Provision for the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service; Implementation of Sections 3(n) and 332 of the Communications Act Regulatory Treatment of Mobile Services; and Implementation of Section 309(j) of the Communications ActCompetitive Bidding

SUMMARY: The Commission adopts a Third Report and Order and Fifth

Notice of Proposed Rulemaking regarding the use of the 220-222 MHz Band

(220 MHz service) by the Private Land Mobile Radio Service. The Third

Report and Order portion of this decision is summarized elsewhere in

this edition of the Federal Register. The Fifth Notice of Proposed

Rulemaking (Fifth NPRM) seeks comment on various issues related to the

partitioning of 220 MHz licenses and whether to permit full

partitioning and disaggregation in the 220 MHz service. This action is

taken to establish a record from which to consider the specific rules

that should govern partitioning and the benefits and drawbacks of full

partitioning and disaggregation, and to reach an ultimate decision.

DATES: Comments are due on or before April 15, 1997, and reply comments

are due on or before April 30, 1997. Written comments by the public on

the proposed and/or modified information collections are due June 2,

1997.

ADDRESSES: Federal Communications Commission, Washington, DC 20554. In

addition to filing comments with the Secretary, a copy of any comments

on the information collections contained herein should be submitted to

Dorothy Conway, Federal Communications Commission, Room 234, 1919 M

Street, NW, Washington, DC 20554, or via the Internet to

[email protected].

FOR FURTHER INFORMATION CONTACT: Mary Woytek, (202) 418-1310, or Frank

Stilwell, (202) 418-0660, Wireless Telecommunications Bureau. For

additional information concerning the information collections contained

in this Fifth NPRM, contact Dorothy Conway at (202) 418-0217, or via

the Internet at [email protected].

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

Proposed Rulemaking segment of the Third Report and Order and Fifth

Notice of Proposed Rulemaking in PR Docket No. 89-552, FCC 97-57,

adopted February 19, 1997, and released March 12, 1997. The Third

Report and Order portion of this decision is summarized elsewhere in

this edition of the Federal Register. The complete text of this

decision is available for inspection and copying during normal business

hours in the FCC Reference Center (Room 239), 1919 M Street, NW,

Washington, DC 20554 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.

Paperwork Reduction Act

This Fifth NPRM contains either a proposed or modified information

collection. The Commission, as part of its continuing effort to reduce

paperwork burdens, invites the general public to comment on the

information collections contained in this Fifth NPRM, as required by

the Paperwork Reduction Act of 1995, Public Law 104-13. Public comments

are due June 2, 1997. Comments should address: (a) Whether the proposed

collection of information is necessary for the proper performance of

the functions of the Commission, including whether the information

shall have practical utility; (b) the accuracy of the Commission's

burden estimates; (c) ways to enhance the quality, utility, and clarity

of the information collected; and (d) ways to minimize the burden of

the collection of information on the respondents, including the use of

automated collection techniques or other forms of information

technology.

OMB Approval Number: New Collection (which adds respondents to

three existing collections 3060-0105, FCC 430; 3060-0319, FCC 490;

3060-0623, FCC 600).

Title: Amendment of Part 90 of the Commission's Rules to Provide

for the Use of the 220-222 MHz Band by the Private Land Mobile Radio

Service.

Form No.: FCC Forms 430, 490, and 600.

Type of Review: New collection.

Respondents: 220 MHz applicants and potential applicants and

licensees.

Number of Respondents; Estimated Time Per Response and Total Annual

Burden: If the proposed changes in the Fifth NPRM are adopted the

respondents and burden for the FCC Form's 430, 490 and 600 as follows:

The FCC 430 has 1,900 respondents, to be increased to 23,050; the

estimated time for completion is 2 hours per respondent. The total

annual burden for the FCC 430 would increase to 46,100 hours. The Form

490 has 5,000 respondents, to be increased to 28,500; the estimated

time for completion is 3 hours per respondent. The total annual burden

for the FCC 490 would increase to 85,500. The FCC 600 has 194,769

respondents, which may be increased by the Third Report and Order to

197,777, and further increased to 244,777 by the Fifth NPRM. The

estimated time for completion is 4 hours per respondent. The total

annual burden is 779,076. This figure will be increased to 791,108 by

an information collection adopted in the Third Report and Order portion

of this decision and to 979,108 hours if the changes proposed in the

Fifth NPRM are adopted.

Needs and Uses: The information will be used by Commission

personnel to determine if the licensee is a qualifying entity to obtain

a partitioned license or disaggregated spectrum. Additionally, the

information will be used by Commission personnel to determine who is

using spectrum and thus maintain the integrity of the spectrum.

Synopsis of the Fifth Notice of Proposed Rulemaking

1. The Commission has concluded in the Third Report and Order that

it will permit any holder of a Phase II Economic Area (EA), nationwide,

or Regional 220 MHz license to partition portions of its

authorization.1 In this Fifth NPRM, the Commission considers the

issue of full partitioning for Phase I nationwide 220 MHz licensees and

the establishment of disaggregation rules for the 220 MHz service. As

we indicated in the recent Partitioning Report and Order (which

expanded the Commission's rules to permit geographic partitioning and

disaggregation for all broadband PCS licensees), the Commission

believes that partitioning and disaggregation are an effective means of

providing broadband PCS licensees with the flexibility they need to

tailor their service offerings to meet market demands.2 The

Partitioning Report and Order further concluded that partitioning and

disaggregation may be used to overcome entry barriers through the

creation of smaller licenses that require less capital, thereby

facilitating greater participation by small businesses, rural telephone

companies, and minority- and female-owned

[[Page 16005]]

businesses.3 The Commission seeks comment on whether these

benefits similarly justify the extension of partitioning rules to Phase

I nationwide licensees and the establishment of disaggregation rules

for the 220 MHz service.

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\1\ The Commission refers to such licenses as ``Covered Phase II

licenses.''

\2\Report and Order and Further Notice of Proposed Rule Making

in GN Docket No. 96-113, 62 FR 653 (January 6, 1997).

\3\ Id.

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2. The Commission seeks comment as to how various requirements

imposed on covered Phase II licensees may be modified if such licensees

partition their authorization. The Commission also invites comment as

to whether partitioning of 220 MHz Phase I nationwide licenses should

be permitted in a manner similar to the rules for partitioning that

have been adopted for broadband PCS licensees. The Commission

tentatively concludes that it should not adopt partitioning for those

Phase II licensees that are not covered Phase II licensees and non-

nationwide Phase I licensees because such licenses are awarded on a

site-specific rather than for a geographic area basis. In addition, the

Commission seeks comment as to whether all Phase I and Phase II 220 MHz

licensees should be permitted to disaggregate their licensed spectrum.

Since the 220 MHz service includes non-commercial uses by Public Safety

and EMRS entities, the Commission seeks comment as to whether

additional rules for partitioning and disaggregation should be adopted

to address the use of the 220 MHz service for possible commercial and

non-commercial services.

3. The full text of this Fifth NPRM solicits comment on specific

aspects of partitioning and disaggregation, which will need to be

addressed if the Commission decides to adopt partitioning for Phase I

nationwide licensees and disaggregation for all 220 MHz licensees. For

example, Phase I nationwide licensees are not currently permitted to

assign or transfer a license before the licensee has constructed at

least 40 percent of the proposed system. The Commission therefore seeks

comment as to whether a Phase I nationwide licensee should be permitted

to partition or disaggregate prior to constructing at least 40 percent

of its proposed system. The Commission also seeks comment as to whether

there are technical or regulatory constraints unique to the 220 MHz

service that would render partitioning or disaggregation impractical or

administratively burdensome.

4. Covered Phase II 220 MHz service areas are based on nationwide,

Economic Areas or Regional Areas. In addition, there are Phase I

nationwide licenses in the 220 MHz service. The Commission tentatively

concludes that a flexible approach to partitioned areas, similar to the

one adopted for broadband PCS, is appropriate for the 220 MHz service.

The Commission therefore proposes to permit partitioning of Phase I

nationwide and covered Phase II 220 MHz licenses based on any license

area defined by the parties. Comment is invited on this proposal, and

in particular on whether this proposal is consistent with the

Commission's licensing of the 220 MHz service, and whether there are

any technical or other issues unique to the 220 MHz service that might

impede the adoption of a flexible approach to defining the partitioned

license area.

5. The Commission next seeks comment as to whether, if

disaggregation in the 220 MHz service is permitted, minimum

disaggregation standards are necessary. The Commission seeks to

determine whether, given the unique characteristics of the 220 MHz

service, technological and administrative considerations warrant the

adoption of such standards. The Commission seeks comment as to whether

to adopt standards which would be flexible enough to encourage

disaggregation while providing a standard which is consistent with its

technical rules and by which it would be able to track disaggregated

spectrum and review disaggregation proposals in an expeditious fashion.

6. The Commission further seeks comment regarding whether combined

partitioning and disaggregation should be permitted for the 220 MHz

service. The Commission tentatively concludes that it should permit

such combinations in order to provide parties the flexibility they need

to respond to market forces and demands for service relevant to their

particular locations and service offerings.

7. The Commission seeks comment as to whether it should adopt rules

for covered Phase II licensees to establish dual construction options

and attendant requirements for 220 MHz service partitioners and

partitionees, similar to those adopted for broadband PCS. Under the

first option, the partitionee certifies that it will satisfy the same

construction requirements as the original licensee. The partitionee

then must meet the prescribed service requirements in its partitioned

area while the partitioner is responsible for meeting those

requirements in the area it has retained. Under the second option, the

original licensee certifies that it has already met or will meet its 5-

year construction requirement and that it will meet the 10-year

requirement for the entire market involved. Because the original

licensee retains the responsibility for meeting the construction

requirements for the entire market, the partitionee is permitted to

comply with a less rigorous construction requirement--the partitionee

must only meet a substantial service requirement for its partitioned

license area at the end of the 10-year license term. The Commission

particularly seeks comment as to the appropriateness of the lesser

construction requirement for the second option.

8. The Commission invites comment as to whether to adopt rules for

covered Phase II licensees similar to the disaggregation rules adopted

for broadband PCS. Under this certification approach, the

disaggregating parties would be required to submit a certification,

signed by both the disaggregator and disaggregatee, stating whether one

or both of the parties will retain responsibility for meeting the 5-

and 10-year construction requirements for the 220 MHz market involved.

If one party takes responsibility for meeting the construction

requirements, then that party would be subject to license forfeiture

for failing to meet the construction requirements, but such a failure

would not affect the status of the other party's license. If both

parties agree to share the responsibility for meeting the construction

requirements, then both parties' licenses would be subject to

forfeiture if either party fails to meet the construction requirements.

9. The Commission proposes rules for licensees other than covered

Phase II licensees that differ from the approach taken in the

Partitioning Report and Order. Phase I non-nationwide licensees and

Phase II licensees authorized on Public Safety or EMRS channels are not

authorized to operate within a particular geographic area, but instead

are authorized to construct a single land mobile base station for base

and mobile operations. Phase I non-nationwide licensees must construct

their systems, having all specified base stations constructed with all

channels, and place their systems in operation within eight months of

the initial license grant.

10. The Commission proposes that Phase I non-nationwide licensees

be permitted to disaggregate their licensed spectrum only after they

have met the applicable construction deadline. The Commission also

proposes that Phase II licensees operating on Public Safety or EMRS

channels should be permitted to disaggregate their licensed spectrum

only after they have met the applicable construction deadline. Since

the construction deadline would therefore

[[Page 16006]]

be met before any disaggregation is allowed, no construction

requirement would be imposed on a disaggregatee. Comment is solicited

on these proposals.

11. The Commission next tentatively concludes that a disaggregatee

obtaining spectrum from a Phase I nationwide licensee should be

required to meet the same two-, four-, six-, and 10-year construction

requirements as the original licensee. The disaggregatee would be

required to meet the same two-, four-, six-, and 10-year requirements

as the original licensee for the spectrum it obtains. The Commission

seeks comment on this tentative conclusion.

12. Because the construction requirements for Phase I nationwide

licensees differ so markedly from those pertaining to Phase II

nationwide licensees or licensees in other services such as broadband

PCS or GWCS, it does not appear, as a practical matter, to be possible

to have similar construction options for Phase I nationwide

partitionees. Given the difficulties created by these construction

requirements, the Commission seeks comment on whether partitioning of

Phase I nationwide licenses should be permitted. If such partitioning

is allowed, the Commission seeks comment on what construction

requirements could be imposed on the original licensee and any

partitionees. In light of the unique construction requirements imposed

on Phase I nationwide licensees, the Commission also seeks comment on

what type of construction requirements should be imposed on Phase I

licensees and their partitionees and disaggregatees if a Phase I

nationwide license is both partitioned and disaggregated.

13. Regarding the license term, the Commission seeks comment as to

whether its 220 MHz rules should provide that parties obtaining

partitioned 220 MHz licenses or disaggregated spectrum hold their

license for the remainder of the original licensee's five- or 10-year

license term. In addition, the Commission seeks comment as to whether

220 MHz partitionees and disaggregatees should be afforded the same

renewal expectancy as other 220 MHz licensees. The Commission

tentatively concludes that limiting the license term of the partitionee

or disaggregatee is necessary to ensure that there is maximum incentive

for parties to pursue available spectrum as quickly as practicable.

14. The Commission's competitive bidding rules for the covered

Phase II 220 MHz service include provisions for installment payments

and bidding credits for small businesses and very small businesses. The

Commission has also adopted rules to prevent unjust enrichment by such

entities that seek to transfer licenses obtained through use of one of

these special benefits. The Commission tentatively concludes that the

Phase II 220 MHz service partitionees and disaggregatees that would

qualify as small businesses or very small businesses should be

permitted to pay their pro rata share of the remaining government

obligation through installment payments. The Commission seeks comment

on this tentative conclusion. The Commission also invites comment as to

the exact mechanisms for apportioning the remaining government

obligation between the parties and whether there are any unique

circumstances that would make devising such a scheme for the Phase II

220 MHz service more difficult than for broadband PCS. Since Phase II

220 MHz service areas are allotted on a geographic basis, in a manner

similar to broadband PCS, the Commission proposes using population as

the objective measure to calculate the relative value of the

partitioned area and amount of spectrum disaggregated as the objective

measure for disaggregation, and seeks comment on this proposal.

15. The Commission invites comment on whether to apply unjust

enrichment rules to small or very small business Phase II 220 MHz

licensees that partition or disaggregate to non-small businesses.

Commenters should address how to calculate unjust enrichment payments

for designated entity Phase II 220 MHz service licensees paying through

installment payments and those that were awarded bidding credits that

partition or disaggregate to non-small businesses. The Commission asks

that commenters also address how it should calculate unjust enrichment

payments in situations where a very small business partitions or

disaggregates to a small business that qualifies for a lower bidding

credit. Commenters should also address whether the unjust enrichment

payments should be calculated on a proportional basis, using population

of the partitioned area and amount of spectrum disaggregated as the

objective measures. The Commission proposes using methods similar to

those adopted for broadband PCS for calculating the amount of the

unjust enrichment payments that must be paid in such circumstances, and

seeks comment on this proposal.

16. Section 90.709(d) of the Commission's rules currently forbids

partial assignment of Phase I 220 MHz licenses. However, since there

are existing partial assignment rules for commercial mobile radio

stations in part 90, the Commission proposes utilizing partial

assignment procedures, similar to those adopted for broadband PCS, to

review 220 MHz partitioning and disaggregation transactions. Partial

assignment applications would be placed on public notice and subject to

petitions to deny. The parties would be required to submit an FCC Form

490, an FCC Form 600 and, if necessary, an FCC Form 430, together as

one package under cover of the FCC Form 490. The Commission invites

comment on whether any additional procedures are necessary for

reviewing these applications. We also seek comment on how licensing

issues should be addressed for non-commercial mobile radio stations in

the 220 MHz service with respect to partial assignments.

Administrative Matters

17. Pursuant to applicable procedures set forth in Secs. 1.415 and

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

parties may file comments on or before April 15, 1997, and reply

comments on or before April 30, 1997. To file formally in this

proceeding, you must file an original plus 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, DC

20554. Comments and reply comments will be available for public

inspection during regular business hours in the FCC Reference Center

(Room 239), 1919 M Street, NW., Washington, DC 20554.

18. 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 the

Commission rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).

Initial Regulatory Flexibility Act Statement

19. 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. These comments must be filed in accordance with the same

filing deadlines as comments on the rest of this Fifth Notice of

Proposed Rulemaking, but they must have a separate and distinct heading

[[Page 16007]]

designating them as responses to the Initial Regulatory Flexibility

Analysis. The Secretary shall send a copy of this Fifth Notice of

Proposed Rulemaking, 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 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq.

(1981).

List of Subjects in 47 CFR Part 90

Business and industry, Radio.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97-8013 Filed 4-2-97; 8:45 am]

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