Examination of Exclusivity and Frequency Assignment Policies of the Private Land Mobile Radio Services

SUMMARY: The Commission has adopted a Further Notice of Proposed Rule

Making which seeks to introduce market forces into the Private Land

Mobile Radio (PLMR) bands. This Further Notice of Proposed Rule Making

proposes three options to introduce market forces into these bands:

exclusivity, user fees, and competitive bidding. The Commission seeks

comment on each of these options and believes that the information

gathered will assist in developing and implementing an overall strategy

on how to promote greater efficiency in these bands.

DATES: Comments must be filed on or before September 15, 1995, and

reply comments must be filed on or before October 16, 1995.

ADDRESSES: Federal Communications Commission, 1919 M Street NW.,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Ira Keltz of the Wireless

Telecommunications Bureau at (202) 418-0680.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's

Further Notice of Proposed Rule Making, PR Docket No. 92-235, FCC 95-

255, adopted June 15, 1995, and released June 23, 1995. The full text

of this Further Notice of Proposed Rule Making is available for

inspection and copying during normal business hours in the FCC

Reference Center (Room 239), 1919 M Street NW., Washington, DC. The

complete text may be purchased from the Commission's copy contractor,

International Transcription Services, Inc., 2100 M Street NW.,

Washington, DC 20037, telephone (202) 857-3800.

Summary of Notice of Proposed Rule Making

1. The Commission initiated the instant proceeding to explore

methods to promote more efficient and effective use of the PLMR bands

below 800 MHz. This action stems from the Commission's Notice of

Proposed Rule Making (56 FR 31097, July 9, 1991) and Notice of Inquiry

(57 FR 54034, November 16, 1992) in PR Docket 92-235 which sought

public comment regarding ways to promote more efficient use of the PLMR

bands below 800 MHz. The Commission does not believe that the current

shared regulatory environment contains the proper incentives to

encourage efficient spectrum usage. Introducing market-based incentives

into these bands will help to encourage more efficient spectrum use

while allowing users to make the equipment choices which best address

their needs by attaching an economic cost to inefficient use of the

spectrum and promoting the use of more efficient technologies. The user

community will ultimately benefit from more efficient use of spectrum

through the availability of more channels and better quality service.

2. The spectrum in the PLMR bands historically has been available

on a shared use basis. The environment that has emerged is

characterized by unlimited sharing of the spectrum by over 500,000

licensees with over 12 million transmitters. Because of the significant

and varied spectrum use, the PLMR bands have become highly congested

and there is a substantial risk that service in these bands will

deteriorate to unacceptable levels. Unfortunately, in this shared use

environment, PLMR users generally have little incentive to economize on

spectrum use because users do not pay for their spectrum, cannot

realize the benefit of more efficient use, and generally share their

frequency assignments with a number of other users. Shared use of

spectrum also precludes the use of spectrum efficient technologies,

such as trunking and time division multiple access (TDMA) because they

generally require centralized channel control.

3. This Further Notice of Proposed Rule Making proposes three

options to introduce market forces into these bands: exclusivity, user

fees, and competitive bidding. The Commission seeks comment on each of

these options and believes that the information gathered will assist in

developing and implementing an overall strategy on how to promote

greater efficiency in these bands.

4. First, the Commission proposes the introduction of exclusivity

on channels in the PLMR bands, and to explicitly permit the leasing of

excess capacity on these exclusive channels. The Commission believes

that offering users the option of exclusivity with the right to resell

excess capacity if they agree to convert to narrowband technology by a

specified date will promote the use of more efficient technologies. In

addition, affording users the opportunity to obtain exclusivity will

enable them to benefit directly from the increased capacity which

results from their conversion to more efficient technologies, thus

encouraging more rapid transition to narrowband technology. In this

regard, users will be more likely to install trunked systems if they

are certain that additional users, who might interfere with their

trunked systems, would not be licensed on their channel. The

Commission's experience with the spectrum above 800 MHz supports this

theory. The introduction of exclusivity into the 800 MHz bands

facilitated and encouraged the use of more spectrum efficient

technologies and equipment. We seek here to provide users of the PLMR

bands with that same flexibility to use the most advanced and efficient

technology available.

5. Regarding the lease of excess capacity, in order to promote more

flexible use of the spectrum, the Commission proposes to allow

licensees who choose the exclusivity option to lease excess capacity to

any party without restriction. The Commission seeks comment on whether

such leasing arrangements should be limited to PLMR eligibles in order

to ensure that sufficient spectrum is available to satisfy the needs of

the PLMR community. Additionally, the Commission seeks comment on

whether these proposals will affect whether traditional PLMR users, who

seek to lease excess capacity, are considered commercial mobile radio

service (CMRS) providers. The Commission tentatively concludes that

licensees who lease excess capacity will have the aspect of their

operations regulated as CMRS. The Commission seeks comment on this

tentative conclusion.

6. Second, the Commission seeks comment on how a system of user

fees can be used in these bands to encourage licensees to make the most

efficient and effective use of the spectrum. Under this approach, users

would pay a fee based on the estimated value of the spectrum. The

spectrum fee would be calculated based on the area and population

covered, and the amount of spectrum used. This type of a user fee

structure would attach an economic cost to inefficient spectrum use,

thereby motivating users to increase their efficient use of the

spectrum. Although the Commission does not currently have statutory

authority to impose such a fee structure, this option may be the most

effective way to encourage efficiency in the PLMR bands while

recognizing the varying needs of the incumbent users. The Commission

believes that seeking further comment on the imposition of

[[Page 37149]]

user fees at this time will enable the Commission to consider how such

fees can best be implemented in the PLMR bands, so that if fee

authority is granted, the Commission will be able to act quickly to

implement such authority.

7. Third, the Commission seeks comment on introducing competitive

bidding into the PLMR bands as an alternative to user fees.

Specifically, the Commission seeks comment on a proposal to create

geographic overlay licenses and use competitive bidding as the

assignment mechanism for these overlay licenses. Competitive bidding of

overlay licenses could promote efficiency by allowing the marketplace

to determine the value of spectrum and by awarding licenses to those

who value them most highly, thus ensuring that spectrum will be put to

its highest value use. As with exclusivity, competitive bidding of

overlay licenses attaches a cost to inefficient spectrum use. The

Commission's current auction authority does not permit the use of

competitive bidding to assign private licenses because these licenses

are not mutually exclusive and the principal use of the spectrum does

not involve the provision of service to subscribers for a fee. However,

expanded auction authority which could include private wireless users

is proposed by the Administration and the U.S. Senate. Accordingly, the

Commission believes that it is appropriate at this time to seek comment

on how auctions could best be implemented for PLMR licenses, if such

authority is granted.

8. Additionally, the Commission tentatively concludes that public

safety users should be exempt from market-based incentives. Public

safety users are charged with the protection of life and property, and

the Commission is committed to ensuring that such users have access to

spectrum to perform their critical function. We seek comment on

exempting public safety users from spectrum fees and competitive

bidding, or developing a reduced fee structure and a protected auction

environment for these users.

9. The proposed rules are set forth at the end of this document.

10. FURTHER INITIAL REGULATORY FLEXIBILITY ANALYSIS

Reason for Action

This rule making proceeding was initiated to secure comment on

proposals for establishing shared exclusive assignments arrangements in

the PLMR bands which will grant licensees flexibility to voluntarily

adopt new technology and thereby achieve more efficient use of

spectrum. We also propose to permit licensees who convert to narrowband

technology to sell or lease excess capacity to PMRS eligibles as a

means of enhancing the competitive potential of the PLMR services in

the marketplace. The proposals advanced in the Further Notice of

Proposed Rule Making are also designed to respond to the increasing

need for spectrum and considerable changes in the mobile communications

landscape.

Objectives

The Commission proposes changes to its rules for the PLMR services

for use of spectrum in a manner that yields the greatest potential

benefit to the public. Specifically, the exclusivity proposal will

promote more efficient use of spectrum by encouraging licensees

participating in exclusive sharing agreements to convert to innovative

narrowband technology in an expeditious manner. Further, the proposal

relating to the sale or lease of excess capacity will provide for the

enhancement of the PLMR services by allowing marketplace mechanisms to

intervene to give insight into the value of the PLMR bands to private

eligibles. These new proposals will result in improving the quality of

service, increasing the level of technology, and fostering economic

growth in the private land mobile environment.

Legal Basis

The legal basis for these rule changes if found in Section 4(i),

303(g), 303(r), 332(a), 332(c), and 332(d) of the Communications Act of

1934, as amended, 47 U.S.C. Secs. 303(g), 303(r), 332(a), 332(c), and

332(d), as amended.

Reporting, Recordkeeping, and Other Compliance Requirements

Under the proposal for shared exclusivity agreements in the Further

Notice of Proposed Rule Making, existing licensees will be required to

report information regarding its plans for implementation of narrowband

systems within 5 year guidelines after entering the exclusivity

arrangement. These reports will serve as a benchmark for the Commission

to measure the progress of licensees in fulfilling their plans to

determine whether a specific exclusivity agreement should be rescinded.

Federal Rules Which Overlap, Duplicate or Conflict With These Rules

None.

Description, Potential Impact, and Number of Small Entities Involved

The Further Notice of Proposed Rule Making potentially affects

numerous small entities, as the private land mobile services is

comprised of millions of small business entities operating in urban and

rural areas across the United States. The shared exclusivity and the

sale or lease of excess capacity proposals are options available for

small business licensees, as well as all other entities utilizing the

private land mobile service. Many small entities could be positively

affected by the proposals because they provide for new exclusive

communications assignments that will foster new technologies and

promote the competitive potential of the PLMR spectrum. The full extent

of the impact on small entities cannot be predicted until various

issues raised in the proceeding have been resolved. After evaluating

the comments filed in response to the Further Notice, the Commission

will examine further the impact of all final rules in this proceeding

on small entities and set forth its findings in the Final Regulatory

Flexibility Analysis.

Any Significant Alternatives Minimizing the Impact on Small Entities

Consistent With the Stated Objectives

This Further Notice of Proposed Rule Making solicits comments on a

variety of alternatives. Any additional significant alternatives

presented in the comments will also be considered.

List of Subjects in 47 CFR Part 90

Communications equipment, Radio.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Part 90 of Chapter I of Title 47 of the Code of Federal Regulations

is proposed to be amended as follows:

PART 90--PRIVATE LAND MOBILE RADIO SERVICES

1. The authority citation for Part 90 continues to read as follows:

Authority: Sections 4, 302, 303, and 332, 48 Stat. 1066, 1082,

as amended; 47 U.S.C. 154, 302, 303, and 332, unless otherwise

noted.

2. Section 90.175 is amended by revising paragraph (a) to read as

follows:

Sec. 90.175 Frequency coordination requirements.

* * * * *

(a) For frequencies between 25 and 470 MHz: A statement from the

applicable frequency coordinator recommending the most appropriate

frequency. The coordinator's recommendation may include comments on

technical factors such as power, antenna height and gain, terrain and

other factors which may serve to

[[Page 37150]]

minimize potential interference. Tables 1 and 2 in Sec. 90.193 must be

used by coordinators to determine co-channel station distance

separations between stations participating in a negotiated exclusivity

agreement and those stations that are not participating in a negotiated

exclusivity agreement. Frequencies in the 450-470 MHz band, when used

for secondary fixed operations, shall be assigned and coordinated

pursuant to Sec. 90.261.

* * * * *

3. Section 90.189 is added to read as follows:

Sec. 90.189 Shared Exclusivity--150-170, 421-430, and 450-470 MHz

Bands.

To promote spectrally efficient technologies (e.g. trunking, TDMA,

etc.) and to increase quality of service for licensees, assignments may

be limited on certain frequencies in a specific geographic area as set

out in Secs. 90.190-90.193.

4. Section 90.190 is added to read as follows:

Sec. 90.190 User agreements.

Co-channel licensees, operating in the same geographical area can,

by mutual agreement, develop sharing arrangements on their currently

licensed frequency or frequencies that would facilitate their use of

advanced technology. The following guidelines will apply to the

development of these sharing agreements:

(a) This agreement must be unanimous among all licensees on a given

frequency or frequencies within the composite service area,

irrespective of the radio service to which each user belongs. Any

license application forwarded from a frequency coordinator to the

Commission, prior to the date that the coordinator is notified, in

writing, of a licensee action to negotiate an agreement will be

considered, for the purposes of the agreement, an existing licensee and

must be included in the agreement.

(b) All agreements must be finalized by August 31, 2000. Each

participant of the plan must agree to utilize equipment designed to

operate single mode with a maximum channel bandwidth of 6.25 kHz or

equipment designed to operate single mode with a channel bandwidth of

12.5 kHz provided that it meets the efficiency standard of one

communication channel per 6.25 kHz within 5 years after an agreement is

finalized.

(c) A 90 day temporary freeze on the assignment of new licensees on

a given frequency or frequencies will be made when a licensee, who

desires to negotiate with other co-channel users to enter a sharing

agreement, notifies all frequency coordinators who have cognizance of

that frequency. This notification must be in writing and include:

(1) The frequency or frequencies under consideration; and

(2) A description of all co-channel licensees who must be a party

to the agreement. This description will include: a list of all affected

co-channel licensees, their base station locations (latitude and

longitude), their current service areas, and their exclusivity service

area. The exclusivity service area for each licensee will be defined as

a point radius centered on their base station. The maximum radius

defining the size of the exclusivity service area will consistant with

the specifications of Sec. 90.205.

(d) During the temporary freeze on new licenses in the exclusivity

service area, no new licenses will be granted without the consent of

all existing users within this area. Co-channel licenses will be

granted outside of the exclusivity service area at minimum distances as

determined by the tables of Sec. 90.193. Existing licensees who are

located outside of the composite service area and closer than the

minimum distance to this area as specified by the tables of Sec. 90.193

may continue to operate on a co-primary basis with all licensees inside

the composite service area.

(e) If at the completion of the 90 day period, a unanimous

agreement is not reached among all licensees, the freeze on new

authorizations on the frequency or frequencies within this area will be

lifted. No licensee who is located within the exclusivity service area

may file a new notification to temporarily freeze this frequency or

frequencies in this area for a minimum of one calendar year from the

date the temporary freeze expires. All parties are still free to

negotiate an agreement, but must include any new licensees who are

located within the composite service area.

(f) If prior to or at the completion of the 90 day period, a

unanimous agreement is reached among all licensees, the freeze on new

authorizations on this frequency or frequencies in this composite

service area will be made permanent. No new licenses will be granted on

this frequency or frequencies in the exclusivity service area without

the consent of participants in the agreement, but systems subject to

the agreement can be modified, expanded, or renewed. Existing licensees

who are located outside of the exclusivity service area and closer than

the minimum distance to this area as specified by the tables of

Sec. 90.193 may continue to operate on a co-primary basis with all

licensees inside the exclusivity service area.

(1) The final agreement will be filed with all cognizant frequency

coordinators. This agreement will include:

(i) The frequency or frequencies which are covered under the

agreement;

(ii) Signatures of all parties to the agreement;

(iii) A description of all co-channel licensees who must be a party

to the agreement. This description will include: a list of all affected

co-channel licensees, their base station locations (latitude and

longitude), their current service areas, and their exclusivity service

area; and

(iv) A plan for complying with the requirement to employ narrowband

technology within five (5) years from the agreement date.

(2) The coordinator must make this agreement available to the

public upon request.

(3) New co-channel licenses will not be granted closer to the

composite service area than the minimum distances determined by the

tables in Sec. 90.193.

(4) If a licensee expands a system after an agreement is negotiated

and filed with the cognizant frequency coordinators, then any portion

of the expanded service area which falls outside of the composite

service area of the agreement, will not be afforded the protection of

the tables in Sec. 90.193 from co-channel licensees, unless a new

agreement which includes the expanded area is negotiated.

5. Section 90.191 is added to read as follows:

Sec. 90.191 Sell or lease of excess capacity.

Licensees who participate in a sharing plan and have fully

converted their systems to narrowband or equivelent operation may lease

excess capacity of their systems.

6. Section 90.193 is added to read as follows:

Sec. 90.193 Shared exclusivity separation distances.

The minimum distance between an existing base station that is

included in a negotiated exclusivity agreement and a proposed co-

channel station not included in the agreement will be determined from

tables 1 and 2.

[[Page 37151]]

Table 1.--150-174 MHz--Minimum Distance (km) Between Existing Base Stations and Proposed Stations \1\

----------------------------------------------------------------------------------------------------------------

Existing station service area radius (km) \2\

Proposed service area (km) -------------------------------------------------------------------------------

3 8 13 16 24 32 40 48 \3\ 64 \3\ 80 \3\

----------------------------------------------------------------------------------------------------------------

3............................... 16 27 45 60 84 90 100 111 138 162

8............................... 27 32 50 64 88 95 105 118 143 164

13.............................. 45 50 55 69 93 100 110 122 148 169

16.............................. 60 64 69 70 97 103 113 130 151 172

24.............................. 84 88 93 97 105 111 121 134 160 180

32.............................. 90 95 100 103 111 119 129 142 167 188

40.............................. 100 105 110 113 121 129 140 150 176 196

48 \3\.......................... 111 118 122 126 134 142 150 158 184 204

64 \3\.......................... 138 143 148 151 160 167 176 184 194 220

80 \3\.......................... 162 164 169 172 180 188 196 204 220 237

----------------------------------------------------------------------------------------------------------------

\1\ Distances are based upon 37 dBu desired and 19 dBu undesired signal strengths and are derived from FCC

Report R-6602, Figs. 19 and 20 (See Sec. 73.699 of this chapter, Figs. 10 and 10a)

\2\ For those stations licensed before August 1, 1996, whose authorizations do not include a service area radius

or area of operation, the service areas will be determined from table 1 using the station's authorized

transmitter power increased by 3 dB or its actual ERP when given, and the antenna height above sea level in

lieu of HAAT, or the HAAT if given.

\3\ Permitted only for base stations located 200 km (125 mi) or more from the center of markets 1-60 as listed

in Sec. 90.741. Applicants for such systems must demonstrate that the signal strength at the edge of their

service area does not exceed 37 dBu.

Table 2.--421-430, 450-470 MHz--Minimum Distance Between Existing Base Stations and Proposed Stations \1\

----------------------------------------------------------------------------------------------------------------

Existing station service area radius (km) \2\

Proposed service area (km) -------------------------------------------------------------------------------

3 8 13 16 24 32 240 248 264 >64

------------------------------------------------------------------------------------\3\-----\3\-----\3\-----\3\-

3............................... 16 27 43 55 68 80 97 111 155 180

8............................... 27 32 48 60 72 85 101 118 159 185

13.............................. 43 48 53 64 77 90 106 122 164 190

16.............................. 55 60 64 68 80 93 109 126 167 194

24.............................. 68 72 77 80 89 101 118 134 175 201

32.............................. 80 85 90 93 101 109 126 142 184 209

40 \3\.......................... 97 101 106 109 118 126 134 150 192 217

48 \3\.......................... 111 118 122 126 134 142 150 158 200 225

64 \3\.......................... 155 159 164 167 175 184 192 200 216 242

>64 \3\......................... 180 185 190 193 201 209 217 225 241 253

----------------------------------------------------------------------------------------------------------------

\1\ Distances are based upon 37 dBu desired and 19 dBu undesired signal strengths and are derived from FCC

Report R-6602, Figs. 19 and 20 (See Sec. 73.699 of this chapter, Figs. 10 and 10a).

\2\ For those stations licensed before August 1, 1996, whose authorizations do not include a service area radius

or area of operation, the service areas will be determined from table 1 using the station's authorized

transmitter power increased by 3 dB or its actual ERP when given, and the antenna height above sea level in

lieu of HAAT, or the HAAT if given.

\3\ Permitted only for base stations located 200 km (125 mi) or more from the center of markets 1-60 as listed

in Sec. 90.741. Applicants for such systems must demonstrate that the signal strength at the edge of their

service area does not exceed 37 dBu.

[FR Doc. 95-17302 Filed 7-18-95; 8:45 am]

BILLING CODE 6712-01-P