the Commission's general competitive bidding rules are suitable to conduct auction of PALs. These rules have proven successful in previous spectrum auctions, and will enable the Commission to meet its goals for the Citizens Broadband Radio Service.
We proposed to apply any future modifications made to the part 1 general competitive bidding rules to an auction of PALs in the 3.5 GHz Band. We received no comment on this proposal. Specifically, we noted the Commission's proposal, in the Broadcast Incentive Auction proceeding, to revise the list of auction design options in Section 1.2103 of the competitive bidding rules. The Commission has since adopted its proposed revisions in the
Broadcast Incentive Auction Report & Order
(80 FR 19661, April 13, 2015), which provide for the establishment of specific auction procedures governing bid collection, assignment of winning bids, and the determination of payment amounts in spectrum license auctions, and these provisions will be generally applicable as we consider procedures for future spectrum auctions, including auctions of PALs in the 3.5 GHz Band. The Commission also adopted its proposed amendments to Section 1.2104, which permit the Commission to establish stopping rules in order to terminate multiple round auctions within a reasonable time and in accordance with the goals, statutory requirements, and rules for the incentive auction, including the reserve price or prices. In the absence of comments establishing a record, we do not adopt any additional revisions to Sections 1.2103 or 1.2104. Our decision to conduct competitive bidding for PALs subject to the Commission's most current Part 1 rules, including any modifications that the Commission may adopt in the future, will ensure that the rules applied to auctions of licenses in the 3.5 GHz Band are up-to-date and will avoid uncertainty for prospective applicants if changes are made to the part 1 competitive bidding rules.
We nonetheless recognize that the Commission could greatly benefit from a more fully developed record regarding limited rule revisions that may be necessary to accommodate payment, application and default issues that are unique to the service rules we adopt for the Citizens Broadband Radio Service. These issues will therefore be considered in the context of the
Second Notice of Proposed Rulemaking
discussed fully below.
Finally, we decline to adopt AT&T's proposal to eliminate the Commission's Section 1.2105(c)'s prohibited communications rule in auctions for PALs in the Citizens Broadband Radio Service. We disagree with AT&T's contention that the prohibition would impair secondary markets and reduce participation in the 3.5 GHz Band. The plain text of the rule makes clear that business discussions and negotiations that are unrelated to bids or bidding strategies or to post-auction market structure are not prohibited by the rule (47 CFR 1.2105(c)). The rule's prohibition has always been aimed at the specific content of an applicant's communication to a competing applicant regardless of the context or situation in which such content is communicated, and applies only during a limited window.
c. Bidding Process Options
Competitive Bidding Design Options.
We solicited comment on a number of issues regarding competitive bidding design options for PALs. Here too we received limited comment. WISPA proposes a two-step auction process. AT&T asked that the Commission clarify its PAL competitive bidding rules. Consistent with the Commission's practice in past spectrum license auctions, the rules we adopt allow subsequent determination of specific final auction procedures. The process will be initiated by the release of the
Auction Comment PN,
which will solicit public input on final auction procedures, and which will include specific proposals for auction components such as minimum opening bids. Thereafter, the
Auction Procedures PN
will specify final procedures, including dates, deadlines, and other final details of the applications and bidding processes. We believe the Commission's practice of finalizing auction procedures in the pre-auction process provides time for interested participants to both comment on the final procedures and to develop business plans in advance of the auction (47 U.S.C. 309(j)(3)). Maintaining flexibility in the implementation of final procedures is a prudent approach to assuring that the PAL auction will fulfill the goals we have established by this
Report and Order
.
Payment, Application and Default Rules.
We solicited comment on our general competitive bidding rules regarding payments, including upfront payments, down and final payments, default and disqualification. We received a limited number of comments on these payment issues. Federated Wireless proposes a two-step payment process. WISPA asks that the Commission “revise its payment rules to require payment for winning bids on an annual basis after the competitive bidding process is complete[ ].” Open Technology Institute at the New America Foundation and Public Knowledge argue that payment should be “due annually prior to the license start date and a license would terminate automatically if the payment is not made.” We believe that it is in the public interest to develop a more complete record on payment, application and default issues.
Bidding Credits.
We solicited comment on the use of bidding credits in the 3.5 GHz Band. In the
FNPRM,
we explained that in authorizing the Commission to use competitive bidding, Congress mandated that the Commission “ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services (47 U.S.C. 309(j)(4)(D)).” We further discussed that one of the principal means by which the Commission furthers these statutory goals is the award of bidding credits to small businesses.
For the 3.5 GHz Band, the Commission specifically asked whether the flexible and dynamic auction and licensing mechanisms, shorter license term, and size of the license area would limit the barriers to participate in PAL auctions. Six CII entities filed comments, requesting that the Commission provide bidding credits “for entities that would use the spectrum for `mission critical' communications systems, such as utilities.” API also suggests that the Commission could “provide bidding credits to current licensees who demonstrate they are using their licenses in the public interest.” WISPA objects to CII-specific bidding credits, arguing that “[b]idding credits add a layer of complexity that would make
conducting competitive bidding for potentially thousands of census blocks much more difficult, especially considering that the Commission has proposed one-year license terms.” Mobile Future opposes “restrictive spectrum set-asides and preferential rules including bidding credits.” We also solicited comment regarding bidding credits for serving a qualifying tribal land. We received no comment regarding tribal land bidding credits.
We conclude that given the unique characteristics of the service, bidding credits are not necessary to ensure the participation by small businesses in competitive bidding for PALs. We also conclude that the unique characteristics of the Citizens Broadband Radio Service are sufficient to promote greater use of the spectrum over tribal lands, making bidding credits unnecessary for tribal lands. As we noted in the
FNPRM,
“the Commission takes into account both the nature of the service and the nature of the parties most likely to be interested in using the spectrum.” The Citizens Broadband Radio Service licensing scheme is designed to encourage participation from a wide variety of users and a broad range of operations. The GAA tier already allows low cost access to the 3.5 GHz Band, both in the at least 80 megahertz of spectrum in which there is no PAL use, and in the remaining portion of the band on an opportunistic basis. While mutually exclusive applications for PALs in up to 70 megahertz of the band are subject to competitive bidding, the short term of the license and small geographic area should work to keep costs affordable to acquire PALs. Because the nature of the Citizens Broadband Radio Service already gives designated entities the opportunity to access 3.5 GHz spectrum, we will not offer small business nor tribal land bidding credits in auctions of PALs. For the same reason, we decline to adopt bidding credits for CII entities.
Commission Notices.
In the
FNPRM,
we proposed to follow our established practice of issuing a public notice upon the conclusion of a PAL auction declaring the bidding closed and identifying the winning bidders. We received no comment on this proposal, and accordingly, we will follow this process for notifying auction participants and the public of the auction results.
As noted above, after adoption of all of the necessary service rules for the Citizens Broadband Radio Service, consistent with the Commission's longstanding approach, the Commission will initiate a public notice process to solicit public input on certain details of auction design and the auction procedures. This public notice will address auction-specific matters such as the competitive bidding design and mechanisms, minimum opening bids and/or reserve prices, and payment procedures. In advance of the auction, the Commission will issue another public notice to announce the auction procedures and provide detailed instructions for potential auction participants. Because we expect the first auction to raise new and novel considerations with respect to the auction procedures, we will vote the public notices for the initial auction at the Commission level.
As discussed above, procedures regarding minimum opening bids and upfront payments will be announced via the public notice process. In determining these amounts, we expect we will have to balance our twin objectives of satisfying applicant demand for PALs and the possibility of shared GAA use where no PALs are issued. We recognize that this balance may vary in different geographic areas. In addition, given the very high volume of licenses that will be available in an auction of PALs, it may be necessary to implement measures that will allow the auction to close within a reasonable time. Therefore, we will consider establishing other auction procedures that will encourage targeted bidding on specific PAL licenses. To further that objective, we may consider various procedures, including, among others, establishing an upfront payment process that requires qualified bidders to make upfront payments on a license-by-license basis,
i.e.
for a PAL in a specific license area, rather than for general bidding eligibility on any one of a set number of PALs. If bidding eligibility is nontransferable to other PALs, this would limit a bidder's ability to change the geographic area of the PALs for which it bids during the auction. We may also consider whether such license-specific upfront payments should also serve as an applicant's opening bid for that PAL, constituting a binding commitment to purchase the PAL at that price.
D. General Authorized Access
The GAA-tier is intended to provide a low-cost entry point into the Citizens Broadband Radio Service for a wide array of users. GAA users will have no expectation of interference protection from Incumbent Users and other Citizens Broadband Radio Service users. Further, GAA users must comply with the instructions of the SAS and avoid causing harmful interference to Priority Access Licensees and Incumbent Access tier users. We believe that GAA availability will promote competition, encourage flexible network deployments, and facilitate the efficient use of available spectrum. The same technical rules will apply to devices operated in both the Priority Access and GAA tiers of service to maximize flexible and efficient use of the band. Therefore, as discussed below and consistent with the proposals set forth in the
NPRM
and
FNPRM,
we adopt a license-by-rule authorization framework under Section 307 of the Communications Act for GAA users (
See
47 U.S.C. 307(e)(1)).
1. Authorization Methodology
Background.
We proposed to establish the Citizen's Broadband Radio Service (including the GAA tier) by rule under Section 307(e) of the Communications Act (
See
47 U.S.C. 307(e)). We reasoned that a license-by-rule licensing framework would allow for rapid deployment of small cells by a wide range of users, including consumers, enterprises, and service providers, at low cost and with minimal barriers to entry. As we explained, much wireless broadband use occurs indoors or in other enclosed facilities. Typically, the owners or users of such facilities already have access to the siting permissions, backhaul facilities, electrical power, and other key non-spectrum inputs for the provision of service. Moreover, small cell operation in the 3.5 GHz Band would generally tend to contain service within such facilities, allowing for a high degree of spectrum reuse. Therefore, authorizing these end users to have direct access to the 3.5 GHz Band in the physical locations that they otherwise are able to access would seem to facilitate expeditious and low-cost provision of service. Accordingly, we concluded that a license-by-rule framework was very compatible with and conducive toward these aims.
A number of commenters endorsed the license-by-rule approach. The Utility Groups, for example, agree that the Citizens Broadband Radio Service should be licensed by rule. The Utility Groups note that a license-by-rule model for this band is consistent with the Commission's decision to license the Wireless Medical Telemetry Service by rule because both services facilitate the accelerated deployment of mission critical services. In addition, UTC notes that the license-by-rule model promotes economies of scale, minimizes administrative burdens, and provides a unified licensing model in the band. WISPA argues that a license-by-rule approach coupled with SAS requirements “represents an evolution
of
ad hoc
unlicensed systems where spectrum coordination often occurs after deployment, an inefficient and outdated approach for avoiding interference.” The WiMAX Forum states that a license-by-rule approach “would streamline deployment as compared to the `light licensing' scenario of the current 3650-3700 MHz band.”
Other commenting parties express a preference for an unlicensed (Part 15) framework, rather than the
FNPRM's
proposed license-by-rule framework. AT&T specifically opposes license-by-rule authorizations and asserts that the Commission's statutory authority under Section 307(e) is narrower than the Commission claims. AT&T argues that the Commission should authorize GAA users under Part 15 instead. Microsoft likewise argues that an unlicensed regime would facilitate the rapid deployment of new technologies in the band “because of the relatively low regulatory barriers to entry and because the technical rules governing Part 2 and 15 devices have proven effective in protecting incumbent users from interference.” TIA, by contrast, argues that license-by-rule and unlicensed approaches are too unpredictable to support the Commission's service expectations, as envisioned by the National Broadband Plan.
Discussion.
After careful consideration of the record in this proceeding, we adopt a licensed-by-rule framework for the GAA tier of the new Citizens Broadband Radio Service, pursuant to Section 307(e) of the Communications Act, as amended, and subject to applicable technical rules. Section 307(e) states in part that, “[n]otwithstanding any license requirement established in this Act, if the Commission determines that such authorization serves the public interest, convenience, and necessity, the Commission may by rule authorize the operation of radio stations without individual licenses in the following radio services: (A) citizens band radio service; . . ..” (47 U.S.C. 307(e)(1)). Section 307(e) further states that, “[f]or purposes of this subSection, the terms `citizens band radio service' . . . shall have the meanings given them by the Commission by rule (47 U.S.C. 307(e)(3)).”
We conclude that a license-by-rule framework is the appropriate methodology for authorizing users in the 3.5 GHz Band consistent with the tiers of service proposed herein. This proposed framework will facilitate the rapid deployment of compliant small cell devices while minimizing administrative costs and burdens on the public, licensees, and the Commission.
We disagree with AT&T's assertion that the Commission does not have authority to license GAA users by rule under Section 307(e) of the Communications Act (See 47 U.S.C. 307(e)). As noted above, the Act expressly delegates to the Commission the discretion to define the scope of the term “citizens band radio service.” The Commission has repeatedly exercised that authority to license new services by rule under Section 307.
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Indeed, the Commission has licensed an array of beneficial services by rule by defining the Citizens Band Radio S
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