Commission's Rules To License Fixed Services at 24 GHz

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 2, and 101

[WT Docket No. 99-327; FCC 99-333]

Commission's Rules To License Fixed Services at 24 GHz

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Notice of Proposed Rulemaking (NPRM), the Commission

proposes licensing and service rules to govern the 24 GHz band

generally. Specifically, the Commission proposes that future licensees

in the 24 GHz band, as well as licensees relocated to the 24 GHz band

from the 18 GHz band, will be generally subject to part 101, as

modified to reflect the particular characteristics and circumstances of

this band. The Commission also proposes to apply competitive bidding

procedures under the Commission's part 1 competitive bidding rules for

future licensing in the band.

DATES: Comments are due on or before January 19, 2000. Reply comments

are due on or before February 7, 2000.

ADDRESSES: Federal Communications Commission, Secretary, 445 12th

Street, SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Howard Davenport, Wireless

Telecommunications Bureau, Auctions and Industry Analysis Division,

Legal Branch, at (202) 418-0585. Media Contact: Meribeth McCarrick at

(202) 419-0654.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice

of Proposed Rulemaking in the matter of Amendments to parts 1, 2, and

101 of the Commission's Rules To License Fixed Services at 24 GHz, WT

Docket No. 99-327, adopted November 4, 1999 and released November 10,

1999. The complete text of this NPRM is available for inspection and

copying during normal business hours in the Commission's Reference

Center (Room CY-A257), 445 12th Street, SW, Washington, DC and also may

be purchased from the Commission's copy contractor, International

Transcription Services, Inc. (ITS, Inc.), 1231 20th Street, NW,

Washington, DC 20036, (202) 857-3800. It is also available through the

Internet at http://www.fcc.gov.

Synopsis of Notice of Proposed Rulemaking

1. In 1983, the Commission adopted rules for Digital Electronic

Message Service (``DEMS''), which was envisioned as a high-speed, two-

way, point-to-multipoint terrestrial microwave transmission system.

See, Amendment of the Commission's Rules to Relocate the Digital

Electronic Message Service From the 18 GHz Band to the 24 GHz Band and

to Allocate the 24 GHz Band for Fixed Service, Memorandum Opinion and

Order, 63 FR 50538, (September 22, 1998), (``DEMS MO&O''). The service

was allocated spectrum in the 18.36-18.46 GHz band paired with the

18.94-19.04 GHz band. Subsequently, the Commission modified the initial

DEMS allocation, instead designating spectrum in the 18.82-18.92 GHz

and 19.16-19.26 GHz bands. The Commission began to grant DEMS licenses

in the early 1980's, but the service was not initially commercially

successful. Frequently, licensees had to return their licenses because

they had not met construction requirements. The high cost of equipment

appears to have been one of the many issues involved in the service's

lack of early success. In the early 1990s, a small number of companies

began acquiring licenses in approximately 30 of the country's largest

markets.

2. In January 1997, and again in March 1997, the National

Telecommunications and Information Administration (``NTIA''), on behalf

of the United States Department of Defense (``DoD''), formally

requested that the Commission take action to protect military satellite

system operations in the 18 GHz band. NTIA stated that DEMS use of

frequencies in the 17.8-20.2 GHz bands within 40 kilometers of existing

Government Fixed-Satellite Service (``FSS'') earth stations ``will not

be possible.'' As a result, NTIA asked the Commission to protect those

government satellite earth stations operating in the 18 GHz band in

Washington, DC and Denver, and ``[e]xpeditiously undertake any other

necessary actions, such as amending the Commission's rules and

modifying Commission issued licenses.'' Specifically, in its January

1997 letter, NTIA stated:

We are asking that these actions be undertaken on an expedited

basis. As we have previously indicated, this matter involves

military functions, as well as specific sensitive national security

interests of the United States. These actions are essential to

fulfill requirements for Government space systems to perform

satisfactorily.

The Commission is permitted to amend its Rules without complying

with the notice provisions of the Administrative Procedure Act (APA) in

cases involving any ``military, naval of [sic] foreign affairs function

of the United States'' or where the agency for good cause finds

``notice and public procedure * * * are impracticable, unnecessary, or

contrary to the public interest.'' To protect the two government earth

stations from interference, NTIA proposed to make 400 MHz of spectrum

available in the 24 GHz band so that the Commission could relocate DEMS

licensees. Recognizing the Commission's objective of maintaining DEMS

on a uniform, nationwide frequency band, NTIA stated that ``[t]aking

into account our common interests, [NTIA] could make available spectrum

in the region of 24.25-24.65 GHz'' and suggested that ``the Commission

take such steps as may be necessary to license DEMS stations in this

spectrum * * *''

3. For its part, the Commission had before it sharing issues

between 18 GHz non-Government satellite services and DEMS. See

Amendment of the Commission's Rules to Relocate the Digital Electronic

Message Service from the 18 GHz Band to the 24 GHz Band and To Allocate

the 24 GHz Band For Fixed Service, Order, 62 FR 24576 (May 6, 1997)

(``Reallocation Order''). In July 1996, the Commission designated 500

MHz of spectrum in the 18.8-19.3 GHz band for non-geostationary

satellite orbit, fixed satellite service (NGSO/FSS) downlinks to help

meet increasing demand for spectrum for this service. See, Rulemaking

to Amend parts 1, 2, 21, and 25 of the Commission's Rules to

Redesignate the 27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-

30.0 GHz Frequency Band, to establish Rules and Policies for Local

Multipoint Distribution Service and for Fixed Satellite Services, 61 FR

39425 (July 29, 1996). Initially, it appeared that sharing between

NGSO/FSS and DEMS would be possible. However, subsequent to that

allocation, the only applicant for an NGSO/FSS system in the 18 GHz

band

[[Page 71089]]

indicated that coordination between the two services might present

difficulties.

4. Finally, on March 5, 1997, NTIA reiterated its request for

protection of government systems, using the 18 GHz band and further

discussed the issues regarding use of that spectrum. NTIA stated again

that it had ``determined that both existing and anticipated FCC

licensees could cause interference problems to the Federal Government

use of the 18 GHz band.'' Consequently, NTIA offered to withdraw

government co-primary allocations for radionavigation service in the

24.25-24.45 and 25.05-25.25 GHz bands to clear the way for DEMS

relocation. Accordingly, in the Reallocation Order, adopted on March

14, 1997, the Commission amended the Table of Frequency Allocations and

part 101 of the Commission's Rules regarding Fixed Microwave Services

to permit fixed service use of the 24.25-24.45 GHz and 25.05-25.25 GHz

bands (24 GHz band). See 47 CFR 101. This also had the practical effect

of resolving potential interference concerns between non-Government

NGSO/FSS and DEMS operations at 18 GHz.

A. Licensing Plan for 24 GHz Services

1. Table of Allocations

5. In the Reallocation Order, the Commission amended the Table of

Allocations in part 2 of the Commission's Rules to add the fixed

service on a primary basis in the 24 GHz band, and the Commission

recognized the deletion of radionavigation by the government from its

portion of the 24 GHz band. See 47 CFR 2. One issue the Commission

intends to examine in this rulemaking is whether the Table of

Allocations should be amended further to facilitate other possible uses

of spectrum in the 24 GHz band. The Commission has focused its initial

review on the issue of whether mobile service should be added to the

Table of Allocations for the 24 GHz band. Based on the information

currently available, it appears that, in the near term, equipment may

not be available for mobile use in the 24 GHz band. Licensees at 18 GHz

are limited to fixed service, and no one has requested the opportunity

to provide mobile service at 24 GHz. If, contrary to the Commission's

assumption, equipment is available for mobile use in this band, and

interference problems can be resolved, the Commission knows of no

reason why it would not allow mobile operations. The Commission

believes this would be consistent with its goal of providing 24 GHz

licensees with flexibility in designing their systems. The Commission

seeks comment on whether it should include an allocation in the 24 GHz

band for mobile service.

6. The Commission proposes to amend the Commission's Table of

Allocations and rules to provide, among other things, for the use of

the 24.75-25.25 GHz band for Broadcasting Satellite Service (BSS)

earth-to-space ``feeder links'' in the FSS. See, Redesignation of the

17.7-19.7 GHz Frequency Band, Blanket Licensing of Satellite Earth

Stations in the 17.7-20.2 GHz and 27.5-30.0 GHz Frequency Bands, and

the Allocation of Additional Spectrum in the 17.3-17.8 GHz and 24.75-

25.25 GHz Frequency Bands for Broadcast Satellite-Service Use, Notice

of Proposed Rulemaking, 63 FR 54100 (October 8, 1998) (``18 GHz Band

Plan''). Current 24 GHz licensees contend that the Commission would

have to prohibit 24 GHz BSS feeder link sites within 300 miles of the

boundaries of each 24 GHz service area, a requirement that would be too

impractical and inefficient to be consistent with the public interest.

On the other hand, one licensee takes the position that it is possible

for BSS feeder links and 24 GHz nodal stations, which are the central

or controlling station in a radio system operating on point-to-

multipoint frequencies, in the 25.05-25.25 GHz band to share spectrum

on a co-frequency basis at distances in the range of 0.2 miles. Because

BSS feeder link stations need not be ubiquitously employed and can be

located outside population centers, the Commission believes sharing

between these services may be feasible. In the 18 GHz Band Plan

proceeding, the Commission noted that the corresponding downlink BSS

allocation in the 17.3-17.8 GHz band cannot become effective until

after April 1, 2007; and thus there is no immediate need to implement

the FSS allocation in the 25.05-25.25 GHz band. Delaying the FSS

allocation would allow sufficient time for a detailed sharing

methodology to be formulated between terrestrial fixed service

interests and satellite interests. In light of the foregoing, the

Commission tentatively concludes, based on preliminary review of the

petition and comments filed regarding such FSS use of this band, that

the criteria need not be as severe and restrictive as that put forth by

the current 24 GHz licensees, and that a more workable solution can be

developed. The Commission solicits comment on the interaction between

these two services.

7. The Commission proposes to revise the Table of Frequency

Allocations in part 2 of its rules to delete the non-Government

radionavigation service allocations in the 24.25-24.45 GHz and 25.05-

25.25 GHz bands, which is consistent with previous Government action

taken with respect to these bands. The Commission has not issued any

licenses for the use of these bands by the radionavigation service, and

does not anticipate any demand for this service in these bands.

Further, the Commission also proposes to delete footnote US341 from the

Table of Frequency Allocations because the Federal Aviation

Administration has decommissioned its remaining radar facility at the

Newark, New Jersey International Airport and thus, concluded its

operations in the 24.25-24.45 GHz band. In light of the foregoing, the

Commission proposes to amend the frequency table in the aviation

service rules, specifically section 87.173(b), by changing the entry

for 24.25-25.45 GHz to 24.45-25.05 GHz, which would remain available

for use by the aeronautical radionavigation service. See 47 CFR

87.173(b).

2. Geographic Area-Wide Licensing

8. The Commission proposes to license the 24 GHz band spectrum on

the basis of Economic Areas (EAs), which were developed by the

Department of Commerce's Bureau of Economic Analysis (BEA), because it

believes this licensing scheme would best serve the public interest in

facilitating efficient use of this spectrum. See Final Redefinition of

the BEA Economic Areas, 60 FR 13114 (March 10, 1995). The Commission

seeks comment on this proposal. The Commission tentatively concludes

that using EAs for 24 GHz licenses in connection with its proposed

partitioning and disaggregation rules discussed will create reasonable

opportunities for the dissemination of 24 GHz licenses among a large

number of entities. See In the Matter of Amendment of the Commission's

Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Band, (``39 GHz''),

Memorandum Opinion and Order, ET Docket No. 95-183, 64 FR 45891,

(August 23, 1999). The Commission also tentatively concludes that using

EAs for 24 GHz licenses will facilitate service to rural areas. See 47

USC 309(j)(3)(A). Specifically, because EAs typically contain both

urban and rural areas, licensees will have both the legal authority to

provide service in both areas and the financial incentive to do so in

order to earn a return on their investment in their licenses. In

contrast, the Standard Metropolitan Statistical Areas (``SMSA'') which

were originally used to license DEMS service did not include rural

areas, and thus, rural areas

[[Page 71090]]

were not provided the service. Further, the relatively small size of

EAs will allow for a more rapid build-out than might be the case in a

larger geographic area. In addition, to give licensees maximum

flexibility, the Commission tentatively concludes that licensees will

be permitted to aggregate licenses in order to operate in larger

geographic areas. The Commission seeks comment on these tentative

conclusions. Because the Commission used SMSAs to license those that

were originally relocated from 18 GHz to 24 GHz, it proposes to exclude

from the applicable EAs, the areas currently licensed in the 24 GHz

band, and to add as three additional areas for licensing the United

States territories and possessions over which the Commission has

jurisdiction: Guam and the Commonwealth of Northern Marianas (EA 173),

Puerto Rico and the U.S. Virgin Islands (EA 174), and American Samoa

(EA 175). See e.g., 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, Third Report and Order, 62 FR 16004 (April 3, 1997). The

Commission seeks comment on these proposals.

9. The Commission also requests comment on alternative geographic

areas, including nationwide licenses, and licenses based upon

Metropolitan and Rural Service Areas (MSAs and RSAs), See

Implementation of Section 309(j) of the Communications Act--Competitive

Bidding, Fourth Report and Order, 59 FR 24947 (May 13, 1994), Regional

Economic Area Groupings (REAGs), Major Economic Areas (MEAs) or other

relevant geographic areas. Commenters supporting alternative geographic

areas should specify which areas they support and explain in detail why

those alternatives would be superior to the use of EAs for 24 GHz

licensing areas.

3. Treatment of Incumbents

10. As the Commission discussed in the Reallocation Order,

incumbent licensees would begin to transfer their operations to

frequencies in the 24 GHz band over a period of time commencing with

the effective date, June 24, 1997, of the Order which modified the

licenses. After the transfer of operations by an incumbent licensee to

the 24 GHz band, such licensee generally shall be governed by part 101

of the Commission's rules. See 47 CFR 101. Under those rules,

transferred licensees are generally subject to the same rules as

applied to operations in the 18 GHz band.

11. By this NPRM, the Commission proposes to make licensees subject

to any changes it makes in this proceeding to the part 101 rules that

are generally applicable to the 24 GHz band, including interference

criteria. Therefore, it is the Commission's tentative view that no

special rules for protection of incumbents alone are necessary, any

more than special protections would be required if additional providers

were licensed in the 18 GHz band. The Commission believes that the

protection requirements of part 101.509 will accommodate the new

stations and allow licensees to effectively coordinate their systems.

To the extent that any incumbent licensee wishes to use additional

frequencies at 24 GHz or to extend its currently authorized service

area, then such licensee may apply for such a license or licenses

subject to the Commission's competitive bidding and other assignment

procedures available. Any incumbent licensee may also acquire

additional frequencies in the 24 GHz band through the partitioning and

disaggregation procedures proposed. The Commission seeks comment on

these proposals.

4. Authorized 24 GHz Services

12. In the Reallocation Order, the Commission adopted fixed service

in this band as the only authorized use under its Table of Frequency

Allocations. In keeping with this allocation, the Commission proposes

to permit any 24 GHz licensee to use spectrum in the band for any fixed

service. In addition, as discussed in section II.B.1, supra, the

Commission seeks comment on whether it should permit the use of this

band for mobile services, should it become technically feasible to do

so. While the Commission proposes general ``fixed'' use for this

spectrum, it does not know precisely the types of services new

licensees will seek to provide. The Commission therefore proposes rules

that will enable licensees to offer a wide variety of services and that

will minimize regulatory barriers and costs of operation. It is the

Commission's tentative view that the proposals it is making regarding

licensed services areas, spectrum blocks, and partitioning and

disaggregation will provide both incumbent and new licensees with a

wide variety of options for using 24 GHz spectrum to meet market

demands.

13. The Commission notes that section 303(y) of the Communications

Act grants it the ``authority to allocate electromagnetic spectrum so

as to provide flexibility of use,'' if ``such use is consistent with

international agreements to which the United States is a party'' and if

the Commission makes certain findings. The Commission has not proposed

to allocate this spectrum to multiple categories of service listed in

the Table of Allocations, but rather have allocated spectrum only to

the Fixed Service. However, in this service rule proceeding, the

Commission is seeking comment on whether to expand or revise its

earlier approach. The Commission seeks comment on the findings required

by section 303(y) of the Act and whether section 303(y) applies here.

14. The Commission proposes to modify part 101 of its rules to

include the entire range of digital services to be provided at 24 GHz,

so that the use of the 24 GHz band by new and relocated licensees in

the 24 GHz band shall be subject to those rules. (Because relocated and

new licensees in the 24 GHz band will be treated the same, the

Commission refers to both as ``24 GHz licensees.'') The Commission

refers to them separately as ``relocated licensees'' and ``new

licensees.'' Consequently, all applications for licenses will be filed

pursuant to Section 101 of 47 CFR. The Commission also proposes to

modify part 101 of its rules to the extent necessary to reflect the

particular characteristics and circumstances of the services to be

offered. The Commission seeks comment on this general approach. The

Commission discusses several specific issues in this NPRM, but also

requests comment on any other changes in the existing part 101 rules

that might be useful or necessary for the 24 GHz band. The Commission

believes that making this spectrum available for use under these rules

is in the public interest because it will contribute to technological

and service innovation and, more robust competition in the

telecommunications service markets.

5. Spectrum Blocks

15. In the Reallocation Order, the Commission decided to license

relocated operations in 40 megahertz channel pairs. 47 CFR 101.109(c).

The Commission proposes that the same amount of spectrum be provided to

each new 24 GHz licensee as is provided under the rules for the

relocated licensees adopted in the Reallocation Order. In the

Reallocation Order, the Commission discussed the basis for its

conclusion that DEMS licensees need 40 megahertz channel pairs at 24

GHz for their capacity to be equivalent to the capacity they have at 18

GHz. The Commission found that differences in propagation, rain

attenuation, and available equipment between the two bands would

require DEMS systems at 24 GHz to use approximately four times as much

bandwidth as DEMs systems at

[[Page 71091]]

18 GHz to maintain comparable reliability and coverage. While this

analysis would not necessarily apply to non-DEMS use at 24 GHz, the

Commission believes that 40 megahertz paired blocks would be efficient

for such use. Thus, the Commission proposes that it license five

spectrum blocks, except in the SMSAs where there are incumbent

licensees. Each spectrum block shall consist of a pair of 40 megahertz

channels. The Commission also proposes to modify the emission mask in

section 101.111 to accommodate the changes in spectrum and bandwidth.

See 47 CFR 101.111. The Commission seeks comment on these proposals.

16. The Commission tentatively concludes that the use of EAs,

described in section A.2, supra, as well as the partitioning and

spectrum disaggregation, described in section B.4, infra, will result

in economic opportunity for a wide variety of applicants, including

small business, rural telephone, and minority-owned and women-owned

applicants, as required by section 309(j)(4)(C). These proposals, the

Commission tentatively concludes, will lower entry barriers through the

creation of licenses for smaller geographic areas, thus requiring less

capital and facilitating greater participation by such entities.

B. Application, Licensing, and Processing Rules

1. Regulatory Status

17. In this NPRM, the Commission is proposing a broad licensing

framework for implementing services in the 24 GHz spectrum band. Under

its proposal, a 24 GHz licensee would be allowed to provide a variety

or combination of fixed services. In order to fulfill its enforcement

obligations and ensure compliance with the statutory requirements of

Titles II and III of the Communications Act, the Commission has

required applicants to identify whether they seek to provide common

carrier services.

18. In the LMDS Second Report and Order, the Commission required

applicants for fixed services to indicate if they planned to offer

services as a common carrier, a non-common carrier, or both, and to

notify the Commission of any changes in status without prior

authorization. The Commission seeks comment on a similar proposal to

permit an applicant for a 24 GHz license to request common carrier

status as well as non-common carrier status for authorization in a

single license, rather than require the applicant to choose between

common carrier and non-common carrier services, and to change

regulatory status upon notification without prior approval. The

licensee would be able to provide all allowable services anywhere

within its licensed area at any time, consistent with its regulatory

status. This approach, the Commission tentatively concludes, would

achieve efficiencies in the licensing and administrative process. This

is consistent with its approach with respect to Multipoint Distribution

Service (``MDS''), and the Local Multipoint Distribution Service

(``LMDS''). See Revisions to part 21 of the Commission's Rules

Regarding the Multipoint Distribution Service, ``MDS Report and

Order'', 52 FR 27553 (July 22, 1987). Apart from the designation of

regulatory status, the Commission proposes not to require 24 GHz

license applicants to describe the services they seek to provide. The

Commission believes it is sufficient that an applicant indicate its

choice for regulatory status in a streamlined application process. In

providing guidance on this issue to MDS and LMDS applicants, the

Commission points out that an election to provide service on a common

carrier basis requires that the elements of common carriage be present;

otherwise, the applicant must choose non-common carrier status.

Accordingly, a determination of regulatory status will be based on the

service actually provided, rather than the service proposed. The

Commission also proposes that if licensees change the service they

offer such that it would change their regulatory status, they must

notify the Commission, although such change would not require prior

Commission authorization. The Commission proposes that licensees notify

them within 30 days of this change, unless the change results in the

discontinuance, reduction, or impairment of the existing service, in

which case the licensee is also governed by section 101.305 and submits

the application under section 1.947 in conformance with the time frames

and requirements of Sec. 101.305. See 47 CFR 101.305.

2. Eligibility

19. The Commission's primary goal in the present proceeding is to

encourage efficient competition, particularly in the local exchange

telephone market. In assessing whether to restrict the opportunity of

any class of service providers to obtain and use spectrum to provide

communications services in the 24 GHz band, the Commission seeks to

determine whether open eligibility poses a significant likelihood of

substantial competitive harm in specific markets, and, if so, whether

eligibility restrictions are an effective way to address that harm. See

Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and

38.6-40.0 GHz Bands and Implementation of Section 309(j) of the

Communications Act--Competitive Bidding, 37.0-38.6 GHz and 38.6-40.0

GHz, Report and Order and Second Notice of Proposed Rulemaking, (``39

GHz Report and Order''), 63 FR 3075 (January 21, 1998). This approach

relies on competitive market forces to guide license assignment absent

a showing that regulatory intervention to exclude potential

participants is necessary. Such an approach is appropriate because it

best comports with the Commission's statutory guidance. When granting

the Commission authority in section 309(j)(3) of the Communications Act

to auction spectrum for the licensing of wireless services, Congress

acknowledged the Commission's authority ``to [specify] eligibility and

other characteristics of such licenses.'' However, Congress

specifically directed the Commission to exercise that authority so as

to ``promot[e] * * * economic opportunity and competition.'' Congress

also emphasized this pro-competitive policy in section 257, where it

articulated a ``national policy'' in favor of ``vigorous economic

competition'' and the elimination of barriers to market entry by a new

generation of telecommunications providers.

20. Current providers in the 24 GHz band offer a range of services

such as local and long distance telephony and internet access. The

Commission tentatively concludes that open eligibility for 24 GHz

licenses will not pose a significant likelihood of substantial

competitive harm in local exchange telephone markets, and that it is

therefore unnecessary to impose eligibility restrictions on incumbent

local exchange carriers (``ILECs''). This tentative conclusion is based

on several factors. First, other wireless providers such as LMDS and 39

GHz licensees may provide competition in the local telephony markets.

See 47 CFR 101.1003(a) and Amendment of the Commission's Rules

Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-

183, Report and Order and Second Notice of Proposed Rulemaking. Second,

other facilities-based, wireline entrants such as interexchange

carriers and competitive LECs, and non-facilities-based wireline

entrants utilizing the local competition provisions of the

Communications Act, may provide competition in these

[[Page 71092]]

markets as well. Third, in LMDS, a fixed broadband point-to-multipoint

microwave service in the 28 GHz band, ILECs and cable companies have

been prohibited from holding an attributable interest in any license

whose geographic service area significantly overlaps such incumbent's

authorized or franchised service area. This prohibition guaranteed that

initially each one of those licenses will be acquired by a firm new to

the provision of local exchange in the service area. These new

providers have now had a significant opportunity to enter these markets

without the participation of ILECs and cable interests. Finally, under

its proposal, the Commission will make available five licenses for each

geographic area. This number of licenses permits numerous 24 GHz

licensees in any one market and, thus, numerous competitors for the

licenses. This scenario makes it more difficult for an incumbent LEC to

acquire all the licenses in a single geographic area. Taken together,

these factors demonstrate that an incumbent strategy of trying to

forestall competition in local telephony by buying 24 GHz licenses

cannot succeed because there are several other sources of actual and

potential competition.

21. Given all these competitive possibilities, the Commission

tentatively concludes that it would be exceedingly difficult for an

incumbent LEC to pursue a strategy of buying 24 GHz licenses in the

hope of foreclosing or delaying competition, and implausible that it

would succeed at that strategy. As noted, the Commission seeks comment

on these tentative conclusions. The Commission also tentatively

concludes that the spectrum made available for 24 GHz may be inadequate

to enable the provision of competitive multi-channel video programming

distribution (MVPD) service, and that incumbent cable company

acquisition of these licenses does not raise anti-competitive concerns.

The Commission bases this conclusion in part on Teligent's current

service offerings, which are generally limited to voice and data, as

well as its own assessment. The Commission also relies on the number of

licenses (five) available in each geographic area to check anti-

competitive conduct by cable operators. Nevertheless, the Commission

does note, however, that cable companies are increasingly offering high

speed internet access, a service offering that Teligent is currently

providing. The Commission's concerns about anti-competitive behavior by

cable companies is substantially attenuated by the existence of

alternative sources of such internet access, including digital

subscriber lines, fixed wireless applications, and satellite.

Furthermore, the cable companies are also subject to the restrictions

in the LMDS service, which the Commission has noted herein. The

Commission, therefore, tentatively concludes that it is unnecessary to

impose eligibility restrictions on incumbent cable operators

3. Foreign Ownership Restrictions

22. Certain foreign ownership and citizenship requirements are

imposed in sections 310(a) and 310(b) of the Communications Act, as

modified by the 1996 Act, that restrict the issuance of licenses to

certain applicants. The statutory provisions are implemented in

Sec. 101.7 of the Commission's Rules and reflect the restrictions as

they must be imposed on 24 GHz license applicants. Specifically,

Sec. 101.7(a) prohibits the granting of any license to be held by a

foreign government or its representative. Sec. 101.7(b) prohibits the

granting of any common carrier license to be held by individuals who

fail any of the four citizenship requirements listed in the rule. See

47 CFR 101.7(b).

23. Based on the prohibitions set forth in Sec. 101.7(a), the

Commission concludes that neither a foreign government, nor its

representative can hold a license, including either a common carrier or

non-common carrier license, to operate in the 24 GHz band. In addition,

the Commission concludes that Sec. 101.7(b) prohibits any individual

who fails to meet the four citizenship requirements set forth therein

from holding a license to operate as a common carrier in the 24 GHz

band. Further, any individual who elects both common carrier and non-

common carrier status must comply with Sec. 101.7(b)'s four citizenship

requirements. But, since the prohibitions set forth in Sec. 101.7(b) do

not apply to non-common carriers, an individual may elect to hold a

license, as a non-common carrier in the 24 GHz band, without complying

with the four citizenship requirements, as long as the individual is

still in compliance with the requirements set forth in Sec. 101.7(a).

See 47 CFR 101.7(b)(4); See also Rules and Policies on Foreign

Participation in the U.S. Telecommunications Market and Market Entry

and Regulation of Foreign-Affiliated Entities, Report and Order and

Order on Reconsideration, (``Foreign Participation Report and Order''),

62 FR 64741 (December 9, 1997).

24. To assist its analysis of alien ownership restrictions, the

Commission tentatively concludes that applicants in the 24 GHz band

shall file FCC Form 430. This requirement is identical to the

information which the Commission requires MDS, satellite, and LMDS

applicants to submit in order to assess the alien ownership

restrictions under Sec. 101.7(b). Furthermore, both common carriers and

non-common carriers would be required to file the information whenever

there are changes to the foreign ownership information, as well as the

other legal and financial qualifications. The Commission would not

disqualify an applicant requesting authorization exclusively to provide

non-common carrier services solely because its citizenship information

reflects that it would be disqualified from a common carrier license.

However, consistent with what the Commission stated in the Satellite

Rules Report and Order and in the LMDS Second Report and Order, the

Commission tentatively concludes that requiring non-common carriers to

address all the alien ownership prohibitions better enables the

Commission to monitor all of the licensed providers in light of their

ability to provide both common and non-common carrier services. The

Commission requests comment on this proposal.

4. Aggregation, Disaggregation and Partitioning

25. The Commission proposes to permit 24 GHz licensees to partition

their service areas and to aggregate and disaggregate their spectrum.

The Commission believes that such an approach would serve to promote

the efficient use of the spectrum. The Commission thus tentatively

concludes that partitioning and spectrum disaggregation will provide a

means to overcome entry barriers through the creation of licenses for

smaller geographic areas that require less capital, thereby

facilitating greater participation by, and economic opportunity for,

smaller entities such as small businesses, rural telephone companies,

and businesses owned by minorities and women, as required by section

309(j)(4)(C) of the Communications Act. See Geographic Partitioning and

Spectrum Disaggregation by Commercial Mobile Radio Services Licensees

and Implementation of section 257 of the Communications Act--

Elimination of Market Barriers, Report and Order and Further Notice of

Proposed Rulemaking, (``Partitioning and Disaggregation Report and

Order''), 62 FR 653 (January 6, 1997), 62 FR 696 (January 6, 1997). The

Commission requests comment on this conclusion.

[[Page 71093]]

26. The Commission also requests comment regarding what limits, if

any, should be placed on the ability of a 24 GHz licensee to partition

its service area and disaggregate its spectrum. The Commission notes

that in the Partitioning and Disaggregation Report and Order the

Commission permitted both geographic partitioning and spectrum

disaggregation by broadband PCS licensees. In the case of broadband PCS

service, the Commission decided to permit geographic partitioning along

any service area defined by the partitioner and partitionee, and

spectrum disaggregation without restriction on the amount of spectrum

to be disaggregated, and to permit combined partitioning and

disaggregation. The Commission concluded that allowing parties to

decide without restriction the exact amount of spectrum to be

disaggregated will encourage more efficient use of the spectrum and

permit the deployment of a broader mix of service offerings, both of

which will lead to a more competitive wireless marketplace.

27. The Commission requests comment regarding whether such an

approach should apply to 24 GHz licenses. If commenters take the

position that such an approach should apply, they should also address

what information should be filed with the Commission to allow us to

maintain our licensing records.

5. License Term and Renewal Expectancy

28. The Commission proposes that the 24 GHz license term for both

incumbent and new licensees be 10 years, with a renewal expectancy

similar to that afforded PCS and cellular licensees. In the case of

either a cellular or PCS licensee, a renewal applicant shall receive a

preference or renewal expectancy if the applicant has provided

substantial service during its past license term and has complied with

the Act and applicable Commission rules and policies. See 47 CFR

22.940(a)(1)(i). While preferring a substantial service requirement,

the Commission also invites comment on whether a build-out requirement

is more appropriate for this service. The Commission believes that this

10-year license term, combined with a renewal expectancy, will help to

provide a stable regulatory environment that will be attractive to

investors and, thereby, encourage development of this frequency band.

The Commission also seeks comment on whether a license term longer than

10 years is appropriate to achieve these goals and better serve the

public interest. Commenters who favor a license term in excess of ten

years should specify the appropriate license term and include a basis

for the period proposed.

29. The Commission proposes that the renewal application of a 24

GHz licensee must include at a minimum the following showings in order

to claim a renewal expectancy:

A description of current service in terms of geographic

coverage and population served or links installed and a description of

how the service complies with the substantial service requirement.

Copies of any Commission Orders finding the licensee to

have violated the Communications Act or any Commission rule or policy,

and a list of any pending proceedings that relate to any matter

described by the requirements for the renewal expectancy.

If applicable, a description of how the licensee has

complied with the build-out requirement. These proposed requirements

are based on those the Commission ordered for LMDS. See 47 CFR

22.940(a)(1)(i).

30. Under the Commission's proposal, in the event that a 24 GHz

license is partitioned or disaggregated, any partitionee or

disaggregatee would be authorized to hold its license for the remainder

of the partitioner's or disaggregator's original license term, and the

partitionee or disaggregatee will be required to demonstrate that it

has met the substantial service, or build-out standard, requirements in

any renewal application. The Commission believes that this approach,

which is similar to the partitioning provisions it adopted for MDS and

for current broadband PCS licensees, is appropriate because a licensee,

through partitioning or disaggregation, should not be able to confer

greater rights than it was awarded under the terms of its license

grant. See Amendment of parts 21 and 74 of the Commission's Rules With

Regard to Filing Procedures in the Multipoint Distribution Service and

in the Instructional Television Fixed Service, Report and Order, 60 FR

36524 (July 17, 1995); See Partitioning and Disaggregation Report and

Order.

C. Operating Rules

1. Performance Requirements

31. The Commission seeks comment on whether licensees in the 24 GHz

band should be subject to a substantial service requirement or a

minimum coverage requirements as a condition of license renewal. The

Commission imposed such requirements on licensees in other services to

ensure that spectrum is used effectively and service is implemented

promptly.

32. The Commission seeks comment on whether 24 GHz licensees should

be required to provide ``substantial service'' to the geographic

license area within ten years or any other license term which the

Commission adopts for this service. The Commission defined substantial

service as ``service which is sound, favorable, and substantially above

a level of mediocre service which just might minimally warrant renewal.

See e.g. 47 CFR 22.940(a)(1)(i). Further, as an alternative, safe

harbor standard, the Commission seeks comment on whether there should

be a construction requirement that the licensee transmit to reach a

minimum of one-third of the population in their licensed area, no later

than the mid-point of the license term and two-thirds of the population

by the end of the license term. The Commission also seeks comment on

whether, in the event that a 24 GHz license is partitioned or

disaggregated, a partitionee or disaggregatee should be bound by the

standard, either substantial service or a construction requirement,

which the Commission may adopt in this proceeding.

33. If a licensee does not comply with whichever standard the

Commission adopts, either substantial service or minimum coverage, the

Commission must consider what action to take. The Commission could

adopt a standard whereby a licensee who does not comply with the

appropriate standard, either substantial service or minimum coverage,

is subject to license termination upon action by the Commission or

alternatively, the license would automatically cancel. The Commission

seeks comment on whether to adopt an automatic cancellation standard or

cancellation only upon action by the Commission. If the geographic

licensee loses its license for failure to comply with coverage

requirements, should the licensee be prohibited from bidding on the

geographic license for the same territory in the future? Is there a

sanction more appropriate than automatic cancellation?

2. Application of Title II Requirements to Common Carriers

34. The Commission also seeks comment on whether it should forbear

from applying certain obligations on common carrier licensees in the 24

GHz band pursuant to section 10 of the Act. In the case of commercial

mobile radio service (``CMRS'') providers, the Commission concluded

that it was appropriate to forbear from sections 203, 204, 205, 211,

212, and most

[[Page 71094]]

applications of section 214. See also In the Matter of Personal

Communications Industry Association's Broadband Personal Communications

Services Alliance's Petition for Forbearance For Broadband Personal

Communications Services, Forbearance from Applying Provisions of the

Communications Act to Wireless Telecommunications Carriers, Memorandum

Opinion and Order and Notice of Proposed Rulemaking, (``Forbearance

Order'') 63 FR 43033 (August 11, 1998), 63 FR 43026 (August 11, 1998).

The Commission, however, declined to forbear from enforcing other

provisions, including sections 201 and 202. The Commission has also

exercised its forbearance authority in permitting competitive access

providers (``CAPS'') and competitive local exchange carriers

(``CLECs'') to file permissive tariffs. The Commission seeks comment on

whether it is appropriate to forbear from enforcing any provisions of

the Act or the Commission's rules in the 24 GHz band.

D. Technical Rules

35. As discussed, the Commission's general proposal is to apply the

rules in part 101 to govern the use of the 24 GHz band, except as they

may be modified as a result of this proceeding. This would include

technical parameters such as channelization, frequency tolerance and

stability, power and emission limitations, antennas, and equipment

authorization. Also, general provisions of part 101, such as

environmental and radio frequency (RF) safety requirements, and the

protection of quiet zones, would be applicable.

36. The technical parameters for operations at 24 GHz were adopted

in the Reallocation Order. As discussed there, such parameters were

derived, for purposes of expedience, from those applied to operations

at 18 GHz , and may not have been exactly suited to operations at the

higher 24 GHz band. The use of the higher frequency band is, for

example, one reason for the change in channelization. The Commission

has little information in the record at this time, however, on which to

propose other specific changes to the part 101 rules. New developments

in fixed technology, besides those generated by the transition to a new

band, may warrant other changes in the technical parameters. Moreover,

changes and advancements in technology may, in the future, warrant use

of this band for not only digital modulation, but also other

modulations. In that connection, it is not the Commission's intent to

impose technological requirements which may in the future restrain more

efficient and innovative use of this spectrum. Therefore, the

Commission solicits comment regarding whether this service should be

limited to digital modulation and whether further development of

service at 24 GHz will be facilitated by technical parameters different

from those that are currently in part 101. Regardless of the final set

of technical rules adopted in this proceeding, the Commission proposes

that they all apply to all licensees in the 24 GHz band, including

licensees that acquire their licenses through partitioning and

disaggregation. But, none of the proposed rule changes are directed at,

nor intended to apply to DEMS licensees that operate in the 10 GHz

band. While it is the Commission's tentative view that most technical

issues are addressed by the current rules, there is one specific

technical issue that warrants some attention and is therefore

discussed. The Commission solicits comments, however, on all technical

parameters that should apply to operations at 24 GHz.

1. Licensing and Coordination of 24 GHz Stations

37. With one exception, incumbent licenses have been granted, by

waiver, on an area wide basis. However, nodal stations, which serve as

the central or controlling station in a radio system operating on

point-to-multipoint frequencies, must be specifically applied for by

licensees and authorized by the Commission. See 47 CFR 101.3 and 47 CFR

101.503. This could be viewed as a dual licensing situation and may not

be necessary or administratively efficient. Sec. 101.103(d) of the

Commission's Rules contains guidelines for the current frequency

coordination process for Fixed Microwave Services, while Sec. 101.509

of the Commission's Rules sets forth interference protection criteria

for 24 GHz licensees. These two rule sections have similar goals: to

facilitate interference-free operations, to ensure cooperation among

licensees to minimize and resolve potential interference problems, and

to obtain the most efficient and effective use of the spectrum and

authorized facilities. The Commission intends to auction the remaining

spectrum in geographic areas and believes that licensees must be

assured a reasonable and effective use of their own areas, while

equally protecting the interests of other licensees.

38. The Commission tentatively concludes that a requirement to

coordinate those 24 GHz nodal stations located within the boundaries of

a licensed SMSA or other geographic licensing area prior to putting

them into operation would be sufficient to achieve these goals, and

therefore proposes to replace the individual licensing of nodal

stations with a coordination requirement. Such coordination would be

required with co-channel 24 GHz licensees in adjacent geographic areas

and with adjacent channel 24 GHz licensees in adjacent geographic

areas, as well as the same or overlapping area. Based on propagational

characteristics at 24 GHz, the Commission's information on planned

system configurations, the current technical parameters and similar

distances adopted in Commission proceedings regarding other microwave

bands, the Commission tentatively concludes that the 80 km coordination

distance currently specified in our rules appears to be too large. See

Sec. 101.103(g) and 101.103(I) of the Commission's Rules, 47 CFR

101.103(g), 101(i). However, the Commission proposes to have each

licensee coordinate with licensees in other relevant areas and develop

agreements between systems. Instead of specifying a fixed distance, the

Commission proposes that licensees coordinate their facilities whenever

their facilities have line-of-sight into other licensees' facilities or

are within the same geographic area. Under the Commission's proposal,

both types of coordination must be successfully completed before

operation is permitted. In the event that there is no 24 GHz licensee

immediately available in an adjacent, same or overlapping area, the

licensee must be prepared to coordinate its stations in the future in

order to accommodate other licensees to ensure cooperative and

effective use of the spectrum in each area. The Commission solicits

comment on these coordination procedures and criteria.

39. International coordination is also an issue that needs to be

addressed. While no specific proposals are made at this time,

operations at 24 GHz in the United States will be subject to any

agreements reached with Canada and Mexico. The Commission is in the

process of holding discussions with these countries to determine the

types of coordination that would be necessary.

2. RF Safety

40. The Commission proposes that licensees and manufacturers be

subject to the RF radiation exposure requirements specified in

Secs. 1.1307(b), 2.1091, and 2.1093 of the Commission's Rules, which

lists the services and devices for which an environmental evaluation

must be performed. See 47 CFR 1.1307(b), 2.1091, 2.1093. See also

Guidelines for Evaluating the

[[Page 71095]]

Environmental Effects of Radiofrequency Radiation, Report and Order,

(``RF Guidelines Report and Order''), 61 FR 41006 (August 7, 1996);

First Memorandum Opinion and Order, 62 FR 3232 (January 22, 1997); and

Second Memorandum Opinion and Order, 62 FR 47960 (September 12, 1997).

The Commission tentatively concludes that routine environmental

evaluations for RF exposure should be required in the case of fixed

operations, including base stations, when the effective radiated power

(ERP) is greater than 1,000 watts.

41. The Commission proposes to treat services and devices in the 24

GHz band in accordance with the Commission's exposure limits in OET

Bulletin 65, which has replaced OST Bulletin No. 65.

E. Competitive Bidding Procedures

1. Statutory Requirements

42. The Balanced Budget Act of 1997 amended section 309(j) of the

Act to require the Commission to award mutually exclusive applications

for initial licenses or permits using competitive bidding procedures,

with very limited exceptions. Section 309(j)(2) exempts from auctions

licenses and construction permits for public safety radio services,

digital television service licenses and permits given to existing

terrestrial broadcast licensees to replace their analog television

service licenses, and licenses and construction permits for

noncommercial educational broadcast stations and public broadcast

stations. Thus, if not exempted by the statute, a service will be

auctionable if the Commission implements a licensing process that

permits the filing and acceptance of mutually exclusive applications.

In establishing particular licensing schemes or methodologies, the

Commission is required to consider the public interest objectives

described in section 309(j)(3).

43. Pursuant to section 309(j)(6)(E) of the Act, the Commission has

an ``obligation in the public interest to continue to use engineering

solutions, negotiation, threshold qualifications, service regulations,

and other means in order to avoid mutual exclusivity in application and

licensing proceedings.'' In the Balanced Budget Act, Congress

highlighted the Commission's obligation under section 309(j)(6)(E) by

referencing that obligation in the general auction authority provision.

The Commission recently sought comment on whether that reference

changes the scope or content of the Commission's obligation under

section 309(j)(6)(E). See Implementation of Sections 309(j) and 337 of

the Communications Act of 1934 as Amended, Notice of Proposed Rule

Making, (``BBA NPRM''), 64 FR 23571 May 3, 1999. In determining whether

to resolve mutually exclusive applications for licenses in the 24 GHz

band through competitive bidding, the Commission intends to adhere to

any conclusions it reaches in the Balanced Budget Act proceeding

regarding the scope of our auction authority.

44. In paragraphs 8 and 9, supra, the Commission proposed to

continue the use of a geographic area licensing scheme for the 24 GHz

band, using EAs instead of SMSAs. Because the Commission has

tentatively concluded that it would serve the public interest to

implement a licensing scheme under which mutual exclusivity is

possible, it also tentatively concludes that mutually exclusive initial

applications for the 24 GHz band must be resolved through competitive

bidding. The Commission seeks comment on this tentative conclusion.

2. Incorporation of Part 1 Standardized Auction Rules

45. In the Part 1 Third Report and Order, the Commission

streamlined its auction procedures by adopting general competitive

bidding rules applicable to all auctionable services, and, in the same

proceeding, issued a Second Further Notice of Proposed Rule Making

concerning designated entities and attribution rules, among other

issues. The Commission proposes to conduct the auction for initial

licenses in the 24 GHz band in conformity with the general competitive

bidding rules set forth in part 1, subpart Q of the Commission's rules,

and substantially consistent with the bidding procedures that have been

employed in previous Commission auctions. Specifically, the Commission

proposes to employ the part 1 rules governing designated entities,

application issues, payment issues, competitive bidding design,

procedure and timing issues, and anti-collusion. These rules would be

subject to any modifications that the Commission adopts in relation to

the Second Further Notice of Proposed Rule Making. The Commission seeks

comment on this proposal and on whether any of our part 1 rules would

be inappropriate in an auction for this service.

3. Provisions for Designated Entities

46. The Communications Act provides that, in developing competitive

bidding procedures, the Commission shall consider various statutory

objectives and consider several alternative methods for achieving them.

Specifically, the statute provides that, in establishing eligibility

criteria and bidding methodologies, the Commission shall:

promot[e] economic opportunity and competition and ensur[e] that new

and innovative technologies are readily accessible to the American

people by avoiding excessive concentration of licenses and by

disseminating licenses among a wide variety of applicants, including

small businesses, rural telephone companies, and businesses owned by

members of minority groups and women.

47. In the Competitive Bidding Second Memorandum Opinion and Order,

the Commission stated that it would define eligibility requirements for

small businesses on a service-specific basis, taking into account the

capital requirements and other characteristics of each particular

service in establishing the appropriate threshold. See Implementation

of Section 309(j) of the Communications Act--Competitive Bidding,

Second Memorandum Opinion and Order, (``Competitive Bidding Second

Memorandum Opinion and Order''), 59 FR 44272 (August 26, 1994). The

Part 1 Third Report and Order, while it standardizes many auction

rules, provides that the Commission will continue a service-by-service

approach to defining small businesses. For the 24 GHz band, the

Commission proposes to adopt the definitions the Commission adopted for

broadband PCS for ``small'' and ``very small'' businesses, which the

Commission also adopted for 2.3 GHz and 39 GHz applicants. See

Implementation of Section 309(j) of the Communications Act--Competitive

Bidding, Fifth Memorandum Opinion and Order, 59 FR 63210 (December 7,

1994). See 47 CFR 27.210(b)(1)(2), 101.1209(b)(1)(i). The Commission

tentatively concludes that the capital requirements are likely to be

similar to the capital requirements in those services. Specifically,

the Commission proposes to define a small business as any firm with

average annual gross revenues for the three preceding years not in

excess of $40 million. For entities who qualify as a small business,

the Commission proposes to provide them with a bidding credit of 15%.

See 47 CFR 1.2110(e)(2)(iii).

48. The Commission observes that the capital costs of operational

facilities in the 24 GHz band are likely to vary widely. Accordingly,

the Commission seeks to adopt small business size standards that afford

licensees substantial flexibility. Thus, in addition to its proposal to

adopt the general small business standard the Commission used in the

case of

[[Page 71096]]

broadband PCS, 2.3 GHz, and 39 GHz licenses, the Commission proposes to

adopt the definition for very small businesses used for 39 GHz licenses

and for the PCS C and F block licenses: businesses with average annual

gross revenues for the three preceding years not in excess of $15

million. For entities who qualify as a very small business, the

Commission proposes to provide them with a bidding credit of 25%. See

47 CFR 1.2110(e)(2)(ii).

49. The Commission seeks comment on the use of these standards and

associated bidding credits for applicants to be licensed in the 24 GHz

band, with particular focus on the appropriate definitions of small and

very small businesses as they relate to the size of the geographic area

to be covered and the spectrum allocated to each license. In discussing

these issues, commenters are requested to address the expected capital

requirements for services in the 24 GHz band. Commenters are invited to

use comparisons with other services for which the Commission has

already established auction procedures as a basis for their comments

regarding the appropriate definitions for small and very small

businesses.

50. The Commission seeks comment here on whether there are any

actions specific to the 24 GHz service that should be taken to insure

that this service will be provided in rural areas. Relatedly, the

Commission notes that section 309(j) requires the Commission to

``promote * * * economic opportunity for a wide variety of applicants,

including * * * rural telephone companies.'' Consistent with this

mandate, the Commission seeks comment on whether there are specific

measures that should be taken with respect to these entities.

Procedural Matters

A. Initial Regulatory Flexibility Analysis

51. As required by Sec. 603 of the Regulatory Flexibility Act (RFA)

of 1980, the Commission has prepared an Initial Regulatory Flexibility

Analysis (IRFA) of the possible significant economic impact on small

entities of the policies and rules proposed in this NPRM. The IRFA is

set forth in Appendix A. The Commission requests written public comment

on the IRFA. In order to fulfill the mandate of the Contract with

America Advancement Act of 1996 regarding the Final Regulatory

Flexibility Analysis, the Commission asks a number of questions in our

IRFA regarding the prevalence of small businesses in the affected

industries.

52. Comments must be filed in accordance with the same filing

deadlines as comments filed in this rulemaking proceeding, but they

must have a separate and distinct heading designating them as responses

to the Initial Regulatory Flexibility Analysis. The Consumer

Information Bureau, Reference Operations Division, shall send a copy of

this NPRM, including the Initial Regulatory Flexibility Analysis, to

the Chief Counsel for Advocacy of the Small Business Administration in

accordance with Sec. 603(a) of the Regulatory Flexibility Act.

B. Comment Dates

53-55. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules,

47 CFR 1.415, 1.419, interested parties may file comments on or before

January 19, 2000, and reply comments on or before February 7, 2000.

Comments may be filed using the Commission's Electronic Comment Filing

System (ECFS) or by filing paper copies. See Electronic Filing of

Documents in Rulemaking Proceedings, Report and Order, 63 FR 24121 (May

1, 1998); Electronic Filing of Documents in Rulemaking Proceedings,

Memorandum Opinion and Order, 63 FR 56090 (October 21, 1998). All

relevant and timely comments will be considered by the Commission

before final action is taken in this proceeding. To file formally,

interested parties must file an original and four copies of all

comments, reply comments, and supporting comments. If interested

parties want each Commissioner to receive a personal copy of their

comments, they must file an original plus nine copies. Interested

parties should send comments and reply comments to the Office of the

Secretary, Federal Communications Commission, 445 12th Street, SW,

Washington, DC 20554, with a copy to Howard Davenport, Wireless

Telecommunications Bureau, 445 12th Street, SW, Washington, DC 20554.

Parties are also encouraged to file a copy of all pleadings on a 3.5-

inch diskette in Word 97 format.

56. Comments filed through the ECFS can be sent as an electronic

file via the Internet to http://www.fcc.gov/e-file/ecfs.html>.

Generally, only one copy of an electronic submission must be filed. In

completing the transmittal screen, commenters should include their full

name, Postal Service mailing address, and the applicable docket or

rulemaking number. Parties may also submit an electronic comment by

Internet e-mail. To get filing instructions for e-mail comments,

commenters should send an e-mail to [email protected], and should include

the following words in the body of the message, ``get form <your e-mail

address.'' A sample form and directions will be sent in reply.

57. Parties who choose to file by paper must file an original and

four copies of each filing. If more than one docket or rulemaking

number appear in the caption of this proceeding, commenters must submit

two additional copies for each additional docket or rulemaking number.

58. Comments and reply comments will be available for public

inspection during regular business hours in the FCC Reference Center,

445 12th Street, SW, Washington, DC 20554.

Ordering Clauses

59. Accordingly, these actions are taken pursuant to sections 1,

4(i), 7, 301, 303, 308 and 309(j) of the Communications Act of 1934, 47

U.S.C. 151, 154(i), 157, 301, 303, 308, 309(j) and that notice is

hereby given of the proposed regulatory changes described, and that

comment is sought on these proposals.

60. This NPRM is hereby adopted and that the Commission's Office of

Public Affairs, Reference Operations Division, shall send a copy of

this NPRM, including the Initial Regulatory Flexibility Analysis to the

Chief Counsel for Advocacy of the Small Business Administration in

accordance with Sec. 603(a) of the Regulatory Flexibility Act of 1980,

Public Law 96-354, 94 Stat 1164, 5 U.S.C. 601-612.

List of Subjects

47 CFR 1

Administrative practice and procedure.

47 CFR 2 and 101

Communications equipment.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Attachment--Initial Regulatory Flexibility Analysis

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 and very small entities of the

policies and rules proposed in this Notice of Proposed Rule Making

(NPRM). Written public comments are requested on the IRFA. Comments

must be identified as responses to the IRFA and must be filed by the

deadlines for comments on the NPRM.

[[Page 71097]]

Reason for Action

This rulemaking is being initiated to adopt certain licensing and

service rules for the 24 GHz band, to auction 24 GHz spectrum not used

by Digital Electronic Message Service (DEMS) licensees relocated from

the 18.82-18.92 and 19.16-19.26 GHz bands (18 GHz band) to the 24.25-

24.45 and 25.05-25.25 GHz bands (24 GHz band).

Objectives

The Commission's objectives are: (1) to accommodate the

introduction of new uses of spectrum and the enhancement of existing

uses; and (2) to facilitate the awarding of licenses to entities who

value them the most.

Legal Basis for Proposed Rules

The proposed action is authorized under the Administrative

Procedure Act, 5 U.S.C. 553; and sections 1, 4(i), 7, 301, 303, 308 and

309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 151,

154(i), 157, 301, 303, 308 and 309(j).

Description and Estimate of Small Entities Subject to the Rules

The rules will affect incumbent licensees who are relocated to the

24 GHz band from the 18 GHz band and applicants who wish to provide

services in the 24 GHz band.

The Commission has not developed a definition of small entities

applicable to licensees in the 24 GHz band. Therefore, the applicable

definition of small entity is the definition under the Small Business

Administration (SBA) rules for the radiotelephone industry that

provides that a small entity is a radiotelephone company employing

fewer than 1,500 persons. The 1992 Census of Transportation,

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

which is the most recent information available, shows that only 12

radiotelephone firms out of a total of 1,178 such firms that operated

during 1992 had 1,000 or more employees. The Commission believes that

there are only two licensees in the 24 GHZ band that will be relocated,

Teligent and TRW, Inc. It is the Commission's understanding that

Teligent and its related companies have less than 1,500 employees,

although this may change in the future. On the other hand, TRW is not a

small entity. The Commission therefore believes that only one licensee

in the 24 GHz is a small business entity. The Commission seeks comment

on this analysis. In providing such comment, commenters are requested

to provide information regarding how many total and small business

entities would be relocated.

The proposals also affect potential new licensees on the 24 GHz

band. Pursuant to 47 CFR 24.720(b), the Commission has defined ``small

entity'' for Blocks C and F broadband PCS licensees as firms that had

average gross revenues of less 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. With

respect to new applicants in the 24 GHz band, the Commission also

proposes to use the small entity definition adopted in the Broadband

PCS proceeding. With regard to ``very small businesses'' the Commission

proposes to adopt the definition used for 39 GHz licenses and for the

PCS C and F block licenses: businesses with average annual gross

revenues for the three preceding years not in excess of $15 million.

The Commission will not know how many licensees will be small or

very small businesses until the auction, if required, is held. Even

after that, the Commission will not know how many licensees will

partition their license areas or disaggregate their spectrum blocks, if

partitioning and disaggregation are allowed. In view of our lack of

knowledge of the entities that will seek 24 GHz licenses, the

Commission therefore assumes that, for purposes of its evaluations and

conclusions in the Initial Regulatory Flexibility Analysis, all of the

prospective licensees are either small or very small business entities.

The Commission invites comment on this analysis.

Reporting, Recordkeeping, and Other Compliance Requirements

Applicants for 24 GHz licenses will be required to submit

applications. The Commission requests comment on how these requirements

can be modified to reduce the burden on small entities and still meet

the objectives of the proceeding.

Significant Alternatives Minimizing the Impact on Small Entities

Consistent With Stated Objectives

The Commission has reduced burdens wherever possible. To minimize

any negative impact, however, it proposes certain incentives for small

and very small entities that will redound to their benefit. These

special provisions include partitioning and spectrum disaggregation.

The regulatory burdens the Commission has retained, such as filing

applications on appropriate forms, are necessary in order to ensure

that the public receives the benefits of innovative new services in a

prompt and efficient manner. The Commission will continue to examine

alternatives in the future with the objectives of eliminating

unnecessary regulations and minimizing any significant economic impact

on small entities. The Commission seeks comment on significant

alternatives commenters believes it should adopt.

Federal Rules That Overlap, Duplicate, or Conflict With These

Proposed Rules

None.

[FR Doc. 99-32829 Filed 12-17-99; 8:45 am]

BILLING CODE 6712-01-P