Provision of Roaming Services by Commercial Mobile Radio Service Providers

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 20 and 22

[CC Docket No. 94-54; FCC 96-284]

Provision of Roaming Services by Commercial Mobile Radio Service

Providers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Federal Communications Commission adopts a Second Report

and Order and Third Notice of Proposed Rulemaking regarding the

offering of roaming services by commercial mobile radio service

providers. The Third Notice of Proposed Rulemaking portion of this

decision is summarized elsewhere in this edition of the Federal

Register. The Second Report and Order expands the scope of the

Commission's existing ``manual'' roaming rule. As a result of this

action, cellular, broadband personal communications services and

certain specialized mobile radio licensees must, as a condition of

their licenses, provide service upon request to any individual roamer

whose handset is technically capable of accessing their networks. This

decision is needed to ensure that customers of all providers competing

in the mass market for two-way, real-time, interconnected switched

voice service have an equal opportunity to obtain manual roaming

service if they are using technically compatible equipment, thus

promoting competition.

EFFECTIVE DATE: October 28, 1996.

FOR FURTHER INFORMATION CONTACT: Jeffrey Steinberg, Wireless

Telecommunications Bureau, (202) 418-1310.

SUPPLEMENTARY INFORMATION: This is a summary of the Second Report and

Order (Second R&O) portion of the Commission's Second Report and Order

and Third Notice of Proposed Rulemaking in CC Docket No. 94-54, FCC 96-

284, adopted June 27, 1996, and released August 13, 1996. The summary

of the Third Notice of Proposed Rulemaking portion of this decision may

be found elsewhere in this edition of the Federal Register. The

complete text of this Second R&O is available for inspection and

copying during normal business hours in the FCC Reference Center (Room

239), 1919 M Street, NW., Washington, DC, and also may be purchased

from the Commission's copy contractor, International Transcription

Service, (202) 857-3800, 2100 M Street, NW., Suite 140, Washington, DC,

20037.

Synopsis of the Second Report and Order

1. In this Second R&O, the Commission extends its existing rule

under which cellular licensees are required to provide manual roaming

service upon request to subscribers in good standing of any cellular

carrier.

2. ``Roaming'' occurs when the subscriber of one commercial mobile

radio service (CMRS) provider utilizes the facilities of another CMRS

provider with which the subscriber has no direct pre-existing service

or financial relationship to place an outgoing call, to receive an

incoming call, or to continue an in-progress call. Typically, although

not always, roaming occurs when the subscriber is physically located

outside the service area of the provider to which he or she subscribes.

Under Sec. 22.901 of the Commission's rules, cellular system licensees

``must provide cellular mobile radiotelephone service upon request to

all cellular subscribers in good standing, including roamers, while

such subscribers are located within any portion of the authorized

cellular geographic service area * * * where facilities have been

constructed and service to subscribers has commenced.''

3. The Commission initiated this proceeding in a Notice of Proposed

Rulemaking and Notice of Inquiry, 59 FR 35664, July 13, 1994, which

requested comment regarding whether the obligation to permit roaming

should be extended to all CMRS, what regulatory standards are

appropriate to promote roaming, and what technical issues or

requirements are implicated. In the Second Notice of Proposed

Rulemaking (Second NPRM), 60 FR 20949, April 28, 1995, the Commission

tentatively concluded that roaming service is important to the

development of a seamless CMRS ``network of networks.'' The Second NPRM

also tentatively concluded that uncertainties concerning the

technological development of non-cellular CMRS and the likelihood that

market forces would adequately promote the availability of roaming

counseled regulatory caution. Therefore, the Commission proposed, in

lieu of a rule, to monitor the development of roaming service and to

intercede as appropriate. In addition,

[[Page 43978]]

the Commission requested comment on several other issues related to

roaming, including the technical feasibility of cross-service roaming,

the necessity of direct physical interconnection to facilitate roaming,

the necessity of access to subscriber databases and any privacy or

proprietary issues raised, and the technical and contractual

arrangements that are currently used to provide roaming in the cellular

service.

4. At the outset, the Commission notes that Sections 201(b) and

202(a) of the Communications Act apply to CMRS providers and govern the

provision of common carrier communications services.1 The

Commission agrees with those commenters that argue that roaming is a

common carrier service because it gives end users access to a foreign

network in order to communicate messages of their own choosing. The

Commission also notes that it has authority to impose a roaming

requirement in the public interest pursuant to its license conditioning

authority under sections 303(r) and 309 of the Communications Act.

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\1\ See 47 U.S.C. 332(c)(1) (CMRS providers are subject to

duties of common carriers, including Sections 201 and 202).

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5. The record submitted in response to the Second NPRM demonstrates

that roaming capability is widely available to cellular subscribers, is

highly valued by those subscribers, and is one of the industry's

fastest growing sources of revenue. Thus, roaming capability may be a

key competitive consideration in the wireless marketplace, and newer

entrants may be at a competitive disadvantage vis-a-vis incumbent

wireless carriers if their subscribers have no ability to roam on other

networks. Having said that, the Commission recognizes that roaming

regulation may impose significant costs and burdens on CMRS providers

and that it should narrowly tailor its actions to avoid placing an

undue burden on such providers.

6. Based on comments in the record and the experience of the first

broadband PCS licensee to begin service, the Commission concludes that

the public interest will be served by extending its existing manual

roaming rule, which is part of the Commission's cellular service

rules,2 to obligate all CMRS licensees competing in the mass

market for real-time, two-way voice services and to protect the

subscribers of all carriers offering such services. That group consists

of cellular, broadband PCS and covered SMR providers. These ``covered

SMR providers'' include two classes of SMR licensees. The first

consists of 800 MHz and 900 MHz SMR licensees that hold geographic area

licenses. The second covers incumbent wide area SMR licensees, defined

as licensees who have obtained extended implementation authorizations

in the 800 MHz or 900 MHz SMR service, either by waiver or under

Sec. 90.629 of the Commission's rules. Within each of these classes,

``covered SMR providers'' includes only licensees that offer real-time,

two-way switched voice service that is interconnected with the public

switched network, either on a stand-alone basis or packaged with other

telecommunications services. This is the same group of SMR licensees to

which the Commission applied its recently adopted rule governing

restrictions on resale.

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\2\ See 47 CFR 22.901.

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7. Under the rule adopted in this Second R&O, cellular, broadband

PCS, and covered SMR licensees are required to provide manual roaming

to any subscriber of any of these services who is using a handset that

is technically capable of accessing the licensee's system. The rule

does not require licensees to modify their systems in order to provide

service to any end user. To avoid any uncertainty, this decision

clarifies that any subscriber to any covered service with a technically

cellular-compatible handset has the same right as a cellular subscriber

to manually roam on cellular systems. Furthermore, the existing rule is

extended to obligate broadband PCS and covered SMR, as well as

cellular, licensees. Because this Second R&O furthers the public

interest by facilitating the widespread availability of roaming, the

Commission makes compliance with this rule a condition of cellular,

broadband PCS and covered SMR licenses under sections 303(r) and 309 of

the Communications Act.

8. By contrast, the record does not establish that ubiquitous

roaming capability is important to the competitive success or utility

of mobile services other than those offered by cellular, broadband PCS

and covered SMR providers. The Commission therefore concludes that its

action shall be limited to such licensees. In particular, because they

do not compete substantially with cellular and broadband PCS providers,

local SMR licensees offering mainly dispatch services to specialized

customers in a non-cellular system configuration, as well as licensees

offering only data, one-way, or stored voice services on an

interconnected basis, are not covered by the roaming rule. Of course,

any SMR provider that is not interconnected to the public switched

network does not offer CMRS, and therefore is not subject to the

roaming rule. Allegations that particular practices by non-covered CMRS

providers are unjust, unreasonable or otherwise in violation of the

Communications Act would be grounds for complaint under section 208 of

that Act.

Final Regulatory Flexibility Analysis

9. As required by section 603 of the Regulatory Flexibility Act, 5

USC 603 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was

incorporated in the Second NPRM in this proceeding. The Commission

sought written public comments on the proposals in the Second NPRM,

including on the IRFA. The Commission's Final Regulatory Flexibility

Analysis (FRFA) in this Second R&O conforms to the RFA, as amended by

the Contract With America Advancement Act of 1996, Pub. L. 104-121, 110

Stat. 847 (1996) (CWAAA).3

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\3\ Subtitle II of the CWAAA is the Small Business Regulatory

Enforcement Fairness Act of 1996 (SBREFA), codified at 5 USC 601 et

seq.

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I. Need for and Purpose of this Action

10. In this decision, the Commission extends its existing rule

under which cellular licensees are required to provide manual roaming

service upon request to subscribers in good standing of any cellular

carrier. Under the rule adopted in this decision, cellular, broadband

personal communications services (PCS), and certain specialized mobile

radio (SMR) licensees must provide manual roaming service upon request

to subscribers in good standing of all such carriers, provided the

subscriber is using a handset that is technically capable of accessing

the licensee's system. This action will ensure that customers of all

providers competing in the mass market for two-way, real-time,

interconnected switched voice service have an equal opportunity to

obtain manual roaming service, if they are using technically compatible

equipment. In this way, the rule will promote the development of

competition by ensuring that newer entrants to the market, as well as

competitors without extensive affiliations, are not competitively

disadvantaged by the inability of their subscribers to roam.

II. Summary of Issues Raised by the Public Comments in Response to the

Initial Regulatory Flexibility Analysis

11. No comments were filed in direct response to the IRFA. In

general comments on the Second NPRM, however, several commenters raised

issues that might affect small entities. Some of these commenters

argued that

[[Page 43979]]

the Commission should adopt a roaming rule in order to protect the

ability of carriers without a nationwide footprint or extensive

affiliations to compete. Other commenters, however, expressed concern

that compliance with a requirement to offer roaming could be

technically infeasible or unduly costly under some circumstances. In

particular, several commenters urged the Commission not to require

carriers to adopt particular technologies or modify their networks in

order to facilitate roaming. Some commenters also argued that a roaming

requirement could expose carriers to financial losses due to fraud. Two

alliances of rural cellular carriers argued that, in drafting any

roaming rule, the Commission should consider the technical obstacles

faced by providers that do not have SS7 capability, as well as rural

cellular licensees' alleged lack of market power.

III. Description and Estimate of the Small Entities Subject to the

Rules

12. The rule adopted in this Second R&O will apply to cellular,

broadband PCS, and geographic area 800 MHz and 900 MHz SMR licensees,

including licensees who have obtained extended implementation

authorizations in the 800 MHz or 900 MHz SMR services, either by waiver

or under Sec. 90.629 of the Commission's rules. However, the rule will

apply to SMR licensees only if they offer real-time, two-way voice

service that is interconnected with the public switched network.

A. Estimates for Cellular Licensees

13. The Commission has not developed a definition of small entities

applicable to cellular licensees. Therefore, the applicable definition

of small entity is the definition under the Small Business

Administration (SBA) rules applicable to radiotelephone companies. This

definition provides that a small entity is a radiotelephone company

employing fewer than 1,500 persons.4 Since the Regulatory

Flexibility Act amendments were not in effect until the record in this

proceeding was closed, the Commission was unable to request information

regarding the number of small cellular businesses and is unable at this

time to determine the precise number of cellular firms which are small

businesses.

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\4\ 13 CFR 121.201, Standard Industrial Classification (SIC)

Code 4812.

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14. The size data provided by the SBA does not enable the

Commission to make a meaningful estimate of the number of cellular

providers which are small entities because it combines all

radiotelephone companies with 500 or more employees.5 The

Commission therefore used the 1992 Census of Transportation,

Communications, and Utilities, conducted by the Bureau of the Census,

which is the most recent information available. This document shows

that only 12 radiotelephone firms out of a total of 1,178 such firms

which operated during 1992 had 1,000 or more employees.6

Therefore, even if all 12 of these firms were cellular telephone

companies, nearly all cellular carriers were small businesses under the

SBA's definition. The Commission assumes, for purposes of its

evaluations and conclusions in this FRFA, that all of the current

cellular licensees are small entities, as that term is defined by the

SBA. Although there are 1,758 cellular licenses, the Commission does

not know the number of cellular licensees, since a cellular licensee

may own several licenses.

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\5\ U.S. Small Business Administration 1992 Economic Census

Employment Report, Bureau of the Census, U.S. Department of

Commerce, SIC Code 4812 (radiotelephone communications industry data

adopted by the SBA Office of Advocacy).

\6\ U.S. Bureau of the Census, U.S. Department of Commerce, 1992

Census of Transportation, Communications, and Utilities, UC92-S-1,

Subject Series, Establishment and Firm Size, Table 5, Employment

Size of Firms: 1992, SIC Code 4812 (issued May 1995).

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15. Two alliances of rural cellular licensees filed comments in

which they argued that a roaming rule may have an especially large

impact on rural licensees. In its comments, the Rural Cellular

Coalition states that it has 12 members which serve licensed cellular

areas encompassing approximately 3 million people; the Rural Cellular

Association states that its members serve areas with a cumulative

population of more than 6 million. The Commission does not have

information, however, sufficient to support a meaningful estimate

regarding the total number of rural licensees, nor does it have

specific information regarding how many rural cellular licensees are

small entities. For purposes of this FRFA, the Commission assumes that

all rural cellular licensees are small entities, as that term is

defined by the SBA.

B. Estimates for Broadband PCS Licensees

16. The broadband PCS spectrum is divided into six frequency blocks

designated A through F. Pursuant to 47 CFR 24.720(b), the Commission

has defined ``small entity'' in the auctions for Blocks C and F as a

firm that had average gross revenues of not more than $40 million in

the three previous calendar years. This regulation defining ``small

entity'' in the context of broadband PCS auctions has been approved by

the SBA.7

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\7\ See Implementation of section 309(j) of the Communications

Act--Competitive Bidding, PP Docket No. 93-253, Fifth Report and

Order, 59 FR 37566 (July 22, 1994).

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17. The Commission has auctioned broadband PCS licenses in Blocks

A, B, and C. The Commission does not have sufficient data to determine

how many small businesses bid successfully for licenses in Blocks A and

B. As of now, there are 90 non-defaulting winning bidders that qualify

as small entities in the Block C auctions. Based on this information,

the Commission concludes that the number of broadband PCS licensees

affected by the rule adopted in this Second R&O includes the 90 winning

bidders that qualify as small entities in the Block C broadband PCS

auctions.

18. At present, no licenses have been awarded for Blocks D, E, and

F of broadband PCS spectrum. Therefore, there are no small businesses

currently providing these services. However, a total of 1,479 licenses

will be awarded in the D, E, and F Block broadband PCS auctions, which

are scheduled to begin on August 26, 1996. Eligibility for the 493 F

Block licenses is limited to entrepreneurs with average gross revenues

of not more than $125 million. However, the Commission cannot estimate

how many of these licenses will be won by small entities, nor how many

small entities will win D and E Block licenses. Given the facts that

nearly all radiotelephone companies have fewer than 1,000 employees and

that no reliable estimate of the number of prospective D, E, and F

Block licensees can be made, the Commission assumes, for purposes of

its evaluations and conclusions in this FRFA, that all of the licenses

will be awarded to small entities, as that term is defined by the SBA.

C. Estimates for SMR Licensees

19. Pursuant to 47 CFR 90.814(b)(1), the Commission has defined

``small entity'' in auctions for geographic area 800 MHz and 900 MHz

SMR licenses as a firm that had average gross revenues of not more than

$15 million in the three previous calendar years. This regulation

defining ``small entity'' in the context of 800 MHz and 900 MHz SMR has

been approved by the SBA.8

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\8\ See Amendment of parts 2 and 90 of the Commission's rules to

Provide for the Use of 200 Channels Outside the Designated Filing

Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the

Specialized Mobile Radio Pool, PR Docket No. 89-583, Second Order on

Reconsideration and Seventh Report and Order, 60 FR 48913 (September

21, 1995); Amendment of Part 90 of the Commission's Rules to

Facilitate Future Development of SMR Systems in the 800 MHz

Frequency Band, PR Docket No. 93-144, First Report and Order, Eighth

Report and Order, and Second Further Notice of Proposed Rulemaking,

61 FR 6212 (February 16, 1996).

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[[Page 43980]]

20. The rule adopted in this Second R&O applies to SMR providers in

the 800 MHz and 900 MHz bands that either hold geographic area licenses

or have obtained extended implementation authorizations. The Commission

does not know how many firms provide 800 MHz or 900 MHz geographic area

SMR service pursuant to extended implementation authorizations, nor how

many of these providers have annual revenues of less than $15 million.

Since the Regulatory Flexibility Act amendments were not in effect

until the record in this proceeding was closed, the Commission was

unable to request information regarding the number of small businesses

in this category. The Commission does know that one of these firms has

over $15 million in revenues. The Commission assumes, for purposes of

its evaluations and conclusions in this FRFA, that all of the remaining

existing extended implementation authorizations are held by small

entities, as that term is defined by the SBA.

21. The Commission recently held auctions for geographic area

licenses in the 900 MHz SMR band. There were 60 winning bidders who

qualified as small entities in the 900 MHz auction. Based on this

information, the Commission concludes that the number of geographic

area SMR licensees affected by the rule adopted in this Second R&O

includes these 60 small entities.

22. No auctions have been held for 800 MHz geographic area SMR

licenses. Therefore, no small entities currently hold these licenses. A

total of 525 licenses will be awarded for the upper 200 channels in the

800 MHz geographic area SMR auction. However, the Commission has not

yet determined how many licenses will be awarded for the lower 230

channels in the 800 MHz geographic area SMR auction. There is no basis

to estimate, moreover, how many small entities within the SBA's

definition will win these licenses. Given the facts that nearly all

radiotelephone companies have fewer than 1,000 employees and that no

reliable estimate of the number of prospective 800 MHz licensees can be

made, the Commission assumes, for purposes of its evaluations and

conclusions in this FRFA, that all of the licenses will be awarded to

small entities, as that term is defined by the SBA.

IV. Summary of Projected Reporting, Recordkeeping and Other Compliance

Requirements

23. The rule adopted in this Second R&O imposes no reporting or

recordkeeping requirements. The only compliance requirement is that

licensees subject to the rule (i.e., cellular licensees, broadband PCS

licensees, and geographic area 800 MHz and 900 MHz SMR licensees that

offer real-time, two-way, interconnected switched voice service) must

provide manual roaming service upon request to subscribers in good

standing of covered services who are using technically compatible

equipment.

V. Steps Taken to Minimize the Economic Impact on Small Entities

24. The rule adopted in this Second R&O only requires certain CMRS

licensees to provide manual roaming service to eligible subscribers

upon request. The Commission determines on the present record not to

promulgate any rule governing roaming agreements between carriers, but

instead to request further comment regarding the need for any such rule

and the costs that it would impose. Thus, the Commission in this Second

R&O avoids potential burdens that a rule governing intercarrier roaming

agreements might impose on small entities, including questions

regarding the feasibility and cost of offering automatic roaming under

certain circumstances, the administrative costs of entering into

roaming agreements, and possible exposure to fraud. Furthermore, the

rule requires covered licensees to provide service only to subscribers

who are using equipment that is technically capable of accessing their

systems. The rule therefore does not require carriers to adopt

particular technologies or to modify their networks to accommodate

roamers using different technologies. Because the rule neither requires

carriers to enter into roaming agreements nor impacts their

technological choices, it does not implicate the concerns raised by

rural carriers.

25. The Commission also determines not to apply its roaming rule to

CMRS providers other than cellular, broadband PCS and certain SMR

licensees. Many of the providers that are thereby excluded from the

rule are small entities, including paging, narrowband PCS, air-ground,

public coast service, and non-covered SMR providers. In addition, the

Commission requests comment on whether it should sunset the rule

adopted herein five years after it awards the last group of initial

licenses for currently allotted broadband PCS spectrum.

26. Finally, the Commission believes that the rule adopted in this

Second R&O will benefit certain small entities by ensuring that

subscribers of providers that do not have a nationwide presence or

affiliations will have the same right to obtain roaming service as

subscribers to competing larger carriers, provided they are using

technically compatible equipment.

VI. Significant Alternatives Considered and Rejected

27. The Commission considered and rejected the alternative of not

extending its existing manual roaming rule beyond cellular licensees

and cellular subscribers. Instead, the Commission concluded that the

rule should extend to broadband PCS and covered SMR services in order

to protect smaller and newer providers of these services from likely

competitive disadvantage. At the same time, the Commission rejected the

alternative of extending the rule to other CMRS services because the

record did not establish that ubiquitous roaming capability is

important to the competitive success or utility of these services. The

Commission also rejected the alternative of promulgating a rule

governing intercarrier roaming agreements in this Second R&O because

the record did not sufficiently illuminate the costs and benefits of

any such rule. Finally, the Commission rejected any alternative that

would require carriers to adopt particular technologies or modify their

physical networks.

VII. Report to Congress

28. The Commission shall send a copy of this Final Regulatory

Flexibility Analysis, along with this Second Report and Order, in a

report to Congress pursuant to SBREFA, 5 U.S.C. 801(a)(1)(A).

Ordering Clause

29. Accordingly, it is ordered that the rule amendments appearing

below are adopted and shall be effective October 28, 1996.

List of Subjects

47 CFR Part 20

Communications common carriers

47 CFR Part 22

Communications common carriers

[[Page 43981]]

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Parts 20 and 22 of Chapter I of Title 47 of the Code of Federal

Regulations are amended as follows:

PART 20--COMMERCIAL MOBILE RADIO SERVICES

1. The authority citation for part 20 continues to read as follows:

Authority: Sec. 4, 303, and 332, 48 Stat. 1066, 1092, as

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

2. Section 20.12 is amended by revising the section heading and

adding new paragraph (c) to read as follows:

Sec. 20.12 Resale and roaming.

* * * * *

(c) Roaming. Each licensee subject to this section must provide

mobile radio service upon request to all subscribers in good standing

to the services of any carrier subject to this Section, including

roamers, while such subscribers are located within any portion of the

licensee's licensed service area where facilities have been constructed

and service to subscribers has commenced, if such subscribers are using

mobile equipment that is technically compatible with the licensee's

base stations.

PART 22--PUBLIC MOBILE SERVICES

1. The authority citation for part 22 continues to read as follows:

Authority: Sec. 4, 303, and 332, 48 Stat. 1066, 1082, as

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

2. Section 22.901 is amended by revising the introductory paragraph

to read as follows:

Sec. 22.901 Cellular service requirements and limitations.

Cellular system licensees must provide cellular mobile

radiotelephone service upon request to subscribers in good standing,

including roamers, as provided in Sec. 20.12 of this chapter. A

cellular system licensee may refuse or terminate service, however,

subject to any applicable requirements for timely notification, to

anyone who operates a cellular telephone in an airborne aircraft in

violation of Sec. 22.925 or otherwise fails to cooperate with the

licensee in exercising operational control over mobile stations

pursuant to Sec. 22.927.

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[FR Doc. 96-21797 Filed 8-26-96; 8:45 am]

BILLING CODE 6712-01-P