Flexible Service Offerings in the Commercial Mobile Radio Services

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2, 22, 24, 90

[WT Docket No. 96-6; FCC 96-283]

Flexible Service Offerings in the Commercial Mobile Radio

Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Further Notice of Proposed Rule Making the Commission

seeks comment on the regulatory treatment of entities offering fixed

services on CMRS spectrum. The rule amendments are necessary to respond

to the strong support to flexible services show in the initial Notice

of Proposed Rule Making. The comment period is necessary for

clarification prior to making a final determination with respect to the

regulatory treatment of licensees providing such services. The intended

effect of this action is to provide a service that will further the

public interest.

DATES: Comments are to be filed on or before November 25, 1996, and

reply comments are to be filed on or before December 24, 1996.

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

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: David Krech, Commercial Wireless

Division, Wireless Telecommunications Bureau, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: The First Report and Order and Further

Notice of Proposed Rule Making in WT Docket No. 96-6, adopted on June

27, 1996, and released on August 1, 1996, is available for inspection

and copying during normal business hours in the FCC Reference Center,

Room 575, 2000 M Street N.W., Washington, D.C. The complete text may

also be purchased from the Commission's copy contractor, International

Transcription Service, Inc., 2100 M Street N.W., Suite 140, Washington,

D.C. 20037, (202) 857-3800.

Summary of Action

I. Introduction & Executive Summary

1. In the Notice of Proposed Rule Making in WT Docket No. 96-6

(``NPRM'') (Amendment of the Commission's Rules to Permit Flexible

Service Offerings in the Commercial Mobile Radio Services, Notice of

Proposed Rule Making, WT Docket No. 96-6, 11 FCC Rcd 2445 (1996)),

released on January 25, 1996, 61 FR 6189 (February 16, 1996), we sought

comment on proposals for expanding permitted offerings of fixed

wireless service by Commercial Mobile Radio Service (``CMRS'')

providers. In addition, we sought comment with regard to the regulatory

treatment for such services under Section 332 of the Communications Act

of 1934, as amended. 47 U.S.C. Sec. 332.

2. In this Further Notice of Proposed Rule Making, we seek

additional comment on the regulatory treatment of entities offering

fixed services on CMRS spectrum:

We do not intend to alter the regulatory treatment of

licensees offering the types of ancillary, auxiliary, and incidental

fixed services that have been offered by CMRS providers under our rules

prior to this order.

We propose to establish a presumption that licensees

offering other fixed services over CMRS spectrum should be regulated as

CMRS. We seek comment on such a presumption and, if adopted, what

factors should be used to support or rebut this presumption.

II. Further Notice of Proposed Rule Making

3. Discussion. Based on our review of the record in WT 96-6, we

believe it is premature to attempt a final comprehensive determination

regarding the regulatory treatment of these various types of fixed

services that may be offered by licensees. While some commenters argue

that all of the fixed offerings described above should be treated as

sufficiently related to CMRS to justify uniform regulatory treatment,

we believe that a uniform approach would be premature at this time.

Instead, we believe that the regulatory issues raised by this

proceeding require further development of the record and more specific

analysis related to the particular fixed service offerings that

carriers develop. Therefore, we propose to refine the approach set

forth in the NPRM by seeking comment on additional guidelines for

determining when fixed wireless services may fall within the scope of

CMRS regulation.

4. At the outset, we emphasize that our decision in the First

Report in Order to allow carriers to offer co-primary fixed services on

spectrum allocated for CMRS does not alter in any way our regulatory

treatment of fixed services

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that have been provided by CMRS providers under our prior rules. In the

CMRS Second Report and Order, 59 FR 18493 (April 19, 1994), we stated

that ancillary, auxiliary, and incidental services offered by CMRS

providers fall within the statutory definition of mobile service, and

are subject to CMRS regulation. We reaffirm that determination here. In

the First Report and Order, however, we broadened the potential scope

of fixed services that may be offered by CMRS providers. We therefore

seek further comment on the regulatory treatment of such fixed services

that may not be considered ancillary, auxiliary or incidental to mobile

service.

5. Several parties argue that because the definition of ``mobile

service'' contains a clause referencing PCS licenses, Congress intended

that all service provided through a PCS license would be treated as

mobile. According to Omnipoint, inclusion of the PCS clause means that

the Act, unlike FCC regulations, does not limit the amount of fixed

service a PCS provider may offer, and the offering of fixed service by

a PCS licensee does not change its status as a CMRS provider. AT&T and

CTIA argue, further, that since one goal of Congress and the Commission

is regulatory parity for similarly situated CMRS providers, all

services provided through a license for a CMRS service, not just a PCS

license, come within the definition of ``mobile service.'' One could

also read the definition of ``mobile service'' to require the use of

``mobile stations'' and the ``and includes'' language which precedes

the description of the three enumerated services to mean that they are

examples. In that case, a service provided with a PCS license would

have to include the use of a ``mobile station'' to come within the

definition of ``mobile service'' and consequently be considered in the

definition of ``commercial mobile service.'' ``Mobile station'' is

defined in the Act as ``a radio-communication station capable of being

moved and which ordinarily does move.'' 47 U.S.C. Sec. 153(28). We seek

comment on these alternative statutory interpretations and their

regulatory consequences. Parties should submit support from the

legislative history or prior Commission rulings for or against the

argument that the language ``and includes'' in the definition of

``mobile service'' sets out examples of mobile services, rather than

listing additional services which come under the definition.

6. CTIA also argues that the Commission has substantial discretion

under the Act to define ``mobile services.'' CTIA states that this

authority stems from the language in the PCS clause of the definition

of ``mobile service'' that refers to ``any successor proceeding.''

According to CTIA, that language allows the Commission to establish

alternative definitions of ``mobile service'' in successor proceedings.

We seek comment on the breadth and scope of Commission authority under

the PCS clause and the ``any successor proceeding'' language.

7. As noted above, in the CMRS Second Report and Order we found

that the definition of ``mobile service'' includes ``all auxiliary

services provided by mobile service licensees.'' We seek comment on

what precedential value, if any, we should give to our treatment of

auxiliary, ancillary, and incidental services as CMRS for regulatory

purposes when determining how to regulate other fixed wireless services

provided by CMRS providers. For example, because we consider a fixed

service that is ancillary to a mobile service to be CMRS, what

implications should that have for how we should treat a wholly fixed

service that may use no mobile stations.

8. Some parties have also argued that because these fixed wireless

services would be provided by CMRS providers in spectrum that has been

allocated for CMRS, the service providers must therefore be regulated

as CMRS. We disagree. The regulatory structure for providers of the

primary service to which the spectrum is allocated does not necessarily

dictate the type of regulation to which every service provider in that

same band will be subject regardless of the particular attributes of

that service. A pertinent example is BETRS. While BETRS is provided in

a spectrum band allocated to Public Land Mobile Service, we have

determined that BETRS is a fixed service, rather than a mobile service,

and therefore BETRS providers are not subject to CMRS regulation under

Section 332. Similarly, private service licensees in the 220 and 800

MHz SMR bands are not subject to CMRS regulation. Likewise, we do not

intend to base our decision here merely on the classification of the

majority of users of the spectrum in which the fixed service in

question is provided.

9. We believe that, ultimately, the regulatory issues on which we

seek comment herein may require resolution on a case-by-base basis. We

seek comment on this conclusion, including whether we may be able to

establish a uniform approach for determining the regulatory status of

fixed services offered on CMRS spectrum. To provide a framework for a

case-by-case analysis, we propose to establish a rebuttable presumption

that any wireless service provided under a CMRS provider's license

would be considered to come within the definition of CMRS and

consequently regulated as CMRS. Based on the record in this proceeding,

we believe this to be a reasonable presumption. Most of the fixed

wireless service applications which commenters have discussed in the

record would be provided in conjunction with a traditional CMRS

services such as cellular or paging.

10. Under our proposed approach, the Commission would allow any

interested party to challenge this presumption regarding a particular

service offered by a CMRS provider. If a party could demonstrate that

the service provider in question does not meet the definition of CMRS

for a particular offering, we would not regulate that particular

offering as CMRS. We seek comment on this approach and what types of

evidence the Commission should evaluate when considering a challenge to

a presumption that a fixed wireless service provided by a CMRS provider

should be regulated as CMRS. Possible factors may include: the relative

mobility of mobile stations used in conjunction with the fixed service;

whether the fixed service is part of a larger package which includes

mobile services or is offered alone; the size of the service area over

which the fixed wireless service is provided; the amount of mobile

versus fixed traffic over the wireless system; whether the fixed

service is offered over a discrete block of spectrum separate from the

spectrum used for mobile services; the degree to which fixed and mobile

services are integrated; and whether customers perceive the service to

be a fixed service. Part of any analysis of customer perception may

also include consideration of how the service is marketed by the CMRS

provider to potential customers.

11. The Commission seeks comment on the appropriateness of using

these factors or other types of evidence that may be presented to rebut

this presumption. We also seek comment on the extent to which services

provided under separate licenses or by separate entities may be

relevant to the regulatory status of a particular fixed service

offering provided under a given license. For example, should we

consider only the services provided under a particular license or

consider the services provided by a common licensee under multiple

licenses, e.g., a licensee who provides fixed service under its PCS

license and mobile service under a cellular license in the same market.

Similarly, in instances

[[Page 43723]]

where fixed and mobile services are provided by different corporate

affiliates, should we look at each affiliate's service separately or at

the services provided by the corporation as a whole? Another possible

scenario would be where a CMRS provider provides fixed service under

its own license and has a joint marketing arrangement or resale

agreement with another CMRS provider in that market. How should we

consider such arrangements in making our analysis under this

presumption? We seek comment on our proposal for regulating fixed

wireless service provided by a CMRS provider and we seek alternative

suggestions for presumptive regulatory classifications.

12. Some parties have advocated that we regulate any fixed wireless

service provided by a CMRS provider as CMRS until such time that the

service constitutes a substitute for land line telephone exchange

service in a substantial portion of a state. Under this approach a

state would have to petition the Commission under Section 332(c)(3),

and the Commission would have to grant such a petition, before a CMRS

provider's fixed wireless service would be subject to state regulation.

The Commission seeks comment on this approach. We also seek comment on

what federal regulation should be imposed on a CMRS provider's offering

of fixed wireless service if we find that it does not come within the

purview of CMRS. To the extent that there are interstate common carrier

services, such services would be subject to regulation under Title II;

if so are there any Title II regulations from which such services

should be exempt?

13. The Commission recognizes that we are addressing a related

issue in the context of our proceeding on implementation of Section 251

of the Communications Act, as amended by the 1996 Act--i.e., in what

circumstances, if any, a CMRS provider should be regulated as a ``local

exchange carrier'' under the Act. Herein we are concerned with whether

service providers should be regulated as CMRS if they provide fixed

services. While we will review and consider the comments submitted in

the Section 251 proceeding, we do not believe that resolution of the

issue presented in the Section 251 proceeding resolves the issues

presented here. For example, even if we were to find that a CMRS

provider could be considered a local exchange carrier in terms of the

requirements in Section 251, we tentatively conclude that it could

still be considered engaged in the provision of CMRS under Section 332

and therefore exempt from states' regulation of intrastate rates. We

seek comment on this tentative conclusion and whether the other

obligations imposed on LECs have a direct relationship to the rates

charged by CMRS providers, and thus may impact on the rate regulation

scheme set out in Section 332.

III. Procedural Matters

A. Regulatory Flexibility Act

14. 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 proposals

suggested in this document. Written public comments are requested on

the IRFA. We also seek comment on the number of CMRS entities affected

by the proposed rules are small businesses, and request that commenters

identify whether they themselves are small businesses. These comments

must be filed in accordance with the same filing deadlines as comments

on the rest of the Further Notice of Proposed Rule Making, but they

must have a separate and distinct heading designating them as responses

to the Initial Regulatory Flexibility Analysis. The Secretary shall

send a copy of this First Report and Order and Further Notice of

Proposed Rule Making, including the Initial Regulatory Flexibility

Analysis, to the Chief Counsel for Advocacy of the Small Business

Administration in accordance with paragraph 603(a) of the Regulatory

Flexibility Act. Public Law No. 96-354, 94 Stat. 1164, 5 U.S.C.

Sec. 601 et. seq. (1981).

1. Reason for Action

15. This rule making proceeding was initiated to secure comment on

proposals for allowing CMRS providers greater flexibility in the

provision of fixed wireless services. The proposals advanced in the

Further Notice of Proposed Rule Making are designed to determine the

appropriate regulatory scheme for CMRS providers who wish to offer

fixed wireless services. The Commission seeks comment on the

appropriate role of the federal government and the states in the

regulation of CMRS providers who offer hybrid mobile and fixed services

on a co-primary basis.

2. Objectives

16. The Commission proposes to establish a rebuttable presumption

that any wireless service provided under a CMRS provider's license

would be considered to come within the definition of CMRS and

consequently regulated as CMRS. Under this approach, the Commission

would allow any interested party to challenge this presumption

regarding a particular service offered by a CMRS provider. If a party

could demonstrate that the service provider in question does not meet

the definition of CMRS for a particular offering, we would not regulate

that particular offering as CMRS. We seek comment on this approach and

what types of evidence the Commission should evaluate when considering

a challenge to a presumption that a fixed wireless service provided by

a CMRS provider should be regulated as CMRS. We also seek comment on

the extent to which services provided under separate licenses or by

separate entities may be relevant to the regulatory status of a

particular fixed service offering provided under a given license. Some

parties have advocated that we regulate any fixed wireless service

provided by a CMRS provider as CMRS until such time that the service

constitutes a substitute for land line telephone exchange service in a

substantial portion of a state. We seek comment on this approach. We

also seek comment on what federal regulation should be imposed on a

CMRS provider's offering of fixed wireless service if we find that it

does not come within the purview of CMRS.

3. Reporting, Recordkeeping, and Other Compliance Requirements

17. The proposals under consideration in the Further Notice of

Proposed Rule Making do not require recordkeeping, or other compliance

requirements for small business entities.

4. Federal Rules Which Overlap, Duplicate or Conflict With These Rules

18. None.

5. Description, and Number of Small Entities Involved

19. Pursuant to the Contract with America Advancement Act of 1996,

Public Law No. 104-121, 110 Stat. 847 (1996), the Commission is

required to estimate in its Final Regulatory Flexibility Analysis the

number of small entities to which a rule will apply, provide a

description of such entities, and assess the impact of the rule on such

entities. To assist the Commission in this analysis, commenters are

requested to provide information regarding how many total CMRS entities

would be affected by the proposed rules in the Further Notice of

Proposed Rule Making. In particular, we seek estimates of how many CMRS

entities are small businesses.

[[Page 43724]]

20. There are different definitions of ``small business'' for the

various services affected by this proceeding. Since the Commission did

not define a small business with respect to cellular services, paging,

and interconnected business radio service, we will utilize the Small

Business Administration's (SBA) definition applicable to radiotelephone

companies--i.e. an entity employing less than 1,500 persons. 13 CFR

Sec. 121.201, Standard Industrial Classification (SIC) Code 4812. We

seek comment on whether this definition should be refined to take into

account the different classes of cellular, paging and for-profit

interconnected business radio services. With respect to narrowband and

broadband PCS, the Commission defines small business to mean firms who

have gross revenues of not more than $40 million in each of the

preceding three calendar years. With respect to 800 MHz and 900 MHz SMR

services, the Commission has a two-tiered definition of small business:

(a) ``very small businesses'' are firms who have gross revenues of not

more than $3 million in each of the preceding three calendar years; and

(b) ``small businesses'' are firms who have annual gross revenues of

not more than $15 million in the each of the preceding three years.

With respect to commercial 220 MHz services, the Commission has

proposed a two-tiered analysis: (1) for EA licensees, a firm with

average annual gross revenues of not more than $6 million for the

preceding three years and (2) for regional and nationwide licensees, a

firm with average annual gross revenues of not more than $15 million

for the preceding 3 years.

21. We seek comment on our use of these definitions in this

context. Additionally, we request commenters to identify whether they

are a ``small business'' under this definition. For commenters that are

a subsidiary of another entity, we seek this information for both the

subsidiary and the parent corporation or entity.

6. Significant Alternatives Minimizing the Impact on Small Entities

Consistent With the Stated Objectives

22. In the Further Notice of Proposed Rule Making the Commission

proposes to establish a rebuttable presumption that any wireless

service provided under a CMRS provider's license would be considered to

come within the definition of CMRS and be regulated as CMRS. The

Commission seeks comment on this approach and what types of evidence

the Commission should evaluate when considering a challenge to such a

presumption. Other alternatives suggested in the comment to the Notice

of Proposed Rule Making, 61 FR 6189 (February 16, 1996), include

regulating any fixed wireless service provided by a CMRS provider as

CMRS until such time that the service constitutes a substitute for land

line telephone exchange service in a substantial portion of a state. We

seek comment on that approach and any additional significant

alternatives presented in the comments also will be considered. If the

fixed wireless service provided by a CMRS provider, including small

business entities, is not regulated as CMRS, that service may be

subject to state regulation of entry and rates. We also seek comment on

what Federal regulation should be imposed on a CMRS provider's offering

of fixed wireless service if that service does not come within the

purview of CMRS. We also seek comment on what impact each alternative

may have on small business entities.

7. Legal Basis

23. The proposed action is authorized under Sections 4(i), 4(j),

7(a), 303(b), 303(f), 303(g), 303(r), 332(a), and 332(c) of the

Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i), 154(j),

157(a), 303(b), 303(f), 303(g), 303(r), 332(a), and 332(c).

8. IRFA Comments

24. 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 deadlines provided in paragraph 27 below.

B. Ex Parte Rules--Non-Restricted Proceeding

25. This is a non-restricted notice and comment rule making

proceeding. Ex parte presentations are permitted except during the

Sunshine Agenda period, provided they are disclosed as provided in the

Commission's rules. See generally 47 CFR Secs. 1.1202, 1.1203, and

1.1206(a).

C. Initial Paperwork Reduction Act of 1995 Analysis

26. The First Report and Order and Further Notice of Proposed Rule

Making do not contain either a proposed or modified information

collection.

D. Comment Dates

27. Pursuant to applicable procedures set forth in Sections 1.415

and 1.419 of the Commission's rules, 47 CFR Secs. 1.415 and 1.419,

interested parties may file comments on or before November 25, 1996,

and reply comments on or before December 24, 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 the 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

FCC Reference Center of the Federal Communications Commission, Room

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

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

the Commission has prepared an Initial Regulatory Flexibility Analysis

of the expected impact on small entities of the proposals suggested in

the Further Notice of Proposed Rule Making. Written public comments are

requested on the IRFA. These comments must be filed in accordance with

the same filing deadlines as comments on the remainder of the Further

Notice of Proposed Rule Making, but they must have a separate and

distinct heading designating them as responses to the IRFA. The

Secretary shall send a copy of this Further Notice of Proposed Rule

Making, including the IRFA, the Chief Counsel for Advocacy of the Small

Business Administration in accordance with paragraph 603(a) of the

Regulatory Flexibility Act. Public Law No. 96-354, 94 Stat. 1164, 5

U.S.C. Sec. 601 et. seq. (1981).

E. Contacts for Information

29. For further information concerning this proceeding, contact

David Krech at (202) 418-0620 (Commercial Wireless Division, Wireless

Telecommunications Bureau).

List of Subjects

47 CFR Part 2

Radio.

47 CFR Part 22

Communications common carriers, Radio.

47 CFR Part 24

Communications common carriers, Radio.

47 CFR Part 90

Business and industry, Common carriers, Radio.

[[Page 43725]]

Federal Communications Commission

William F. Caton,

Acting Secretary.

[FR Doc. 96-21793 Filed 8-23-96; 8:45 am]

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