# Use of the 28 GHz and 31 GHz Bands for Local Multipoint Distribution Service

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-8775

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** April 7, 1997
- **Citation:** 62 FR 16514

## Text

FEDERAL COMMUNICATIONS COMMISSION

47 CFR PART 101

[CC Docket No. 92-297; FCC 97-82]

Use of the 28 GHz and 31 GHz Bands for Local Multipoint
Distribution Service

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission adopts a Second Report and Order, Order on
Reconsideration and Fifth Notice of Proposed Rulemaking regarding the
use of the 28 GHz and 31 GHz Bands for Local Multipoint Distribution
Service (LMDS). The Second Report and Order designates an additional
300 megahertz of spectrum in the 31 GHz band to LMDS and adopts service
and competitive bidding rules for LMDS. The Order on Reconsideration
denies petitions for reconsideration of the Commission's dismissal of
applications for waiver of the Commission's point-to-point rules
governing the 28 GHz band. These portions of the decision will be
summarized in a future edition of the Federal Register. The Fifth
Notice of Proposed Rulemaking (Fifth NPRM) seeks comment on specific
rules to be applied for the partitioning and disaggregation of LMDS
licenses. This action is taken to establish a record from which to
consider procedural, administrative and operational rules for
partitioning and disaggregating LMDS licenses and to reach an ultimate
decision. This Fifth NPRM contains new information collections subject
to the Paperwork Reduction Act of 1995 (PRA). It will be submitted to
the Office of Management and Budget (OMB) for review under the PRA. The
general public is invited to comment on the proposed information
collections contained in this proceeding.

DATES: Comments are due on or before April 21, 1997, and reply comments
are due on or before May 6, 1997. Written comments by the public on the
proposed information collections are due by April 21, 1997.

ADDRESSES: Secretary, 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:
Bob James, Private Wireless Division, (202) 418-0680, Mark Bollinger or
Jay Whaley, Auctions Division, (202) 418-0660, or Joe Levin or Jane
Phillips, Policy Division, (202) 418-1310. 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 NPRM segment
of the Second Report and Order, Order on Reconsideration and Fifth
Notice of Proposed Rulemaking in CC Docket No. 92-297, FCC 97-82,
adopted March 11, 1997, and released March 13, 1997. The Second Report
and Order portion of this decision will be summarized in a future
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, 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

1. This Fifth NPRM contains a proposed 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 and agency comments
are due at the same time as other comments on this Fifth NPRM. 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

[[Page 16515]]

collection techniques or other forms of information technology.
OMB Approval Number: 3060-0531.
Title: Redesignation of 27.5 GHz Frequency Band, Establishing Rules
and Policies for Local Multipoint Distribution (NPRM CC Docket No. 92-
297).
Form No.: N/A.
Type of Review: Reinstatement, with change, of a previously
approved collection for which approval has expired.
Respondents: Business or other for-profit.
Number of Respondents: 197.
Estimated Time Per Response: 21 hours.
Total Annual Burden: 3,132.5 hours.
Total Annual Cost: $205,800.
Needs and Uses: The information requested will be used by FCC
personnel to determine whether partitioning and disaggregation
applicants are qualified legally and technically to be licensed to use
the radio spectrum.

OMB Approval Number: New Collection (which adds respondents to
three existing collections 3060-0105, FCC 430; 3060-0068, FCC 702;
3060-0623, FCC 600).
Title: Redesignation of 27.5 GHz Frequency Band, Establishing Rules
and Policies for Local Multipoint Distribution (NPRM CC Docket No. 92-
297).
Form No.: FCC Forms 430, 600, and 702.
Type of Review: New collection.
Respondents: Potential LMDS applicants.
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, 600, and 702 as follows:
The FCC 430 has 1,900 respondents, to be increased to 3,433; the
estimated time for completion is 2 hours per respondent. The total
annual burden for the FCC 430 is now 3,800 hours, and would increase to
6,866 hours. The FCC 600 has 194,769 respondents, which would be
increased to 198,053. The estimated time for completion is 4 hours per
respondent. The total annual burden is currently 779,076. This figure
will be increased to 792,212 hours if the changes proposed in the Fifth
NPRM are adopted. The Form 702 has 1,000 respondents, to be increased
to 2,644 respondents. The estimated time for completion is 5 hours per
respondent. The total annual burden for the FCC 702 is now 5,000 hours
and would increase to 13,220 hours.
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

2. The Commission has concluded in the Second Report and Order that
any LMDS licensee will be permitted to partition or disaggregate
portions of its authorization. As part of the next phase of our LMDS
rulemaking, the Commission is proposing specific procedural,
administrative, and operational rules to ensure effective
implementation of the general partitioning and disaggregation rules
adopted in the Second Report and Order for LMDS. It is the Commission's
tentative view that a more complete delineation of these partitioning
and disaggregation mechanisms, which we hope to achieve in this
rulemaking, will ensure realization of the competitive benefits that
are at the core of our partitioning and disaggregation policy.
3. In the Fifth NPRM we will seek comment as to how various
requirements imposed on LMDS licensees (e.g., construction
requirements) may be modified if such licensees partition or
disaggregate their authorization. We seek comment as to whether
partitioning of LMDS licenses should be permitted in a manner similar
to the rules for partitioning we have adopted for broadband PCS
licensees. In addition, we seek comment as to specific procedural,
administrative, and operational rules under which LMDS licensees are
permitted to disaggregate their licensed spectrum.
4. We seek comment on the following specific aspects of
partitioning and disaggregation, which we will need to address in order
to administer the general partitioning and disaggregation rules for
LMDS licensees that we have adopted in the Second Report and Order. For
example, we seek comment as to whether there are any technical or
regulatory constraints unique to the LMDS service that would render any
aspects of partitioning or disaggregation impractical or
administratively burdensome. Further, we recognize that there are
special competitive bidding issues, similar to those raised in the
broadband personal communications services (PCS) context, that must be
resolved if we permit partitioning and disaggregation for LMDS. We
address those issues separately in paragraphs 13 through 15, of the
Second Report and Order.

Available License Area

5. In the Partitioning and Disaggregation Report and Order, (62 FR
653, January 6, 1997) we found that allowing partitioning of broadband
PCS licenses along any service area defined by the parties is the most
logical approach. We concluded that allowing the parties to define the
partitioned PCS service area would allow licensees to design flexible
and efficient partitioning agreements which would permit marketplace
forces to determine the most suitable service areas. We also found that
requiring PCS partitioning along county lines was too restrictive and
might discourage partitioning.
6. We have decided to base LMDS licenses on Basic Trading Area
(BTA) geographic service areas, finding that BTAs are logical licensing
areas for LMDS because they comprise areas within which consumers have
a community of interest. We tentatively conclude that a flexible
approach to partitioned areas, similar to the one we adopted for
broadband PCS, is appropriate for LMDS. We therefore propose to permit
partitioning of LMDS licenses based on any license area defined by the
parties. We seek comment on this proposal, and in particular on whether
there are any technical or other issues unique to the LMDS service that
might impede the adoption of a flexible approach to defining the
partitioned license area.

Minimum or Maximum Disaggregation Standards

7. We seek comment as to whether we should augment our general rule
permitting disaggregation of LMDS spectrum in order to establish
minimum disaggregation standards. We seek to determine whether, given
any unique characteristics of LMDS, technological and administrative
considerations warrant the adoption of such standards. We seek comment
as to whether we should adopt standards which would be flexible enough
to encourage disaggregation while providing a standard which is
consistent with our technical rules and by which we would be able to
track disaggregated spectrum and review disaggregation proposals in an
expeditious fashion.

Combined Partitioning and Disaggregation

8. We seek comment regarding whether combined partitioning and
disaggregation should be permitted for LMDS. By ``combined''
partitioning and disaggregation we refer to circumstances

[[Page 16516]]

in which a licensee would be authorized, for example, to obtain a
license for a portion of a BTA with only a portion of the 1,150
megahertz license or the 150 megahertz license involved in the
disaggregation of spectrum. As another example, the licensee could
obtain a license consisting of a partitioned portion of one or more
other licenses held by other LMDS providers and a disaggregated portion
of one or more other licenses held by other LMDS providers. We
tentatively conclude that we should permit such combinations in order
to provide carriers with the flexibility they need to respond to market
forces and demands for service relevant to their particular locations
and service offerings.

Construction Requirements

9. In paragraphs 266-272 of the Order we have adopted today we have
promulgated a performance standard under which a licensee must make a
showing of substantial service at the end of the license term. In the
case of partitioned LMDS licenses, we propose that the partitionee must
certify 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.
10. In the case of disaggregated LMDS licenses, we propose to adopt
rules for LMDS licensees similar to those disaggregation certification
rules we have adopted for broadband PCS. (See Partitioning and
Disaggregation Report and Order, at paras. 61-63.) Under such a
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 performance requirement for the LMDS
market involved. If one party takes responsibility for meeting the
performance requirement, then actual performance by that party would be
taken into account in a renewal proceeding at the end of the license
term, but such performance would not affect the status of the other
party's license. If both parties agree to share the responsibility for
meeting the performance requirement, then the performance of each of
the parties would be taken into account in the respective renewal
proceedings.

License Term

11. In the Order we have adopted today we established a 10-year
license term for LMDS licenses. In this Fifth NPRM we are proposing
that LMDS licenses should be eligible for a license renewal expectancy
based upon the criteria established in Section 22.940(a) of the
Commission's Rules.
12. In the Partitioning and Disaggregation Report and Order, we
found that allowing parties acquiring a partitioned license or
disaggregated spectrum to ``re-start'' the license term from the date
of the grant of the partial assignment application could allow parties
to circumvent our established license term rules and unnecessarily
delay service. We seek comment as to whether our LMDS rules should
similarly provide that parties obtaining partitioned LMDS licenses or
disaggregated spectrum hold their license for the remainder of the
original licensee's 10-year license term. In addition, we seek comment
as to whether LMDS partitionees and disaggregatees should be afforded
the same renewal expectancy as we have proposed for other LMDS
licensees. We tentatively conclude 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.

Competitive Bidding Issues

13. Competitive bidding issues similar to those in broadband PCS
arise in the context of LMDS partitioning and disaggregation. Our
competitive bidding rules for the LMDS service include provisions for
installment payments and bidding credits for small businesses and
businesses with average annual gross revenues not exceeding $75
million. We also adopted rules to prevent unjust enrichment by such
entities that seek to transfer licenses obtained through use of one of
these special benefits.
14. We tentatively conclude that LMDS partitionees and
disaggregatees that would qualify for installment payments should be
permitted to pay their pro rata share of the remaining Government
obligation through installment payments. We seek comment on this
tentative conclusion. We further invite 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 LMDS more difficult than for broadband
PCS. Since LMDS service areas are allotted on a geographic basis, in a
manner similar to broadband PCS, we propose 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 we seek comment on this proposal.
15. We seek comment regarding whether to apply unjust enrichment
rules to small business LMDS licensees, or LMDS licensees with average
annual gross revenues not exceeding $75 million, that partition or
disaggregate to larger businesses. Commenters should address how to
calculate unjust enrichment payments for LMDS licensees paying through
installment payments and those that were awarded bidding credits that
partition or disaggregate to larger businesses. Commenters should
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. We propose
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 we seek comment on this proposal. (See
Partitioning and Disaggregation Report and Order at paras. 34-35).

Licensing Issues

16. We propose that all LMDS licensees who are parties to
disaggregation or partitioning arrangements must comply with our
technical and service rules established in the Order we are adopting
today. We also propose that coordination and negotiation among
licensees must be maintained and applied in licensing involving
disaggregated or partitioned licenses.
17. We propose to treat the disaggregation and partitioning of LMDS
licenses to be types of assignments requiring prior approval by the
Commission. We therefore propose to follow existing assignment
procedures for disaggregation and partitioning. Under this proposal,
the licensee must file FCC Form 702 signed by both the licensee and
qualifying entity. The qualifying entity would also be required to file
an FCC Form 430 unless a current FCC Form 430 is already on file with
the Commission.

Administrative Matters

18. Pursuant to applicable procedures set forth in Sections 1.415
and 1.419 of the Commission's Rules, 47 CFR Sections 1.415 and 1.419,
interested parties may file comments on or before April 21, 1997, and
reply comments on or before May 5, 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

[[Page 16517]]

Commissioner to receive 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 FCC
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C.
20554.
19. 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 Sections 1.1202, 1.1203, and
1.1206(a).

Initial Regulatory Flexibility Analysis

20. 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 NPRM, but they
must have a separate and distinct heading designating them as responses
to the IRFA. The Secretary shall send a copy of this Fifth NPRM,
including the IRFA, 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.
Section 601 et seq. (1981).

Initial Regulatory Flexibility Act Statement

21. Need for and Objectives: Our objectives are to afford licensees
the flexibility to disaggregate and partition their licenses so as to:
(1) promote efficient use of LMDS spectrum by leaving determinations
regarding the correct size of licenses to the licensees, who are in the
best position to analyze their business plans, assess new technology,
and determine customer demand, (2) encourage more rapid deployment of
services in the LMDS spectrum, (3) enable licensees to concentrate on
core areas or to deliver services to isolated complexes, such as rural
towns or university campuses, that do not lie within major market
areas, and (4) provide opportunities for small businesses seeking to
enter the multichannel video programming distribution and local
telephony marketplaces.
22. Legal Basis for Proposed Rules: The proposed action is
authorized under the Administrative Procedure Act, 5 U.S.C. Sec. 553;
and Secs. 4(i), 257, 303(g), 303(r), 309(j) and 332(a) of the
Communications Act of 1934, 47 U.S.C. Secs. 154(i), 257, 303(g),
303(r), 309(j), 332(a).
23. Description and Estimate of Small Entities Subject to the
Rules: The service regulations we adopt to implement LMDS would apply
to all entities seeking an LMDS license, including small entities. In
addition, the in-region, temporary eligibility restrictions we adopt
would apply to qualifying LECs and cable companies. Finally, the rules
we adopt to designate additional spectrum for LMDS in the 31.0-31.3 GHz
band would apply to all entities providing incumbent services under
existing rules for 31 GHz services. We consider these three groups of
affected entities separately below.

Estimates of Potential Applicants of LMDS

24. SBA has developed definitions applicable to radiotelephone
companies and to pay television services. We are using these
definitions that SBA has developed because these categories approximate
most closely the services that may be provided by LMDS licensees. The
definition of radiotelephone companies provides that a small entity is
a radiotelephone company employing fewer than 1,500 persons. (See 13
CFR 121.201, Standard Industrial Classification (SIC) 4812.) The
definition of a pay television service is one which has annual receipts
of $11 million or less. (SIC 4841)
25. The size data provided by SBA do not enable us to make an
accurate estimate of the number of telecommunications providers which
are small entities because it combines all radiotelephone companies
with 500 or more employees. We therefore use 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. Likewise, the size data provided by SBA do not enable us to
make a meaningful estimate of the number of cable and pay television
providers which are small entities because it combines all such
providers with revenues of $11 million or less. We therefore use the
1992 Census of Transportation, Communications, and Utilities (Table
2D), conducted by the Bureau of the Census, which is the most recent
information available. This document shows that only 36 of 1,788 firms
providing cable and pay television service have a revenue of greater
than $10 million. Therefore, the majority of LMDS entities to provide
video distribution and telecommunications services may be small
businesses under SBA's definition.
26. The Commission has not developed a definition of small entities
applicable to LMDS licensees, which is a new service being licensed in
the Order. The RFA amendments were not in effect until shortly before
the Fourth Notice of Proposed Rulemaking (Fourth NPRM) was released,
and no data has been received establishing the number of small
businesses associated with LMDS. However, in the Third Notice of
Proposed Rulemaking (Third NPRM) we proposed to auction the spectrum
for assignment and requested information regarding the potential number
of small businesses interested in obtaining LMDS spectrum, in order to
determine their eligibility for special provisions such as bidding
credits and installment payments to facilitate participation of small
entities in the auction process. In the Order we adopt criteria for
defining small businesses for purposes of determining such eligibility.
We will use this definition for estimating the potential number of
entities applying for auctionable spectrum that are small businesses.
27. As discussed in Section II.D.2.e of the Order, we adopt
criteria for defining small businesses and other eligible entities for
purposes of defining eligibility for bidding credits and installment
payments. We define a small business as an entity that, together with
affiliates and controlling principals, has average gross revenues not
exceeding $40 million for the three preceding years (paras. 345 and 348
of the Order). Additionally, bidding credits and installment payments
are available to applicants that, together with affiliates and
controlling principals, have average gross revenues for the three
preceding years of more than $40 million but not more than $75 million
(paras. 349 and 358 of the Order).
28. SBREFA was not in effect until the record in the Third NPRM
closed, and we did not seek comment on the potential number of
prospective applicants for LMDS that might qualify as small businesses.
Therefore, we are unable to predict accurately the number of applicants
for LMDS that would fit the definition of a small business for
competitive bidding purposes. However, using the definition of small
business we adopted for auction eligibility, we can estimate the number
of applicants

[[Page 16518]]

that are small businesses by examining the number of applicants in
similar services that qualified as small businesses. For example, MDS
authorizes non-common carrier services similar to what may be developed
through LMDS. The MDS rules provide a similar definition of a small
business as an entity that, together with its affiliates, has annual
gross revenues for the three proceeding years not in excess of $40
million. A total of 154 applications were received in the MDS auction,
of which 141, or 92 percent, qualified as small businesses.
29. We plan to issue 2 licenses for each of the 492 BTAs, excluding
New York, that are the geographic basis for licensing LMDS. Thus, 984
licenses will be made available for authorization in the LMDS auction.
Inasmuch as 92 percent of the applications were received in the MDS
auction were from entities qualifying as small businesses, we
anticipate receiving at least the same from LMDS applicants interested
in providing non-common carrier services.
30. There is only one company, CellularVision, that is currently
providing LMDS video services. Although the Commission does not collect
data on annual receipts, we assume that CellularVision is a small
business under both the SBA definition and our proposed auction rules.
31. Reporting, Recordkeeping, and Other Compliance Requirements:
Under the proposal contained in the Fifth NPRM: (1) acquisitions by
partitioning or disaggregation will be treated as assignments of a
license and will require the parties to seek prior approval of the
Commission; (2) the parties will be required to identify which of them
will be responsible for complying with the construction requirements
set forth in the Second Report and Order we have adopted today, and to
submit a certification to that effect, signed by both parties, (3)
parties failing to meet their construction requirement obligations will
be subject to forfeiture of their license; and (4) licensees afforded
bidding preferences and other benefits available to small entities will
be subject to the Commission's unjust enrichment rules should they
partition or disaggregate to entities that are not small businesses. If
adopted, this proposal would apply to all LMDS licensees and all
entities that attempt to acquire an LMDS license by means of
partitioning or disaggregation. We request comment on how these
requirements can be modified to reduce the burden on small entities and
still meet the objectives of the proceeding.
32. Significant Alternatives Minimizing the Significant Economic
Impact on a Substantial Number of Small Entities Consistent with the
Stated Objectives: We have not identified any significant alternatives
that would minimize the significant economic impact on small entities
that are consistent with the stated objectives to allow a flexible
approach to partitioning and disaggregation of LMDS. We tentatively
conclude that a flexible approach affords providers, including small
businesses, the ability to respond to market forces and demands for
service relevant to their particular locations and service offerings.
The regulatory burdens we have imposed on LMDS licensees with
respect to assignments and buildout certifications, as well as unjust
enrichment, are necessary in order to ensure that the public receives
the benefits of innovative new services in a prompt and efficient
manner. We seek comment on any significant alternatives that are
consistent with the objectives in the NPRM.
33. Federal Rules That Overlap, Duplicate, or Conflict with These
Proposed Rules: None.

List of Subjects in 47 CFR Part 101

Communications common carriers, Radio, Reporting and recordkeeping
requirements.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-8775 Filed 4-4-97; 8:45 am]
BILLING CODE 6712-01-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-8775. Public record. Not legal advice.