Microwave Relocation Rules; Comment Request for Blocks C Through F

[[Page 24470]]

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 15, 22, and 24

[WT Docket No. 95-157; RM-8643; FCC 96-196]

Microwave Relocation Rules; Comment Request for Blocks C Through

F

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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

SUMMARY: By this Further Notice of Proposed Rule Making, the Commission

seeks further comment on certain aspects of the microwave relocation

rules for C, D, E, and F blocks. Specifically, the Commission seeks

further comment on whether to adjust the negotiation periods by

shortening the voluntary negotiation period and lengthening the

mandatory negotiation period for the D, E, and F blocks, and whether

the negotiation periods for the C block should be subject to the same

adjustment. The Commission also seeks comment on whether microwave

incumbents should be permitted to seek reimbursement from PCS licensees

through participation in the cost-sharing plan. The Commission believes

that the rules proposed herein, will expedite the clearing of the 2 GHz

band in an equitable and efficient manner.

DATES: Comments must be filed on or before May 28, 1996 and reply

comments on or before June 7, 1996.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W.,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Michael Hamra (202) 418-0620, Wireless

Telecommunications Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Further Notice of

Proposed Rule Making, adopted April 24, 1996 and released April 30,

1996. The complete 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 230, 1919 M Street, N.W., Washington,

D.C., and also may be purchased from the Commission's copy contractor,

International Transcription Service, at (202) 857-3800, 2100 M Street,

N.W., Suite 140, Washington, D.C. 20037.

FURTHER NOTICE OF PROPOSED RULE MAKING

I. Background

1. In the First Report and Order and Third Notice of Proposed Rule

Making in ET Docket No. 92-9, 57 FR 49020 (October 29, 1992) the

Commission reallocated the 1850-1990, 2110-2150, and 2160-2200 MHz

bands from private and common carrier fixed microwave services to

emerging technology services. The Commission also established

procedures for 2 GHz microwave incumbents to be relocated to available

frequencies in higher bands or to other media, by encouraging

incumbents to negotiate voluntary relocation agreements with emerging

technology licensees or manufacturers of unlicensed devices when

frequencies used by the incumbent are needed to implement the emerging

technology. The First Report and Order stated that, should negotiations

fail, the emerging technology licensee could request involuntary

relocation of the incumbent, provided that the emerging technology

service provider pays the cost of relocating the incumbent to a

comparable facility.

2. In the Commission's Third Report and Order in ET Docket No. 92-

9, 58 FR 46547 (September 2, 1993) as modified on reconsideration by

the Memorandum Opinion and Order, 59 FR 19642 (April 25, 1994) the

Commission established additional details of the transition plan to

enable emerging technology providers to relocate incumbent facilities.

The relocation process consists of two negotiation periods that must

expire before an emerging technology licensee may request involuntary

relocation. The first is a fixed two-year period for voluntary

negotiations--three years for public safety incumbents, e.g., police,

fire, and emergency medical--commencing with the Commission's

acceptance of applications for emerging technology services, during

which the emerging technology providers and microwave licensees may

negotiate any mutually acceptable relocation agreement. Negotiations

are strictly voluntary. If no agreement is reached, the emerging

technology licensee may initiate a one-year mandatory negotiation

period--or two-year mandatory period if the incumbent is a public

safety licensee--during which the parties are required to negotiate in

good faith.

3. Should the parties fail to reach an agreement during the

mandatory negotiation period, the emerging technology provider may

request involuntary relocation of the existing facility. Involuntary

relocation requires that the emerging technology provider (1) guarantee

payment of all costs of relocating the incumbent to a comparable

facility; (2) complete all activities necessary for placing the new

facilities into operation, including engineering and frequency

coordination; and (3) build and test the new microwave (or alternative)

system. Once comparable facilities are made available to the incumbent

microwave operator, the Commission will amend the 2 GHz license of the

incumbent to secondary status. After relocation, the microwave

incumbent is entitled to a one-year trial period to determine whether

the facilities are indeed comparable, and if they are not, the emerging

technology licensee must remedy the defects or pay to relocate the

incumbent back to its former or an equivalent 2 GHz frequency.

4. Under these procedures, it is possible for a relocation

agreement between a PCS licensee and a microwave incumbent to have

spectrum-clearing benefits for other PCS licensees as well. First, some

microwave spectrum blocks overlap with one or more PCS blocks, because

the spectrum in the 1850-1990 MHz band was assigned differently in the

two services. Second, incumbents' receivers may be susceptible to

adjacent or co-channel interference from PCS licensees in more than one

PCS spectrum block. For example, a microwave link located partially in

Block A, partially in Block D, and adjacent to Block B, may cause

interference to or receive interference from PCS licensees that are

licensed in each of those blocks. Third, because most 2 GHz microwave

licensees operate multi-link systems, PCS licensees may be asked to

relocate links that do not directly encumber their own spectrum or

service area in order to obtain the microwave incumbent's voluntary

consent to relocate. Finally, the Unlicensed PCS Ad Hoc Committee for 2

GHz Microwave Transition and Management Inc. (``UTAM''), the frequency

coordinator for the PCS spectrum designated for unlicensed devices,

expects that some licensed PCS providers will have to relocate links in

the unlicensed band that are paired with links in licensed PCS

spectrum. The Commission has designated UTAM to coordinate relocation

in the 1910-1930 MHz band, which has been reallocated for unlicensed

PCS devices. Once the 1910-1930 MHz band is clear, or there is little

risk of interference to the remaining incumbents, and UTAM has

recovered its relocation costs, UTAM's role will end and it will be

dissolved.

5. Because the Commission is licensing PCS providers at different

times and multiple PCS licensees may benefit from the relocation of a

microwave system or even a single link, the first PCS licensee in the

market potentially bears a disproportionate share of relocation costs.

Subsequent PCS licensees to enter the market may

[[Page 24471]]

therefore obtain a windfall. As a result of this potential ``free

rider'' problem, the first PCS licensee in the market might not

relocate a link or might delay its deployment of PCS if it believes

that another PCS licensee will relocate the link first, thus paying for

some or all of the relocation costs. In addition, unless cost-sharing

is adopted, PCS licensees might not engage in relocation that is cost-

effective if viewed from an industry-wide perspective. For example, a

link that encumbers two PCS blocks might not be moved if the cost is

greater than the benefit to any single licensee, even though the joint

benefit received by two or more licensees exceeds the cost of

relocating the link.

6. In 1994, PCIA proposed a cost-sharing plan to alleviate the free

rider problem, which the Commission found to be attractive in theory

but dismissed as underdeveloped. On May 5, 1995, Pacific Bell

(``PacBell'') filed a Petition for Rulemaking. In its petition, PacBell

proposed a detailed cost-sharing plan in which PCS licensees on all

blocks, licensed and unlicensed, would share in the cost of relocating

microwave stations. On May 16, 1995, the Commission requested comment

on PacBell's proposal. Most parties that commented on PacBell's

Petition for Rulemaking supported the cost-sharing concept, although

the comments reflected some differences regarding the details of the

proposal. On October 12, 1995, the Commission adopted a Notice of

Proposed Rule Making, 60 FR 55529 (November 1, 1995) which sought

comment on a modified version of the plan proposed by PacBell.

7. The Commission also adopted and released with this Further

Notice of Proposed Rule Making, the First Report and Order changing and

clarifying certain aspects of the microwave relocation rules adopted in

the Commission's Emerging Technologies proceeding, ET Docket No. 92-9.

II. Further Notice of Proposed Rule Making

8. In this Further Notice of Proposed Rule Making, the Commission

seeks comment on whether to shorten the voluntary negotiation period

and lengthen the mandatory negotiation period for the D, E, and F

blocks. The Commission also seeks comment on whether the negotiation

periods for the C block should be subject to the same adjustment.

Finally, the Commission proposes that microwave incumbents be permitted

to relocate some of their own links and obtain reimbursement rights

pursuant to the cost-sharing plan adopted in the First Report and

Order.

A. Voluntary and Mandatory Negotiation Periods for C, D, E, and F

Blocks

9. The Commission agrees with commenters, however, that changing

the negotiation timetable for PCS blocks other than the A and B blocks

may not raise the same concerns. In the case of the D, E, and F blocks,

bidding has not commenced and there are no ongoing negotiations between

PCS licensees and incumbents. Therefore, the Commission believes it is

appropriate to consider whether the relocation process in these blocks

would benefit from adjusting the negotiation periods. Specifically, the

Commission seeks comment on whether to adjust the negotiation periods

for the D, E, and F blocks by shortening the voluntary negotiation

period by one year and lengthening the mandatory period by one year.

Under this approach, non-public safety incumbents would have a one-year

negotiation period instead of the two-year negotiation period provided

under current rules, and the mandatory negotiation period would be

lengthened from one to two years. Similarly, public safety incumbents

would have a two-year voluntary negotiation period instead of a three-

years period, and a three-year mandatory negotiation period instead of

a two-year period.

10. This approach could potentially accelerate the development of

PCS in the D, E, and F blocks by speeding up the negotiation process

and creating additional incentives for incumbents to enter into early

agreements. At the same time, while incumbents would be required to

commence mandatory negotiations sooner than under the existing rules,

they would have the same total amount of time for negotiations provided

under the existing rules before they become subject to involuntary

relocation. The Commission seeks comment on whether this adjustment

would effectively balance the interests of PCS licensees in bringing

service to the public quickly and the interest of microwave incumbents

in making a smooth transition to relocated facilities.

11. Finally, the Commission seeks comment on whether to make the

same changes discussed above to the voluntary and mandatory negotiation

periods applicable to C block. The Commission notes that C block is in

a different posture from the D, E, and F blocks because the C block

auction is ongoing and possibly near conclusion, and bidding has been

based on the current rules. At the same time, the voluntary negotiation

period for C block has not yet commenced, so unlike A and B blocks,

there are no ongoing negotiations currently taking place in reliance on

the current rules. The Commission seeks comment on whether shortening

the voluntary period and lengthening the mandatory negotiation period

for C block would facilitate the development of PCS in this band and

what effect it would have on negotiations between C block licensees and

microwave incumbents.

B. Microwave Incumbent Participation in Cost-Sharing Plan

12. The Commission tentatively concludes that microwave incumbents

that relocate themselves should be allowed to obtain reimbursement

rights and collect reimbursement under the cost-sharing plan from

later-entrant PCS licensees that would have interfered with the

relocated link. The Commission agrees with incumbents that allowing

incumbent participation might facilitate system-wide relocations and

could potentially expedite the deployment of PCS. The Commission is

concerned, however, about what the incentive would be for an incumbent

to minimize costs, if the incumbent knows in advance that it may be

able to recover some of its expenses from PCS licensees. The Commission

seeks comment, therefore, on how subsequent PCS licensees could be

protected from being required to pay a larger amount to an incumbent

that relocates itself than to another PCS licensee who has an incentive

to minimize expenses. In addition, the Commission also questions

whether a large number of incumbents would avail themselves of such an

option, given that the Commission's rules require PCS licensees to pay

for the entire cost of providing incumbents with comparable facilities.

Assuming the Commission allows incumbent participation, the Commission

seeks comment on whether, for purposes of the cost-sharing formula, the

Commission should treat incumbents as if they were the initial PCS

relocator.

III. Conclusion

13. The Commission believes that the rules proposed in this Further

Notice of Proposed Rule Making will promote the public policy goals set

forth by Congress. The Commission believes that the proposals for

negotiation and reimbursement will facilitate the rapid relocation of

microwave facilities operating in the 2 GHz band, and will allow PCS

licensees to offer service to the public in an expeditious manner.

[[Page 24472]]

IV. Procedural Matters

A. Initial Regulatory Flexibility Act

As required by Section 603 of the Regulatory Flexibility Act, the

Commission has prepared an Initial Regulatory Flexibility Analysis

(IRFA) of the expected impact on small entities of the policies and

rules proposed in this Further NPRM (Further Notice). Written public

comments are requested on the IRFA.

Reason for Action: This rulemaking proceeding was initiated to

secure comment on whether the negotiation period for the D, E, and F

block PCS licensees should be adjusted by shortening the voluntary

period by one year (i.e., to one year for non-public safety incumbents

and two years for public safety incumbents) and lengthening the

mandatory negotiation period for these blocks by a corresponding year

(i.e., to two years for non-public safety incumbents and three years

for public safety incumbents); whether the negotiation periods for the

C block should be subject to the same readjustments as the negotiation

periods for the D, E, and F blocks; and whether microwave incumbents

should be permitted to seek reimbursement from PCS licensees through

the cost-sharing plan. This proposal would facilitate negotiations

between the parties and promote the efficient relocation of microwave

licensees by encouraging microwave incumbents to relocate their own

microwave systems, thus bringing PCS services to the public in an

speedy manner.

Objectives: Our objective is to facilitate negotiations between PCS

licensees and microwave incumbents. This proposal would also enable

microwave incumbents who pay to relocate their own links to collect

reimbursement from PCS licensees that benefit from the relocation.

Cost-sharing is necessary to enhance the speed of relocation and

provide an incentive to incumbents to move their own links. This action

would result in faster deployment of PCS and delivery of service to the

public.

Legal Basis: The proposed action is authorized under the

Communications Act, Sections 4(i), 7, 303(c), 303(f), 303(g), 303(r),

and 332, 47 U.S.C. 154(i), 303(c), 303(f), 303(g), 303(r), 332, as

amended.

Reporting, Record keeping, and Other Compliance Requirements: Under

the proposal contained in the Further NPRM, microwave incumbents who

relocate their own links would be required to document the relocation

costs paid and report them to a central clearinghouse. Later PCS market

entrants would then be required to file a Prior Coordination

Notification with the clearinghouse and, if necessary, reimburse the

incumbent for relocation expenses.

Federal Rules Which Overlap, Duplicate or Conflict With These

Rules: None.

Description, Potential Impact, and Number of Small Entities

Involved: This proposal would benefit small PCS licensees by

facilitating negotiations with microwave incumbents and allowing them

to bring their services to market sooner. This proposal would also

benefit small microwave incumbents by enabling them to relocate their

entire system at once and collect reimbursement from PCS licensees who

benefit from the resulting clearance of the spectrum. Such incumbents

would therefore benefit from the reduced time and administrative

inconvenience involved with relocating links at different times. The 2

GHz fixed microwave bands support a number of industries that provide

vital services to the public. We are committed to ensuring that the

incumbents' services are not disrupted and that the economic impact of

this proceeding on the incumbents is minimal. We must further take into

consideration that not all of the incumbent licensees are large

businesses, particularly in the bands above 2 GHz, and that many of the

licensees are local government entities that are not funded through

rate regulation. We believe that this proceeding would further our

policy of encouraging rapid deployment of PCS and system-wide

relocations of microwave incumbents. After evaluating comments filed in

response to the Further NPRM, the Commission will examine further the

impact of all rule changes on small entities and set forth its findings

in the Final Regulatory Flexibility Analysis.

Significant Alternatives Minimizing the Impact on Small Entities

Consistent with the Stated Objectives: We have reduced burdens wherever

possible. The regulatory burdens we have retained are necessary in

order to ensure that the public receives the benefits of innovative new

services in a prompt and efficient manner. We will continue to examine

alternatives in the future with the objectives of eliminating

unnecessary regulations and minimizing any significant economic impact

on small entities.

IRFA Comments: We request written public comment on the foregoing

Initial Regulatory Flexibility Analysis. Comments must have a separate

and distinct heading designating them as responses to the IRFA and must

be filed by the comment deadlines set forth in this Further NPRM.

B. Ex Parte Rules--Non-Restricted Proceeding

This is a non-restricted notice and comment rulemaking proceeding.

Ex parte presentations are permitted except during the Sunshine Agenda

period, provided they are disclosed as provided in Commission rules.

C. Comment Period

Pursuant to applicable procedures set forth in Sections 1.415 and

1.419 of the Commission's rules, interested parties may file comments

on or before May 28, 1996, and reply comments on or before June 7,

1996. To file formally in this proceeding, you must file an original

and four copies of all comments, reply comments, and supporting

comments. If you want each Commissioner to receive a personal copy of

your comments, you must file an original plus nine copies. You should

send comments and reply comments to Office of the Secretary, Federal

Communications Commission, Washington, D.C. 20554. Comments and reply

comments will be available for public inspection during regular

business hours in the Reference Center of the Federal Communications

Commission, Room 239, 1919 M Street, N.W., Washington, D.C. 20554. A

copy of all comments should also be filed with the Commission's copy

contractor, ITS, Inc., 2100 M Street, N.W., Suite 140, (202) 857-3800.

D. Authority

Authority for issuance of this Further Notice of Proposed Rule

Making is contained in the Communications Act, Sections 4(i), 7,

303(c), 303(f), 303(g), 303(r), and 332, 47 U.S.C. 154(i), 157, 303(c),

303(f), 303(g), 303(r), 332, as amended.

E. Ordering Clauses

It is ordered that the Initial Regulatory Flexibility Analysis, as

required by Section 604 of the Regulatory Flexibility Act, and as set

forth in Section VII(A) is Adopted.

It is further ordered that the Secretary shall send a copy of this

Further Notice of Proposed Rule Making to the Chief Counsel for

Advocacy of the Small Business Administration.

List of Subjects

47 CFR Part 22

Radio.

47 CFR Part 24

Personal communications services.

[[Page 24473]]

47 CFR Part 101

Fixed microwave services.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 96-12269 Filed 5-14-96; 8:45 am]

BILLING CODE 6712-01-P