**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WT Docket No. 03-103         |
|                                  | * |                              |
| Amendment of Part 22 of the      | ) | WT Docket No. 05-42          |
| Commission's Rules To Benefit    | * |                              |
| the Consumers of Air-Ground      | * | File No. 0001716212          |
| Telecommunications Services      |   |                              |
|                                  | * |                              |
| Biennial Regulatory              | * |                              |
| Review---Amendment of Parts 1,   | ) |                              |
| 22, and 90 of the Commission's   | * |                              |
| Rules                            | * |                              |
|                                  |   |                              |
| Amendment of Parts 1 and 22 of   | * |                              |
| the Commission\'s Rules To Adopt | * |                              |
| Competitive Bidding Rules for    | ) |                              |
| Commercial and General Aviation  | * |                              |
| Air-Ground Radiotelephone        | * |                              |
| Service                          |   |                              |
|                                  | * |                              |
| Application of Verizon Airfone   | * |                              |
| Inc. for Renewal of 800 MHz      | ) |                              |
| Air-Ground Radiotelephone        | * |                              |
| License, Call Sign KNKG804       | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**REPORT AND ORDER**

**AND**

**NOTICE OF PROPOSED RULEMAKING**

**Adopted:** December 15, 2004 **Released:** February 22, 2005

By the Commission: Chairman Powell issuing a statement, Commissioners
Copps and Adelstein approving in part, dissenting in part, and issuing
separate statements.

**Comment Date: 20 days after publication in the Federal Register**

**Reply Comment Date: 30 days after publication in the Federal
Register**

Table of Contents

Heading Paragraph \#

I. Introduction 1

II\. report and Order 7

A. 800 MHz Air-Ground Radiotelephone Service 7

1\. Background 9

2\. Market for Air-Ground Wireless Communications Services 12

3\. Reconfiguration of the 800 MHz Air-Ground Radiotelephone Service
Band 24

a\. Spectrum Reconfiguration Proposals 25

b\. Available Air-Ground Band Plans 29

\(i\) Location of Ground Stations 34

\(ii\) Provision of Deck-to-Deck Service 35

\(iii\) Competitive Considerations 37

\(iv\) Air-Ground Services 52

4\. Technical Standards 54

5\. Incumbent Station KNKG804 73

a\. Transition of Incumbent System 75

b\. Reimbursement of Relocation Costs 77

c\. Renewal of Call Sign KNKG804 79

6\. Construction Requirements 83

B. 400 MHz Air-Ground Radiotelephone Service 86

1\. Form 409, Airborne Mobile Radio Telephone License Application 87

2\. Idle Tone 93

3\. Construction Period for General Aviation Ground Stations 95

4\. AGRAS 97

C. Revision of Part 22 Non-Cellular Rules 99

1\. Scope and Authority---Authorization Required, General Eligibility,
and Definitions 99

2\. Licensing Requirements and Procedures 104

a\. Construction Prior to Grant of Application 104

b\. Computation of Distance 106

c\. Computation of Terrain Elevation 109

d\. ASSB 111

3\. Operational and Technical Requirements 113

a\. Channel Assignment Policy 113

b\. Interference Protection 115

c\. Emission Types and Emission Masks 117

d\. Standby Facilities 120

e\. Directional Antennas 122

f\. Wave Polarization 124

g\. Access to Transmitters 126

h\. Replacement of Equipment 128

i\. Auxiliary Test Transmitters 130

j\. In-building Radiation Systems 132

4\. Developmental Authorizations 134

a\. Developmental Authorization of 43 MHz Paging Transmitters 135

b\. Developmental Authorization of 928-960 MHz Fixed Transmitters 137

c\. Developmental Authorization of Meteor Burst Systems 139

5\. Paging and Radiotelephone Service Rules 141

a\. Composite Interference Contour Over Water 141

b\. Nationwide Network Paging Channels 145

c\. Additional Channel Policies 147

d\. Provision of Rural Radiotelephone Service on Paging Channels 149

e\. Transmission Power Limits 151

f\. Dispatch Service 153

g\. Hawaiian UHF Channels for Point-to-Point Operation 155

h\. Channels for Point-to-Point Operation---Microwave Channels 157

i\. Effective Radiated Power Limits 160

j\. Channel Usage Reports 162

6\. Rural Radiotelephone Service Rules---Channels for Basic Exchange
Telephone Radio Systems 165

7\. Offshore Radiotelephone Service Rules 167

III\. NOTICE OF PROPOSED RULEMAKING -- COMPETITIVE BIDDING 169

A. Incorporation by Reference of the Part 1 Standardized Auction Rules
170

B. Provisions for Designated Entities 172

IV\. PROCEDURAL MATTERS 179

A. Comment Filing Procedures 179

B. *Ex parte* Rules ---Permit-But-Disclose 180

C. Congressional Review Act 181

D. Final Regulatory Flexibility Analysis 182

E. Initial Regulatory Flexibility Analysis 183

F. Paperwork Reduction Act of 1995 184

G. Contact Information 187

V. Ordering Clauses 188

Appendix A --- Commenting Parties

Appendix B --- Final Rules

Appendix C --- Final Regulatory Flexibility Analysis

Appendix D --- Initial Regulatory Flexibility Analysis

# Introduction

1.  In this Report and Order,[^1] we revise our rules governing the four
    megahertz of dedicated spectrum in the 800 MHz commercial Air-Ground
    Radiotelephone Service band.[^2] In order to facilitate the
    provision of new, innovative wireless telecommunications services,
    including broadband services, to the public onboard aircraft, we
    adopt a flexible regulatory approach to determine the configuration
    of the band. Specifically, we adopt rules that enable interested
    parties to bid on spectrum licenses according to the band
    configuration that they believe will best meet their needs for the
    provision of air-ground services. Based on the band configurations
    proposed by the parties in this proceeding, the Commission will make
    available nationwide air-ground licenses in three
    configurations: (1) band plan 1, comprised of two overlapping,
    shared, cross-polarized 3 MHz licenses (licenses A and B,
    respectively),[^3] (2) band plan 2, comprised of an exclusive 3 MHz
    license and an exclusive 1 MHz license (licenses C and D,
    respectively),[^4] and (3) band plan 3, comprised of an exclusive 1
    MHz license and an exclusive 3 MHz license (licenses E and F,
    respectively), with the blocks at opposite ends of the band from the
    second configuration.[^5] Licenses will have a ten-year term.
    Licenses will be awarded to winning bidders for the licenses
    comprising the configuration that receives the highest aggregate
    gross bid, subject to long-form license application review. In order
    to promote competition in the 800 MHz air-ground band, we will
    prohibit any party from obtaining a controlling interest, either at
    auction or by a post-auction transaction, in more than three
    megahertz of spectrum (either shared or exclusive) in the band. No
    single party, therefore, may hold more than one license in any of
    the available band configurations. In this item, we also
    contemporaneously issue a *Notice* of Proposed Rulemaking (*Notice*)
    in which we seek comment on competitive bidding rules to be used for
    the new spectrum licenses we make available today and on competitive
    bidding rules to resolve pending as well as future mutually
    exclusive applications for licenses in the 400 MHz general aviation
    Air-Ground Radiotelephone Service.[^6]

![](media/image1.wmf){width="6.303472222222222in"
height="5.332638888888889in"}

2.  *New 800 MHz Air-Ground Radiotelephone Service Band Plans*. We adopt
    a flexible regulatory framework that will enable licensees to
    provide air-ground communication services using any existing or
    future technology that can fit within their assigned spectrum block.
    Licenses A, B, C, and F could accommodate spectrally-efficient
    broadband technologies such as Code Division Multiple Access (CDMA)
    2000 1xEV-DO,[^7] Fast Low-latency Access with Seamless Handoff
    Orthogonal Frequency Division Multiplexing (FLASH-OFDM),[^8] and
    Global System for Mobile Communication Enhanced Data Rates for
    Global Evolution (GSM EDGE),[^9] as well as Integrated Dispatch
    Enhanced Network (iDEN)[^10] technology and other technologies.
    Licenses D and E also could accommodate iDEN and an array of
    narrowband technologies. The licensees will be required to provide
    service to airborne locations. Air-ground service may be any type
    (*e.g.*, voice, data, broadband internet, etc.) and may be provided
    to any or all aviation markets (*e.g.*, commercial, government, and
    general). New licensees also may reconfigure their licensed
    frequencies to accommodate multiple overlapping or exclusive
    air-ground systems through spectrum leasing, partitioning,
    disaggregation, or a combination of these mechanisms.

3.  The new rules for the 800 MHz Air-Ground Radiotelephone Service that
    we adopt today will promote key spectrum policy objectives of the
    Commission, and will lead to greater technical, economic, and
    marketplace efficiency.[^11] Our new framework for flexible spectrum
    access in this band will facilitate the provision of broadband
    services to consumers by eliminating unnecessary regulatory
    restrictions, and thereby provide greater flexibility in deploying
    the spectrum to respond to evolving market demands. We further our
    goal to "foster innovation and offer consumers meaningful choice in
    services"[^12] by replacing the existing narrowband spectrum sharing
    approach---which limits services to voice and very slow speed
    data---with a highly flexible licensing approach. We also further
    our goal "to encourage the growth and rapid deployment of innovative
    and efficient communications technologies and services"[^13] by
    providing flexibility to deploy current broadband technologies,
    which heretofore could not be used in the 800 MHz Air-Ground
    Radiotelephone Service band, as well as future technologies that can
    be deployed within the designated spectrum and consistent with
    technical regulations necessary to prevent harmful interference to
    adjacent frequency bands, especially those used for public safety
    communications. We also believe that providers of broadband
    air-ground service in this band will be well-positioned to compete
    against satellite-delivered broadband air-ground telecommunications
    services currently being offered or under development.

4.  *Incumbent Transition*. Verizon Airfone is the sole incumbent
    currently operating in the 800 MHz air-ground band. In April 2004,
    the company filed an application for renewal of its authorization to
    operate in the band, which is pending.[^14] We are granting Verizon
    Airfone a non-renewable license for a five-year term on the
    effective date of this Report and Order. As explained below, the
    record reflects that unencumbered paired 1.5 MHz channels are
    necessary to deploy broadband technologies in the 800 MHz air-ground
    band. We seek to ensure that the air-ground spectrum can be used to
    provide broadband air-ground telecommunications services in the near
    future. If band plan 1 or 2 is the winning configuration at auction,
    Verizon Airfone's incumbent system must cease operations in the
    lower 1.5 MHz portion of each 2 MHz air-ground band within 24 months
    of the initial date of grant of a new license or licenses. Verizon
    Airfone may relocate its incumbent operations to the upper 0.5 MHz
    portion of each 2 MHz band (0.5 MHz at 850.500-851.000 MHz paired
    with 0.5 MHz at 895.500-896.000 MHz) and may continue to operate
    under the renewal authorization until the end of the five-year
    license term. If band plan 3 is the winning configuration at
    auction, Verizon Airfone's incumbent system must cease operations in
    the upper 1.5 MHz portion of each 2 MHz air-ground band within 24
    months of the initial date of grant of license F; Verizon Airfone
    may relocate to the lower 0.5 MHz portion of each 2 MHz band (0.5
    MHz at 849.000-849.500 MHz paired with 0.5 MHz at 894.000-894.500
    MHz) and may continue to operate under the renewal authorization
    until the end of the five-year license term. We note that if Verizon
    Airfone acquires a new spectrum authorization as a result of
    competitive bidding, it could elect to continue its incumbent
    operations using such new authorization.

5.  *Part 22 Biennial Review*. We also revise and eliminate, pursuant to
    our biennial review of regulations under Section 11 of the
    Communications Act of 1934[^15] as well as a staff-initiated
    assessment of our Part 22 regulations, certain non-cellular Part 22
    Public Mobile Services (PMS) rules that we find are no longer
    warranted as a result of technological change, increased competition
    in Commercial Mobile Radio Services (CMRS), supervening changes to
    related Commission rules, or a combination of these factors.[^16] We
    implement certain staff recommendations[^17] under Section 11 and
    our general regulatory authority for deleting or modifying various
    rules in Parts 1, 22, and 90.[^18] Many of the rules that we revise
    or eliminate today reflect outdated policies and technical concerns
    or unnecessarily limit the flexibility of Part 22 licensees to
    respond to the marketplace and meet the needs of consumers. Our
    action today serves the public interest as it corrects these
    deficiencies and should facilitate technological innovation.

6.  We also seek to harmonize our rules, where appropriate, across
    various wireless services. For example, we afford licensees of
    nationwide paging channels flexibility to provide other services and
    revise our rules that currently limit the provision of dispatch
    service by paging licensees. We also recodify certain Part 22 rules
    to Part 1 to provide uniform methods for the calculation of terrain
    elevation and distance for most wireless services. In addition to
    eliminating unnecessary regulatory hurdles, many of the rule changes
    that we adopt today will provide licensees with greater flexibility
    regarding the use of their spectrum and thereby enable them to
    better respond to market demands.

# report and Order

## 800 MHz Air-Ground Radiotelephone Service

7.  We initiated this proceeding, inter alia, to reexamine our 800 MHz
    Air-Ground Radiotelephone Service band plan and service rules.
    Although the Commission initially licensed six 800 MHz air-ground
    nationwide licensees, only one licensee (Verizon Airfone) continues
    to provide service in the band, and our service rules allow it to
    provide only a limited range of narrowband voice and data
    services.[^19] This circumstance led us to question in the *Notice*
    whether our existing rules were impeding the provision of
    telecommunications services desired by the public onboard
    aircraft.[^20] Nearly all parties commenting on these issues agree
    that our existing band plan and rules have hindered the efficient,
    competitive provision of services desired by the public. Based on
    our review of the record in this proceeding, we conclude that the
    specified narrow bandwidth (6 kHz) of the existing 800 MHz
    Air-Ground Radiotelephone Service communications channels has
    constrained the ability of licensees to provide the type of
    broadband air-ground services desired by the traveling public. We
    find that the public interest will be served by adopting flexible
    rules that will enable interested parties to bid on licenses in
    three possible band configurations. The three band configurations
    are based on proposals submitted by parties in this proceeding and
    each includes at least one spectrum block that will permit the
    provision of high-speed telecommunications services to the public
    onboard aircraft.

8.  In reexamining the current band plan and service rules, we must
    address both competitive issues (*i.e.*, how many competitors can
    the spectrum and the market support) and technical considerations
    (*i.e.*, how much spectrum is necessary to efficiently and
    effectively support a range of air-ground service offerings,
    including voice and broadband applications, and the technical
    parameters to minimize the potential for air-ground systems to cause
    interference). We resolve these interrelated issues by adopting
    flexible rules to determine the best technological configuration of
    the band and the number of competitors for air-ground communications
    over multiple platforms (*i.e.*, terrestrial and satellite). We note
    that six companies---AirTV, ARINC, Boeing, Inmarsat, OnAir, and Row
    44---are developing or have commenced offering broadband air-ground
    services using satellite-based systems.[^21] We find that
    reconfiguration of the 800 MHz air-ground band will facilitate
    competition with these satellite-based offerings in the provision of
    high-speed air-ground services to commercial and other aircraft. We
    also note that other spectrum is available for the provision of
    air-ground communications services.[^22] Based on our review of the
    record developed in this proceeding and for the reasons stated
    below, we conclude that a flexible licensing approach coupled with
    flexible technical and operational rules will promote the highest
    valued use of the 800 MHz air-ground spectrum for the provision of
    air-ground services that better meet the needs of the public.

### Background

9.  In 1990, the Commission allocated four megahertz of spectrum for
    commercial Air-Ground Radiotelephone Service, authorizing operation
    at 849-851 MHz (ground stations) and 894-896 MHz (airborne mobile
    stations).[^23] Each band is divided into ten paired channel
    blocks,[^24] which are allotted to specific geographic locations
    (essentially a national grid).[^25] Each channel block contains 29
    narrowband (6 kHz) communications channels and 6 very narrowband
    (3.2 kHz) control channels.[^26] Under the current service rules,
    each licensee has an exclusive control channel, shares all the
    communication channels with the other licensees in the band,[^27]
    and must provide nationwide service.[^28] To promote interoperable
    communications and to manage interference, some of the ground
    station locations in North America and channel block assignments
    have been predetermined consistent with bilateral agreements with
    Mexico and with Canada.[^29] The number of communications channels
    limits the number of voice calls that can be simultaneously handled
    in a particular area, and the narrow bandwidth of these channels
    limits a service provider to voice and low-speed data services.[^30]

10. The current 800 MHz Air-Ground Radiotelephone Service rules
    contemplate six competing licensees providing voice and low-speed
    data services. Six entities were originally licensed under these
    rules, which required all systems to conform to detailed technical
    specifications to enable shared use of the air-ground channels. Only
    three of the six licensees built systems and provided service, and
    two of those failed for business reasons. Only Verizon Airfone
    remains as an incumbent in the band.[^31] The prescriptive
    command-and-control nature of the current air-ground service rules,
    the regulatory requirement to share only four megahertz of spectrum
    among up to six licensees, and the limited data capacity of the
    narrow bandwidth (6 kHz) communications (slow dial-up modem speed)
    preclude the provision of broadband services to the public.

11. We note that Skyway Aircraft, Inc. acquired the former "ClairCom"
    air-ground system and has authority to operate in the 800 MHz
    air-ground band under the current rules on a shared basis pursuant
    to a Special Temporary Authorization (STA).[^32] In this proceeding,
    SkyWay has argued that it has an expectancy to use the air-ground
    spectrum,[^33] and supported retention of the existing 800 MHz
    Air-Ground Radiotelephone Service rules.[^34]

### Market for Air-Ground Wireless Communications Services

12. There is substantial and rapidly growing consumer, airline, and
    service provider interest in access to high-speed Internet and other
    wireless services onboard aircraft.[^35] Market research suggests
    that 38 percent of frequent flyers are willing to pay for high-speed
    access to the Internet and their corporate network.[^36] A September
    2003 market study, moreover, indicates that 43 percent of adults who
    travel by commercial aircraft are interested in using their own
    wireless phones, and 34 percent would like to connect to the
    Internet with a laptop while onboard an aircraft.[^37] American
    Airlines and Continental Airlines both state that passenger demand
    for in-flight connectivity for Internet access, email, and text
    messaging is increasing, and that passengers expect high-speed data
    rates.[^38]

13. We see great potential for air-ground wireless services for
    commercial, government, and general aviation. These user markets can
    be served by satellite systems, systems using the spectrum subject
    to this rulemaking, by AirCell (and potentially others) using the
    cellular or other CMRS bands,[^39] and by Air-Ground Radiotelephone
    Automated Service (AGRAS) stations in the 454/459 MHz bands serving
    general aviation. We also consider, in a separate *Notice* of
    Proposed Rulemaking, the possibility of modifying Section 22.925 of
    our rules,[^40] which prohibits the use of cellular phones onboard
    airborne aircraft.[^41] We intend in that companion proceeding to
    examine, inter alia, the possible use of onboard pico cells to
    control cellular handsets on airborne aircraft. We note, however,
    that as the expert agency responsible for air traffic safety, the
    Federal Aviation Administration (FAA) also regulates the use of
    cellular phones and other personal electronic devices on aircraft
    because of the potential for interference to aircraft communications
    and navigation systems.[^42] Thus, the scope of use of cellular
    phones onboard airborne aircraft remains subject to FAA regulations,
    regardless of the action we may take in the companion proceeding.

14. Boeing has been authorized by the Commission to deploy up to 800
    transmit and receive earth stations on aircraft in the 14 GHz uplink
    and the 12 GHz downlink bands.[^43] By the terms of the grant,
    Boeing's authority to communicate with these satellites is limited
    geographically to the airspace above the United States and its
    territorial waters.[^44] Boeing currently has pending before the
    Commission an application to expand its authority by seeking to
    communicate with several foreign satellites from aircraft flying
    over the high seas (*i.e.*, over international waters).[^45] Boeing
    has also filed a petition for rulemaking, which is pending before
    us, seeking establishment of licensing and service rules for the
    Aeronautical Mobile Satellite Service (AMSS).[^46]

15. In 2004, Connexion by Boeing launched a broadband in-flight
    Internet, data, and entertainment service on commercial flights
    operated by non-U.S. airlines,[^47] using a Ku-band satellite
    system. Boeing states that it can provide a forward link data rate
    of up to 5 megabits, and a reverse link of 512 kbps.[^48] Each plane
    equipped with the Connexion service offers either an Ethernet Local
    Area Network (LAN) connection or a wireless 802.11b network
    connection, or both.[^49] The company has entered into agreements
    with numerous carriers,[^50] and reportedly expects to generate
    service revenues of \$500,000 per airplane per year and annual
    revenues of \$2 billion.[^51] Boeing projects that by 2010, the
    market for passenger Internet service will mature, and the company's
    market share will range from 4,500 to 5,000 of the 14,000 aircraft
    that will be flying at that time.[^52] Boeing's Connexion service is
    currently available only on foreign airlines such as Lufthansa;
    however, some routes of these foreign carriers cover U.S.
    territory.[^53] Boeing also has approached a number of U.S. airlines
    regarding installation of the Connexion service on their
    U.S.-registered aircraft.[^54] Connexion Service currently is
    available in the United States on executive jet platforms the size
    of a Boeing 737 and larger, including Airbus aircraft.[^55] Boeing
    has also announced that, in cooperation with Rockwell Collins
    eXchange service, service will be available in early 2005 on a
    majority of the global routes flown by business jet operators,
    including the entire Bombardier Global family of aircraft.[^56]

16. Aeronautical Radio Inc. (ARINC) is currently pursuing several
    efforts in order to bring broadband service to both business and
    commercial aircraft. The company has filed an application with the
    Commission seeking authority to offer, on a non-interference basis,
    a service similar to Boeing's Connexion.[^57] While this application
    remains pending before the Commission, ARINC has begun testing a
    Ku-band satellite system pursuant to a grant of experimental
    authority.[^58] ARINC claims that its proposed SKYLink service can
    offer aircraft passengers uplink speeds between 512 kbps and 3 Mbps
    and downlink speeds up to 128 kbps.[^59] The company recently
    announced that it is conducting talks with three domestic airlines
    interested in the service.[^60] The company claims that "SKYLink is
    the only broadband Internet solution suited to 95 percent of the
    world's passenger aircraft."[^61] The commercial SKYLink hardware
    package, which weighs 150 pounds (including its low-profile
    antenna), reflects advances in technology that enable deployment of
    increasingly lighter weight satellite-based air-ground systems.[^62]

17. SITA INC, Airbus and Tenzing recently formed OnAir, a company that
    intends to offer a range of voice and data broadband services to
    both long- and short-haul fleets across the world.[^63] The company
    anticipates that SITA's existing cabin connectivity customers and
    Tenzing's existing customers will form the OnAir customer base.[^64]
    OnAir expects to introduce access to corporate Virtual Private
    Networks and Internet browsing capabilities in 2005.[^65]

18. Inmarsat also provides onboard wireless services to airlines,[^66]
    corporate and private users,[^67] and governmental entities.[^68]
    The company uses a constellation of geostationary satellites to
    provide service to approximately 5,000 aircraft fitted with Inmarsat
    aeronautical communications systems, including more than 2,000
    aircraft operated by major air carriers, including Air France,
    Continental, Delta, Qantas, United, US Airways, and Virgin
    Atlantic.[^69] The remaining aircraft are operated by businesses and
    private individuals, and by a variety of government agencies,
    including the military.[^70] Inmarsat delivers services to aircraft
    using seven different systems.[^71] Swift64 is Inmarsat\'s latest
    service offering and provides enough data bandwidth for applications
    such as high-quality voice, email, Internet and intranet access, and
    videoconferencing.[^72] Inmarsat states that Swift64 terminals now
    offer up to four 64 kbit/s channels that can be bonded to produce a
    256 kbit/s data rate.[^73] It also claims that application of
    compression and acceleration techniques can boost the effective rate
    to beyond half a megabit per second.[^74]

19. On September 22, 2004, Row 44, LLC,[^75] a provider of data
    communication services and equipment to the aviation industry,
    announced an agreement with Hughes Network Systems (HNS)[^76] to
    bring broadband connectivity to North American commercial and
    business aircraft.[^77] The company intends to leverage the existing
    HNS DIRECWAY® satellite platform, which it claims is capable of
    high-speed connectivity of up to 30 Mbps to aircraft, to provide
    in-flight entertainment, consumer services, security, flight deck
    data, cabin crew operations, operational services, and emergency
    medical support.[^78] The system supports both wired and wireless
    WiFi (802.11) installations and uses a lightweight low-profile
    radome (*i.e.*, a dome-shaped antenna enclosure) and steerable
    antenna (only three inches thick) that can simultaneously provide
    DBS television and two-way Internet traffic.[^79] Row 44 is in
    discussions with a number of major airlines and owners of business
    jet fleets, and system testing is targeted to begin in early
    2005.[^80]

20. On September 23, 2004, AirTV announced that it has signed a launch
    services agreement with Arianespace[^81] to deliver in-flight
    entertainment and connectivity for airlines worldwide.[^82] AirTV
    states that its system will provide more than 60 channels of live
    television (in multiple languages) and 40 Mbps of Internet, e-mail,
    and data services to aircraft.[^83] AirTV has adopted an incremental
    approach for rollout of its system. AirTV plans to launch its
    initial satellite in 2007 over the North Atlantic Ocean. This
    satellite will cover airline routes from Europe and the Middle East
    to North America (roughly one-third of all airline traffic).[^84]
    AirTV\'s subsequent three satellites will be launched soon after,
    providing coverage for aircraft flying over nearly all of the
    commercial airline routes around the globe.[^85]

21. Although they do not currently provide the types of passenger-based
    phone and internet access services that the Aeronautical Mobile
    Satellite Service is capable of providing, the two operating Big LEO
    (Low Earth Orbit) systems, Iridium Satellite LLC (Iridium) and
    Globalstar USA (Globalstar), serve the aviation market for their
    private communication needs.[^86] Aviation users can access the
    Iridium network to send and receive voice, messaging, and data
    regardless of their positions on or above the earth.[^87] Globalstar
    provides specially designed communication solutions for in-flight
    voice and data services aboard both helicopters and fixed-wing
    aircraft.[^88] Globalstar also provides internet connectivity for
    aircraft through two airborne satellite telephone systems.[^89]

22. AirCell also is interested in providing service to commercial
    airline passengers. In conjunction with its cellular licensee
    partners, AirCell currently provides, pursuant to waiver, air-ground
    services to more than 1,400 general aviation aircraft using
    traditional cellular networks and frequencies.[^90] The AirCell
    operations employ existing ground-based cellular networks pursuant
    to agreements with 23 cellular providers.[^91] While, to date,
    AirCell has provided air-ground service only to general aviation
    aircraft over its network, it has announced plans to begin testing
    the service in commercial aircraft.[^92] AirCell has participated
    extensively in this proceeding and stated an interest in providing
    services in the 800 MHz air-ground spectrum.

23. Verizon Airfone is the sole incumbent operating in the 800 MHz
    air-ground spectrum. The company's service is available on
    approximately 4,500 aircraft (including 1,500 commercial
    aircraft).[^93] Verizon Airfone generally charges a connection fee
    of \$3.99 for each voice call, plus \$3.99 per minute of air
    time.[^94] Verizon Airfone has taken several steps to enhance its
    services in recent years. The company launched an in-flight data
    service called JetConnect(SM) in September 2002 on some commercial
    U.S. flights, including planes operated by Continental Airlines,
    Inc.[^95] JetConnect service includes instant messaging, online
    games, and current news, priced at \$5.99 for an entire flight.[^96]
    In 2004, the company introduced two new pricing plans for Verizon
    Airfone voice calls made by Verizon Wireless subscribers---\$10.00
    per month and \$0.10 per minute, or \$0.69 per minute with no
    monthly fee.[^97] Despite these efforts, demand for Verizon Airfone
    Service has waned in recent years. American Airlines, for example,
    has suspended Verizon Airfone service due to a sharp decline in
    passenger demand.[^98] The service has declined from up to 15 users
    per flight, at prices comparable to today's rates, to two or three
    users per flight today.[^99]

### Reconfiguration of the 800 MHz Air-Ground Radiotelephone Service Band

24. In the *Notice*, we asked parties to assess our current rules and
    policies affecting the 800 MHz Air-Ground Radiotelephone Service and
    identify restrictions or policies that impede the competitive
    provision of services designed to meet consumers' needs.[^100] We
    asked whether any changes to our rules could provide greater
    opportunities for the competitive provision of air-ground services,
    leading to lower prices to consumers and increased choices in
    wireless services and enhancements while traveling by plane.[^101]
    We specifically asked parties to make suggestions for rules and
    policies that would achieve more effective consumer choice,[^102]
    and whether this spectrum should be limited to air-ground use, or
    whether we should allow for more flexible use.[^103] We sought
    comment on increasing the operational flexibility afforded to
    air-ground licensees and whether such flexibility would raise any
    co-channel, adjacent channel, or other interference issues, *e.g.*,
    with respect to existing or future services in the 800 MHz
    band.[^104] We also sought comment regarding whether the 800 MHz
    air-ground spectrum is being efficiently used and possible changes
    to our rules that would encourage the use of more innovative,
    spectrum-efficient technologies that could be utilized in this
    spectrum and how best to promote deployment of such
    technology.[^105]

#### Spectrum Reconfiguration Proposals

25. In response to the *Notice*, four parties---AirCell,[^106]
    Boeing,[^107] Space Data,[^108] and Verizon
    Airfone[^109]---submitted detailed proposals regarding revision of
    the 800 MHz Air-Ground Radiotelephone Service band plan and rules.
    These parties uniformly agree that the 800 MHz air-ground band
    should be reconfigured, and urge us to adopt a band plan and rules
    that would enable a licensee to deploy spectrally-efficient
    broadband technologies, including CDMA2000 1xEV-DO and FLASH-OFDM.
    The parties, however, offer different proposals for reconfiguration
    of the band.

26. AirCell and Boeing jointly propose that we reconfigure the four
    megahertz of spectrum in the band into two co-primary, overlapping
    3.0 MHz licenses.[^110] The parties propose that each licensee would
    initially share three megahertz of spectrum in the band (1.5 MHz at
    849.000-850.500 MHz paired with 1.5 MHz at 894.000-895.500
    MHz).[^111] They propose that one licensee use vertical radio wave
    polarization and the other use horizontal radio wave polarization in
    order to mitigate potential inter-system interference.[^112] This
    approach would provide one megahertz of spectrum (the upper 0.5 MHz
    of each 2 MHz band) to accommodate Verizon Airfone's incumbent
    system for a limited transition period.[^113] Following the
    transition period, the licensee using horizontal radio wave
    polarization would shift its operations to 1.5 MHz at
    849.500-851.000 MHz paired with 1.5 MHz at 894.500-896.000 MHz, and
    each licensee's spectrum would overlap the other's spectrum by 60
    percent. The parties suggest that the Commission specify ground
    station spacing based on the existing site list for the air-ground
    service.[^114] The parties propose that sites serving the same
    airspace be located within two miles of each other and that the
    licensees coordinate the location of new sites.[^115]

27. Verizon Airfone, the sole incumbent in the 800 MHz air-ground band,
    initially proposed that the four megahertz of spectrum in the band
    be licensed to one exclusive licensee, and contended that it should
    receive the license without an auction based on its incumbent
    status.[^116] More recently, Verizon Airfone supports reconfiguring
    the band into an exclusive 3 MHz license and an exclusive 1 MHz
    license.[^117]

28. Space Data proposes the use of combinatorial bidding to determine
    configuration of the 800 MHz air-ground band.[^118] Based on the
    outcome of an auction, Space Data's proposal would accommodate one
    of three band configurations---(1) a shared licensing approach with
    overlapping 2.75 MHz and 3 MHz licenses, (2) exclusive 3MHz and 1
    MHz licenses, or (3) exclusive 2.75 MHz and 1.25 MHz licenses.[^119]
    Space Data also has proposed the use of combinatorial bidding
    procedures to auction three exclusive 1.33 MHz spectrum blocks or
    two exclusive 1.5 MHz blocks and two shared 1.0 MHz blocks.[^120]
    The latter approach would permit either exclusive or shared
    licensing of the band.[^121]

#### Available Air-Ground Band Plans

29. We have reviewed the extensive record in this proceeding and
    carefully weighed the parties' competing proposals to reconfigure
    the 800 MHz air-ground spectrum band. We conclude that the public
    interest will be served by adopting a flexible framework that will
    enable interested parties to bid on spectrum licenses according to
    the band configuration that they believe will best meet their needs
    for the provision of air-ground services. Interested parties may bid
    on spectrum licenses in any of the following three band plans,[^122]
    including two overlapping, shared, cross-polarized spectrum licenses
    (band plan 1) as advocated by AirCell and Boeing and exclusive
    spectrum licenses (band plans 2 and 3) as proposed by Space Data and
    Verizon Airfone. Licenses will have a ten-year term.

    Band plan 1---two overlapping, shared, cross-polarized 3 MHz
    licenses (licenses A and B, respectively).[^123]

    Band plan 2---an exclusive 3 MHz license and an exclusive 1 MHz
    license (licenses C and D, respectively).[^124]

    Band plan 3---an exclusive 1 MHz license and an exclusive 3 MHz
    license (licenses E and F, respectively), with the blocks at
    opposite ends of the band from the third configuration.[^125]

    The Commission will award licenses to winning bidders for the
    licenses comprising the band plan that receives the highest
    aggregate gross bid, subject to long-form license application
    review. In order to further competition and ensure maximum use of
    this frequency band for air-ground services, no party will be
    eligible to hold more than one of the spectrum licenses being made
    available.[^126]

30. We believe this flexible approach to configuration of the band will
    promote our goal in this proceeding of facilitating the highest
    valued use of this scarce spectrum resource, resulting in the
    provision of wireless communications services that better meet the
    needs of the traveling public onboard aircraft.[^127] We also
    further our strategic objective "to encourage the growth and rapid
    deployment of innovative and efficient communications technologies
    and services"[^128] by adopting rules that will permit licensees to
    deploy any current or future technology with an occupied bandwidth
    that fits within its assigned spectrum and to provide any kind of
    air-ground service to any type of aircraft. As explained below, we
    also provide a transition period for the incumbent system currently
    operated by Verizon Airfone.[^129]

31. The parties urge us to reconfigure the air-ground band to enable the
    deployment of CDMA2000 1xEV-DO and/or FLASH-OFDM technologies in the
    air-ground band in order to deliver high-speed communications
    services to consumers onboard aircraft.[^130] We conclude that a 3
    MHz spectrum block (comprised of 1.5 MHz paired channels) will
    provide sufficient spectrum to deploy these technologies in the
    air-ground band. The originators of these technologies, QUALCOMM
    Incorporated (CDMA) and Flarion Technologies Inc. (OFDM), both state
    that 125 kHz guard bands are required on each side of a 1.25 MHz
    wide carrier to deploy their respective technologies,[^131] and that
    a 3 MHz spectrum block (comprised of 1.5 MHz paired channels) would
    provide sufficient spectrum to deploy these technologies in the
    band. AirCell, Boeing, and Verizon Airfone concur that guard bands
    are necessary.[^132] Accordingly, in view of the foregoing and our
    goal to encourage the deployment of spectrally efficient
    technologies in the air-ground band, each of the three band plans
    includes at least one spectrum license of 3 MHz.

32. In addition, future licensees in the 800 MHz air-ground band, as
    well as other interested parties, will have the opportunity to
    engage in spectrum leasing under our rules.[^133] Future licensees
    will also be permitted to engage in partitioning and/or
    disaggregation of their licenses.[^134] These regulatory
    opportunities are intended to provide the air-ground marketplace
    greater flexibility to respond to consumer demand.

33. Below, we address the location of ground stations, the provision of
    deck-to-deck service (*i.e.*, service from takeoff to landing),
    competitive considerations, and the provision of services in the
    air-ground band.

##### Location of Ground Stations

34. Band plans 2 and 3 provide for exclusive spectrum licensing and will
    afford new licensees significant flexibility to configure and modify
    their systems to address current and future market conditions. For
    example, licensees will be able to initially configure their systems
    to best meet the needs of their customers, and may flexibly
    reconfigure or add ground stations to respond to future demand for
    air-ground services.[^135] An exclusive licensee also could deploy
    new technologies in response to changing market conditions---without
    having to coordinate its choice of technology with another licensee
    in the band.[^136] If the band is comprised of two overlapping 3 MHz
    licenses (band plan 1), the new licensees will be required to
    jointly file a spectrum sharing and site selection plan with the
    Wireless Telecommunications Bureau within six months of the initial
    grant of their spectrum licenses,[^137] and will be required to
    notify the Bureau of any changes to the plan. The Wireless
    Telecommunications Bureau will issue a public notice prior to the
    Commission's auction of new 800 MHz air-ground spectrum licenses in
    which it will specify the filing requirements for the plan.[^138]
    This approach would provide parties with overlapping spectrum
    licenses flexibility to configure their systems without having to
    adhere to minimum spacing requirements or site locations dictated by
    the Commission. AirCell, which supports spectrum sharing in the
    band, observes that parties with overlapping licenses would act with
    "enlightened self-interest" and cooperate in the site selection
    process.[^139]

##### Provision of Deck-to-Deck Service

35. The record reflects that parties desire deck-to-deck service
    (*i.e.*, service from terminal to terminal). The Federal Air Marshal
    (FAM) Service, for example, urges us to ensure that communications
    capabilities in the air-ground band are fully operational during all
    phases of a commercial flight.[^140] We note that air-ground
    communications services are currently provided to Federal, State,
    and local agencies, including the FBI, the U.S. Department of
    Energy, and the U.S. Customs Service,[^141] and that the air-ground
    spectrum can be used to support aircraft management, other public
    safety services, and homeland security communications. In view of
    the foregoing and in light of our statutory mandate to promote the
    safety of life and property,[^142] we have selected three band plans
    that would enable licensees to provide deck-to-deck service.

36. An exclusive licensing approach (band plans 2 and 3) would
    facilitate the provision of service continuously because ground
    stations can be located without inter-system coordination and would
    not have to be limited in power or sector orientation by the
    presence of an overlapping licensee. If a spectrum sharing approach
    (band plan 1) is selected by the auction winners, the record
    indicates that the parties will have to agree on power limits and
    sharing rules to facilitate the full provision of deck-to-deck
    service. AirCell suggests that a licensee could deploy a hybrid
    system that uses terrestrial spectrum (such as cellular or PCS
    spectrum) to provide service at low altitudes in the vicinity of
    airports.[^143] As noted above, in the event that applicants seeking
    band plan 1 win at auction, the new licensees will have to jointly
    file a spectrum sharing plan with the Wireless Telecommunications
    Bureau, which may include terms to facilitate the provision of
    deck-to-deck service.

##### Competitive Considerations

37. AirCell and Boeing urge us to configure the 800 MHz air-ground band
    into two overlapping 3.0 MHz licenses, claiming that because shared
    use is possible under rules that they propose, consumers would
    benefit from having two providers in the band each with access to
    three megahertz of spectrum.[^144] As noted above, however, such a
    spectrum sharing regime would require the Commission to dictate
    rules such as requiring that the parties coordinate ground station
    locations or adhere to spacing criteria. AirCell, moreover, notes
    that if licensees that share spectrum wish to deploy incompatible
    technologies, one of the licensees may have to acquire spectrum in
    another band suitable for air-ground service.[^145] We conclude that
    adopting only the spectrum sharing proposal of AirCell and Boeing
    and incorporating it into our rules may unnecessarily limit a
    licensee's ability to respond to changing market conditions and
    provide optimal air-ground broadband services to the public. We
    therefore make available a sharing plan that would permit the
    licensees, rather than the Commission, to determine appropriate and
    necessary sharing rules. In order to provide potential licensees
    requiring additional flexibility with the ability to operate without
    sharing requirements, we also make available exclusive licensing
    plans as well. The holder of an exclusive spectrum block could, for
    example, flexibly site its ground stations and select any technology
    without having to coordinate with another operator in the band.
    Accordingly, we provide for both shared and exclusive licensing
    options.

38. The flexible band configuration approach that we adopt today will
    enable interested parties to bid on overlapping spectrum licenses
    (band plan 1) as proposed by AirCell and Boeing in the event that
    they believe spectrum sharing will best meet their needs for the
    provision of air-ground services. Under this approach, the
    individual licensees---rather than the Commission, as suggested by
    AirCell and Boeing---would determine the criteria for ground station
    locations and other technical requirements necessary to facilitate
    the provision of broadband services on an overlapped basis.
    Moreover, in lieu of codifying their sharing plan into the
    Commission's rules, any sharing plan that the winning bidders
    develop between themselves can be modified at any time without their
    having to seek a change in the rules. If band plan 1 is implemented,
    we expect the parties to engage in good faith negotiations in
    developing and implementing their spectrum sharing plan. If the two
    licensees cannot agree on a spectrum sharing plan or if a dispute
    arises under their initial or amended agreement, we would encourage
    them to use binding arbitration or other alternative dispute
    resolution procedures. Alternatively, either party may request that
    the Commission resolve major disputes by filing, for example, a
    petition for declaratory ruling; the Commission would endeavor to
    resolve such matters expeditiously.

39. *Eligibility Restriction*. A number of commenting parties urge us to
    promote competition in the 800 MHz air-ground band.[^146] T-Mobile
    USA, for example, supports licensing multiple providers in the band
    if it is technically feasible.[^147] AirCell, Boeing, and Space Data
    state that we should limit eligibility to prevent a single entity
    from obtaining all four megahertz of spectrum in the band.[^148]
    Verizon Airfone, however, contends that we should make available all
    four megahertz of spectrum in the band to a single party on an
    exclusive basis.[^149]

40. In developing the available band plan options, we have considered
    the potential harms and benefits that may accrue from the
    possibility of a single provider in this band versus opportunities
    for multiple service providers. We have also weighed the possible
    harms and benefits in the context of our goal in this proceeding of
    facilitating the highest valued use of this spectrum, resulting in
    the provision of wireless telecommunications services onboard
    aircraft that better meet the needs of the traveling public.[^150]
    Included in this balancing, we have considered not only the
    existence of emerging satellite-based competition[^151] but also the
    availability of other spectrum for the provision of air-ground
    service.[^152] In addition, we have taken into account the fact that
    our new air-ground band plan and rules will provide an adequate
    amount of spectrum for the provision of new high-speed wireless
    services using the 800 MHz air-ground spectrum that cannot be
    provided under our current rules, and we anticipate that any future
    provider will take advantage of the new rules to provide services
    that will compete more directly with broadband air-ground providers
    operating from different platforms. Therefore, we find that the
    air-ground band plan and the flexible service rules that we adopt
    today are likely to enhance intermodal air-ground competition even
    if ultimately only one entity operates in the 800 MHz air-ground
    band.

41. Nevertheless, in light of the very limited amount of spectrum (four
    megahertz) available in the 800 MHz air-ground band, we conclude
    that the public interest would be served by ensuring access to this
    spectrum by more than one entrant by prohibiting any single party
    from controlling more than three megahertz of spectrum in the band.
    Although other spectrum and platforms will be available for the
    provision of domestic air-ground service, the 800 MHz air-ground
    band constitutes the only four megahertz of spectrum dedicated
    specifically to the commercial air-ground service in the United
    States. Thus, there is currently no guarantee that any spectrum
    other than the 800 MHz air-ground band and the spectrum used by
    satellite services will in fact be used for commercial air-ground
    service. We accordingly conclude that it is in the public interest
    to promote competition by ensuring that at least two parties will
    have an opportunity to provide service in the 800 MHz air-ground
    band. Other providers will be able to access the spectrum through
    secondary markets, resale or similar means.[^153] In addition, the
    record demonstrates that no more than three megahertz of spectrum is
    required to deliver high-speed air-ground services using today's
    broadband technologies.[^154] Permitting one party to control the
    entire four megahertz of spectrum comprising the band therefore
    could result in one megahertz of spectrum (25 percent of the band)
    lying fallow, which would undermine our goal of promoting the
    highest valued use of this spectrum. As discussed below, we find
    that the holder of a 1 MHz spectrum block could provide a meaningful
    competitive alternative to air-ground services currently offered by
    Globalstar and Iridium, could offer more robust applications than
    currently provided by AirCell and Verizon Airfone once the latter
    discontinues its narrowband operations in the 1 MHz spectrum block,
    and could offer services superior to Air-Ground Radiotelephone
    Automated Service (AGRAS) stations in the 454/459 MHz band. A 1 MHz
    spectrum block could support such applications as email service,
    Internet access, messaging services, avionic support, and homeland
    security services.[^155] Given the many potential uses of a 1 MHz
    spectrum block, restricting the access of any single party to three
    megahertz of the spectrum not only will increase the air-ground
    service choices available to consumers, but also will ensure the
    efficient use of this spectrum. We also believe that promoting
    competition in the band and with satellite-based service providers
    will serve the public interest by spurring technological
    innovation.[^156] In light of these findings, we conclude that it is
    in the public interest to have two licensees in this band.

42. The Commission has previously determined that an eligibility
    restriction may be imposed when open eligibility poses a significant
    likelihood of substantial harm to competition in specific markets
    and when a restriction will be effective in eliminating that
    harm.[^157] AirCell, Boeing, and Space Data argue that we should
    prevent a single entity from obtaining all four megahertz of
    spectrum in the 800 MHz air-ground band,[^158] but they do not
    specifically address whether open eligibility in the band would
    result in a significant likelihood of substantial competitive harm
    in the air-ground market. In light of our findings above that three
    megahertz is an adequate amount of spectrum to provide new services
    and that an eligibility restriction is in the public interest, we
    conclude that it is unnecessary at this time for us to determine
    whether there would be "a significant likelihood of substantial harm
    to competition" if we imposed no eligibility restrictions in this
    band. Although we do not apply the "competitive harm" standard in
    this proceeding, as this market develops we will, as in other
    contexts, consider a waiver of the eligibility rule based on a
    showing that market conditions and other factors would favor common
    control of more than three megahertz without resulting in a
    significant likelihood of substantial competitive harm.[^159]

43. In view of the foregoing, we will prohibit any party from obtaining
    a controlling interest, either at auction or by a post-auction
    transaction, in more than three megahertz of spectrum (either shared
    or exclusive) in the 800 MHz air-ground band. Each of the three band
    configurations contains two licenses and each includes at least one
    3 MHz license. Accordingly, no party may have a controlling interest
    in more than one license in the band plan implemented as a result of
    the Commission's auction of new air-ground licenses. For purposes of
    this eligibility restriction, individuals and entities with either
    de jure or de facto control of a licensee in the band will be
    considered to have a controlling interest in the licensee.[^160]

44. We also will apply the definitions of "controlling interests" and
    "affiliate" currently set forth in Sections 1.2110(c)(2) and
    1.2110(c)(5) of the Commission\'s rules.[^161] These provisions have
    worked well to identify individuals and entities that have the
    ability to control applicants for Commission licenses and therefore
    are well-suited to our goal here of ensuring that no party will hold
    a controlling interest in more than three megahertz of spectrum
    (shared or exclusive) in the 800 MHz air-ground band. We note that
    Section 1.2110(c)(2) includes the requirement that ownership
    interests generally be calculated on a fully diluted basis,[^162]
    and also provides that any person who manages the operations of an
    applicant pursuant to a management agreement, or enters into a joint
    marketing agreement with an applicant, shall be considered to have a
    controlling interest in the applicant if such person, or its
    affiliate, has authority to make decisions or otherwise engage in
    practices or activities that determine, or significantly influence,
    the types of services offered, or the terms or prices of such
    services.[^163] We find that, together with the other provisions of
    Sections 1.2110(c)(2) and 1.2110(c)(5), these provisions will ensure
    that no entity will hold a controlling interest in more than three
    megahertz of spectrum (shared or exclusive) in the 800 MHz
    air-ground band.

45. *Additional Spectrum*. We note that in addition to the 800 MHz
    air-ground band, other mobile allocation spectrum is available for
    the provision of air-ground communications services, including
    several commercial mobile radio service bands. The allocations for
    the frequency blocks 698-792 MHz, 1710-1755 MHz, 1850-2000 MHz,
    and 2110-2175 MHz, for example, do not restrict aeronautical
    communications and could be used to provide air-ground
    communications services. We are committed to fostering flexible
    regulatory schemes to facilitate competitive entry in the provision
    of air-ground communications. In the Advanced Wireless Services
    *Notice*, for example, we have sought comment on whether two
    nationwide 10 MHz licenses (1915-1920 MHz/1995-2000 MHz, and
    2020-2025 MHz/2175-2180 MHz) should be issued for services such as
    air-ground.[^164] Sprint Corporation and Verizon Wireless have filed
    comments in that proceeding noting that this spectrum would be
    particularly well-suited for the provision of air-ground service,
    which would be consistent with the band's existing service
    allocations.[^165] T-Mobile USA also notes that this spectrum could
    be used to provide air-ground service.[^166]

46. *Intermodal Competition*. We conclude that satellite-based systems
    and terrestrial air-ground systems have the potential to compete
    with one another.[^167] Satellite-based companies currently are
    developing or already providing high-speed Internet access to
    passengers onboard aircraft,[^168] and intend to provide in-flight
    entertainment, consumer services, security, flight deck data, cabin
    crew operations, operational services, and emergency medical
    support.[^169] Boeing notes that aeronautical mobile satellite
    spectrum is an "appropriate vehicle" for the provision of domestic
    air-ground communications services, but that it is not "fully
    substitutable" for terrestrial air-ground service.[^170] In its
    reply comments, however, Boeing suggests that "aeronautical
    communication services are composed of a broader class of services
    than ATG operations in the 800 MHz or terrestrial cellular bands"
    and includes both traditional voice and limited data service
    (currently offered in the 800 MHz and cellular bands) and advanced
    broadband communications applications, such as those provided by
    Connexion by Boeing.[^171] It states that "aeronautical
    communication services can be provided using various types of
    technologies and system architectures, including terrestrial and
    satellite-based systems."[^172] We agree.

47. Although terrestrial and satellite platforms are not perfect
    competitive substitutes from which to provide air-ground services,
    either platform can be used to deliver high-speed broadband
    connectivity to aircraft. Satellite platforms offer an efficient
    means to deliver point-to-multipoint services such as multi-channel
    video services to aircraft. Depending on the system configuration,
    higher data rates to aircraft can be achieved via satellite.[^173]
    Boeing states that, at some level of domestic traffic, an air-ground
    system or a hybrid air-ground/satellite system would be more
    cost-effective than a satellite-based system.[^174] On the other
    hand, terrestrial systems may be better suited for voice over
    Internet Protocol (VoIP) services because of lower latency.[^175]

48. The regulatory flexibility afforded by the licensing approach that
    we adopt today will enable at least one licensee in each of the
    three band plans to deploy advanced broadband technologies and
    thereby provide a meaningful competitive alternative to services
    offered or being developed by a number of satellite-based
    competitors.[^176] Spectrum blocks A, B, C, and F each provide
    sufficient bandwidth to deliver an array of broadband services to
    passengers onboard aircraft, including access to the Internet,
    corporate virtual private networks, personal email accounts, and
    VoIP services. These spectrum blocks also are well-suited for the
    provision of homeland security applications (*e.g.*, services to
    federal air marshals, the military, and first responders),
    communications with aircraft personnel, and monitoring of critical
    avionic systems.

49. Band plans 2 and 3 each include exclusive 1 MHz and 3 MHz spectrum
    blocks. While the holder of a 1 MHz spectrum block may not be able
    to provide the same level of broadband services as satellite
    providers such as Connexion by Boeing, or the holder of a 3 MHz
    spectrum block in the air-ground band, it could provide a meaningful
    competitive alternative to air-ground services currently offered by
    Globalstar and Iridium, which use satellite systems.[^177] Space
    Data, for example, notes that a 1 MHz license could accommodate iDEN
    and most narrowband technologies, which would provide sufficient
    capacity for voice and short messaging services (SMS) that could
    compete with another operator in the band.[^178] Once Verizon
    Airfone discontinues its narrowband operations in the 1 MHz spectrum
    block, our flexible regulatory approach would enable the holder of
    an exclusive 1 MHz spectrum block to offer more robust applications
    than currently provided by AirCell[^179] and Verizon Airfone. A 1
    MHz exclusive spectrum block also would be superior to Air-Ground
    Radiotelephone Automated Service (AGRAS) stations in the 454/459 MHz
    band, which serve the general aviation market, because AGRAS is
    analog and limited to 20 kHz emissions within 12 paired channels
    spaced at 25 kHz.[^180] Given the variety of applications desired by
    the various aviation markets,[^181] a 1 MHz spectrum block could be
    used to serve niche markets and customers with different service
    demands than larger passenger aircraft. Such applications might
    include email service, Internet access, messaging services, avionic
    support, and homeland security services. Accordingly, we find that a
    1 MHz spectrum block would facilitate the competitive provision of a
    variety of air-ground voice and data applications.

50. *Competitive Safeguards*. AirCell expresses concern that an
    air-ground licensee could unfairly favor a particular class of
    subscribers or unreasonably refuse to provide service to certain
    airlines.[^182] AirCell points out that Verizon Airfone currently
    offers lower service rates to subscribers of wireless service
    provided by its affiliate, Verizon Wireless.[^183] We note that,
    like other Part 22 licensees, 800 MHz Air-Ground Radiotelephone
    Service licensees are classified as commercial mobile radio service
    (CMRS) providers and thus are subject to common carrier regulation
    under Title II of the Communications Act.[^184] While the Commission
    has previously decided to forbear from applying certain provisions
    of Title II to CMRS providers,[^185] it has determined that it would
    be inappropriate to exempt CMRS providers from the competitive
    safeguards embodied in Sections 201 and 202 of the Act.[^186]
    Air-ground licensees therefore are required to provide service upon
    reasonable request,[^187] and their "charges, practices,
    classifications, and regulations for and in connection with" service
    must be just and reasonable.[^188] Air-ground licensees moreover may
    not "make any unjust or unreasonable discrimination in charges,
    practices, classifications, regulations, facilities, or services for
    or in connection with a like communication service," and may not
    afford any undue or unreasonable preference or advantage to any
    person or class of persons.[^189] Accordingly, if an air-ground
    licensee were to unreasonably discriminate in its service rates,
    terms, or conditions, it could be subject to enforcement action by
    the Commission as well as a complaint proceeding initiated pursuant
    to Section 208 of the Communications Act.[^190]

51. Although the Commission retains the authority to enforce core
    provisions of Title II of the Act, the Commission previously
    determined to forbear from certain Title II provisions, including
    the tariffing provisions of Section 203, and to apply mandatory
    detariffing to CMRS providers (including 800 MHz air-ground
    licensees).[^191] The Commission relieved CMRS operators of the
    requirement to file tariffs and prohibited them from filing
    voluntary tariffs.[^192] The Commission based this determination on
    its finding that CMRS providers, including those in the 800 MHz
    air-ground band, were not dominant so as to warrant extensive
    regulation.[^193] The Commission, however, remains free to revisit
    its determination regarding tariffing requirements should
    circumstances so warrant. In light of the unique characteristics of
    air-ground service, the Commission will monitor the development of
    the marketplace and will reserve the ability to take corrective
    action if necessary.

##### Air-Ground Services 

52. We seek to let marketplace forces, rather than prescriptive
    regulations, determine the highest valued air-ground service
    applications. Accordingly, a new licensee may provide any type of
    air-ground service (*i.e.*, voice telephony, broadband Internet,
    data, etc.) to aircraft of any type, and serve any or all aviation
    markets (*e.g.*, commercial, government, and general). A licensee
    must provide service to aircraft. We note that current bilateral
    agreements between the United States, Canada, and Mexico provide for
    coordinated use of air-ground frequencies over North American
    airspace and are based on a narrow bandwidth channel scheme, and
    therefore may need to be renegotiated to provide for more flexible
    use of this spectrum.[^194]

53. In the *Notice*, we asked whether the air-ground spectrum should be
    limited to air-ground use, or whether we should allow for more
    flexible use.[^195] At this time, we decide not to permit a licensee
    to provide ancillary land mobile or fixed services in the 800 MHz
    air-ground spectrum. We agree with T-Mobile that because there is
    only four megahertz of dedicated air-ground spectrum, it should be
    used predominantly for the provision of air-ground service.[^196] We
    also note that a number of parties claim that adjacent band
    interference could arise from the provision of ancillary
    services.[^197] While we believe that it would be possible to
    address the potential for adjacent band interference, we find that
    the public interest would be best served at this time by ensuring
    that this limited spectrum resource is devoted to the provision of
    air-ground service.

###  Technical Standards

54. We are adopting the minimal set of technical rules for the new
    air-ground service necessary to implement the three alternative band
    plan configurations that will be subject to auction. Generally,
    these rules provide licensees flexibility to deploy any type of
    transmission technology, provided that the radio emissions produced
    fit within a licensee's assigned spectrum. The new technical rules
    limit only transmitting power and the power level of unwanted
    emissions.

55. Under the new rules, an air-ground licensee will be allowed greater
    flexibility than under the current rules to deploy the technologies,
    both now and in the future,[^198] that it believes will best enable
    it to provide services desired by consumers. As a general matter,
    these new technical rules are crafted to allow sufficient power to
    provide robust air-ground services, while limiting the potential for
    harmful interference to services operating in adjacent spectrum.

56. *Transmitting power limits*. In considering how the air-ground power
    limit rules may need to be modified, we first review the existing
    air-ground power limit rules. We note that inter-service
    interference has not been reported to the Commission as a
    significant problem under these rules. These rules provide maximum
    transmitting power limits of 100 Watts ERP for ground stations,
    30 Watts ERP for airborne mobiles, and 1 Watt ERP for low power
    ground stations.[^199] These power limits were proposed by The
    Goeken Group Corporation in General Docket No. 88-96 as a part of a
    plan for sharing narrowband air-ground channels.[^200] The principal
    technical elements of that plan, including the power limits, were
    ultimately adopted by the Commission.

57. In order to contribute to our goal of providing a viable,
    competitive terrestrial air-ground service, the new power limit rule
    must allow transmitting power sufficient to provide a robust
    broadband service. AirCell, Boeing, and Verizon each seek to provide
    high-speed Internet service using CDMA2000 1xEV-DO (as well as
    possibly Flash-OFDM in the case of Verizon Airfone) in the band, and
    we consider it likely that one of these technologies, or a similar
    technology, will be used in the reconfigured air-ground band. We
    therefore adopt a transmitting power level that will allow these
    broadband technologies to function efficiently. In the case of
    CDMA2000 1xEV-DO, the transmitting power has to be high enough to
    maintain a substantial positive signal to interference and noise
    ratio (SINR) in order to enjoy a high data rate. When the SINR drops
    below certain values, excessive errors result, and the system
    technology automatically compensates by changing the modulation type
    (*e.g.*, from 16QAM to QPSK) and lowering the data rate. In other
    words, with CDMA2000 1xEV-DO, transmitting power trades off against
    the data rate. With FLASH-OFDM, high data rates produce an emission
    envelope having a relatively high peak to average power ratio. These
    factors suggest that a ground station power limit higher than that
    in the existing rule is appropriate.

58. The studies and simulations filed in the record assume ground
    station power levels to be on the order of 400 to 600 Watts
    ERP.[^201] AirCell asserts that airborne mobile stations may operate
    satisfactorily with less than 1 Watt ERP.[^202] Verizon, on the
    other hand, claims that an airborne mobile power level of 12 Watts
    ERP is necessary to provide reliable high-speed Internet
    connectivity.[^203] We have considered the various proposed
    air-ground forward and reverse power examples in the record,[^204]
    and we conclude that a ground station maximum power limit of
    500 Watts ERP and an airborne mobile station maximum power limit of
    12 Watts ERP will allow a licensee to deploy CDMA2000 1xEV-DO and/or
    FLASH-OFDM with an ample margin. Installations will also be subject
    to the radiofrequency radiation exposure limits rules set forth in
    Section 1.1310 of the Commission\'s rules.[^205]

59. *Potential for interference with adjacent services*. We next address
    the potential for interference to existing services operating in the
    spectrum adjacent to the air-ground service. A number of parties,
    including AirCell,[^206] CTIA-The Wireless Association (CTIA),[^207]
    Motorola,[^208] Nextel Communications, Inc. (Nextel),[^209]
    QUALCOMM,[^210] and The Association of Public-Safety Communications
    Officials International, Inc. (APCO),[^211] filed comments regarding
    the possibility of interference occurring between stations in the
    reconfigured air-ground band and those in the existing radio
    services immediately adjacent to the air-ground allotment.[^212]

60. *Interference to air-ground from adjacent services*. Each of the two
    paired bands comprising the 800 MHz air-ground allocation is
    adjacent to and just above spectrum allocated to the cellular
    radiotelephone service. The 849-851 MHz uplink band is adjacent to
    and just below spectrum allocated to land mobile services, including
    public safety, which will soon become all public safety pursuant to
    the 800 MHz Order. The 894-896 MHz downlink band is adjacent to and
    just below spectrum allocated to land mobile services including 900
    MHz SMR. These services are heavily used in many areas. Base
    stations in these adjacent services are authorized to utilize high
    power levels. Nextel argues that its experience with cellular
    out-of-band emissions (OOBE) and its 900 MHz SMR facilities show
    that such emissions could degrade the new air-ground
    operations.[^213]

61. The services adjacent to the 849-851 MHz band are subject to rules
    that limit their potential to cause interference to air-ground
    service. We do not, at this time, find a need to adopt additional or
    more stringent rules applicable to the adjacent service licensees to
    further limit interference potential to the air-ground
    service.[^214] It would be excessively burdensome and inefficient to
    apply more stringent OOBE limits to existing adjacent spectrum
    services, which would apply to their transmitters everywhere, in
    order to protect a far smaller number of air-ground ground stations
    that will be located in several hundred and generally widely
    separated locations. We believe that, under the current rules, new
    air-ground systems should be able, through careful ground station
    site selection and technical coordination with the licensees in the
    adjacent services, to build out their systems. Potential licensees
    should plan on obtaining qualified engineering advice regarding
    system design and ground station site selection, taking fully into
    account the existing radio frequency environment at candidate sites.

62. *Interference to Cellular Block B*. The air-ground ground station
    transmit band at 849-851 MHz is adjacent to the Cellular
    Radiotelephone Service Block B band, which is used for cellular base
    station receivers. Noting this adjacency, QUALCOMM asserts that OOBE
    from ground stations could potentially cause interference to
    cellular base station receivers.[^215] It suggests that we base our
    rule limiting ground station OOBE on a criterion it proposes as the
    maximum allowable amount of received power from such emissions into
    the cellular base station receivers.[^216] QUALCOMM claims that in
    order to meet its criterion, a ground station transmitter would need
    to use a transmit filter with attenuation of as much as 60 dB at the
    band edge.[^217] It argues that such filters would be impractical if
    a CDMA air-ground signal is transmitted with only 125 kHz of guard
    band between it and the cellular band edge.[^218] QUALCOMM claims
    that, in order to use such filtering, a CDMA air-ground signal
    should be transmitted in the middle of the 2 MHz ground station
    transmit band, to provide 375 kHz of guard band. In making this
    assertion, QUALCOMM apparently ignores the fact that there is
    already a small de facto guard band at the top of cellular Block B.
    We disagree that guard bands greater than 125 kHz are necessary for
    interference avoidance purposes.[^219]

63. We note that no harmful interference problems between the cellular
    service and the commercial air-ground service have been reported to
    the Commission during more than ten years of air-ground service
    operations, despite the fact that the air-ground mobile station and
    ground station transmit bands are reversed from the adjacent
    cellular bands.[^220] We believe that several factors may explain
    why there have been no reported interference problems.[^221] First,
    both services have OOBE limits to suppress undesired signals from
    adjacent allocations. Second, there are far fewer ground stations in
    an air-ground system than in a cellular system (*e.g.*, the entire
    U.S. airspace can be covered at an altitude of 20,000 feet by fewer
    than 200 ground stations). Third, an air-ground licensee must employ
    careful site selection practices for its ground stations, including
    an unobstructed view of the sky and consideration of the local RF
    environment (*i.e.*, what other stations are nearby). Further,
    air-ground antennas also are typically up-tilted whereas cellular
    antennas are often down-tilted, adding some isolation between the
    two. The rule changes that we adopt to permit broadband air-ground
    services will not alter any of these factors and, consequently, we
    expect that these factors will be effective in avoiding
    inter-service interference under our new air-ground band plan.

64. Furthermore, we do not believe that the use of wider bandwidth
    technologies in the 800 MHz air-ground spectrum will result in
    increased interference between air-ground operations and cellular
    operations. Although spread spectrum emissions typically have
    broader out-of-band noise skirts, the level of this noise is subject
    to the Commission's OOBE rules. We also note that the broadband
    spread spectrum based technologies used in the cellular band and
    those that the parties have proposed for use in the air-ground band
    are resistant to small amounts of out-of-band noise.[^222] In
    summary, we find that applying our standard OOBE rules here is
    adequate to limit unwanted emissions between ground stations in the
    air-ground service and base stations in the cellular service. We
    note that our standard OOBE rules also provide that the Commission
    may require greater attenuation of unwanted emissions in the event
    it is necessary to prevent interference to other services.[^223]

65. The airborne mobile transmit band (894-896 MHz) is adjacent on its
    lower side to the cellular telephone receivers of the Cellular Block
    B licensee. There have been no reported instances of harmful
    interference between airborne mobile stations and cellular
    telephones. This stems from the large distance separation between
    aircraft and cellular phones on the ground, and our decision today
    does not change this factor. We conclude that our OOBE limits and
    the distance separation make it likely that the mobile units in
    these two services will continue to operate in adjacent spectrum
    without harmful interference problems. Nevertheless, if an
    air-ground licensee elects to operate aircraft mobile transmitters
    on the ground or during approach and take-off, they may find it
    necessary in some cases to provide additional attenuation of OOBE
    falling into the spectrum below 894 MHz, in order to avoid
    interference to cellular phones in use in the immediate vicinity of
    airports.[^224]

66. *Interference to Public Safety*. The upper edge of the air-ground
    ground station transmit band at 849-851 MHz is adjacent to what are
    now mobile receivers for interleaved business, industrial and land
    transportation, SMR, and public safety radio channels, but which
    will soon become the National Public Safety Plan Advisory Committee
    (NPSPAC) public safety channels pursuant to the our recent 800 MHz
    Order.[^225] Nextel asserts that OOBE from air-ground ground
    stations could produce a significant amount of noise energy in
    nearby public safety receivers.[^226] Although we have found that
    emissions from cellular base stations may have contributed to
    interference problems with public safety and critical infrastructure
    mobile receivers above 851 MHz, there is no history of similar
    interference being caused by the existing air-ground ground stations
    to mobile receivers. There are again several factors that we believe
    may explain why air-ground caused interference is rare, including
    the fact that there are so few air-ground ground stations, as
    compared to cellular base stations, and the deployment
    characteristics of ground stations (*e.g.*, up-tilted antennas).
    Further, we note that NPSPAC operations above 851 MHz will be
    protected by our OOBE limit rule, including the provision that
    allows the Commission to require greater attenuation if necessary to
    prevent interference.

67. Nevertheless, in light of the substantial efforts of Nextel, APCO,
    public safety entities, and land mobile organizations to solve the
    interference problems in the 800 MHz band, we believe that it is
    prudent to adopt a rule providing that ground stations in the
    Air-Ground Radiotelephone Service that operate in the 849-851 MHz
    range will be subject to the same interference abatement obligation
    rules adopted for the cellular service in the 800 MHz Order.[^227]
    We note that AirCell, APCO, Motorola, and Nextel concur that this
    would be an appropriate safeguard for public safety and critical
    infrastructure services.[^228] AirCell argues, however, that we
    should not apply the interference abatement and resolution
    procedures established in the 800 MHz Order to the Air-Ground
    Radiotelephone Service.[^229] We disagree. While we believe that the
    potential for adjacent band interference is minimal, we find that
    the public interest would be served by applying these safeguards to
    air-ground licensees. The rule we are adopting is essentially the
    same as that adopted for the cellular service in the 800 MHz Order.
    We will not require air-ground licensees to participate in the
    establishment of the electronic notification process because we
    anticipate that this process will be in place by the time that new
    air-ground licenses are issued.

68. In addition to applying the 800 MHz Order safeguards to the 800 MHz
    Air-Ground Radiotelephone Service, Nextel claims that we should
    adopt further adjacent band interference mitigation measures.[^230]
    Nextel states that we should require air-ground licensees to avoid
    locating transmitters in public safety hotspots.[^231] We find no
    basis for imposing this special requirement in addition to the 800
    MHz Order safeguards that we apply. We also note there is no current
    mechanism for ascertaining the location of "public safety hotspots,"
    and that such hotspots could change over time. We therefore decline
    to adopt Nextel's proposal. Nextel also asserts that we should
    direct air-ground licensees to submit detailed "documentation" of
    their system parameters and encourage them to mediate interference
    disputes with public safety and Critical Infrastructure
    Industry (CII) licensees.[^232] We find that submission of such
    documentation to the Commission as well as mandatory mediation
    procedures are unnecessary in light of our application of the
    interference abatement and resolution procedures established in the
    800 MHz Order to the air-ground service, and note as well that such
    documentation may be competitively sensitive. Nevertheless, we
    encourage air-ground, public safety, and CII licensees to work
    collaboratively to resolve interference using mediation and other
    appropriate forms of alternative dispute resolution procedures.

69. *Interference to 900 MHz SMR base receivers*. The airborne mobile
    transmit band (894-896 MHz) is adjacent on its upper side to the
    base station receive band in the 900 MHz SMR service. Distance
    separation will normally serve to protect 900 MHz SMR base station
    receivers because airborne stations normally operate at altitudes
    well above 900 MHz SMR base stations. Nextel, however, contends that
    there may be a problem where its 900 MHz SMR base stations are
    located near airport runways, and if there are several aircraft at
    low altitude nearby at the same time.[^233] This possibility appears
    to be atypical and we find that it would be best addressed on a
    case-by-case basis rather than by a broad-based rule. Air-ground
    licensees and 900 MHz SMR licensees should cooperate to resolve any
    interference problems of this type.

70. *Miscellaneous interference issues*. Nextel argues that the
    AirCell/Boeing shared spectrum approach would be less likely than
    the exclusive license approaches supported by Verizon and Space Data
    to create interference to services in adjacent spectrum bands.[^234]
    Whether or not this may be true technically, we find that either
    approach can be deployed without causing harmful interference to
    adjacent services under the rules that we adopt today, provided that
    the licensees are aware of the potential for such interference and
    take necessary measures to comply with our rules to prevent such
    interference.

71. In view of the foregoing, we do not believe the record justifies
    adoption of more stringent OOBE limits for the Air-Ground
    Radiotelephone Service. Accordingly, we will apply our harmonized
    flexible OOBE limits rule, which currently applies to cellular and
    broadband PCS,[^235] to the 800 MHz Air-Ground Radiotelephone
    Service. We note that, in the event that band plan 2 or 3 is
    implemented, the exclusive licensees would be subject to the OOBE
    standards between their spectrum blocks, as well as outside the
    air-ground band.

72. *Miscellaneous technical rules*. The existing air-ground rules have
    provided particular limits on transmitter frequency tolerance[^236]
    and specifications for automated operating procedures.[^237] We
    conclude it is unnecessary to retain such a detailed frequency
    tolerance rule. Under the legacy band configuration, numerous
    closely packed air-ground channels were shared by multiple
    licensees, so we required a frequency tolerance rule that tightly
    controlled frequency stability to minimize the possibility of
    adjacent channel interference. By contrast, our new rules establish
    wider spectrum blocks and we anticipate fewer communications
    channels. In addition, we expect that the advanced technologies
    likely to be used in this band will have to be inherently stable in
    order to work properly and possibly to compensate for Doppler shift
    as well. Thus, we find that we need only require in our rules that
    the frequency stability of equipment used be sufficient to ensure
    that, after accounting for Doppler frequency shifts, the occupied
    bandwidth of the fundamental emissions remains within the authorized
    frequency bands of operation. In the event that band plan 1 is
    implemented and licenses for spectrum sharing are issued, the
    licensees may choose to agree upon any number of miscellaneous
    technical standards that may be needed to facilitate shared spectrum
    operation and include them in the spectrum sharing plan that they
    would file with the Wireless Telecommunications Bureau.[^238]

### Incumbent Station KNKG804

73. Verizon Airfone is the sole incumbent currently operating in the 800
    MHz air-ground band.[^239] In April 2004, the company filed an
    application for renewal of its authorization to operate in the band,
    Call Sign KNKG804.[^240] For the reasons stated below, we grant
    Verizon Airfone a non-renewable license for a five-year term
    commencing on the effective date of this Report and Order.

74. At the outset, we reject Verizon Airfone's assertion that it has
    earned the right to exclusive use of the 800 MHz air-ground band
    based on its past efforts to build and support an air-ground
    telecommunications system.[^241] Under the existing 800 MHz
    air-ground band plan and rules, Verizon Airfone is subject to
    sharing the band with up to five additional competing licensees and
    is limited to providing voice and slow speed data services. Under
    the flexible rules that we adopt today, a new air-ground licensee
    may provide any type of air-ground service (*i.e.*, voice telephony,
    broadband Internet, data, etc.) to aircraft of any type, and serve
    any or all aviation markets.[^242] Exclusive use of the air-ground
    band would confer fundamentally greater rights and access to
    substantially more spectrum than is available to Verizon Airfone
    under its existing license and the current 800 MHz air-ground rules.
    We note that the 929 Paging Order,[^243] cited by the company, lends
    no support to its claim. In that proceeding, the Commission did not
    grant flexible spectrum rights or additional spectrum to existing
    licensees. Rather, the Commission granted exclusivity to existing
    and future paging licensees to use existing very-narrowband channels
    to provide paging services, provided that they satisfied certain
    construction and system loading requirements.[^244] In view of the
    foregoing, we find that there is no justification for granting
    Verizon Airfone exclusive use of the 800 MHz air-ground band, which
    would provide it with a substantial windfall, and we conclude that
    permitting competing applications for licenses in this band would
    better serve the public interest.

#### Transition of Incumbent System 

75. The parties, including Verizon Airfone, state that a new broadband
    air-ground system could not operate efficiently, if at all, in the
    same spectrum with Verizon Airfone's existing narrowband
    system.[^245] The record reflects that paired 1.5 MHz channels will
    provide the necessary bandwidth to deploy broadband technologies
    such as CDMA2000 1xEV-DO.[^246] In order to ensure that the
    air-ground spectrum can be used to provide broadband air-ground
    services to the public in the near future, it is imperative to clear
    the incumbent narrowband system from a minimum of three megahertz of
    spectrum as soon as reasonably practicable. We conclude that, given
    the declining and relatively low usage level of Verizon Airfone's
    system,[^247] and because the original 800 MHz air-ground band plan
    was intended to accommodate six competing licensees, the existing
    system can be provided comparable spectrum in one megahertz of
    spectrum in the air-ground band. Verizon Airfone acknowledges that a
    one megahertz spectrum block would enable it to continue its
    narrowband operations.[^248]

76. Verizon Airfone's incumbent system must cease operations in the
    lower 1.5 MHz portion of each 2 MHz air-ground band within 24 months
    of the initial date of grant of any license, if band plan 1 or 2 is
    implemented; Verizon Airfone may relocate its incumbent operations
    to the upper 0.5 MHz portion of each 2 MHz band[^249] and may
    continue to operate under the renewal authorization until the end of
    the five-year license term. If band plan 3 is implemented, Verizon
    Airfone's incumbent system must cease operations in the upper 1.5
    MHz portion of each 2 MHz air-ground band within 24 months of the
    initial date of grant of any new license; Verizon Airfone may
    relocate its incumbent operations to the lower 0.5 MHz portion of
    each 2 MHz band[^250] and may continue to operate under the renewal
    authorization until the end of the five-year license term. We note
    that this transition period is consistent with Verizon Airfone's
    request that we provide it a "limited transitional period" for its
    narrowband system.[^251] In revising our current air-ground rules,
    we are eliminating all of the command and control technical rules,
    which enabled dynamic sharing of communication channels under the
    former licensing scheme.[^252] Verizon Airfone may reconfigure the
    narrowband channelization of its existing system in the upper 0.5
    MHz portion of each 2 MHz band (or lower 0.5 MHz portion of each
    band if band plan 3 is implemented) any way it wants, including
    using control channel(s) of any authorized bandwidth less than 6 kHz
    (not limited to 3.2 kHz as they are now). We note that if Verizon
    Airfone acquires a new spectrum authorization as a result of
    competitive bidding, it could elect to continue its incumbent
    operations under such new authorization.

#### Reimbursement of Relocation Costs 

77. We conclude, contrary to Verizon Airfone's arguments,[^253] that it
    would not be inequitable for the company to bear any costs
    associated with relocating its narrowband operations within the
    24-month period set out above to accommodate a new entrant in the
    air-ground band. The original 800 MHz air-ground band plan was
    intended to accommodate six competing licensees in the air-ground
    band, and Verizon Airfone has never had a right to exclusive use of
    the band. The new license that we grant Verizon Airfone today,
    moreover, provides the company a substantial period---two years from
    the initial grant of any new air-ground license---to relocate its
    narrowband operations to one megahertz of spectrum in the band.
    Assuming an auction and initial license grant one year after the
    effective date of this order, Verizon Airfone would need to limit
    its operations to one megahertz three years into its 5-year license
    term. We note that this approach is consistent with the company's
    request for a "limited transitional period"[^254] to shift its
    narrowband operations to a 1 MHz spectrum block in the band.[^255]

78. We do not foresee harm to the flying public flowing from Verizon
    Airfone bearing any relocation expenses it may have. As noted above,
    demand for Verizon Airfone's service has markedly declined in recent
    years, and the company's system is approaching technological
    obsolescence. The company, moreover, has had more than ten years to
    recoup its investment in its air-ground system. We note that a new
    air-ground licensee could seek to negotiate and compensate Verizon
    Airfone to relocate earlier than required by the terms of Verizon
    Airfone's new license; Verizon Airfone, however, will not be
    obligated to engage in such negotiations. On balance, we conclude
    that any burden that might be incurred by Verizon Airfone to
    relocate its operations under the conditions we are adopting should
    be minimal. Accordingly, we require Verizon Airfone to bear any
    costs for relocating its narrowband operations in the air-ground
    band at the end of the 24-month transition period.

#### Renewal of Call Sign KNKG804

79. We reject Verizon Airfone's claim that we must afford it a hearing
    under Section 316 of the Act in the event that we modify its license
    to operate in the 800 MHz air-ground band.[^256] The hearing
    requirements of Section 316 only apply to modification of an
    existing license. Verizon Airfone's license expired on July 22,
    2004, and Section 316 therefore is inapplicable.

80. We hereby grant Verizon Airfone Inc. a non-renewable license, Call
    Sign KNKG804, for a five-year term subject to the following
    conditions:

-   If band plan 1 or 2 is implemented, Verizon Airfone must cease its
    existing narrowband operations in the lower 1.5 MHz portion of each
    2 MHz air-ground band within 24 months of the initial date of grant
    of a new spectrum license.

-   If band plan 1 or 2 is implemented, Verizon Airfone may relocate its
    incumbent operations to the upper 0.5 MHz portion of each 2 MHz band
    (0.5 MHz at 850.500-851.000 MHz paired with 0.5 MHz at
    895.500-896.000 MHz).

-   If band plan 3 is implemented, Verizon Airfone must cease its
    existing narrowband operations in the upper 1.5 MHz portion of each
    2 MHz air-ground band within 24 months of the initial date of grant
    of a new spectrum license.

-   If band plan 3 is implemented, Verizon Airfone may relocate its
    incumbent operations to the lower 0.5 MHz portion of each 2 MHz band
    (0.5 MHz at 849.000-849.500 MHz paired with 0.5 MHz at
    894.000-894.500 MHz).

-   The existing Section 22.867 power limits for ground stations (100
    Watts ERP) and airborne mobile stations (30 Watts ERP) will become
    license terms. We are amending Section 22.867 and it will apply to
    the new licensees only.

-   The existing Section 22.861 out-of-band and spurious emission limits
    will become license terms. We are amending Section 22.861 and it
    will apply to the new licensees only.

-   The authorized emission bandwidth of any transmission from the
    existing system may not exceed 6 kHz. This license condition
    replaces Section 22.857(a)(2) because we are removing Section
    22.857. This condition requires that the existing system remain a
    narrowband system.

81. Verizon Airfone must coordinate any technical changes within 885
    kilometers (550 miles) of the U.S.-Canadian or U.S.-Mexican borders
    with the appropriate air-ground licensees in those countries prior
    to requesting appropriate governmental approval.[^257] Verizon
    Airfone may locate or relocate ground stations operating at any
    power level (not exceeding 100 Watts), subject only to international
    coordination. Verizon Airfone must maintain and provide to the FCC
    and the new 800 MHz air-ground licensee(s) a current list of the
    locations and channels used at all ground stations, which will
    enable the licensee(s) to provide interference protection to the
    existing system's operations.

82. During the period that the existing system continues to operate and
    provide service, the licensee of a new spectrum license must not
    cause harmful interference to it. Protection from interference
    requires that the signals of the new licensee(s) must not exceed the
    current adjacent channel emission limit, which is a ground station
    received power of -130 dBm in 6 kHz, assuming a 0 dBi vertically
    polarized antenna.[^258] This limit will provide full interference
    protection to the existing system.

### Construction Requirements

83. The record indicates that an air-ground system using broadband
    technologies, such as FLASH-OFDM and CDMA2000 1xEV-DO, cannot be
    deployed while the incumbent system operates in the same
    spectrum,[^259] and that paired 1.5 MHz channels will provide
    sufficient bandwidth in which to deploy these technologies.[^260] As
    noted above, in order to facilitate the provision of advanced
    air-ground telecommunications services to the public in the near
    future, Verizon Airfone must cease operations in the lower 1.5 MHz
    portion of each air-ground band within 24 months of the initial date
    of grant of any new spectrum license if band plan 1[^261] or 2 is
    implemented.[^262] If band plan 3 is implemented, Verizon Airfone
    must cease operations in the upper 1.5 MHz portion of each
    air-ground band within 24 months of the initial date of grant of a
    new spectrum license.[^263]

84. In light of these considerations, we find that a five-year
    substantial service construction requirement for any new spectrum
    license---other than the 1 MHz spectrum licenses D and E---will
    serve the public interest and is consistent with our statutory
    mandate "to prevent stockpiling or warehousing by licensees, and to
    promote investment in and rapid deployment of new technologies and
    services."[^264] At the end of the five-year construction period, a
    licensee must provide substantial service to aircraft. We define
    substantial service as service that is sound, favorable, and
    substantially above a level of mediocre service that would barely
    warrant renewal. We establish two safe harbors that would satisfy
    this substantial service obligation. First, construction and
    operation of 20 base stations, with at least one base station in
    each of the ten FAA regions,[^265] at the five-year benchmark would
    constitute substantial service. Alternatively, the construction and
    operation of base stations capable of serving the airspace of at
    least 25 of the 50 busiest airports (as measured by annual passenger
    boardings) at the five-year benchmark would constitute substantial
    service.[^266]

85. We do not establish a construction requirement for spectrum licenses
    D and E. If either of these licenses is acquired, the licensee would
    have to share spectrum with Verizon Airfone's incumbent system until
    the expiration of Verizon Airfone's non-renewable license term.
    Depending on system configuration, a licensee of spectrum block D or
    E might not find it technically desirable to operate an air-ground
    system while sharing spectrum with the incumbent system. Under these
    circumstances, a construction requirement could result in a licensee
    deploying a less than optimal system.

## 400 MHz Air-Ground Radiotelephone Service

86. The general aviation air-ground service operates in the
    454.675-454.975 and 459.675-459.975 MHz bands and involves the
    provision of telecommunications service to private aircraft such as
    small single engine craft and corporate jets.[^267] As explained by
    one of the commenters in this proceeding, the channels licensed in
    this service are used for emergency and other purposes.[^268] These
    channels are interconnected with the public switched telephone
    network.[^269] Pursuant to our biennial review of regulations in the
    *Notice*, we are revising and eliminating certain rules governing
    this service.[^270] We also note that, to date, the Commission has
    accepted for filing nine sets of mutually exclusive applications in
    this service.  Because the Commission is required under Section
    309(j) of the Communications Act to resolve this mutual exclusivity
    by auction, we propose competitive bidding rules for the general
    aviation air-ground service in the *Notice* of Proposed Rulemaking
    below.[^271]

### Form 409, Airborne Mobile Radio Telephone License Application

87. *Background*. In contrast to most Part 22 services, Section
    22.3(b)(1) requires an individual authorization to operate a general
    aviation airborne mobile station---an end user unit---in the
    Air-Ground Radiotelephone Service.[^272] This requirement is also
    reflected in Section 1.903(c) of our rules.[^273] Individuals must
    file FCC Form 409 (Airborne Mobile Radio Telephone License
    Application) to apply for authority to operate an airborne station
    or to modify or renew an existing license.[^274] In the *Notice*, we
    tentatively concluded that this individual licensing requirement
    should be eliminated, although we also asked whether there might be
    any reasons for retaining this requirement or adopting a streamlined
    version of this requirement.[^275]

88. *Discussion*. Despite the objections of SkyTel and Able
    Communications, we do not believe that the continued licensing of
    individual airborne mobile stations is warranted. SkyTel objects to
    the elimination of the licensing requirement because "there will be
    no means of knowing whether traffic is legitimate or from a rogue
    user on the system."[^276] It adds that, unlike subscribers in the
    land mobile services, airborne subscribers are not associated with a
    single base station licensee, so if individual end user licensing is
    eliminated, there will be no way to determine the identity and
    number of potential users for the Air-Ground System.[^277]

89. We have considered these concerns and do not believe they justify
    the continued use of FCC Form 409. At present, and likely for the
    foreseeable future, members of the public desiring service using the
    current Air-Ground Radiotelephone Automated Service (AGRAS) system
    must first purchase and install an AGRAS-compatible mobile telephone
    aboard their aircraft. Such mobile units are considerably more
    expensive and not as readily available as mobile telephones
    typically used with land-based public mobile systems. Coupled with
    the fact that the number of general aviation users is relatively
    small, the probability of "rogue" users is minimal.

90. More importantly, a potential air-ground subscriber must first
    register with the billing service utilized by the various air-ground
    licensees to obtain an aircraft telephone number in order to receive
    service. Therefore, the licensee's own billing service would know
    the number and identification of legitimate users of the air-ground
    AGRAS system. Presumably, if an un-registered or "rogue" user
    attempted to place calls over the AGRAS system, service would be
    denied.

91. In addition, the Commission has received few complaints regarding
    these stations. As pointed out in the *Notice*, Air-Ground equipment
    is used to communicate with ground facilities that are otherwise
    licensed by the Commission.[^278] Moreover, we believe that the
    requirement to file Form 409 imposes an unnecessary regulatory
    burden on end users, because it involves preparation of a form as
    well as payment of a \$50 fee for each subscriber unit.

92. Therefore, in keeping with the Commission's policy of simplifying,
    where appropriate, its licensing procedures and easing the
    administrative burden on licensees and other users of Wireless Radio
    Services, we eliminate, by revising Sections 1.903(c) and 22.3(b),
    the requirement that an authorization be obtained to operate general
    aviation airborne mobile stations in the Air-Ground Radiotelephone
    Service. We also eliminate FCC Form 409 and delete references to
    that form in Sections 1.1102 and 1.2003 of our rules.[^279]

### Idle Tone

93. *Background*. Section 22.811 provides that, when a ground station
    transmitter authorized to transmit on any Air-Ground Radiotelephone
    Service channel listed in Section 22.805 (for general aviation
    air-ground service) is available for service but idle, it must
    continuously transmit a modulated signal on that channel with a
    power between 10 and 20 dB lower than the normal transmitting
    power.[^280] In the *Notice*, we pointed out that all U.S.
    Air-Ground stations are currently required to operate using
    Air-Ground Radiotelephone Automated Service (AGRAS), and that as a
    result, the idle tone rule, which was intended to facilitate manual
    Air-Ground service, appears to have become obsolete.[^281] We thus
    tentatively concluded that Section 22.811 should be
    eliminated.[^282]

94. *Discussion*. Both commenters on this issue express their desire to
    maintain the idle tone requirement. In particular, SkyTel argues
    that the rule is not obsolete, because idle tone transmissions
    facilitate the directing of calls to the correct channel.[^283] Able
    Communications adds that eliminating the control tone in the AGRAS
    air-ground service would adversely affect users, as new AGRAS system
    improvements are "backwards compatible," relying on older
    protocols.[^284] Despite these comments, we continue to believe that
    the deletion of Section 22.811 from our rules is warranted. We take
    this opportunity to point out that the removal of this rule in no
    way prohibits carriers from employing the idle control tone. To the
    contrary, the action we take today is permissive. To the extent that
    idle tone transmissions are deemed valuable by system operators,
    they are free to continue to use them. In light of today's automated
    system, however, we do not believe that mandating their continued
    use is warranted.

### Construction Period for General Aviation Ground Stations

95. *Background*. Section 22.815 provides that "\[t\]he construction
    period (see § 22.142) for general aviation ground stations is 12
    months."[^285] In the *Notice*, we pointed out that former Section
    22.142[^286] was consolidated into current Section 1.946[^287] as
    part of the implementation of the Universal Licensing System
    rules.[^288] We therefore proposed to eliminate the reference to
    former Section 22.142 in Section 22.815 and replace it with a
    reference to Section 1.946.

96. *Discussion*. As proposed in the *Notice*, we correct the reference
    in Section 22.815 to specify the actual rule section, Section 1.946.

### AGRAS

97. *Background*. Section 22.819 provides that, after January 1, 1996,
    stations transmitting on the general aviation air-ground service
    channels must operate in compliance with the requirements set forth
    in the document, \"Technical Reference, Air-ground Radiotelephone
    Automated Service (AGRAS), System Operation and Equipment
    Characteristics,\" dated April 12, 1985.[^289] Previously,
    air-ground radiotelephone service was manual in nature, requiring
    operator assistance and intervention in handling all calls. The
    AGRAS protocols advanced this service so that calls could be
    directly dialed.[^290] In addition, the automated system allows two
    or more competing ground stations in a location to share control
    channels.[^291] In the *Notice*, we stated that the industry is
    currently developing a new operating technology that may be superior
    to AGRAS.[^292] We sought comment on the best way in which to
    facilitate such technical innovation.[^293]

98. *Discussion*. We disagree with SkyTel that the Commission should
    continue to require this particular technology, and will delete
    Section 22.819.[^294] SkyTel comments that maintenance of the AGRAS
    protocol will ensure that any nascent standard is "implemented with
    backwards compatibility" and will therefore "protect owners of
    existing hardware and systems" that might not be able immediately to
    implement a new technology when it arrives.[^295] We point out that
    our deletion of the rule does not mean that the AGRAS protocols are
    prohibited. To the contrary, technological advancements in this area
    may continue to utilize AGRAS protocols if developers believe it
    would be appropriate. Despite SkyTel's concerns, we are unwilling at
    this time to mandate the use of a particular technology when the
    market is more suited to make these decisions. We also believe that
    it is unlikely that the industry would simply forsake the current
    users of these systems.

## Revision of Part 22 Non-Cellular Rules

### Scope and Authority---Authorization Required, General Eligibility, and Definitions

99. *Background*. Section 22.3(b) provides that, except for certain
    stations in the Rural Radiotelephone Service and the Air-Ground
    Radiotelephone Service, the operation by subscribers of mobile or
    fixed stations in the Public Mobile Services is covered by "the
    authorization held by the common carrier providing service to
    them."[^296] In the *Notice*, we proposed to eliminate the
    restriction that license holders in Part 22 may only be current or
    future "common carriers."[^297] We tentatively concluded that the
    term "common carrier" in Section 22.3(b) should be replaced with the
    term "licensee," and that end users could continue to rely on the
    operating authority granted by the Commission to their service
    provider.[^298]

100. Part 22 also contains other rules that use the term "common
     carrier." Section 22.7 states that, "except as otherwise provided
     in this part, existing and proposed common carriers are eligible to
     hold authorizations in the Public Mobile Services."[^299] In the
     *Notice*, we proposed to delete this limitation.[^300] We also
     pointed out that several of the definitions contained in Section
     22.99 include references to the term "common carrier" that, should
     we adopt our proposal to remove the common carrier eligibility
     restriction, should be replaced with the term "licensee." We
     specifically sought comment regarding whether elimination of the
     common carrier eligibility requirement in Part 22 could have any
     detrimental effect for Part 22 licensees.[^301] Finally, we
     observed that the distinctions previously drawn between a radio
     common carrier and a wireline common carrier under the Part 22
     rules became obsolete in 1984.[^302]

101. *Discussion*. We revise Sections 22.3(b), 22.7, and 22.99 as
     proposed in the *Notice*, by replacing the term "common carrier"
     with the term "licensee," and thus deleting the requirement that
     licensees in Part 22 services be common carriers.[^303] We also
     revise Section 22.1(b) to delete the reference to "domestic common
     carrier," and Section 22.401 to delete the words "Communications
     common carriers" and replace with the words "Eligible entities (see
     § 22.7)." These revisions help to implement the proposal we adopt
     to remove the common carrier restriction from the Part 22
     eligibility rules. We agree with Blooston that Section 22.351,
     regarding channel assignments, should be similarly amended.[^304]
     Finally, we delete the definitions for Radio Common Carrier and
     Wireline Common Carrier, as these terms are no longer used in Part
     22, and correct references to the term "Air-ground Radiotelephone
     Service" contained in several definitions in Section 22.99 to read
     "Air-Ground Radiotelephone Service."

102. While the commenters are overwhelmingly supportive of our proposal
     to remove the common carrier restriction from the Part 22
     eligibility rules,[^305] Arch Wireless and Able Communications have
     expressed concern that the proposed rule change might alter the
     ability of licensees to retain the protections and rights that
     common carrier status provides.[^306] In particular, Arch states
     that common carrier status has played an important part in
     achieving interconnection agreements with incumbent local exchange
     carriers and notes that common carriers are exempt from Health
     Insurance Portability and Accountability Act of 1996[^307] privacy
     rules.[^308] Able Communications expresses similar concerns
     regarding privacy, interconnection, and licensees' standing in
     state and federal courts.[^309]

103. Our action today does not impact a licensee's ability to elect
     common carrier status under our Part 22 rules. We thus find that
     the commenters' concerns that these rule changes could mean that
     common carriers might lose certain legal and regulatory protections
     are unwarranted. As Blooston suggests, common carrier status should
     be viewed as an "option, rather than a requirement for Part 22
     licensees," and the election of common carrier status should still
     entail protections to CMRS providers.[^310] We agree. Consequently,
     we emphasize that our objective here is to remove the requirement
     that Part 22 licensees be common carriers (*i.e.*, remove the
     eligibility restriction), without impacting the ability of
     licensees to choose such status if so desired.

### Licensing Requirements and Procedures

#### Construction Prior to Grant of Application

104. *Background*. Section 22.143(d)(4) of our rules provides that, for
     any pre-grant construction or alteration that would exceed the
     requirements of Section 17.7,[^311] the licensee must notify the
     FAA and file "a request for antenna height clearance and
     obstruction and marking specifications (FCC Form 854) with the FCC,
     PRB, Support Services Branch, Gettysburg, PA 17325."[^312] In the
     *Notice*, we proposed to make an editorial correction to the Form
     854 filing location to "WTB, Database Management Division, Analysis
     and Development Branch, 1120 Fairfield Road, Gettysburg, PA
     17325."[^313] We also proposed to amend Section 22.143(d)(4) to
     specify that Form 854 may be filed electronically by accessing the
     Commission's Antenna Structure Registration home page at
     wireless.fcc.gov/antenna/.[^314]

105. *Discussion*. No comments were received regarding these proposed
     changes, which will provide the public with better information. We
     note that since the *Notice* was released, the Wireless
     Telecommunications Bureau, in late 2003, was reorganized.[^315] As
     a result, the correct filing location for FCC Form 854 is "WTB,
     Spectrum Management Resources and Technologies Division, 1270
     Fairfield Road, Gettysburg, PA 17325." We revise this form
     accordingly, and we amend Section 22.143(d)(4) of our rules to
     include this updated address.

#### Computation of Distance

106. *Background*. In the *Notice*, we proposed to recodify Section
     22.157 in Part 1, Subpart F, as new Section 1.958, so that a single
     distance calculation method would apply to all Wireless Radio
     Services, providing regulatory certainty and consistency to service
     providers licensed under these rule parts.[^316] Currently, Section
     22.157 requires that distance calculations be rounded to the
     nearest whole kilometer, while Section 90.309(a)(1) requires that
     they be rounded to the nearest 0.1 kilometer.[^317] We also noted
     that the Section 90.309(a)(1) calculation method was based on the
     Section 73.611[^318] calculation method, and we tentatively
     concluded that the reference to Section 73.611 in Section
     90.309(a)(1) should be deleted and replaced by a reference to new
     Section 1.958.[^319]

107. *Discussion*. We recodify Section 22.157 as new Section 1.958 in
     Part 1, Subpart F. This will make the Section 22.157 distance
     calculation method applicable to all Wireless Radio Services
     described in Parts 1 (except Parts 21 and 101 as explained below),
     20, 22, 24, 27, 80, 87, 90, 95, and 97,[^320] and supersede any
     conflicting regulations in these Parts.[^321] We note that software
     used by the Commission to process applications under Parts 21
     (Domestic Public Fixed Radio Services) and 101 (Fixed Microwave
     Services) is programmed to round the result of a distance
     calculation to the nearest tenth of a kilometer. Accordingly, we
     include language in new Section 1.958 to indicate that distance
     calculations for applications under these parts must be rounded to
     the nearest tenth of a kilometer.

108. We disagree with the suggestions of two commenters that we adopt
     the "Great Circle Route" method of computing distance.[^322] This
     distance calculation method inputs the latitudes and longitudes of
     two points into formulas derived from spherical trigonometry to
     measure the great circle distance. A great circle is the
     intersection of a sphere with a plane passing through the center of
     the sphere. Arcs of great circles on the earth represent the
     shortest route between two points on its surface.[^323] First,
     while this method can be more accurate for longer distances
     (*i.e.*, distances of approximately 500 kilometers or more), the
     majority of distance calculations in the Public Mobile Services are
     for much shorter distances. Second, we do not believe that the
     improvements in accuracy resulting from this method are
     significant. Third, the mathematical calculations that are required
     are too complex to warrant its use. We believe that recodification
     of Section 22.157 in Part 1 is a more workable, practical approach
     for applicants.[^324]

#### Computation of Terrain Elevation

109. *Background*. Section 22.159 sets forth the method for computing
     average terrain elevation for Part 22 services.[^325] Section
     90.309(a)(4) sets forth the method for computing average terrain
     elevation for Part 90 services in the 470-512 MHz band.[^326]
     Calculations for the 470-512 MHz band are unique because they must
     take into consideration land mobile and co-channel and adjacent
     channel UHF TV station operations.[^327] Parts 20, 21, 24, 27, 80,
     87, 95, 97, and 101 generally do not specify a terrain elevation
     calculation method.[^328] In the *Notice*, we proposed to recodify
     Section 22.159 in Part 1, Subpart F, as new Section 1.959.[^329] We
     also proposed to retain the Section 90.309(a)(4) method for
     computing average terrain elevation for the 470-512 MHz band under
     Part 90, and cross-reference it in new Section 1.959.[^330]

110. *Discussion*. We recodify Section 22.159 as new Section 1.959 in
     Part 1, Subpart F. Those commenters that discuss this issue support
     the adoption of a consistent terrain elevation calculation method
     applicable to all Wireless Radio Services.[^331] Consequently, we
     make the change as proposed in the *Notice*.[^332] Part 90 services
     in the 470-512 MHz band, due to their proximity to TV operations,
     will continue to be governed by Section 90.309(a)(4).[^333] Thus,
     all wireless services under Parts 1, 20, 22, 24, 27, 80, 87, 90
     (except the 470-512 MHz band), 95, 97 and 101 will be subject to
     the same computation methodology.

#### ASSB

111. *Background*. Section 22.161 sets forth application requirements
     for base stations in the Paging and Radiotelephone Service, Rural
     Radiotelephone Service, and Offshore Radiotelephone Service where
     the applicant proposes to employ amplitude compandored single
     sideband modulation (ASSB).[^334] In the *Notice*, we tentatively
     concluded that Section 22.161 should be eliminated.[^335]

112. *Discussion*. We delete Section 22.161.[^336] No comments were
     received on this ASSB issue. As pointed out in the *Notice*,[^337]
     this rule section is obsolete in light of Section 22.357, which
     permits Part 22 licensees to use any emission type that complies
     with applicable emission limits.[^338]

### Operational and Technical Requirements

#### Channel Assignment Policy

113. *Background*. Section 22.351 sets forth the general policy for the
     assignment of PMS channels.[^339] The third sentence of this
     section uses the term "common carrier."[^340] In the *Notice*, we
     proposed to replace the term "common carrier" with the term
     "licensee."[^341]

114. *Discussion*. Consistent with our action above,[^342] we amend
     Section 22.351 as proposed in the *Notice*.

#### Interference Protection

115. *Background*. Section 22.352 provides, in pertinent part, that PMS
     licensees shall be considered non-interfering if they operate in
     accordance "with FCC rules that provide technical channel
     assignment criteria for the radio service or channels involved, all
     other applicable FCC rules, and the terms and conditions of their
     authorizations."[^343] This rule helps to alleviate the
     administrative burden on the Commission of resolving interference
     complaints by creating a presumption that operations consistent
     with our rules and the applicable authorization are
     non-interfering. In the *Notice*, we tentatively concluded that
     this provision in the rule section could be streamlined by
     essentially removing the language regarding technical channel
     assignment criteria.[^344]

116. *Discussion*. We modify the relevant portion of Section 22.352 to
     read "Public Mobile Service stations operating in accordance with
     applicable FCC rules and the terms and conditions of their
     authorizations are normally considered to be
     non-interfering."[^345] No comments were received on this topic.
     The streamlined wording we adopt more accurately reflects how the
     Commission currently addresses interference issues, as we make
     clear that operation consistent with Commission rules and the
     applicable authorization---whether on a site-by-site basis or on a
     geographic area basis---creates a presumption of non-interfering
     operation.

#### Emission Types and Emission Masks

117. *Background*. An emission mask is defined as "\[t\]he design limits
     imposed, as a condition or certification, on the mean power of
     emissions as a function of frequency both within the authorized
     bandwidth and in the adjacent spectrum."[^346] Section 22.357
     provides that any authorized PMS station may use any type of
     emission provided that it complies with the appropriate emission
     mask.[^347] Section 22.359 is the general emission mask rule.[^348]
     Section 22.861 is the emission limitations and mask rule for
     commercial aviation air-ground systems.[^349] At the time the
     Commission adopted the Part 22 rules, it generally used the
     emission mask approach to regulate in-band energy distribution.
     Recently, however, the Commission has been decreasing its reliance
     on the use of emission masks as a means to limit interference and,
     instead, increased its reliance on the use of out-of-band emission
     (OOBE) limits.[^350] The salient difference between emission masks
     and OOBE limits is that OOBE limits do not limit emission levels
     within a particular frequency band. Rather, they are intended to
     limit emissions outside of the authorized bandwidth. In the
     *Notice*, we sought comment on possible revision or elimination of
     Sections 22.357, 22.359, and 22.861 in light of the trend toward
     use of OOBE limits.[^351] We also sought comment on whether we
     should adopt OOBE limits for the Part 22 services that are the
     subject of this proceeding.[^352]

118. *Discussion*. Consistent with the recent increased use of OOBE
     limits, we replace the emission mask requirements found in Sections
     22.357, 22.359, and 22.861 with an OOBE limitation. Of the
     commenters that discussed this issue, Cingular Wireless and Verizon
     Wireless favor OOBE limits over emission masks as the method of
     preventing harmful interference.[^353] We believe that OOBE
     limitations are preferable to emission masks for the PMS because
     OOBE limitations do not need to be revised every time a new
     technology is implemented (unlike emission masks). Moreover, OOBE
     limitations make more sense with channels that are often combined
     in blocks, since there is no need for a single licensee on adjacent
     channels to be required to use an emission mask on each channel to
     protect itself. OOBE limitations protect services operating beyond
     the outer edges of the channel block. Emission masks require
     protection of each individual channel within the block.

119. The National Telecommunications and Information Administration
     (NTIA), while not opposed to our approach regarding OOBE
     limitations, recommends that we clarify the unwanted emissions to
     be covered by the term OOBE consistent with International
     Telecommunication Union (ITU) definitions.[^354] That entity's main
     concern is that our use of an OOBE standard may not include
     spurious emissions, which it believes should be covered.[^355] We
     clarify that, for purposes of this proceeding, we interpret our
     OOBE limitations to include what would be termed "spurious"
     emissions under the ITU standards.

#### Standby Facilities

120. *Background*. Section 22.361 permits PMS licensees to install
     standby transmitters, without separate authorization, to continue
     service in the event of transmitter failure or during transmitter
     maintenance.[^356] In the *Notice*, we tentatively concluded that
     this section should be eliminated, as it is now universally
     understood in the wireless industry that licensees are not required
     to obtain a separate authorization to install standby
     transmitters.[^357]

121. *Discussion*. We agree with the one commenter that mentioned this
     issue that eliminating Section 22.361 is warranted.[^358] We also
     note that doing so is in line with our desire to streamline or
     eliminate rules that are no longer necessary.[^359] Thus, we
     eliminate Section 22.361.

#### Directional Antennas

122. *Background*. Section 22.363 and Table C-2 to Section 22.361 set
     forth directional antenna technical requirements.[^360] These
     requirements were adopted at a time when the Commission generally
     considered fixed wireless operations to be secondary to mobile
     operations. As noted in the *Notice*, these regulations appear to
     no longer be necessary because, when the Commission licenses
     spectrum today, it provides greater flexibility to licensees to use
     the spectrum for mobile or fixed operations.[^361] Accordingly, we
     tentatively concluded that Section 22.363 and Table C-2 to Section
     22.361 should be eliminated.[^362]

123. *Discussion*. We eliminate the directional antenna requirements as
     proposed in the *Notice*. The lone commenter on this issue endorses
     our approach here,[^363] which we believe better reflects the
     current regulatory landscape.

#### Wave Polarization

124. *Background*. Section 22.367 sets forth polarization requirements
     for the electromagnetic waves radiated by PMS providers.[^364] In
     the *Notice*, we observed that, where fixed and mobile services
     operate on a co-channel basis, the polarization restrictions may no
     longer be necessary or effective in reducing interference.[^365] We
     therefore sought comment on whether we should eliminate Section
     22.367.[^366]

125. *Discussion*. The only commenter that mentions this issue supports
     the elimination of the rule,[^367] and we agree that this change is
     warranted. Thus, we delete Section 22.367.

#### Access to Transmitters

126. *Background*. Section 22.373 generally requires PMS transmitters to
     be accessible only to persons authorized by the licensee.[^368] In
     the *Notice*, we tentatively concluded that this rule is not
     necessary to insure that unauthorized persons are kept out of PMS
     transmitter sites, and consequently, that the section should be
     eliminated.[^369]

127. *Discussion*. We remove Section 22.373 from our rules. Although no
     commenters mention this issue, we believe that the rule is
     unnecessary due to the fact that licensees have an economic
     self-interest to prevent unauthorized access to their transmitters.

#### Replacement of Equipment

128. *Background*. Section 22.379 permits PMS licensees to replace
     equipment without notifying the Commission, provided that such
     equipment meets certain technical requirements.[^370] In the
     *Notice*, we tentatively concluded that Section 22.379 is no longer
     necessary, and should therefore be eliminated, because licensees
     have known since the rule change in 1994 that applications are not
     required for replacement equipment.[^371]

129. *Discussion*. We eliminate Section 22.379. While no comments were
     received regarding this issue, we believe that Wireless Radio
     Service licensees understand that they are not required to file an
     application in order to deploy replacement equipment, provided that
     such equipment meets the technical requirements for the service
     involved. As a result, the rule is no longer necessary.

#### Auxiliary Test Transmitters

130. *Background*. Section 22.381 limits the use of auxiliary test
     transmitters to testing the performance of fixed receiving
     equipment located remotely from the control point.[^372] Section
     22.381 further provides that such transmitters may only transmit on
     channels designated for mobile transmitters.[^373] In the *Notice*,
     we tentatively concluded that this section should be eliminated,
     because limiting test transmissions to only the mobile frequencies
     appears overly prohibitive.[^374]

131. *Discussion*. We believe that Section 22.381 unnecessarily
     restricts the use of test equipment, and therefore we eliminate
     this section from our rules. We are aware of no harm that would
     arise from operating auxiliary test transmitters on any authorized
     channel, whether base or mobile, and no commenters have suggested
     otherwise.

#### In-building Radiation Systems

132. *Background*. Section 22.99 defines "in-building radiation systems"
     as "\[s\]upplementary systems comprising low power transmitters,
     receivers, indoor antennas and/or leaky coaxial cable radiators,
     designed to improve service reliability inside buildings or
     structures located within the service areas of stations in the
     Public Mobile Services."[^375] Section 22.383 provides that PMS
     licensees may install in-building radiation systems, without prior
     Commission approval, within their "protected service area."[^376]
     Section 22.352(c)(7), which contains a cross-reference to Section
     22.383, provides that no interference protection is afforded to
     in-building radiation systems.[^377] In-building radiation systems
     are exempted from FAA notification under Section 17.14(a)[^378]
     and, under Section 22.377, transmitters used with in-building
     radiation systems must be certificated for use in the radio
     services regulated under Part 22.[^379] In the *Notice*, we
     tentatively concluded that Section 22.383 is no longer needed and
     should be eliminated.[^380]

133. *Discussion*. The lone commenter that addresses this issue supports
     the approach set forth in the *Notice*, but expresses concern that
     readily available off-the-shelf boosters could cause harmful
     interference to cellular networks.[^381] At this time, we take no
     action on the proposal set forth in the *Notice*. Commission staff
     currently is examining a set of issues related to the appropriate
     regulatory treatment of wireless boosters used to improve or
     facilitate service in a number of areas, including buildings.
     Accordingly, we will address Section 22.383 in the context of that
     examination. We do take this opportunity to clarify that, under our
     current policies, such devices may only be operated by a licensee
     or pursuant to the licensee's permission and control, unless they
     fall under the power limits for unlicensed devices under our Part
     15 rules.[^382]

### Developmental Authorizations 

134. Part 22, Subpart D---which includes Sections 22.401, 22.403,
     22.409, 22.411, 22.413, 22.415, and 22.417---governs grant of
     developmental authorizations in the PMS.[^383] As pointed out in
     the *Notice*, a review of Commission records indicates that these
     rules are seldom used and, instead, parties frequently file waiver
     requests that are tantamount to requests for developmental
     authorizations.[^384] We therefore sought comment regarding how any
     of our Part 22 rules governing developmental authorizations could
     be improved and whether any of these rules should be
     eliminated.[^385]

#### Developmental Authorization of 43 MHz Paging Transmitters

135. *Background*. Sections 22.411 and 22.531(a) provide that 43 MHz
     channels can be initially assigned only as developmental
     authorizations.[^386] The requirements of Sections 22.411 and
     22.531(a) are intended to mitigate interference with the
     intermediate frequency stages of receivers in television sets and
     video recorders. Section 22.411 also requires licensees to conduct
     and file semi-annual surveys during the first two years of
     operation to determine the extent of any interference to broadcast
     television receivers.[^387] In the *Notice*, we observed that there
     have been significant technical improvements in television and
     video recorder receivers, and we sought comment on whether such
     technical improvements obviate the need for the requirements of
     Sections 22.411 and 22.531(a).[^388]

136. *Discussion*. While no comments were received on this topic, we
     believe that Sections 22.411 and 22.531(a) are no longer required.
     Modern NTSC televisions are no longer particularly vulnerable to
     interference from the 43 MHz paging frequencies. Previously,
     television sets utilized an intermediate frequency amplifier that
     converted the received channel to a frequency between 40 and 46
     MHz. New television sets, on the other hand, no longer employ this
     type of technology. In addition, the number of licensees and new
     applications for these paging channels is minimal. Consequently, it
     appears that there is no need for developmental authorizations for
     43 MHz paging transmitters, and we will delete these sections of
     our rules.

#### Developmental Authorization of 928-960 MHz Fixed Transmitters

137. *Background*. Section 22.415 provides that channels in the 928-931
     and 952-960 MHz ranges may be assigned to fixed transmitters in
     point-to-multipoint systems at short-spaced locations (*i.e.*,
     those that do not meet the 70-mile separation requirement of
     Section 22.625(a)).[^389] We stated in the *Notice* that the
     Commission cannot issue any developmental authorizations under
     Section 22.415 unless it waives the licensing prohibition of
     Section 22.621.[^390] We therefore tentatively concluded that
     Section 22.415 should be eliminated.[^391] We also tentatively
     concluded that Section 22.625(a) should be revised by eliminating
     all text following the first sentence that pertains to short-spaced
     developmental authorizations under Section 22.415.[^392] This
     language would no longer be necessary were we to adopt our proposal
     to eliminate Section 22.415.

138. *Discussion*. In light of the prohibition in Section 22.621 against
     licensing any new 900 MHz frequencies, we eliminate Section 22.415
     and modify Section 22.625(a) as proposed in the *Notice*. No
     comments were received on this issue.

#### Developmental Authorization of Meteor Burst Systems

139. *Background*. Section 22.417 provides that Rural Radiotelephone
     Service (RRS) central office and rural subscriber stations in
     Alaska may use "meteor burst" propagation modes.[^393] Meteor burst
     systems bounce radio signals off the ionized trails of evaporating
     space rocks to receivers up to 1,000 miles away. Meteor burst
     technology, however, only works in brief spurts because a typical
     meteor trail has an average duration of a few hundred milliseconds,
     while wait times between suitable trails can range from a few
     seconds to minutes. As such, the technology is well-suited for
     bursty data transmissions but is not suitable for a continuous
     voice call. Section 22.725(c) provides that channels 42.40, 44.10,
     44.20 and 45.90 MHz may be used for such purposes in Alaska.[^394]
     Section 22.729 governs station operations using meteor burst
     propagation modes on these channels.[^395] In the *Notice*, we
     indicated that there are no Part 22 licensees on these channels in
     Alaska, although there are some licenses issued under Part
     90.[^396] We sought comment as to whether Sections 22.417,
     22.725(c), and 22.729 should be eliminated or whether this
     licensing option for RRS should be maintained.[^397]

140. *Discussion*. We do not believe that RRS stations in Alaska would
     benefit from maintaining the licensing option under Sections
     22.417, 22.725(c), and 22.729. Currently, there are no licensees
     taking advantage of these rules. In addition, as a practical
     matter, meteor burst propagation cannot be used to transmit voice
     calls, which is at the core of the RRS. Therefore, as suggested in
     the *Notice*, we delete these sections from our rules. We also
     delete the definition of "meteor burst propagation mode" in Section
     22.99,[^398] the Section 22.313(a)(3) station identification
     requirements for Rural Radiotelephone Service subscriber stations
     using meteor burst propagation,[^399] and the Section 22.727(f)
     limits on transmitter output power for meteor burst stations.[^400]

### Paging and Radiotelephone Service Rules

#### Composite Interference Contour Over Water

141. *Background*. Under Section 1.929(c)(1), any increase in the
     composite interference contour (CIC)[^401] of a site-based licensee
     in the Paging and Radiotelephone Service, Rural Radiotelephone
     Service, or 800 MHz Specialized Mobile Radio Service is a major
     modification of license that requires prior Commission
     approval.[^402] In March 2001, the Wireless Telecommunications
     Bureau conditionally waived Section 1.929(c)(1) to permit expansion
     of paging CICs over water on a secondary basis.[^403] In the
     *Notice* in the instant proceeding, we tentatively concluded that
     Section 1.929(c)(1) should be amended to specify that expansion of
     the CIC of a site-based licensee in these services over water, on a
     secondary, non‑interference basis to any geographic area licensee
     in the same area, is not a major modification of license.[^404] We
     also tentatively concluded that the term "over water" should be
     defined as "over bodies of water that extend beyond county
     boundaries including, but not limited to, oceans, the Gulf of
     Mexico, and the Great Lakes."[^405]

142. In addition, we expressed concern that the incumbent licensee in
     the same geographic area have technical and engineering information
     regarding the site-based licensee's operations over water in order
     to guard against unacceptable interference to its own
     operations.[^406] Accordingly, we proposed that the site-based
     licensee be required to provide to the geographic area licensee on
     the same frequency the technical and engineering information
     necessary for the latter entity to understand and evaluate the
     site-based licensee's operations over water.[^407] We requested
     comment on the contents of such notification, the timing of making
     such a notification, whether such a requirement is necessary or
     excessively burdensome, and whether, instead, any filing with the
     Commission should be required.[^408]

143. *Discussion*. We amend Section 1.929(c)(1) and treat expansions of
     the CIC of a site-based licensee in the Paging and Radiotelephone
     Service, Rural Radiotelephone Service, or 800 MHz Specialized
     Mobile Radio Service over water, on a secondary, non‑interference
     basis to any geographic area licensee in the same area, as a minor,
     not major, modification of license. We also adopt the definition of
     "over water" as proposed in the *Notice*.[^409] As a result, such
     expansions of the CIC are permissive and no notification to the
     Commission is required. As expressed in the comments of Arch
     Wireless, the classification of these modifications as major can
     hamper a carrier's ability to respond to unexpected disruptions or
     to meet changes in consumer demand.[^410] Licensees providing
     service in coastal areas often need to relocate or adjust
     transmitting facilities in order to maintain and improve coverage.
     Moreover, CIC expansions that take place solely over water should
     pose no risk of interference to other systems on land, and
     Commission records indicate that we have not received any
     interference complaints arising from our current temporary policy
     of conditionally waiving Section 1.929(c)(1). We also note the
     benefits to both licensees and the Bureau derived from the removal
     of these particular regulatory filing requirements. Finally, no
     commenters opposed this rule change. We believe that, under these
     circumstances, our action here will facilitate the provision of PMS
     services to the public.[^411]

144. We will not require that site-based licensees automatically notify
     incumbent geographic area licensees of the technical parameters of
     a CIC expansion over water. In this connection, we agree with Arch
     Wireless that such a requirement reduces the flexibility and
     efficiencies created by not requiring pre-approval of such
     extensions.[^412] In contrast to the objection raised by Arch
     Wireless, no parties filed comments supporting automatic
     notification of this information to geographic licensees.

#### Nationwide Network Paging Channels

145. *Background*. Section 22.531(b) provides that frequencies 931.8875,
     931.9125, and 931.9375 MHz may only be used for nationwide network
     paging service.[^413] Section 22.551 specifies the application
     process for such channels in the event one should become available
     for licensing, and provides additional rules for nationwide network
     paging service.[^414] In the *Notice*, we sought comment on whether
     we should amend our rules to allow licensees on these channels to
     provide services other than nationwide network paging.[^415] In
     addition, we requested comment on whether the specific application
     processing rule for these channels remains necessary, or whether we
     should apply our general paging licensing rules to license these
     channels in the event that one of them (or a partitioned or
     disaggregated portion thereof) was to become available for
     re-licensing.

146. *Discussion*. Although no comments were received on this topic, we
     believe that allowing licensees on these channels to provide
     services other than nationwide network paging is in line with our
     policy to facilitate flexible service offerings,[^416] our attempts
     to achieve regulatory parity among competing wireless services, and
     the highly competitive state of the paging industry. Similarly, we
     will apply our general paging licensing rules, including
     competitive bidding procedures, to license these channels in the
     event that one becomes available for licensing.[^417] Therefore, we
     will delete Sections 22.313(a)(5), 22.531(b) and 22.551 from our
     rules.

#### Additional Channel Policies

147. *Background*. Sections 22.539 and 22.569 govern the processing of
     applications for additional paging and mobile channels,
     respectively.[^418] In particular, these rules implement the
     Commission's general policy to assign only one paging or two mobile
     channels in an area to a carrier per application cycle.[^419]
     Carriers that seek to add channels to their systems in the same
     geographic service area may thus do so one at a time (two for
     mobile channels).[^420] Before applying for another channel,
     carriers must certify that service has commenced on the
     previously-granted channel(s).[^421] We pointed out in the *Notice*
     that Sections 22.539 and 22.569 were adopted at a time when the
     Commission assigned the subject paging channels on a site-by-site
     basis and gave close consideration to the amount of paging spectrum
     held by a single entity in a particular geographic area, and that
     our regulatory structure for the licensing of paging channels has
     changed.[^422] We therefore tentatively concluded that Sections
     22.539 and 22.569 should be eliminated.[^423]

148. *Discussion*. We delete Sections 22.539 and 22.569 from our
     rules.[^424] Today, the Part 22 paging channels set forth in these
     rule sections are licensed on a geographic area basis rather than
     assigned on a site-by-site basis.[^425] We no longer place a
     blanket restriction on the amount of spectrum that a single entity
     may hold in one area (although we review competitive issues
     involving paging licensees on a case-by-case basis).[^426]
     Incumbents operating on a site-by-site basis may expand their
     systems by assignment or transfer of a license or by participating
     in a spectrum auction. In addition, under our current licensing
     scheme for paging channels, we place no blanket restrictions on the
     number of overlapping Part 22 paging channels that a particular
     entity may hold in one area. Consequently, we believe that
     maintaining these rules is unnecessary.

#### Provision of Rural Radiotelephone Service on Paging Channels

149. *Background*. Section 22.563 requires stations in the Paging and
     Radiotelephone Service that provide two-way public mobile service
     on certain channels to also provide Rural Radiotelephone Service
     (RRS) upon request from a subscriber.[^427] In the *Notice*, we
     pointed out that these channels are now predominantly assigned for
     use by one-way paging systems that are technically incapable of
     providing RRS.[^428] Consequently, we tentatively concluded that
     Section 22.563 is no longer necessary and should be
     eliminated.[^429]

150. *Discussion*. No comments were received on this issue, and we
     believe that Section 22.563 is no longer needed. Not only are most
     of these channels assigned for one-way paging use, there are now a
     number of wireless telephone service alternatives to RRS (*e.g.*,
     cellular, PCS, and some SMR).[^430] Moreover, consumers in many
     areas---including rural areas---have begun to substitute cellular,
     PCS, and some SMR service for landline service. This nascent trend
     is driven in part by wireless service plans that include the price
     of long distance service that may reduce a consumer's aggregate
     charges for local and toll service. In light of these circumstances
     and the fact that rural subscribers may readily obtain fixed basic
     telephone services from a variety of sources, we delete Section
     22.563 from our rules.

#### Transmission Power Limits

151. *Background*. Section 22.565(g) limits the effective radiated power
     (ERP) of dispatch and auxiliary test transmitters to 100
     watts.[^431] In the *Notice*, we sought comment on whether the
     100-watt limit should be revised or eliminated, noting that were we
     to eliminate the rule, Section 22.565(a) would allow for a 150-watt
     limit.[^432]

152. *Discussion*. We delete Section 22.565(g) so that test transmitters
     may operate, pursuant to Section 22.565(a), at a limit of 150
     watts. Commenters that mention this issue are in favor of this
     revision.[^433] We note that because we have decided to permit
     auxiliary test transmitters to operate on both base and mobile
     frequencies,[^434] licensees can now choose to operate on either
     the base or the mobile side of the frequency subject to the
     150-watt limit under Section 22.565(a).

#### Dispatch Service

153. *Background*. Section 22.577 governs the provision of dispatch
     service.[^435] In the *Notice*, we suggested that the limitations
     placed on the provision of dispatch service in Section 22.577 may
     be unduly restrictive, and we therefore sought comment on whether
     Section 22.577 should be revised or eliminated.[^436] This section
     requires, for example, that service providers notify the Commission
     every time a dispatch transmitter is installed as well as provide
     the name and address of subscribers.[^437]

154. *Discussion*. We believe that the deletion of Section 22.577 of our
     rules is warranted. Commenters were unanimous in their support for
     the removal of dispatch restrictions, stating generally that the
     rule is outdated and no longer necessary.[^438] More specifically,
     the Joint Commenters believe that "limits on output power and the
     functionality of the dispatch transmitter" are out of line with the
     Commission's emphasis on "flexible spectrum use."[^439] Moreover,
     the Joint Commenters point out that Part 90 dispatch operations are
     not subject to such restrictions, and that the removal of Section
     22.577 will "expand the choices to wireless end users."[^440] We
     agree, and therefore delete Section 22.577.[^441]

#### Hawaiian UHF Channels for Point-to-Point Operation

155. *Background*. Section 22.591 includes a table of channels allocated
     to fixed transmitters that support other transmitters that provide
     PMS.[^442] This table includes six UHF channel pairs designated for
     fixed use in the State of Hawaii. In the *Notice*, we noted the
     very limited usage of these channels in Hawaii and sought comment
     on possible alternative uses of this spectrum.[^443]

156. *Discussion*. No comments were received on this topic. Because we
     do not believe that the record supports a particular approach in
     connection with these channels, we will revisit the issue at a
     later time.

#### Channels for Point-to-Point Operation---Microwave Channels

157. *Background*. Section 22.591 also includes a table of 2110-2130 and
     2160-2180 MHz microwave channels.[^444] In 1992, the Commission
     allocated these bands for use by emerging technologies (ET)
     services and no new systems may be authorized on these channels
     under Part 22.[^445] Recently, the Commission allocated, inter
     alia, the 2110-2130 MHz band for Advanced Wireless Services
     (AWS).[^446] At present, both the 2110-2130 and 2160-2180 MHz bands
     are widely used for common carrier fixed microwave service.[^447]
     In the *Notice*, we tentatively concluded that these microwave
     channels should be deleted from the Section 22.591 table and that
     Section 22.591(b) regarding assignment of such channels should be
     deleted.[^448]

158. In addition, Section 22.601 specifies rules for modification of
     previously authorized Part 22 stations on the 2110-2130 and
     2160-2180 MHz channels.[^449] Section 22.602 sets forth rules
     governing a transition period for Paging and Radiotelephone Service
     licensees on the microwave channels listed in Section 22.591 to
     relocate to other frequencies.[^450] In the *Notice*, we sought
     comment on the use of the frequencies under these licenses and
     whether either of these sections should be revised.[^451]

159. *Discussion*. We will take the actions as proposed in the *Notice*.
     Specifically, we delete the microwave channels from the Section
     22.591 table and delete Section 22.591(b) regarding the assignment
     of such channels. None of the entities licensed on the subject
     microwave frequencies submitted comments in this proceeding, and no
     other commenter mentions this issue. Thus, we will allow the
     licenses to expire at the end of their current authorizations, and
     we will not renew them for another license term. These microwave
     incumbents will, in the meantime, continue to be subject to
     Sections 22.601 and 22.602 (although once their license terms end,
     these sections will become superfluous). As discussed in the
     *Notice*, we will delete the cross-reference to Section 22.591 in
     Sections 22.601 and 22.602 and, instead, reference the 2110-2130
     and 2160-2180 MHz channels.

#### Effective Radiated Power Limits

160. *Background*. Section 22.593 specifies power limits for the
     channels enumerated in Section 22.591.[^452]

161. *Discussion*. Although we are deleting the microwave channels
     listed in Section 22.591, these microwave licensees are still
     subject to Section 22.593, which specifies the EIRP of the
     microwave channels listed in Section 22.591.[^453] Consequently, we
     will not amend this rule until after the subject licenses have
     expired.

#### Channel Usage Reports

162. *Background*. Section 22.655 requires a subcategory of paging
     licensees---470-512 MHz band licensees---to submit defined channel
     usage reports every three months.[^454] In the *Notice*, we pointed
     out that only two carriers must still file these reports, that they
     have maintained mobile usage of the channels for some time, and
     that loading reporting requirements for other paging operators have
     been eliminated.[^455] We sought comment on the concerns of the
     Association of Public-Safety Communications
     Officials-International, Inc. (APCO), expressed in the 2002
     Biennial Review Proceeding (WT Docket No. 02-310),[^456] regarding
     the loss of these reports, but we nonetheless tentatively concluded
     that we should eliminate Section 22.655.[^457]

163. *Discussion*. We eliminate Section 22.655 so that we no longer
     requires licensees engaged in trunked mobile operations to measure
     and report channel usage. In this connection, we agree with the
     lone commenter on this topic that the continuation of this
     reporting requirement is burdensome and no longer necessary.[^458]
     Moreover, there are only two licensees that currently remain
     subject to this requirement, while the majority of CMRS licensees
     using the 470-512 MHz band do not have to submit these quarterly
     reports. Given these circumstances, we do not believe that the
     continued channel usage reporting requirements are warranted.

164. In the *Notice*, we specifically requested comment on APCO's
     concerns regarding the "continuing value" of the channel usage
     reports.[^459] No comments were received in the instant proceeding,
     however, that contradict our findings regarding the usefulness of
     these reports.

### Rural Radiotelephone Service Rules---Channels for Basic Exchange Telephone Radio Systems

165. *Background*. Section 22.757 specifies channels (in addition to
     those listed in Section 22.725) in the frequency ranges
     816.0125-820.2375 MHz and 861.0125-865.2375 MHz that are allocated
     for paired assignment to basic exchange telephone radio systems
     (BETRS).[^460] In the *Notice*, we pointed out that the Commission
     auctioned these channels on a geographic area basis in Auction 16,
     and that they are no longer available for assignment to
     BETRS.[^461] We therefore tentatively concluded that Section 22.757
     should be eliminated and that the first sentence of Section 22.725
     should be amended to provide that the channels listed therein are
     available for paired assignment to BETRS.[^462]

166. *Discussion*. We amend Sections 22.757 and 22.725 as proposed in
     the *Notice*. Because the channels listed in Section 22.757 are no
     longer available for assignment to BETRS, these rules are outdated.
     No comments were received regarding this topic.

### Offshore Radiotelephone Service Rules

167. *Background*. Subpart I of Part 22---which includes Sections
     22.1001, 22.1003, 22.1005, 22.1007, 22.1009, 22.1011, 22.1013,
     22.1015, 22.1025, 22.1031, 22.1035, and 22.1037---governs the
     licensing and operation of Offshore Radiotelephone Service (ORS)
     stations. These stations provide telephone service to subscribers
     located on oil exploration and production platforms in the Gulf of
     Mexico. In the *Notice*, we stated that, to date, we have received
     no requests for revising the rules governing ORS to provide
     increased flexibility.[^463] We nonetheless requested comment as to
     whether any of the Subpart I rules warrant review as a result of
     meaningful economic competition among providers of wireless
     services, or on any other basis.[^464] We also proposed to revise
     Section 22.1003,[^465] to revise the eligibility requirements to
     eliminate references to "common carriers" and instead to rely on
     language similar to that used in Parts 24 and 27 ("\[a\]ny entity,
     other than those precluded by section 310 of the Communications Act
     of 1934, as amended, 47 U.S.C. 310, . . . is eligible to hold a
     license under this part").

168. *Discussion*. No comments were received in connection with this
     Subpart in response to the *Notice*. Therefore, at this time, we
     take no action on the majority of the rules in this Subpart, and we
     will revisit the ORS rules at another time. We do, however, remove
     the reference to "common carriers" in Section 22.1003 in order to
     maintain consistency among the Part 22 Public Mobile
     Services.[^466]

# NOTICE OF PROPOSED RULEMAKING -- COMPETITIVE BIDDING

169. If mutually exclusive applications are filed for the commercial
     air-ground licenses that comprise the three band configurations
     defined in the Report and Order, the Commission will be required to
     resolve such applications by competitive bidding pursuant to the
     requirements of Section 309(j) of the Communications Act.[^467]
     Similarly, the Commission is required to resolve by competitive
     bidding mutually exclusive general aviation air-ground
     applications.[^468] To date, the Commission has accepted for filing
     nine groups of mutually exclusive general aviation applications,
     which are currently pending. Therefore, the Wireless
     Telecommunications Bureau ("WTB") will, pursuant to its delegated
     authority, schedule an auction to resolve these applications.[^469]
     Accordingly, in this Notice of Proposed Rulemaking, we request
     comment on a number of issues relating to competitive bidding
     procedures for both commercial air-ground and general aviation
     licenses.

## Incorporation by Reference of the Part 1 Standardized Auction Rules

170. We propose to conduct auctions of both commercial and general
     aviation air-ground licenses 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.[^470] Specifically, we propose to employ the Part 1 rules
     governing, among other things, designated entities, application and
     payment procedures, collusion issues, and unjust enrichment. Under
     this proposal, such rules would be subject to any modifications
     that the Commission may adopt in its Part 1 Competitive Bidding
     proceeding. In addition, consistent with current practice, matters
     such as the appropriate competitive bidding design, as well as
     minimum opening bids and reserve prices, would be determined by WTB
     pursuant to its delegated authority.[^471] We seek comment on this
     proposal. In particular, we request comment on whether any of our
     Part 1 competitive bidding rules would be inappropriate, or should
     be modified, for auctions of either commercial or general aviation
     air-ground licenses.

171. With respect to the commercial air-ground licenses we are making
     available, we are providing applicants with the opportunity to bid
     on licenses constituting different band configurations.
     Accordingly, the determination of whether individual commercial
     air-ground license applications are mutually exclusive for purposes
     of Section 309(j) will be based on whether different applicants
     have applied for licenses in different band plan license
     configurations as well as on whether different applicants have
     applied for the same licenses. In other words, because only one
     band configuration will be implemented, applicants that apply for
     licenses in different configurations will be considered to have
     filed mutually exclusive applications. We tentatively conclude,
     however, that this and any other differences from our past auctions
     do not necessitate any changes to our Part 1 competitive bidding
     rules, and that WTB can address such differences through its
     standard practice of seeking comment on and adopting procedures for
     specific auctions. We seek comment on this tentative conclusion.

## Provisions for Designated Entities

172. In authorizing the Commission to use competitive bidding, Congress
     mandated that the Commission \"ensure that small businesses, rural
     telephone companies, and businesses owned by members of minority
     groups and women are given the opportunity to participate in the
     provision of spectrum-based services."[^472] In addition, Section
     309(j)(3)(B) of the Communications Act requires that in
     establishing eligibility criteria and bidding methodologies, the
     Commission promote \"economic opportunity and competition . . . 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.\"[^473] One of the principal
     means by which the Commission furthers these statutory goals is the
     award of bidding credits to small businesses. The Commission
     defines eligibility requirements for small business bidding credits
     on a service-specific basis, taking into account the capital
     requirements and other characteristics of the particular
     service.[^474]

173. In considering small business bidding credits for the commercial
     air-ground licenses we make available in today\'s Report and Order,
     we note that in the past the Commission has declined to adopt
     provisions for designated entities for certain services, such as
     the direct broadcast satellite service and the digital audio radio
     service, which have extremely high implementation costs.[^475] The
     Commission reached this conclusion in those instances in large part
     because it was unclear whether small businesses could attract the
     capital necessary to implement and provide a nationwide
     service.[^476] We also note that in previous auctions of nationwide
     licenses in which the Commission offered bidding credits to
     designated entities, none of the licenses was won by a designated
     entity.[^477] Moreover, the legislative history of the designated
     entity provisions of Section 309(j) demonstrates that Congress did
     not necessarily intend that the Commission adopt special measures
     for designated entities in nationwide services. The House Report to
     the Omnibus Budget Reconciliation Act of 1993 states that \"\[t\]he
     characteristics of some services are inherently national in scope,
     and are therefore ill-suited for small businesses.\"[^478]

174. Notwithstanding these facts, we tentatively conclude that small
     business bidding credits are appropriate for the commercial
     air-ground service. We base this conclusion on the fact that no
     commercial air-ground license will authorize the use of as much
     spectrum as other nationwide services for which the Commission has
     declined to adopt small business bidding credits. In addition, we
     believe that the operation of a commercial air-ground service may
     require lower capital expenditures than other nationwide services,
     such as satellite services, because the necessary infrastructure
     may be less costly.[^479] Thus, we tentatively conclude that small
     businesses may be able to attract the necessary capital to provide
     commercial air-ground service, particularly if they are assisted by
     bidding credits.[^480] We seek comment on these tentative
     conclusions.

175. Having tentatively concluded that small businesses may be able to
     provide commercial air-ground service, we nonetheless recognize
     that such operations may be very capital-intensive relative to
     other services provided to smaller geographic areas. We therefore
     propose to use the same small business definitions we have adopted
     for other capital-intensive services that serve large geographic
     areas. Specifically, we propose to define a small business as an
     entity with average annual gross revenues for the three preceding
     years not exceeding \$40 million, and to define a very small
     business as an entity with average annual gross revenues for the
     three preceding years not exceeding \$15 million.[^481] We also
     propose a 15 percent bidding credit for small businesses and a 25
     percent bidding credit for very small businesses, as set forth in
     our standardized schedule at 47 C.F.R. § 1.2110(f)(2). These are
     the same tiered small business definitions and bidding credits that
     we adopted, for example, for EAG-based licenses in the upper and
     lower 700 MHz bands.[^482] We note also that AirCell and Space
     Data, in *ex parte* comments, support these small business
     definitions and bidding credits as appropriate for commercial
     air-ground service.[^483]

176. We request comment on these proposals. In particular, we invite
     commenters to discuss the expected capital requirements and other
     characteristics of the commercial air-ground operations that may be
     provided using the licenses made available by today's Report and
     Order, and the relationship of such requirements and
     characteristics to small business definitions and bidding credits.
     We invite commenters to provide comparisons with other services for
     which the Commission has established bidding credits. To the extent
     commenters support a different bidding credit regime than the one
     proposed here, they should support their proposals with relevant
     information. Such comments should provide information on, for
     example, the technology that a commercial air-ground licensee is
     likely to employ, the cost of deployment, and other factors that
     may affect capital requirements for commercial air-ground
     operations.

177. We also seek comment on whether our proposed designated entity
     provisions, if applied to the commercial air-ground service, would
     promote participation by businesses owned by minorities and by
     women, as well as participation by rural telephone companies. To
     the extent that commenters propose additional provisions to enhance
     participation by minority-owned or women-owned businesses,
     commenters should address how we should craft such provisions to
     meet the relevant standards of judicial review.[^484]

178. In contrast to the commercial air-ground licenses made available by
     today\'s Report and Order, general aviation air-ground licenses are
     specialized licenses that are generally valued by relatively small
     businesses. For this reason, we expect that small businesses
     interested in acquiring these licenses are unlikely to have
     difficulty obtaining the capital needed to participate in an
     auction.[^485] We seek comment on whether small business bidding
     credits would be appropriate for the general aviation air-ground
     service.

# PROCEDURAL MATTERS

## Comment Filing Procedures

179. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47
     C.F.R. §§ 1.415, 1.419, interested parties may file comments and
     reply comments on the *Notice* of Proposed Rulemaking, WT Docket
     No. 05-42, on or before 20 and 30 days after publication in the
     Federal Register, respectively. Comments may be filed using: (1)
     the Commission's Electronic Comment Filing System (ECFS), (2) the
     Federal Government's eRulemaking Portal, or (3) by filing paper
     copies. *See* Electronic Filing of Documents in Rulemaking
     Proceedings, 63 FR 24121 (1998).

-   *Electronic Filers*: Comments may be filed electronically using the
    Internet by accessing the ECFS: <http://www.fcc.gov/cgb/ecfs/> or
    the Federal eRulemaking Portal:
    [http://www.regulations.gov](http://www.regulations.gov/). Filers
    should follow the instructions provided on the website for
    submitting comments.

    -   For ECFS filers, if multiple docket or rulemaking numbers appear
        in the caption of this proceeding, filers must transmit one
        electronic copy of the comments for each docket or rulemaking
        number referenced in the caption. In completing the transmittal
        screen, filers should include their full name, U.S. 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, filers should send
        an e-mail to <ecfs@fcc.gov>, and include the following words in
        the body of the message, "get form." A sample form and
        directions will be sent in response.

-   *Paper Filers*: 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 appears in the caption of this proceeding, filers
    must submit two additional copies for each additional docket or
    rulemaking number.

> Filings can be sent by hand or messenger delivery, by commercial
> overnight courier, or by first-class or overnight U.S. Postal Service
> mail (although we continue to experience delays in receiving U.S.
> Postal Service mail). All filings must be addressed to the
> Commission's Secretary, Office of the Secretary, Federal
> Communications Commission.

-   The Commission's contractor will receive hand-delivered or
    messenger-delivered paper filings for the Commission's Secretary at
    236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The
    filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand
    deliveries must be held together with rubber bands or fasteners. Any
    envelopes must be disposed of [before]{.underline} entering the
    building.

-   Commercial overnight mail (other than U.S. Postal Service Express
    Mail and Priority Mail) must be sent to 9300 East Hampton Drive,
    Capitol Heights, MD 20743.

-   U.S. Postal Service first-class, Express, and Priority mail should
    be addressed to 445 12^th^ Street, SW, Washington DC 20554.

> *People with Disabilities*: Contact the FCC to request materials in
> accessible formats (braille, large print, electronic files, audio
> format, etc.) by e-mail at <FCC504@fcc.gov> or call the Consumer &
> Governmental Affairs Bureau at 202-418-0531 (voice), 202-418-7365
> (TTY).

## *Ex parte* Rules ---Permit-But-Disclose

180. This is a permit-but-disclose notice and comment rulemaking
     proceeding. *Ex parte* presentations are permitted, except during
     the Sunshine Agenda period, provided they are disclosed pursuant to
     the Commission\'s rules.[^486]

## Congressional Review Act

181. The Commission will send a copy of this Report and Order in a
     report to be sent to Congress and the Government Accountability
     Office pursuant to the Congressional Review Act, see 5 U.S.C.
     801(a)(1)(A).

## Final Regulatory Flexibility Analysis

182. Pursuant to the Regulatory Flexibility Act,[^487] the Final
     Regulatory Flexibility Analysis (FRFA) for the Report and Order is
     set forth in Appendix C. The Commission's Consumer and Governmental
     Affairs Bureau, Reference Information Center, will send a copy of
     the Report and Order, including the Final Regulatory Flexibility
     Analysis, to the Chief Counsel for Advocacy of the Small Business
     Administration, in accordance with the Regulatory Flexibility Act.

## Initial Regulatory Flexibility Analysis

183. As required by the Regulatory Flexibility Act,[^488] the Commission
     has prepared an Initial Regulatory Flexibility Analysis (IRFA) of
     the possible significant economic impact on a substantial number of
     small entities of the proposals addressed in the *Notice* of
     Proposed Rulemaking. The IRFA is set forth in Appendix D. Written
     public comments are requested on the IRFA. These comments must be
     filed in accordance with the same filing deadlines for comments on
     the *Notice* of Proposed Rulemaking, and they should have a
     separate and distinct heading designating them as responses to the
     IRFA. The Commission's Consumer and Governmental Affairs Bureau,
     Reference Information Center, will send a copy of the *Notice* of
     Proposed Rulemaking, including the IRFA, to the Chief Counsel for
     Advocacy of the Small Business Administration, in accordance with
     the Regulatory Flexibility Act.[^489]

## Paperwork Reduction Act of 1995

184. This document does not contain any proposed, new, or modified
     information collection subject to the Paperwork Reduction Act of
     1995 (PRA), Public Law 104-13. In addition, therefore, it does not
     contain any new or modified "information collection burden for
     small business concerns with fewer than 25 employees," pursuant to
     the Small Business Paperwork Relief Act of 2002, Public Law
     107-198. *See* 44 U.S.C. 3506(c)(4).

## Contact Information

185. The primary Wireless Telecommunications Bureau contact for this
     proceeding is Richard Arsenault, Chief Counsel of the Wireless
     Telecommunications Bureau Mobility Division (202-418-0920,
     <Richard.Arsenault@fcc.gov>). For auctions-related issues, contact
     Lynne Milne (202-418-7055, Lynne.Milne@fcc.gov). Press inquiries
     should be directed to Lauren Patrich, Wireless Telecommunications
     Bureau, at (202) 418-7944, TTY at (202) 418-7233, or e-mail at
     <Lauren.Patrich@fcc.gov>.

# Ordering Clauses

186. Accordingly, IT IS ORDERED THAT, pursuant to the authority
     contained in Sections 1, 4(i), 11, 303(r) and (y), 308, 309, and
     332 of the Communications Act of 1934, as amended, 47 U.S.C.
     §§ 151, 154(i), 161, 303(r), 303(y), 308, 309, and 332, this REPORT
     AND ORDER AND NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED, and
     Parts 1, 22, and 90 of the Commission's rules are amended
     accordingly.

187. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 301, and 307
     of the Communications Act, as amended, 47 U.S.C. §§ 154(i), 301,
     and 307, a new license for Station KNKG804, BE GRANTED to Verizon
     Airfone Inc. for a five-year non-renewable term in accordance with
     the terms and conditions set forth above (file no.
     0001716212).[^490]

188. IT IS FURTHER ORDERED THAT the Commission's Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     REPORT AND ORDER AND NOTICE OF PROPOSED RULEMAKING, including the
     Final Regulatory Flexibility Analysis and the Initial Regulatory
     Flexibility Analysis, to the Chief Counsel for Advocacy of the
     Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**APPENDIX A**

**COMMENTING PARTIES**

**(WT Docket No. 03-103)**

**A. Comments**

AirCell, Inc. (AirCell)

Able Communications Ltd. (Able Communications)

American Mobile Telecommunications Association, Inc. (AMTA)

Arch Wireless Operating Company, Inc., the Allied National Paging
Association, the American Association of Paging Carriers, Metrocall
Holdings Inc., and Weblink Wireless I, L.P.

(collectively, Arch Wireless)

Blooston, Mordkofsky, Dickens, Duffy & Prendergast (Blooston)

Cingular Wireless LLC (Cingular Wireless)

Joint Comments of Emergency Radio Service, Inc., Saia Communications,
Inc., and Texas License

Consultants (collectively, Joint Commenters)

Matt Edwards (Edwards)

Motorola, Inc. (Motorola)

QUALCOMM Incorporated (QUALCOMM)

SkyTel Corp. (SkyTel)

Societe Internationale de Telecommunications Aeronautiques (SITA)

Tony Drake (Drake)

Verizon Airfone

Verizon Wireless

Westel Communications, Inc. (Westel)

**B. Reply Comments**

Able Communications Ltd.

AirCell, Inc.

Blooston, Mordkofsky, Dickens, Duffy & Prendergast

The Boeing Company (Boeing)

New York State Electric & Gas Corporation (NYSE&GC)

QUALCOMM Incorporated

SkyTel Corp.

Societe Internationale de Telecommunications Aeronautiques

Space Data Corporation (Space Data)

Stratophone LLC (Stratophone)

Texas License Consultants (TLC)

Verizon Airfone

Verizon Wireless

**C. *Ex parte*s**

Air Carrier Association of America

AirCell, Inc.

AirTran Airways

American Airlines

American Association of Paging Carriers (AAPC)

Association of American Railroads

Association of Public Safety Communications Officials--International,
Inc. (APCO)

Blooston, Mordkofsky, Dickens, Duffy & Prendergast

The Boeing Company

Cellular Telecommunications & Internet Association--The Wireless
Association (CTIA)

The Honorable Conrad Burns, Deputy Whip, United States Senate

Continental Airlines, Inc.

Federal Bureau of Investigation and U.S. Drug Enforcement Administration
(FBI/DEA)

Flarion Technologies Inc. (Flarion)

The Honorable Fred Upton, Chairman, House Energy and Commerce
Subcommittee on

Telecommunications and the Internet

Frontier Airlines, Inc.

JetBlue Airways

Metrocall Holdings, Inc. (Metrocall)

Motorola, Inc.

National Telecommunications and Information Administration (NTIA)

Nextel Communications, Inc. (Nextel)

Northwest Airlines, Inc.

QUALCOMM Incorporated

Skyway Aircraft, Inc. (Skyway)

Space Data Corporation

Sprint Corporation

T-Mobile USA

United Airlines

U.S. Department of Homeland Security, Immigrations and Customs
Enforcement, Federal Air Marshal

Service

Verizon Airfone

**APPENDIX B**

**FINAL RULES**

**Title 47, Part 1 of the Code of Federal Regulations, 47 CFR Part 1, is
amended as follows:**

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

Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 and
325(e).

2.  In Section 1.903, revise paragraph (c) to read as follows:

§ 1.903 Authorization required.

\* \* \* \* \*

\(c\) *Subscribers*. Authority for subscribers to operate mobile or
fixed stations in the Wireless Radio Services, except for certain
stations in the Rural Radiotelephone Service, is included in the
authorization held by the licensee providing service to them.
Subscribers are not required to apply for, and the Commission does not
accept, applications from subscribers for individual mobile or fixed
station authorizations in the Wireless Radio Services. Individual
authorizations are required to operate rural subscriber stations in the
Rural Radiotelephone Service, except as provided in § 22.703 of this
chapter. Individual authorizations are required for end users of certain
Specialized Mobile Radio Systems as provided in § 90.655 of this
chapter. In addition, certain ships and aircraft are required to be
individually licensed under Parts 80 and 87 of this chapter. See §§
80.13, 87.18 of this chapter.

3.  In Section 1.929, revise paragraph (c)(1) to read as follows:

§ 1.929 Classification of filings as major or minor.

\* \* \* \* \*

\(c\) \* \* \*

\(1\) In the Paging and Radiotelephone Service, Rural Radiotelephone
Service and 800 MHz Specialized Mobile Radio Service (SMR), any change
that would increase or expand the applicant\'s existing composite
interference contour, except extensions of a composite interference
contour over bodies of water that extend beyond county boundaries
(*i.e.*, including but not limited to oceans, the Gulf of Mexico, and
the Great Lakes) on a secondary basis.

\* \* \* \* \*

4.  Add a new Section 1.958 to read as follows:

§ 1.958 Distance computation.

The method given in this section must be used to compute the distance
between any two locations, except that, for computation of distance
involving stations in Canada and Mexico, methods for distance
computation specified in the applicable international agreement, if any,
must be used instead. The result of a distance calculation under
Parts 21 and 101 of this chapter must be rounded to the nearest tenth of
a kilometer. The method set forth in this paragraph is considered to be
sufficiently accurate for distances not exceeding 475 km (295 miles).

\(a\) Convert the latitudes and longitudes of each reference point from
degree-minute-second format to degree-decimal format by dividing minutes
by 60 and seconds by 3600, then adding the results to degrees.

![](media/image2.wmf){width="2.2083333333333335in"
height="0.8888888888888888in"}

\(b\) Calculate the mean geodetic latitude between the two reference
points by averaging the two latitudes:

![](media/image3.wmf){width="1.7222222222222223in" height="0.44375in"}

\(c\) Calculate the number of kilometers per degree latitude difference
for the mean geodetic latitude calculated in paragraph (b) of this
section as follows:

![](media/image4.wmf){width="3.986111111111111in" height="0.25in"}

\(d\) Calculate the number of kilometers per degree of longitude
difference for the mean geodetic latitude calculated in paragraph (b) of
this section as follows:

![](media/image5.wmf){width="4.555555555555555in" height="0.25in"}

\(e\) Calculate the North-South distance in kilometers as follows:

![](media/image6.wmf){width="2.388888888888889in" height="0.25in"}

\(f\) Calculate the East-West distance in kilometers as follows:

![](media/image7.wmf){width="2.5277777777777777in" height="0.25in"}

\(g\) Calculate the distance between the locations by taking the square
root of the sum of the squares of the East-West and North-South
distances:

![](media/image8.wmf){width="1.5576388888888888in"
height="0.2791666666666667in"}

\(h\) Terms used in this section are defined as follows:

\(1\) *LAT1~dd~* and *LON1~dd~* are the coordinates of the first
location in degree-decimal format.

\(2\) *LAT2~dd~* and *LON2~dd~* are the coordinates of the second
location in degree-decimal format.

\(3\) *ML* is the mean geodetic latitude in degree-decimal format.

\(4\) *KPD~lat~* is the number of kilometers per degree of latitude at a
given mean geodetic latitude.

\(5\) *KPD~lon~* is the number of kilometers per degree of longitude at
a given mean geodetic latitude.

\(6\) *NS* is the North-South distance in kilometers.

\(7\) *EW* is the East-West distance in kilometers.

\(8\) *DIST* is the distance between the two locations, in kilometers.

5.  Add new Section 1.959 to read as follows:

§ 1.959 Computation of average terrain elevation.

Except as otherwise specified in § 90.309(a)(4) of this chapter, average
terrain elevation must be calculated by computer using elevations from a
30 second point or better topographic data file. The file must be
identified. If a 30 second point data file is used, the elevation data
must be processed for intermediate points using interpolation
techniques; otherwise, the nearest point may be used. In cases of
dispute, average terrain elevation determinations can also be done
manually, if the results differ significantly from the computer derived
averages.

\(a\) Radial average terrain elevation is calculated as the average of
the elevation along a straight line path from 3 to 16 kilometers (2 and
10 miles) extending radially from the antenna site. If a portion of the
radial path extends over foreign territory or water, such portion must
not be included in the computation of average elevation unless the
radial path again passes over United States land between 16 and 134
kilometers (10 and 83 miles) away from the station. At least 50 evenly
spaced data points for each radial should be used in the computation.

\(b\) Average terrain elevation is the average of the eight radial
average terrain elevations (for the eight cardinal radials).

\(c\) For locations in Dade and Broward Counties, Florida, the method
prescribed above may be used or average terrain elevation may be assumed
to be 3 meters (10 feet).

6.  In the table in Section 1.1102, remove row entry 16.h. "Air Ground
    Individual".

7.  In Section 1.2003, remove the phrase "FCC 409 Airborne Mobile Radio
    Telephone License Application;".

**Title 47, Part 22 of the Code of Federal Regulations, 47 CFR Part 22,
is amended as follows:**

8.  The authority citation for Part 22 continues to read as follows:

Authority: 47 U.S.C. 154, 222, 303, 309 and 332.

9.  Revise paragraph (b) of Section 22.1, to read as follows:

§ 22.1 Basis and purpose.

\* \* \* \* \*

\(b\) *Purpose.* The purpose of these rules is to establish the
requirements and conditions under which radio stations may be licensed
and used in the Public Mobile Services.

10. In Section 22.3, revise the text of paragraph (b) and remove
    paragraphs (b)(1) and (b)(2), to read as follows:

§ 22.3 Authorization required.

\* \* \* \* \*

\(b\) Authority for subscribers to operate mobile or fixed stations in
the Public Mobile Services, except for certain stations in the Rural
Radiotelephone Service, is included in the authorization held by the
licensee providing service to them. Subscribers are not required to
apply for, and the FCC does not accept applications from subscribers
for, individual mobile or fixed station authorizations in the Public
Mobile Services, except that individual authorizations are required to
operate rural subscriber stations in the Rural Radiotelephone Service
under certain circumstances. See § 22.703.

11. Revise Section 22.7 in its entirety to read as follows:

§ 22.7 General eligibility.

Any entity, other than those precluded by section 310 of the
Communications Act of 1934, as amended, 47 U.S.C. 310, is eligible to
hold a license under this part. Applications are granted only if the
applicant is legally, financially, technically and otherwise qualified
to render the proposed service.

12. In Section 22.99, remove the terms "Meteor burst propagation mode",
    "Radio Common Carrier", and Wireline Common Carrier" and their
    definitions.

13. In Section 22.99, in the definition of the term "Channel", remove
    the words "See, for example, § 22.161."

14. In Section 22.99, in the definitions of the terms "Air-Ground
    Radiotelephone Service", "Cellular Radiotelephone Service",
    "Offshore Radiotelephone Service", "Public Mobile Services", and
    "Rural Radiotelephone Service", remove the words "common carrier"
    and add, in their place, the word "licensee".

15. In Section 22.99, correct "Air-ground Radiotelephone Service" to
    read "Air-Ground Radiotelephone Service" in the definitions of
    "Communications channel", "Control channel", and "Ground
    station**".**

16. Revise paragraph (d)(4) of Section 22.143 to read as follows:

§ 22.143 Construction prior to grant of application.

\* \* \* \* \*

\(d\) \* \* \*

\(4\) For any construction or alteration that would exceed the
requirements of § 17.7 of this chapter, the licensee has notified the
appropriate Regional Office of the Federal Aviation Administration (FAA
Form 7460-1), filed a request for antenna height clearance and
obstruction marking and lighting specifications (FCC Form 854) with the
FCC at WTB, Spectrum Management Resources and Technologies Division,
1270 Fairfield Road, Gettysburg, PA 17325, or electronically via the FCC
Antenna Structure Registration home page, wireless.fcc.gov/antenna/.

\* \* \* \* \*

17. Remove Section 22.157.

18. Remove Section 22.159.

19. Remove Section 22.161.

20. Remove and reserve paragraphs (a)(3) and (a)(5) of Section 22.313.

21. Revise Section 22.351 in its entirety to read as follows:

§ 22.351 Channel assignment policy.

The channels allocated for use in the Public Mobile Services are listed
in the applicable subparts of this part. Channels and channel blocks are
assigned in such a manner as to facilitate the rendition of service on
an interference-free basis in each service area. Except as otherwise
provided in this part, each channel or channel block is assigned
exclusively to one licensee in each service area. All applicants for,
and licensees of, stations in the Public Mobile Services shall cooperate
in the selection and use of channels in order to minimize interference
and obtain the most efficient use of the allocated spectrum.

22. In Section 22.352, revise the first sentence of the introductory
    text, as follows:

§ 22.352 Protection from interference.

Public Mobile Service stations operating in accordance with applicable
FCC rules and the terms and conditions of their authorizations are
normally considered to be non-interfering. \* \* \*

\* \* \* \* \*

23. Revise Section 22.357 in its entirety to read as follows:

§ 22.357 Emission types.

Any authorized station in the Public Mobile Services may transmit
emissions of any type(s) that comply with the applicable emission rule,
*i.e.* § 22.359, § 22.861 or § 22.917.

24. Revise Section 22.359 in its entirety to read as follows:

§ 22.359 Emission limitations.

The rules in this section govern the spectral characteristics of
emissions in the Public Mobile Services, except for the Air-Ground
Radiotelephone Service (see § 22.861, instead) and the Cellular
Radiotelephone Service (see § 22.917, instead).

\(a\) *Out of band emissions*. The power of any emission outside of the
authorized operating frequency ranges must be attenuated below the
transmitting power (P) by a factor of at least 43 + 10 log (P) dB.

\(b\) *Measurement procedure*. Compliance with these rules is based on
the use of measurement instrumentation employing a resolution bandwidth
of 30 kHz or more. In the 60 kHz bands immediately outside and adjacent
to the authorized frequency range or channel, a resolution bandwidth of
at least one percent of the emission bandwidth of the fundamental
emission of the transmitter may be employed. A narrower resolution
bandwidth is permitted in all cases to improve measurement accuracy
provided the measured power is integrated over the full required
measurement bandwidth (*i.e.*, 30 kHz or 1 percent of emission
bandwidth, as specified). The emission bandwidth is defined as the width
of the signal between two points, one below the carrier center frequency
and one above the carrier center frequency, outside of which all
emissions are attenuated at least 26 dB below the transmitter power.

\(c\) *Alternative out of band emission limit*. Licensees in the Public
Mobile Services may establish an alternative out of band emission limit
to be used at specified frequencies (band edges) in specified
geographical areas, in lieu of that set forth in this section, pursuant
to a private contractual arrangement of all affected licensees and
applicants. In this event, each party to such contract shall maintain a
copy of the contract in their station files and disclose it to
prospective assignees or transferees and, upon request, to the FCC.

\(d\) *Interference caused by out of band emissions*. If any emission
from a transmitter operating in any of the Public Mobile Services
results in interference to users of another radio service, the FCC may
require a greater attenuation of that emission than specified in this
section.

25. Remove Section 22.361 and Table C-2 thereto.

26. Remove Section 22.363.

27. Remove Section 22.367.

28. Remove Section 22.373.

29. Remove Section 22.379.

30. Remove Section 22.381.

31. In Section 22.401, remove the words "Communications common carriers"
    in the first sentence of the introductory text, and add, in their
    place, the words "Eligible entities (see § 22.7)".

32. Remove Section 22.411.

33. Remove Section 22.415.

34. Remove Section 22.417.

35. Remove and reserve paragraphs (a) and (b) of Section 22.531.

36. Remove Section 22.539.

37. Remove Section 22.551.

38. Remove Section 22.563.

39. Remove paragraph (g) of Section 22.565.

40. Remove Section 22.569.

41. Remove Section 22.577.

42. In Section 22.591, remove from the table in the introductory text,
    the portion of that table which is entitled "Microwave channels",
    and remove and reserve paragraph (b).

43. Revise Section 22.593 in its entirety, to read as follows:

§ 22.593 Effective radiated power limits.

The effective radiated power of fixed stations operating on the channels
listed in § 22.591 must not exceed 150 Watts. The equivalent
isotropically radiated power of existing fixed microwave stations
(2110-2130 and 2160-2180 MHz) licensed under this part (pursuant to
former rules) must not exceed the applicable limits set forth in
§ 101.113 of this chapter.

44. Revise the heading and introductory text of Section 22.601 to read
    as follows:

§ 22.601 Existing microwave stations licensed under this part.

Existing microwave stations (2110-2130 and 2160-2180 MHz) licensed under
this part (pursuant to former rules) are subject to the transition rules
in § 22.602. No new microwave systems will be authorized under this
part.

\* \* \* \* \*

45. Revise the introductory paragraph of Section 22.602 to read as
    follows:

§ 22.602 Transition of the 2110-2130 and 2160-2180 MHz channels to
emerging technologies.

The 2110-2130 and 2160-2180 MHz microwave channels formerly listed in
§ 22.591 have been re-allocated for use by emerging technologies (ET)
services. No new systems will be authorized under this part. The rules
in this section provide for a transition period during which existing
Paging and Radiotelephone Service (PARS) licensees using these channels
may relocate operations to other media or to other fixed channels,
including those in other microwave bands. For PARS licensees relocating
operations to other microwave bands, authorization must be obtained
under Part 101 of this chapter.

\* \* \* \* \*

46. Revise paragraph (a) of Section 22.625 to read as follows:

§ 22.625 Transmitter locations.

\* \* \* \* \*

\(a\) *928-960 MHz*. In this frequency range, the required minimum
distance separation between co-channel fixed transmitters is 113
kilometers (70 miles).

\* \* \* \* \*

47. Remove Section 22.655.

48. In Section 22.725, revise the heading and the first sentence of the
    introductory text and remove paragraph (c), to read as follows:

§ 22.725 Channels for conventional rural radiotelephone stations and
basic exchange telephone radio systems.

The following channels are allocated for paired assignment to
transmitters that provide conventional rural radiotelephone service and
to transmitters in basic exchange telephone radio systems. \* \* \*

\* \* \* \* \*

\(c\) \[deleted\]

49. Remove paragraph (f) of Section 22.727.

50. Remove Section 22.729.

51. Revise Section 22.757 in its entirety to read as follows:

§ 22.757 Channels for basic exchange telephone radio systems.

The channels listed in § 22.725 are also allocated for paired assignment
to transmitters in basic exchange telephone radio systems.

52. Revise Section 22.801 in its entirety to read as follows:

§ 22.801 Scope.

The rules in this subpart govern the licensing and operation of
air-ground stations and systems. The licensing and operation of these
stations and systems is also subject to rules elsewhere in this part and
in part 1 of this chapter that generally apply to the Public Mobile
Services. In case of conflict, however, the rules in this subpart
govern.

53. Redesignate Section 22.803 as Section 22.807, revise the heading,
    introductory text, and paragraph (b), and remove paragraph (c), to
    read as follows:

§ 22.807 General aviation air-ground station application requirements.

In addition to the information required by Subparts B and D of this
part, FCC Form 601 applications for authorization to operate a general
aviation air-ground station must contain the applicable supplementary
information described in this section.

\(a\) \* \* \*

\(b\) *Technical information*. The following information is required by
FCC Form 601.

\(1\) Location description, city, county, state, geographic coordinates
(NAD83) correct to ± 1 second, site elevation above mean sea level,
proximity to adjacent market boundaries and international borders;

\(2\) Antenna height to tip above ground level, antenna gain in the
maximum lobe, the electric field polarization of the wave emitted by the
antenna when installed as proposed;

\(3\) \* \* \*

54. Remove Section 22.811.

55. Revise Section 22.815 in its entirety to read as follows:

§ 22.815 Construction period for general aviation ground stations.

The construction period (see § 1.946) for general aviation ground
stations is 12 months.

56. Remove Section 22.819.

57. Add a new Section 22.853 to read as follows:

§ 22.853 Eligibility to hold interest in licenses limited to 3 MHz of
spectrum.

No individual or entity may hold, directly or indirectly, a controlling
interest in licenses authorizing the use of more than three megahertz of
spectrum (either shared or exclusive) in the 800 MHz commercial aviation
Air-Ground Radiotelephone Service frequency bands (see § 22.857).
Individuals and entities with either *de jure* or *de facto* control of
a licensee in these bands will be considered to have a controlling
interest in its license(s). For purposes of this rule, the definitions
of "controlling interests" and "affiliate" set forth set forth in
paragraphs (c)(2) and (c)(5) of § 1.2110 of this chapter shall apply.

58. Revise Section 22.857 in its entirety to read as follows:

§ 22.857 Frequency bands.

The 849-851 MHz and 894-896 MHz frequency bands are designated for
paired nationwide exclusive assignment to the licensee or licensees of
systems providing radio telecommunications service, including voice
and/or data service, to persons on board aircraft. Air-ground systems
operating in these frequency bands are referred to in this chapter as
"commercial aviation" systems.

59. Revise Section 22.859 in its entirety to read as follows:

§ 22.859 Incumbent commercial aviation air-ground systems.

This section contains rules concerning continued operation of commercial
aviation air-ground systems that were originally authorized prior to
January 1, 2004 to provide radiotelephone service using narrowband
(6 kHz) channels, and that have been providing service continuously
since the original commencement of service (hereinafter "incumbent
systems").

\(a\) An incumbent system may continue to operate under its
authorization, for the remaining term of such authorization, subject to
the terms and conditions attached thereto. Wherever such technical and
operational conditions differ from technical and operational rules in
this subpart, those conditions shall govern its operations.

\(b\) Notwithstanding any other provision in this chapter, the licensee
of an incumbent system shall not be entitled to an expectation of
renewal of said authorization.

\(c\) During the period that an incumbent system continues to operate
and provide service pursuant to paragraph (a) of this section,
air-ground systems of licensees holding a new authorization for the
spectrum within which the incumbent system operates must not cause
interference to the incumbent system. Protection from interference
requires that the signals of the new systems must not exceed a ground
station received power of −130 dBm within a 6 kHz receive bandwidth,
calculated assuming a 0 dBi vertically polarized receive antenna.

60. Revise Section 22.861 in its entirety as follows:

§ 22.861 Emission limitations.

The rules in this section govern the spectral characteristics of
emissions for commercial aviation systems in the Air-Ground
Radiotelephone Service. Commercial aviation air-ground systems may use
any type of emission or technology that complies with the technical
rules in this subpart.

\(a\) *Out of band emissions*. The power of any emission outside of the
authorized operating frequency ranges must be attenuated below the
transmitting power (P) by a factor of at least 43 + 10 log (P) dB.

\(b\) *Measurement procedure*. Compliance with these rules is based on
the use of measurement instrumentation employing a resolution bandwidth
of 100 kHz or greater. In the 1 MHz bands immediately outside and
adjacent to the frequency block a resolution bandwidth of at least one
percent of the emission bandwidth of the fundamental emission of the
transmitter may be employed. A narrower resolution bandwidth is
permitted in all cases to improve measurement accuracy provided the
measured power is integrated over the full required measurement
bandwidth (*i.e.*, 100 kHz or 1 percent of emission bandwidth, as
specified). The emission bandwidth is defined as the width of the signal
between two points, one below the carrier center frequency and one above
the carrier center frequency, outside of which all emissions are
attenuated at least 26 dB below the transmitter power.

\(c\) *Alternative out of band emission limit*. The licensee(s) of
commercial aviation air-ground systems, together with affected licensees
of Cellular Radiotelephone Service systems operating in the spectrum
immediately below and adjacent to the commercial aviation air-ground
bands, may establish an alternative out of band emission limit to be
used at the 849 MHz and 894 MHz band edge(s) in specified geographical
areas, in lieu of that set forth in this section, pursuant to a private
contractual arrangement of all affected licensees and applicants. In
this event, each party to such contract shall maintain a copy of the
contract in their station files and disclose it to prospective assignees
or transferees and, upon request, to the FCC.

\(d\) *Interference caused by out of band emissions*. If any emission
from a transmitter operating in this service results in interference to
users of another radio service, the FCC may require a greater
attenuation of that emission than specified in this section.

61. Revise Section 22.863 in its entirety to read as follows:

§ 22.863 Frequency stability.

The frequency stability of equipment used under this subpart shall be
sufficient to ensure that, after accounting for Doppler frequency
shifts, the occupied bandwidth of the fundamental emissions remains
within the authorized frequency bands of operation.

62. Remove Section 22.865.

63. Revise Section 22.867 in its entirety to read as follows:

§ 22.867 Effective radiated power limits.

The effective radiated power (ERP) of ground and airborne stations
operating on the frequency ranges listed in § 22.857 must not exceed the
limits in this section.

\(a\) The peak ERP of airborne mobile station transmitters must not
exceed 12 Watts.

\(b\) The peak ERP of ground station transmitters must not exceed 500
Watts.

64. Remove Section 22.869.

65. Remove Section 22.871.

66. Revise Section 22.873 to read as follows:

§ 22.873 Construction requirements for commercial aviation air-ground
systems.

Licensees authorized to use more than one megahertz (1 MHz) of the
800 MHz commercial aviation air-ground spectrum allocation (see
§ 22.857) must make a showing of "substantial service\'" as set forth in
this section. Failure by any such licensee to meet this requirement will
result in forfeiture of the license and the licensee will be ineligible
to regain it. Licensees authorized to use one megahertz or less of the
800 MHz commercial aviation air-ground spectrum allocation are not
subject to the requirements in this section.

\(a\) "Substantial service" is defined as service that is sound,
favorable, and substantially above a level of mediocre service that just
might minimally warrant renewal.

\(b\) Each commercial aviation air-ground system subject to the
requirements of this section must demonstrate substantial service within
5 years after grant of the authorization. Substantial service may be
demonstrated by, but is not limited to, either of the following "safe
harbor" provisions:

\(1\) construction and operation of 20 ground stations, with at least
one ground station located in each of the 10 Federal Aviation
Administration regions; or,

\(2\) provision of service to the airspace of 25 of the 50 busiest
airports (as measured by annual passenger boardings).

67. Remove Section 22.875.

68. Add a new Section 22.877 to read as follows:

§ 22.877 Unacceptable interference to Part 90 non-cellular 800 MHz
licensees from commercial aviation air-ground systems.

The definition of unacceptable interference to non-cellular Part 90
licensees in the 800 MHz band from commercial aviation air-ground
systems is the same as the definition set forth in § 22.970 of this
part, which is applicable to Cellular Radiotelephone Service systems.

69. Add a new Section 22.878 to read as follows:

§ 22.878 Obligation to abate unacceptable interference.

This section applies only to commercial aviation ground stations
transmitting in the 849-851 MHz band, other than commercial aviation
ground stations operating under the authority of a license originally
granted prior to January 1, 2004.

\(a\) *Strict Responsibility*. Any licensee who, knowingly or
unknowingly, directly or indirectly, causes or contributes to causing
unacceptable interference to a non-cellular Part 90 licensee in the 800
MHz band, as defined in § 22.877, shall be strictly accountable to abate
the interference, with full cooperation and utmost diligence, in the
shortest time practicable. Interfering licensees shall consider all
feasible interference abatement measures, including, but not limited to,
the remedies specified in the interference resolution procedures set
forth in § 22.879. This strict responsibility obligation applies to all
forms of interference, including out-of-band emissions and
intermodulation.

\(b\) *Joint and Several Responsibility*. If two or more licensees,
whether in the commercial aviation air-ground radiotelephone service or
in the Cellular Radiotelephone Service (see § 22.971), knowingly or
unknowingly, directly or indirectly, cause or contribute to causing
unacceptable interference to a non-cellular Part 90 licensee in the 800
MHz band, as defined in § 22.877, such licensees shall be jointly and
severally responsible for abating interference, with full cooperation
and utmost diligence, in the shortest practicable time.

\(1\) This joint and several responsibility rule requires interfering
licensees to consider all feasible interference abatement measures,
including, but not limited to, the remedies specified in the
interference resolution procedures set forth in § 22.879(c). This joint
and several responsibility rule applies to all forms of interference,
including out-of-band emissions and intermodulation.

\(2\) Any licensee that can show that its signal does not directly or
indirectly cause or contribute to causing unacceptable interference to a
non-cellular Part 90 licensee in the 800 MHz band, as defined in
§ 22.877, shall not be held responsible for resolving unacceptable
interference. Notwithstanding, any licensee that receives an
interference complaint from a public safety/CII licensee shall respond
to such complaint consistent with the interference resolution procedures
set forth in § 22.879.

70. Add a new Section 22.879 to read as follows:

§ 22.879 Interference resolution procedures.

This section applies only to commercial aviation ground stations
transmitting in the 849-851 MHz band, other than commercial aviation
ground stations operating under the authority of a license originally
granted prior to January 1, 2004.

\(a\) *Initial Notification.* Commercial aviation air-ground system
licensees may receive initial notification of interference from
non-cellular Part 90 licensees in the 800 MHz band pursuant to
§ 90.674(a) of this chapter.

\(1\) Commercial aviation air-ground system licensees shall join with
Part 90 ESMR licensees and Cellular Radiotelephone Service licensees in
utilizing an electronic means of receiving the initial notification
described in § 90.674(a) of this chapter. See § 22.972.

\(2\) Commercial aviation air-ground system licensees must respond to
the initial notification described in § 90.674(a) of this chapter as
soon as possible and no later than 24 hours after receipt of
notification from a Part 90 public safety/CII licensee. This response
time may be extended to 48 hours after receipt from other Part 90
non-cellular licensees provided affected communications on these systems
are not safety related.

\(b\) *Interference Analysis.* Commercial aviation air-ground system
licensees -- who receive an initial notification described in
§ 90.674(a) of this chapter -- shall perform a timely analysis of the
interference to identify the possible source. Immediate on-site visits
may be conducted when necessary to complete timely analysis.
Interference analysis must be completed and corrective action initiated
within 48 hours of the initial complaint from a Part 90 public
safety/CII licensee. This response time may be extended to 96 hours
after the initial complaint from other Part 90 non-cellular licensees
provided affected communications on these systems are not safety
related. Corrective action may be delayed if the affected licensee
agrees in writing (which may be, but is not required to be, recorded via
e-mail or other electronic means) to a longer period.

\(c\) *Mitigation Steps.* Any commercial aviation air-ground system that
is responsible for causing unacceptable interference to non-cellular
Part 90 licensees in the 800 MHz band shall take affirmative measures to
resolve such interference.

\(1\) Commercial aviation air-ground system licensees found to
contribute to unacceptable interference, as defined in § 22.877, shall
resolve such interference in the shortest time practicable. Commercial
aviation air-ground system licensees must provide all necessary test
apparatus and technical personnel skilled in the operation of such
equipment as may be necessary to determine the most appropriate means of
timely eliminating the interference. However, the means whereby
interference is abated or the technical parameters that may need to be
adjusted is left to the discretion of the commercial aviation air-ground
system licensee, whose affirmative measures may include, but not be
limited to, the following techniques:

\(i\) increasing the desired power of the public safety/CII signal;

\(ii\) decreasing the power of the commercial aviation air-ground system
signal;

\(iii\) modifying the commercial aviation air-ground system antenna
height;

\(iv\) modifying the commercial aviation air-ground system antenna
characteristics;

\(v\) incorporating filters into the commercial aviation air-ground
system transmission equipment;

\(vi\) changing commercial aviation air-ground system frequencies; and

\(vii\) supplying interference-resistant receivers to the affected
public safety/CII licensee(s). If this technique is used, in all
circumstances, commercial aviation air-ground system licensees shall be
responsible for all costs thereof.

\(2\) Whenever short-term interference abatement measures prove
inadequate, the affected Part 90 non-cellular licensee shall, consistent
with but not compromising safety, make all necessary concessions to
accepting interference until a longer-term remedy can be implemented.

\(3\) When a Part 90 public safety licensee determines that a continuing
presence of interference constitutes a clear and imminent danger to life
or property, the licensee causing the interference must discontinue the
associated operation immediately, until a remedy can be identified and
applied. The determination that a continuing presence exists that
constitutes a clear and imminent danger to life or property, must be
made by written statement that:

\(i\) is in the form of a declaration, notarized affidavit, or statement
under penalty or perjury, from an officer or executive of the affected
public safety licensee;

\(ii\) thoroughly describes the basis of the claim of clear and imminent
danger;

\(iii\) was formulated on the basis of either personal knowledge or
belief after due diligence;

\(iv\) is not proffered by a contractor or other third party; and,

\(v\) has been approved by the Chief of the Wireless Telecommunication
Bureau or other designated Commission official. Prior to the authorized
official making a determination that a clear and imminent danger exists,
the associated written statement must be served by hand-delivery or
receipted fax on the applicable offending licensee, with a copy
transmitted by the fastest available means to the Washington, D.C.
office of the Commission's Wireless Telecommunications Bureau.

71. Add a new Section 22.880 to read as follows:

§ 22.880 Information exchange.

\(a\) *Prior Notification.* Public safety/CII licensees may notify a
commercial aviation air-ground system licensee that they wish to receive
prior notification of the activation or modification of a commercial
aviation air-ground system ground station site in their area.
Thereafter, the commercial aviation air-ground system licensee must
provide the following information to the public safety/CII licensee at
least 10 business days before a new ground station is activated or an
existing ground station is modified:

\(1\) location;

\(2\) effective radiated power;

\(3\) antenna manufacturer, model number, height above ground level and
up tilt angle, as installed;

\(4\) channels available for use.

\(b\) *Purpose of Prior Notification*. The prior notification of ground
station activation or modification is for informational purposes only:
public safety/CII licensees are not afforded the right to accept or
reject the activation of a proposed ground station or to unilaterally
require changes in its operating parameters. The principal purposes of
prior notification are to:

\(1\) allow a public safety licensee to advise the commercial aviation
air-ground system licensee whether it believes a proposed ground station
will generate unacceptable interference;

\(2\) permit commercial aviation air-ground system licensee(s) to make
voluntary changes in ground station parameters when a public safety
licensee alerts them to possible interference; and

\(3\) rapidly identify the source if interference is encountered when
the ground station is activated.

72. Revise Section 22.1003 in its entirety to read as follows:

**§ 22.1003 Eligibility.**

Any eligible entity (see § 22.7) may apply for central station
license(s) and/or offshore subscriber licenses under this subpart.

**Title 47, Part 90 of the Code of Federal Regulations, 47 CFR Part 90,
is amended as follows:**

73. The authority citation for Part 90 continues to read as follows:

Authority: Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 303(g),
303(r), 332(c)(7).

74. Revise Section 90.309(a)(1) to read as follows:

§ 90.309 Tables and figures.

\(a\) Directions for using the tables. (1) Using the method specified in
§ 1.958 of this chapter, determine the distances (i) between the
proposed land mobile base station and the protected cochannel television
station and (ii) between the proposed land mobile base station and the
protected adjacent channel television station. If the exact mileage does
not appear in table A for protected cochannel television stations (or
table B for channel 15 in New York and Cleveland and channel 16 in
Detroit) or table E for protected adjacent channel television stations,
the next lower mileage separation figure is to be used.

**APPENDIX C**

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^491] an Initial Regulatory Flexibility Analysis (IRFA) was
    incorporated in the Notice of Proposed Rulemaking (*Notice*) in this
    proceeding, WT Docket No. 03-103.[^492] The Commission sought
    written public comment on the proposals in the *Notice*, including
    comment on the IRFA. This present Final Regulatory Flexibility
    Analysis (FRFA) conforms to the RFA.[^493]

```{=html}
<!-- -->
```
A.  **Need for, and Objectives of, the Report and Order**

```{=html}
<!-- -->
```
189. The Report and Order addresses revision of the rules and spectrum
     band plan for the 800 MHz commercial Air-Ground Radiotelephone
     Service spectrum. A total of four megahertz of spectrum is
     currently allocated for this service. Although the Commission
     originally licensed six operators to provide service in this band
     on a shared basis using narrowband channels, only one licensee
     (Verizon Airfone) continues to operate in the band. Its operations
     are subject to a number of specific technical requirements designed
     to facilitate sharing among licensees. Given the constraints on
     current operations in this band and the changing demands of the
     public with respect to wireless telecommunications services, the
     *Notice* requested comment on how best to reconfigure this band and
     revise the related service rules in order to meet consumer needs
     and promote flexible, competitive use of this spectrum.

190. The Report and Order makes available new nationwide air-ground
     licenses in three band configurations: (1) band plan 1, comprised
     of two overlapping, shared, cross-polarized 3 MHz licenses
     (licenses A and B, respectively),[^494] (2) band plan 2, comprised
     of an exclusive 3 MHz license and an exclusive 1 MHz license
     (licenses C and D, respectively),[^495] and (3) band plan 3,
     comprised of an exclusive 1 MHz license and an exclusive 3 MHz
     license (licenses E and F, respectively), with the blocks at
     opposite ends of the band from the second configuration.[^496]
     Licenses will be awarded to winning bidders for the licenses
     comprising the configuration that receives the highest aggregate
     gross bid, subject to long-form license application review.
     Licenses will have a ten-year term.

191. The Report and Order also takes action on a range of proposals for
     updating the Commission's Part 1, 22, and 90 rules. Some of these
     steps are taken pursuant to the Commission's biennial review
     obligations as well as to implement the results of staff review of
     the Part 22 non-cellular rules. The Report and Order revises and
     eliminates many rule sections in light of technological change,
     increased competition in Commercial Mobile Radio Services,
     supervening changes to the Commission's rules, or a combination of
     factors. These rule changes also include actions to harmonize the
     treatment of various wireless services.

```{=html}
<!-- -->
```
B.  **Summary of Significant Issues Raised by Public Comments in
    Response to the IRFA**

```{=html}
<!-- -->
```
192. We received no comments in response to the IRFA. As described in
     section E below, we have nonetheless considered potential
     significant economic impacts of our actions on small entities.

```{=html}
<!-- -->
```
C.  **Description and Estimate of the Number of Small Entities to Which
    Rules Will Apply**

```{=html}
<!-- -->
```
193. The RFA directs agencies to provide a description of, and, where
     feasible, an estimate of, the number of small entities that may be
     affected by the rules adopted herein.[^497] The RFA generally
     defines the term "small entity" as having the same meaning as the
     terms "small business," "small organization," and "small
     governmental jurisdiction."[^498] In addition, the term "small
     business" has the same meaning as the term "small business concern"
     under the Small Business Act.[^499] A "small business concern" is
     one which: (1) is independently owned and operated; (2) is not
     dominant in its field of operation; and (3) satisfies any
     additional criteria established by the Small Business
     Administration (SBA).[^500]

194. *Wireless Service Providers*. The SBA has developed a small
     business size standard for wireless firms within the two broad
     economic census categories of "Paging"[^501] and "Cellular and
     Other Wireless Telecommunications."[^502] Under both SBA
     categories, a wireless business is small if it has 1,500 or fewer
     employees. For the census category of Paging, Census Bureau data
     for 1997 show that there were 1,320 firms in this category, total,
     that operated for the entire year.[^503] Of this total, 1,303 firms
     had employment of 999 or fewer employees, and an additional 17
     firms had employment of 1,000 employees or more.[^504] Thus, under
     this category and associated small business size standard, the
     great majority of firms can be considered small. For the census
     category Cellular and Other Wireless Telecommunications, Census
     Bureau data for 1997 show that there were 977 firms in this
     category, total, that operated for the entire year.[^505] Of this
     total, 965 firms had employment of 999 or fewer employees, and an
     additional 12 firms had employment of 1,000 employees or
     more.[^506] Thus, under this second category and size standard, the
     great majority of firms can, again, be considered small.

195. *Cellular Licensees*. The SBA has developed a small business size
     standard for wireless firms within the broad economic census
     category "Cellular and Other Wireless Telecommunications."[^507]
     Under this SBA category, a wireless business is small if it has
     1,500 or fewer employees. For the census category Cellular and
     Other Wireless Telecommunications firms, Census Bureau data for
     1997 show that there were 977 firms in this category, total, that
     operated for the entire year.[^508] Of this total, 965 firms had
     employment of 999 or fewer employees, and an additional 12 firms
     had employment of 1,000 employees or more.[^509] Thus, under this
     category and size standard, the great majority of firms can be
     considered small. According to the most recent Trends in Telephone
     Service data, 719 carriers reported that they were engaged in the
     provision of cellular service, personal communications service, or
     specialized mobile radio telephony services, which are placed
     together in the data.[^510] We have estimated that 294 of these are
     small, under the SBA small business size standard.[^511]

196. *Common Carrier Paging*. The SBA has developed a small business
     size standard for wireless firms within the broad economic census
     categories of "Cellular and Other Wireless
     Telecommunications."[^512] Under this SBA category, a wireless
     business is small if it has 1,500 or fewer employees. For the
     census category of Paging, Census Bureau data for 1997 show that
     there were 1,320 firms in this category, total, that operated for
     the entire year.[^513] Of this total, 1,303 firms had employment of
     999 or fewer employees, and an additional 17 firms had employment
     of 1,000 employees or more.[^514] Thus, under this category and
     associated small business size standard, the great majority of
     firms can be considered small.

197. In the *Paging Second Report and Order*, the Commission adopted a
     size standard for "small businesses" for purposes of determining
     their eligibility for special provisions such as bidding credits
     and installment payments.[^515] A small business is an entity that,
     together with its affiliates and controlling principals, has
     average gross revenues not exceeding \$15 million for the preceding
     three years.[^516] The SBA has approved this definition.[^517] An
     auction of Metropolitan Economic Area (MEA) licenses commenced on
     February 24, 2000, and closed on March 2, 2000. Of the 2,499
     licenses auctioned, 985 were sold.[^518] Fifty-seven companies
     claiming small business status won 440 licenses.[^519] An auction
     of MEA and Economic Area (EA) licenses commenced on October 30,
     2001, and closed on December 5, 2001. Of the 15,514 licenses
     auctioned, 5,323 were sold.[^520] One hundred thirty-two companies
     claiming small business status purchased 3,724 licenses. A third
     auction, consisting of 8,874 licenses in each of 175 EAs and 1,328
     licenses in all but three of the 51 MEAs commenced on May 13, 2003,
     and closed on May 28, 2003. Seventy-seven bidders claiming small or
     very small business status won 2,093 licenses. [^521] Currently,
     there are approximately 74,000 Common Carrier Paging licenses.
     According to the most recent Trends in Telephone Service, 608
     private and common carriers reported that they were engaged in the
     provision of either paging or "other mobile" services.[^522] Of
     these, we estimate that 589 are small, under the SBA-approved small
     business size standard.[^523] We estimate that the majority of
     common carrier paging providers would qualify as small entities
     under the SBA definition.

198. *Offshore Radiotelephone Service*. This service operates on several
     ultra high frequency (UHF) television broadcast channels that are
     not used for television broadcasting in the coastal areas of states
     bordering the Gulf of Mexico.[^524] There are currently
     approximately 55 licensees in this service. We are unable to
     estimate at this time the number of licensees that would qualify as
     small under the SBA's small business size standard for "Cellular
     and Other Wireless Telecommunications" services.[^525] Under that
     SBA small business size standard, a business is small if it has
     1,500 or fewer employees.[^526]

199. *Rural Radiotelephone Service*. The Commission has not adopted a
     size standard for small businesses specific to the Rural
     Radiotelephone Service.[^527] A significant subset of the Rural
     Radiotelephone Service is the Basic Exchange Telephone Radio System
     (BETRS).[^528] The Commission uses the SBA's small business size
     standard applicable to "Cellular and Other Wireless
     Telecommunications," *i.e.*, an entity employing no more than 1,500
     persons.[^529] There are approximately 1,000 licensees in the Rural
     Radiotelephone Service, and the Commission estimates that there are
     1,000 or fewer small entity licensees in the Rural Radiotelephone
     Service that may be affected by the rules and policies adopted
     herein.

200. *Air-Ground Radiotelephone Service*. The Commission has not adopted
     a small business size standard specific to the Air-Ground
     Radiotelephone Service.[^530] We will use SBA's small business size
     standard applicable to "Cellular and Other Wireless
     Telecommunications," *i.e.*, an entity employing no more than 1,500
     persons.[^531] There are approximately 100 licensees in the
     Air-Ground Radiotelephone Service, and we estimate that almost all
     of them qualify as small under the SBA small business size
     standard.

201. *Wireless Communications Equipment Manufacturers*. Some of the
     actions in the Report and Order could also benefit equipment
     manufacturers. The SBA has established a small business size
     standard for Radio and Television Broadcasting and Wireless
     Communications Equipment Manufacturing. Examples of products in
     this category include "transmitting and receiving antennas, cable
     television equipment, GPS equipment, pagers, cellular phones,
     mobile communications equipment, and radio and television studio
     and broadcasting equipment"[^532] and may include other devices
     that transmit and receive IP-enabled services, such as personal
     digital assistants (PDAs). Under the SBA size standard, firms are
     considered small if they have 750 or fewer employees.[^533]
     According to Census Bureau data for 1997, there were 1,215
     establishments[^534] in this category that operated for the entire
     year.[^535] Of those, there were 1,150 that had employment of under
     500, and an additional 37 that had employment of 500 to 999. The
     percentage of wireless equipment manufacturers in this category was
     approximately 61.35 percent[^536] so we estimate that the number of
     wireless equipment manufacturers with employment of under 500 was
     actually closer to 706, with an additional 23 establishments having
     employment of between 500 and 999. Consequently, we estimate that
     the majority of wireless communications equipment manufacturers are
     small entities that may be affected by our action.

```{=html}
<!-- -->
```
D.  **Description of Projected Reporting, Recordkeeping and Other
    Compliance Requirements**

```{=html}
<!-- -->
```
202. In this Report and Order, we are not adopting any new rules that
     would add reporting, recordkeeping, or other compliance
     requirements.[^537] We only modify or eliminate certain rules,
     thereby eliminating economic burdens for small and other sized
     entities. For example, we amend Section 1.929(c)(1) of our rules to
     specify that expansion of a composite interference contour (CIC) of
     a site-based licensee in the Paging and Radiotelephone Service---as
     well as the Rural Radiotelephone Service and 800 MHz Specialized
     Mobile Radio Service---over water on a secondary, non-interference
     basis should be classified as a minor (rather than major)
     modification of license. See para. 143, supra. Such
     reclassification should substantially reduce the filing
     requirements associated with these license modifications.

```{=html}
<!-- -->
```
E.  **Steps Taken To Minimize Significant Economic Impact On Small
    Entities, And Significant Alternatives Considered**

```{=html}
<!-- -->
```
203. The RFA requires an agency to describe any significant alternatives
     that it has considered in developing its approach, which may
     include the following four alternatives (among others): "(1) the
     establishment of differing compliance or reporting requirements or
     timetables that take into account the resources available to small
     entities; (2) the clarification, consolidation, or simplification
     of compliance and reporting requirements under the rule for such
     small entities; (3) the use of performance rather than design
     standards; and (4) an exemption from coverage of the rule, or any
     part thereof, for such small entities."[^538]

204. We do not anticipate any adverse impact on small entities resulting
     from either reconfiguration of the 800 MHz Air-Ground
     Radiotelephone Service band plan or revision of the related service
     rules, see paras. 1-85, supra. Currently, there is only one
     licensee in this band and demand for its service has markedly
     declined, see para. 23, supra. The flexible approach to
     reconfiguration of the 800 MHz air-ground band adopted in the
     Report and Order will promote our goal of facilitating the highest
     valued use of this spectrum, resulting in the provision of wireless
     communications services that better meet the needs of the traveling
     public onboard aircraft.

205. In order to promote competition in the 800 MHz air-ground band, the
     Report and Order prohibits any party from obtaining a controlling
     interest, either at auction or by a post-auction transaction, in
     more than three megahertz of spectrum (either shared or exclusive)
     in the band, see paras. 39-44, supra. No single entity, therefore,
     may hold more than one license in any of the available band
     configurations. The Report and Order adopts limited technical
     constraints in order to provide the eventual licensees with
     significant operational flexibility to provide broadband
     telecommunications services to commercial airline passengers and
     others while onboard aircraft, see paras. 54-72, supra. We note
     that the technical rules will, among other things, ensure that
     operations in this band do not cause harmful interference to
     adjacent bands, including cellular, SMR, and public safety. The
     Report and Order provides that future licensees in the 800 MHz
     air-ground band, as well as other interested parties, will have the
     opportunity to engage in spectrum leasing under the Commission's
     rules, see para. 32, supra. Future licensees will also be permitted
     to engage in partitioning and/or disaggregation of their licenses,
     id. These regulatory opportunities are intended to provide the
     air-ground marketplace greater flexibility to respond to consumer
     demand. The regulatory approach adopted in the Report and Order
     will benefit both small and large entities.

206. Regarding the modification or elimination of rules stemming from
     our Biennial Regulatory Review responsibilities, see paras. 86-168,
     supra, we do not anticipate any adverse impact on small entities.
     To the contrary, to the extent that there is any direct impact at
     all, streamlining and harmonizing technical and operational rules
     should result in decreasing regulatory burdens that benefit both
     small and large entities.

207. *Report to Congress*: The Commission will send a copy of the Report
     and Order and *Notice* of Proposed Rulemaking, including this FRFA,
     in a report to be sent to Congress pursuant to the Congressional
     Review Act.[^539] In addition, the Commission will send a copy of
     the Report and Order and Notice of Proposed Rulemaking, including
     this FRFA, to the Chief Counsel for Advocacy of the SBA. A summary
     of the Report and Order and Notice of Proposed Rulemaking and this
     FRFA will also be published in the Federal Register.[^540]

**APPENDIX D**

**INITIAL REGULATORY FLEXIBILITY ANALYSIS**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^541] the Commission has prepared this present Initial
    Regulatory Flexibility Analysis (IRFA) of the possible significant
    economic impact on a substantial number of small entities by the
    policies and rules proposed in the Notice of Proposed Rulemaking
    (*Notice*), WT Docket No. 05-42.[^542] Written public comments are
    requested on this IRFA. Comments must be identified as responses to
    the IRFA and must be filed by the deadlines for comments on the
    *Notice* provided in paragraph 179 of the item. The Commission will
    send a copy of the *Notice*, including this IRFA, to the Chief
    Counsel for Advocacy of the Small Business Administration
    (SBA).[^543] In addition, summaries of the *Notice* and IRFA will be
    published in the Federal Register.[^544]

```{=html}
<!-- -->
```
A.  **Need for, and Objectives of, the Proposed Rules**

```{=html}
<!-- -->
```
208. The Report and Order addresses revisions to the rules and spectrum
     band plan for the 800 MHz commercial Air-Ground Radiotelephone
     Service spectrum. The Report and Order makes available new
     nationwide air-ground licenses in three band configurations: (1)
     band plan 1, comprised of two overlapping, shared, cross-polarized
     3 MHz licenses (licenses A and B, respectively),[^545] (2) band
     plan 2, comprised of an exclusive 3 MHz license and an exclusive 1
     MHz license (licenses C and D, respectively),[^546] and (3) band
     plan 3, comprised of an exclusive 1 MHz license and an exclusive 3
     MHz license (licenses E and F, respectively), with the blocks at
     opposite ends of the band from the second configuration.[^547]
     Licenses will be awarded to winning bidders for the licenses
     comprising the configuration that receives the highest aggregate
     gross bid, subject to long-form license application review.
     Licenses will have a ten-year term.

209. If mutually exclusive applications are filed for the commercial
     air-ground licenses that comprise the three band configurations
     defined in the Report and Order, the Commission will be required to
     resolve such applications by competitive bidding pursuant to the
     requirements of Section 309(j) of the Communications Act.[^548]
     Similarly, the Commission is required to resolve by competitive
     bidding mutually exclusive general aviation air-ground
     applications.[^549] To date, the Commission has accepted for filing
     nine groups of mutually exclusive general aviation applications,
     which are currently pending. Therefore, the Wireless
     Telecommunications Bureau ("WTB") will, pursuant to its delegated
     authority, schedule an auction to resolve these applications.[^550]

210. In the *Notice*, we request comment on a number of issues relating
     to competitive bidding procedures for both commercial air-ground
     and general aviation licenses. We propose to conduct auctions of
     both commercial and general aviation air-ground licenses 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.[^551] Specifically, we propose to
     employ the Part 1 rules governing, among other things, designated
     entities, application and payment procedures, collusion issues, and
     unjust enrichment. Under this proposal, such rules would be subject
     to any modifications that the Commission may adopt in its Part 1
     Competitive Bidding proceeding. In addition, consistent with
     current practice, matters such as the appropriate competitive
     bidding design, as well as minimum opening bids and reserve prices,
     would be determined by WTB pursuant to its delegated
     authority.[^552] We seek comment on this proposal as well as on
     whether any of our Part 1 competitive bidding rules would be
     inappropriate, or should be modified, for auctions of either
     commercial or general aviation air-ground licenses.

211. With respect to the commercial air-ground licenses we are making
     available, we are providing applicants with the opportunity to bid
     on licenses constituting different band configurations.
     Accordingly, the determination of whether individual commercial
     air-ground license applications are mutually exclusive for purposes
     of Section 309(j) will be based on whether different applicants
     have applied for licenses in different band plan license
     configurations as well as on whether different applicants have
     applied for the same licenses. In other words, because only one
     band configuration will be implemented, applicants that apply for
     licenses in different configurations will be considered to have
     filed mutually exclusive applications. We tentatively conclude,
     however, that this and any other differences from our past auctions
     do not necessitate any changes to our Part 1 competitive bidding
     rules, and that WTB can address such differences through its
     standard practice of seeking comment on and adopting procedures for
     specific auctions. We seek comment on this tentative conclusion.

212. We tentatively conclude that small business bidding credits are
     appropriate for the commercial air-ground service.[^553] We base
     this conclusion on the fact that no commercial air-ground license
     will authorize the use of as much spectrum as other nationwide
     services for which the Commission has declined to adopt small
     business bidding credits. In addition, we believe that the
     operation of a commercial air-ground service may require lower
     capital expenditures than other nationwide services, such as
     satellite services, because the necessary infrastructure may be
     less costly.[^554] Thus, we tentatively conclude that small
     businesses may be able to attract the necessary capital to provide
     commercial air-ground service, particularly if they are assisted by
     bidding credits.[^555] We seek comment on these tentative
     conclusions.

213. Having tentatively concluded that small businesses may be able to
     provide commercial air-ground service, we nonetheless recognize
     that such operations may be very capital-intensive relative to
     other services provided to smaller geographic areas. We therefore
     propose to use the same small business definitions we have adopted
     for other capital-intensive services that serve large geographic
     areas. Specifically, we propose to define a small business as an
     entity with average annual gross revenues for the three preceding
     years not exceeding \$40 million, and to define a very small
     business as an entity with average annual gross revenues for the
     three preceding years not exceeding \$15 million. We also propose a
     15 percent bidding credit for small businesses and a 25 percent
     bidding credit for very small businesses, as set forth in our
     standardized schedule at 47 C.F.R. § 1.2110(f)(2). These are the
     same tiered small business definitions and bidding credits that we
     adopted, for example, for EAG-based licenses in the upper and lower
     700 MHz bands.[^556] We note also that AirCell and Space Data, in
     *ex parte* comments, support these small business definitions and
     bidding credits as appropriate for commercial air-ground
     service.[^557]

214. We request comment on these proposals. In particular, we invite
     commenters to discuss the expected capital requirements and other
     characteristics of the commercial air-ground operations that may be
     provided using the licenses made available by today's Report and
     Order, and the relationship of such requirements and
     characteristics to small business definitions and bidding credits.
     We invite commenters to provide comparisons with other services for
     which the Commission has established bidding credits. To the extent
     commenters support a different bidding credit regime than the one
     proposed here, they should support their proposals with relevant
     information. Such comments should provide information on, for
     example, the technology that a commercial air-ground licensee is
     likely to employ, the cost of deployment, and other factors that
     may affect capital requirements for commercial air-ground
     operations.

215. We also seek comment on whether our proposed designated entity
     provisions, if applied to the commercial air-ground service, would
     promote participation by businesses owned by minorities and by
     women, as well as participation by rural telephone companies. To
     the extent that commenters propose additional provisions to enhance
     participation by minority-owned or women-owned businesses,
     commenters should address how we should craft such provisions to
     meet the relevant standards of judicial review.[^558]

216. In contrast to the commercial air-ground licenses made available by
     today\'s Report and Order, general aviation air-ground licenses are
     specialized licenses that are generally valued by relatively small
     businesses. For this reason, we expect that small businesses
     interested in acquiring these licenses are unlikely to have
     difficulty obtaining the capital needed to participate in an
     auction.[^559] We seek comment on whether small business bidding
     credits would be appropriate for the general aviation air-ground
     service.

```{=html}
<!-- -->
```
B.  **Legal Basis**

```{=html}
<!-- -->
```
217. The proposed action is authorized under Sections 1, 4(i), 11,
     303(r) and (y), 308, 309, and 332 of the Communications Act of
     1934, as amended, 47 U.S.C. §§ 151, 154(i), 161, 303(r), 303(y),
     308, 309, and 332.

```{=html}
<!-- -->
```
C.  **Description and Estimate of the Number of Small Entities to Which
    the Rules Will Apply**

```{=html}
<!-- -->
```
218. The RFA directs agencies to provide a description of, and, where
     feasible, an estimate of, the number of small entities that may be
     affected by the rules adopted herein.[^560] The RFA generally
     defines the term "small entity" as having the same meaning as the
     terms "small business," "small organization," and "small
     governmental jurisdiction."[^561] In addition, the term "small
     business" has the same meaning as the term "small business concern"
     under the Small Business Act.[^562] A "small business concern" is
     one which: (1) is independently owned and operated; (2) is not
     dominant in its field of operation; and (3) satisfies any
     additional criteria established by the Small Business
     Administration (SBA).[^563]

219. *Wireless Service Providers*. The SBA has developed a small
     business size standard for wireless firms within the two broad
     economic census categories of "Paging"[^564] and "Cellular and
     Other Wireless Telecommunications."[^565] Under both SBA
     categories, a wireless business is small if it has 1,500 or fewer
     employees. For the census category of Paging, Census Bureau data
     for 1997 show that there were 1,320 firms in this category, total,
     that operated for the entire year.[^566] Of this total, 1,303 firms
     had employment of 999 or fewer employees, and an additional 17
     firms had employment of 1,000 employees or more.[^567] Thus, under
     this category and associated small business size standard, the
     great majority of firms can be considered small. For the census
     category Cellular and Other Wireless Telecommunications, Census
     Bureau data for 1997 show that there were 977 firms in this
     category, total, that operated for the entire year.[^568] Of this
     total, 965 firms had employment of 999 or fewer employees, and an
     additional 12 firms had employment of 1,000 employees or
     more.[^569] Thus, under this second category and size standard, the
     great majority of firms can, again, be considered small.

220. *Cellular Licensees*. The SBA has developed a small business size
     standard for wireless firms within the broad economic census
     category "Cellular and Other Wireless Telecommunications."[^570]
     Under this SBA category, a wireless business is small if it has
     1,500 or fewer employees. For the census category Cellular and
     Other Wireless Telecommunications firms, Census Bureau data for
     1997 show that there were 977 firms in this category, total, that
     operated for the entire year.[^571] Of this total, 965 firms had
     employment of 999 or fewer employees, and an additional 12 firms
     had employment of 1,000 employees or more.[^572] Thus, under this
     category and size standard, the great majority of firms can be
     considered small. According to the most recent Trends in Telephone
     Service data, 719 carriers reported that they were engaged in the
     provision of cellular service, personal communications service, or
     specialized mobile radio telephony services, which are placed
     together in the data.[^573] We have estimated that 294 of these are
     small, under the SBA small business size standard.[^574]

221. *Air-Ground Radiotelephone Service*. The Commission has not adopted
     a small business size standard specific to the Air-Ground
     Radiotelephone Service.[^575] We will use SBA's small business size
     standard applicable to "Cellular and Other Wireless
     Telecommunications," *i.e.*, an entity employing no more than 1,500
     persons.[^576] There are approximately 100 licensees in the
     Air-Ground Radiotelephone Service, and we estimate that almost all
     of them qualify as small under the SBA small business size
     standard.

```{=html}
<!-- -->
```
D.  **Description of Projected Reporting, Recordkeeping, and Other
    Compliance Requirements for Small Entities**

```{=html}
<!-- -->
```
222. The *Notice* does not propose any new reporting, recordkeeping, or
     other compliance requirements but merely proposes to extend the
     Commission's existing Part 1 competitive bidding and application
     requirements to the commercial and general aviation Air-Ground
     Radiotelephone Service.

```{=html}
<!-- -->
```
E.  **Steps Taken to Minimize Significant Economic Impact on Small
    Entities, and Significant Alternatives Considered**

```{=html}
<!-- -->
```
223. The RFA requires an agency to describe any significant alternatives
     that it has considered in reaching its proposed approach, which may
     include the following four alternatives: "(1) the establishment of
     differing compliance or reporting requirements or timetables that
     take into account the resources available to small entities; (2)
     the clarification, consolidation, or simplification of compliance
     or reporting requirements under the rule for small entities; (3)
     the use of performance, rather than design, standards; and (4)an
     exemption from coverage of the rule, or any part thereof, for small
     entities."[^577]

224. Specifically to assist small businesses, the *Notice* proposes to
     establish the same small business size standards and associated
     small business bidding credits for the commercial Air-Ground
     Radiotelephone Service as the Commission has adopted for a number
     of other wireless services, and also asks whether those small
     business size standards and associated small business bidding
     credits would be appropriate for the general aviation Air-Ground
     Radiotelephone Service.[^578] 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. We invite comment on any
     additional significant alternatives parties believe should be
     considered and on how the approach outlined in the *Notice* will
     impact small entities, including small non-profits and small
     governmental entities.

```{=html}
<!-- -->
```
F.  **Federal Rules that May Duplicate, Overlap, or Conflict with the
    Proposed Rules**

```{=html}
<!-- -->
```
225. None.

**STATEMENT OF**

**CHAIRMAN MICHAEL K. POWELL**

***In the Matter of Amendment of Part 22 of the Commission's Rules To
Benefit the Consumers of Air-Ground Telecommunications Services;
Biennial Regulatory Review---Amendment of Parts 1, 22, and 90 of the
Commission's Rules, WT Docket No. 03-103***

***Amendment of Parts 1 and 22 of the Commission\'s Rules To Adopt
Competitive Bidding Rules for Commercial and General Aviation Air-Ground
Radiotelephone Service, WT Docket No. 05-42***

***Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground
Radiotelephone License, Call Sign KNKG804, File No. 0001716212***

***Report and Order and Notice of Proposed Rulemaking, adopted December
15, 2004***.

The world of wireless telecommunications has seen immense technological
and marketplace developments in the last decade. During that time,
however, the 800 MHz commercial air-ground service has been locked in a
narrowly defined technological and regulatory box. With this action
today, we take important steps to bring this service up-to-date as both
a technical and marketplace matter. We adopt an innovative new licensing
approach that will allow the marketplace to help direct the most highly
valued use of the commercial air-ground spectrum. We grant future
licensees significant flexibility to meet consumer demand for broadband
and other wireless services onboard aircraft while providing a
reasonable transition period for the single remaining incumbent system.
We lift the archaic technical constraints currently imposed on the 800
MHz service, while implementing the requirements and procedures
necessary to ensure that public safety and other operations in adjacent
bands are protected from harmful interference. We thus bring the 800 MHz
commercial air-ground service into the 21^st^ century and lay the
groundwork for its continued growth and expansion as well as its
participation in the marketplace of air-ground services provided to
airplane passengers via multiple modes.

**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

**APPROVING IN PART, DISSENTING IN PART**

***In the Matter of Amendment of Part 22 of the Commission's Rules To
Benefit the Consumers of Air-Ground Telecommunications Services;
Biennial Regulatory Review---Amendment of Parts 1, 22, and 90 of the
Commission's Rules, WT Docket No. 03-103***

***Amendment of Parts 1 and 22 of the Commission\'s Rules To Adopt
Competitive Bidding Rules for Commercial and General Aviation Air-Ground
Radiotelephone Service, WT Docket No. 05-42***

***Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground
Radiotelephone License, Call Sign KNKG804, File No. 0001716212***

***Report and Order and Notice of Proposed Rulemaking, adopted December
15, 2004***.

There is good and bad in today's *Air-to-Ground Order*. On the one hand,
our actions have the potential to give airlines and passengers new
communications technologies. The current air-to-ground narrowband
service surely has not fulfilled expectations. There are few calls made
each day and the service is high-priced and limited to voice. A new
broadband air-to-ground service could allow a far greater diversity of
services, including the ability to check email, access the Web, enhance
avionic support, and improve homeland security communications.

On the other hand, the way the FCC has decided to launch this new
service risks creating a monopoly for broadband air-to-ground services.
The Order creates an auction where one company can lock up the only
license that can support a true broadband air-to-ground service. That
means that if a company bids enough, it can exclude all other
competitors, leaving airlines with only one possible supplier and
passengers with no choice. Experience shows that if a company has the
chance to buy a monopoly license, it will pay a premium for it. That is
because it allows them, with one fell swoop, to ensure that competitors
will not be able to keep prices down or force them to innovate.

That result might be a feast for the monopolist, but it's famine for
consumers. Airlines will have to do business with the monopolist at any
price. That is why so many airlines stated on the record that we should
ensure competition. It also means that when passengers want to access
the Internet using a broadband service they will have to pay what the
monopolist charges or have no broadband service at all on the airplane.
It also means that when the Department of Homeland Security wants
broadband service for Air Marshals, there will be no chance for a
competitive bidding process, because only one company can offer the
service. This could lead to taxpayers paying far more for this DHS
no-competition contract than necessary. Historically, the risks of
creating a monopoly led the Commission to create multiple licenses when
it started the cellular service, PCS, satellite TV, satellite radio and
in every other auction initiating a new service that I can think of. But
we don't do so here.

While I am pleased that we include the chance for competing companies to
use the auction to win two overlapping three MHz licenses in the Order,
history doesn't indicate this will provide the competition consumers
want. Some of my colleagues argue this provides the potential for
competition. But I fear that this possibility is unlikely to be
realized. There is substantial record evidence that two companies
bidding for overlapping three MHz licenses will find it exceedingly
difficult to defeat a company bidding on a monopoly license, whether
that license is for 4 MHz or for 3 MHz. The potential monopolist has far
more to gain and will pay a significant premium to eliminate
competition. My colleagues also point to the fact that if a company buys
the exclusive 3 MHz license, a second company will be able to compete
with them using the remaining 1 MHz license. But this remainder license
seems unlikely to provide real competition. The 1 MHz licensee will have
1/3 the spectrum resources and the service it offers will likely have
only 1/4 of the throughput. The 1 MHz licensee may be able to offer
voice, but it will not be a real broadband competitor. Likewise, even
the Order itself concludes that satellite services, while useful and
important, are not similar enough to terrestrial air-to-ground services
to provide adequate competition. So the unwieldy combinatorial auction,
the orphaned 1 MHz narrowband licensee, and the dissimilar satellite
service are all unlikely to protect consumers. I therefore must dissent
to the decision not to ensure two competitive licenses in this Order.

Thanks to WTB and OET for their hard and good work.

**STATEMENT OF**

**COMMISSIONER JONATHAN ADELSTEIN**

**APPROVING IN PART, DISSENTING IN PART**

***In the Matter of Amendment of Part 22 of the Commission's Rules To
Benefit the Consumers of Air-Ground Telecommunications Services;
Biennial Regulatory Review---Amendment of Parts 1, 22, and 90 of the
Commission's Rules, WT Docket No. 03-103***

***Amendment of Parts 1 and 22 of the Commission\'s Rules To Adopt
Competitive Bidding Rules for Commercial and General Aviation Air-Ground
Radiotelephone Service, WT Docket No. 05-42***

***Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground
Radiotelephone License, Call Sign KNKG804, File No. 0001716212***

***Report and Order and Notice of Proposed Rulemaking, adopted December
15, 2004***.

The prospect of high speed Internet services in the airplane cabin
should be met with great support. As we jet off to our latest
destination, we all have an interest in downloading or uploading a
presentation on the way to a conference, catching up on personal and
corporate e-mail accounts for a couple of hours, or maybe even doing
some on-line shopping for a child's upcoming birthday.

It seems the stuff of Buck Rogers, but we already are seeing the
deployment of satellite-based high-speed Internet services on
international long-distance routes. And with today's decision, we take
an important step towards promoting terrestrial-based broadband services
for domestic air travel. We configure our rules to allow for
next-generation broadband air-ground services. Equally as significant,
we rightly conclude that these broadband services can be provided with
three megahertz of spectrum, and that it is technically feasible for two
licensees to provide broadband air-ground service with overlapping three
megahertz licenses.

I am pleased that these technical decisions have allowed us to move away
from only making available a single four megahertz license and to put in
place restrictions that ensure that one licensee does not control all of
the 800 MHz air-ground spectrum. Such an outcome would not have matched
up with technical realities, and would in no way have served the public
interest.

But we lost a golden opportunity here to guarantee true broadband
competition. While a future auction likely will result in two unique
licensees, it is agreed that a licensee with one megahertz of spectrum
will be unable to compete against a licensee with three megahertz for a
true broadband service. We could have easily made a change to the item
to ensure that the broadband air-ground market would have been served by
two competitors. The item already concludes that a licensing approach
with two overlapping broadband licenses is technically feasible.  For
me, the benefits of competition in the broadband air-ground market far
outweigh any minor restrictions that possibly would arise out of the
overlapping license option. A competitive market ensures price
discipline and technical innovation that simply may not flow from a
single provider market.

 

The Commission has historically tried to ensure a minimum of two
similarly situated licensees given the obvious problems with sole
provider situations.  I disagree with the decision to allow a single
air-ground broadband license and dissent from that portion of the item.

[^1]: Appendix A includes a list of commenting parties and short
    citations to such parties, which are used in this document.

[^2]: *See* 47 C.F.R Pt. 22, Subpt. G; Amendment of Part 22 of the
    Commission\'s Rules to Benefit the Consumers of Air-Ground
    Telecommunications Services, Biennial Regulatory Review---Amendment
    of Parts 1, 22, and 90 of the Commission\'s Rules, *Notice of
    Proposed Rule Making*, 18 FCC Rcd 8380 (2003) ("*Notice*"). The
    spectrum currently consists of an uplink band at 849-851 MHz and a
    downlink band at 894-896 MHz. 47 C.F.R. § 22.857.

[^3]: Licenses A and B would authorize transmission of radio waves that
    are vertically and horizontally polarized, respectively, and would
    initially share 1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz
    at 894.000-895.500 MHz. Once Verizon Airfone's incumbent system
    ceases operations in the upper 0.5 MHz of each band, licensee B
    would shift its operations to 1.5 MHz at 849.500-851.000 MHz paired
    with 1.5 MHz at 894.500-896.000 MHz. If band plan 1 is implemented,
    the parties may agree to a different implementation scheme.

[^4]: License C would be located in the lower 1.5 MHz portion of each 2
    MHz band (1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz at
    894.000-895.500 MHz). License D would be located in the upper 0.5
    MHz portion of each 2 MHz band (0.5 MHz at 850.500-851.000 MHz
    paired with 0.5 MHz at 895.500-896.000 MHz).

[^5]: License E would be located in the lower 0.5 MHz portion of each 2
    MHz band (0.5 MHz at 849.000-849.500 MHz paired with 0.5 MHz at
    894.000-894.500 MHz). License F would be located in the upper 1.5
    MHz portion of each 2 MHz band (1.5 MHz at 849.500-851.000 MHz
    paired with 1.5 MHz at 894.500-896.000 MHz).

[^6]: In addition to the 800 MHz commercial air-ground spectrum, there
    is spectrum in the 454/459 MHz band allocated for general aviation
    air-ground stations. 47 C.F.R. § 22.805.

[^7]: CDMA2000 1xEV-DO (1x Evolution -- Data Optimized) is an air
    interface standard for Wireless Internet officially known as IS-856.
    1xEV-DO achieves a peak data rate of 2.45 Mbps on the forward link
    (from the Base Station, BTS, to the user). The technology is
    well-suited for high-speed mobile as well as fixed wireless Internet
    services. *See also* <http://www.wordiq.com/definition/CDMA2000>.

[^8]: OFDM is a modulation scheme that divides a single digital signal
    across multiple signal carriers simultaneously (FDM). The signals
    are spaced at precise frequencies, which prevents the demodulators
    from seeing frequencies other than their own (hence, orthogonal) so
    they do not interfere with each other. *See also*
    <http://www.flarion.com/products/flash_ofdm.asp>.

[^9]: EDGE is a faster version of GSM wireless service, which enables
    data to be delivered at rates up to 384 Kbps. The standard is based
    on the GSM standard and uses TDMA multiplexing technology. *See
    also*
    <http://www.wordiq.com/definition/Enhanced_Data_Rates_for_Global_Evolution>
    (GSM EDGE definition);
    <http://www.ericsson.com/products/white_papers_pdf/edge_wp_technical.pdf.>
    (GSM EDGE White Paper).

[^10]: iDEN is a high-capacity digital trunked radio system providing
    integrated voice and data services to its users. The iDEN system
    uses M16-QAM digital modulation and VSELP (Vector Sum Excited Linear
    Predictor) speech coding techniques coupled with Time Division
    Multiple Access (TDMA) channel access methodology to enhance channel
    capacity and system services.

[^11]: *See* FCC Staff Report, *Spectrum Policy Task Force Report,* ET
    Dkt. No. 02-135 (rel. Nov. 2002). This document is available at
    http://hraunfoss.fcc.gov/edocs\_
    public/attachmatch/DOC-228542A1.doc.

[^12]: Federal Communications Commission, Strategic Plan FY 2003-FY 2008
    at 5 (2002).

[^13]: *Id.*

[^14]: *See* File No. 0001716212 (filed Apr. 28, 2004).

[^15]: 47 U.S.C. § 161. Section 11 requires us to review our regulations
    applicable to providers of telecommunications service and to
    "determine whether any such regulation is no longer necessary in the
    public interest as the result of meaningful economic competition
    between providers of such service," and to repeal or modify any
    regulation that we find no longer necessary in the public interest.
    47 U.S.C. §§ 161(a)(2) & (b).

[^16]: 47 C.F.R. Pt. 22. Part 22 contains 10 subparts. The first three
    subparts---Subparts A (Scope and Authority), B (Licensing
    Requirements and Procedures) and C (Operational and Technical
    Requirements)---apply generally to all Part 22 licenses. The fourth
    subpart, Subpart D, contains rules for developmental authorizations.
    Each of the next five Subparts (E through I) contain rules
    applicable to one of the five Part 22 services: (1) Paging and
    Radiotelephone; (2) Cellular Radiotelephone; (3) Rural
    Radiotelephone; (4) Air-Ground Radiotelephone; and (5) Offshore
    Radiotelephone. Finally, Subpart J implements the Communications
    Assistance for Law Enforcement Act (CALEA) as it applies to Part 22
    services. *See* Pub. L. No. 103-414, 108 Stat. 4279 (1994) (codified
    as amended in scattered sections of 18 U.S.C. and 47 U.S.C. §§ 229,
    1001-1010, 1021).

[^17]: *See* Biennial Regulatory Review, CC Docket No. 00-175, *Report*,
    16 FCC Rcd 1207 (2001) ("*2000 Biennial Review Report"*); Biennial
    Regulatory Review 2000 Updated Staff Report (rel. Jan. 17, 2001);
    2002 Biennial Regulatory Review, *Report*, 18 FCC Rcd 4726 (2003);
    The Commission Seeks Public Comment in the 2002 Biennial Review of
    Telecommunications Regulations Within the Purview of the Wireless
    Telecommunications Bureau, *Public Notice*, 17 FCC Rcd 18933
    (2002)**.**

[^18]: In our *Cellular Year 2000 Biennial Report and Order,* we stated
    that "section 11 places the burden on the Commission to make the
    requisite determinations; no particular burden is placed on the
    opponents or proponents of a given rule." Year 2000 Biennial
    Regulatory Review--Amendment of Part 22 of the Commission's Rules to
    Modify or Eliminate Outdated Rules Affecting the Cellular
    Radiotelephone Service and Other Commercial Mobile Radio Services,
    *Report and Order*, 17 FCC Rcd 18401, 18404 ¶4 (2002) ("*Cellular
    Year 2000 Biennial Report and Order*"), citing In the Matter of 2000
    Biennial Regulatory Review Spectrum Aggregation Limits for
    Commercial Mobile Radio Services, *Report and Order*, 16 FCC Rcd
    22628, 22679 ¶25 (2001); *see also* Year 2000 Biennial Regulatory
    Review--Amendment of Part 22 of the Commission's Rules to Modify or
    Eliminate Outdated Rules Affecting the Cellular Radiotelephone
    Service and other Commercial Mobile Radio Services, *Second Report
    and Order*, 17 FCC Rcd 18485 (2002); *Erratum*, 17 FCC Rcd 22140
    (2002).

[^19]: *See* Welcome to Airfone web site, www22.verizon.com/airfone and
    [www.22.verizon.com/airfone/service/af_service.htm](http://www.22.verizon.com/airfone/service/af_service.htm).
    Another commercial air-ground licensee, AT&T Wireless, discontinued
    operations on September 1, 2002, and cancelled its license. *See*
    Claircom Licensee Corporation Application for Cancellation of
    License, Call Sign KNKG801, File No. 0001161399 (filed Jan. 16,
    2003). Skyway Aircraft, Inc. has authority to operate in the
    commercial air-ground band under the current rules on a shared basis
    pursuant to a Special Temporary Authorization (STA). *See infra*
    para. 11.

[^20]: *Notice*, 18 FCC Rcd at 8389-8391 ¶¶17-21. The remaining five
    licenses have been unassigned for some time, and no one has formally
    requested that the Commission open another application filing
    window. Pursuant to Section 22.875 of our rules, applications for
    authorization in this service may only be filed during window filing
    periods announced by public notice. 47 C.F.R. § 22.875.

[^21]: *See infra* paras. 14-20.

[^22]: *See infra* para. 45.

[^23]: *See* Amendment of the Commission's Rules Relative to Allocation
    of the 849-851/894-896 MHz Bands, *Report and Order*, 5 FCC Rcd 3861
    (1990) *, recon. granted in part,* In the Matter of Amendment of the
    Commission\'s Rules Relative to Allocation of the 849-851/894-896
    MHz Bands, *Memorandum Opinion and Order,* 6 FCC Rcd 4582 (1991).

[^24]: 47 C.F.R. § 22.857.

[^25]: 47 C.F.R. § 22.859.

[^26]: 47 C.F.R. § 22.857. The Wireless Telecommunications Bureau has
    granted a waiver allowing two of the control channels to be combined
    and used as a thirtieth communication channel while there are fewer
    than six licensees. *See* Claircom Licensee Corporation and GTE
    Airfone Incorporated Requests for Waivers of Air-ground
    Radiotelephone Service Rules, *Order*, 16 FCC Rcd 17959 (WTB, CWD
    2001).

[^27]: 47 C.F.R. §§ 22.865, 22.869.

[^28]: 47 C.F.R. § 22.873(b).

[^29]: *See* \"Arrangement Between the Department of Communications of
    Canada and the Federal Communications Commission of the United
    States of America Concerning the Use of the Bands 849-851 and
    894-896 MHz,\" signed August 18, 1992 (U.S.A.) and August 28, 1992
    (Canada), Section 4.  *See also* \"Protocol Concerning the Use of
    the 849-851 and 894-896 MHz Bands for Public Air-To-Ground Radio
    Service,\" signed June 16, 1994 by the Government of the United
    States and the Government of Mexico, Article IV.

[^30]: When the Commission adopted the rules for this service, it
    implemented policies and technical constraints consistent with the
    experimental air-ground system licensed to Airfone, Inc. (now
    Verizon Airfone) six years prior to the order establishing the
    service in Part 22. *See* Amendment of the Commission's Rules
    Relative to Allocation of the 849-851/894-896 MHz Bands, *Report and
    Order*, 5 FCC Rcd 3861 (1990). The Commission sought to promote open
    entry, which required that the licensees be technically compatible
    and coordinate with one another.

[^31]: As noted above, Verizon's license expired in July 2004, and its
    renewal application currently is pending. *See* File No. 0001716212
    (filed Apr. 28, 2004).

[^32]: SkyWay's STA (call sign WPYZ281) expired November 30, 2004, and
    the company has filed a request to extend the STA, which is pending.
    *See* File No. 00019331747 (filed Nov 11, 2004). The STA provides
    that "SkyWay has no future entitlement to hold an authorization to
    provide air-ground telecommunications services as currently
    authorized by this STA," and requires SkyWay to advise any customers
    of the potentially temporary nature of its operating authority.

[^33]: Skyway Comments at 5 (filed Apr. 1, 2004). We note that the STA
    is explicitly conditioned on the outcome of this proceeding.

[^34]: Skyway Comments at 5 (filed Nov. 26, 2003).

[^35]: *See, e.g.*, White Paper, Satellite Competition to Terrestrial
    Air-to-Ground Service," transmitted by Letter from Donald C.
    Brittingham, Director-Wireless/Spectrum Policy, Verizon, to Marlene
    H. Dortch, Secretary, Federal Communications Commission, dated Sept.
    7, 2004; Letter from Rich Farr, Senior Manager, Radio
    Communications, American Airlines, to Marlene H. Dortch, Secretary,
    Federal Communications Commission, dated Aug. 30, 2004, *clarified
    by* Letter from Rich Farr, Senior Manager, Radio Communications,
    American Airlines, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Sept. 28, 2004 (collectively,
    "American Airlines Letters"); AirCell *Ex parte* Presentation,
    Business Structure & Market Outlook for Inflight Communications
    Services at 12-31 (July 26, 2004); In Search of an In-Air
    Connection, Readers are Willing to Pay Airlines for a Good Web
    Connection in the Sky, Wall St. Journal, Apr. 6, 2004, available at
    <http://webreprints.djreprints.com/974390656496.html>.

[^36]: The study was conducted by Forrester Research. *See* Boeing Press
    Release, "Infonet and Connexion by Boeing Announce Plans to Deliver
    'Wi-Fi in the Sky' Capabilities to MobileXpress^TM^ Customers,"
    available at
    <http://www.boeing.com/news/releases/2004/q2/nr_040510j.html>.

[^37]: The study, conducted by telephone, included a random sample of
    1,009 U.S. adults, and is available at
    <http://www.ce.org/events/event_info/downloads/Presentation_Bates_Wireless_Devices_on_Planes.ppt>.

[^38]: Comments of Continental Airlines (filed Sept. 29, 2004); American
    Airlines Letters, *supra* note 35.

[^39]: AirCell operates in the cellular band under a Commission-granted
    waiver of Section 22.925, 47 C.F.R. § 22.925, which prohibits use of
    cellular telephones in airborne aircraft. AirCell received the
    waiver based on its use of technology specifically designed to avoid
    interference to ground-based cellular systems. *See infra* note 89.

[^40]: 47 C.F.R. § 22.925. In the *Notice*, we asked whether we should
    repeal or modify Section 22.925. *See* *Notice*, 18 FCC Rcd at
    8390-8391 ¶22. This prohibition was initially adopted to prevent
    harmful interference to terrestrial cellular systems. *See*
    Amendment of Sections of Part 22 of the Commission\'s Rules in the
    Matter of Airborne Use of Cellular Telephones and the Use of Cell
    Enhancers in the Domestic Public Cellular Radio Service, *Report and
    Order*, 7 FCC Rcd 23 (1991).

[^41]: *See* Amendment of the Commission's Rules to Facilitate the Use
    of Cellular Telephones and other Wireless Devices Aboard Airborne
    Aircraft, WT Dkt No. 04-435, *Notice of Proposed Rulemaking,* FCC
    04-288 (rel. Feb. 15, 2005).

[^42]: *See* 14 C.F.R. § 91.21; Federal Aviation Administration Advisory
    Circular No. 91.21-1A, "Use of Portable Electronic Devices aboard
    Aircraft" (Oct. 2, 2000).

[^43]: *See* In the Matter of The Boeing Company, Application for
    Blanket Authority To Operate up to Eight Hundred Technically
    Identical Transmit and Receive Mobile Earth Stations Aboard Aircraft
    in the 14.0-14.5 GHz and 11.7-12.2 GHz Frequency Bands, File No.
    SES-LIC-20001204-02300, Call Sign: E000723, *Order and
    Authorization*, 16 FCC Rcd 22645 (IB 2001) ("*Boeing
    Transmit-Receive Order*"). A waiver of Section 2.106 of the
    Commission's rules was necessary because at that time the U.S. Table
    of Frequency Allocations did not include allocations for
    Aeronautical Mobile Satellite Service (AMSS) downlinks in the 12 GHz
    band and AMSS uplinks in the 14 GHz band. However, the Commission
    has since added a secondary allocation in the 14-14.5 GHz band for
    AMSS, following the addition of an international AMSS allocation in
    that band at the 2003 World Radiocommunication Conference. *See*
    Amendment of the Parts 2, 25, and 87 of the Commission's Rules to
    Implement Decisions from World Radio Communications Conferences
    Concerning Frequency Bands Between 28 MHz and 36 GHz and to
    Otherwise Update the Rules in this Frequency Range, *Report and
    Order*, 18 FCC Rcd 23426 (2003). Under its current authorization,
    Boeing is not permitted to cause harmful interference to other
    allocated services in the 11.7-12.2 GHz and 14-14.5 GHz frequency
    bands, and must accept all interference from authorized users of
    these bands. *Boeing Transmit-Receive Order*, 16 FCC Rcd at 22653-54
    ¶19.

[^44]: *Boeing Transmit-Receive Order*, 16 FCC Rcd at 22653-54 ¶19.

[^45]: *See* The Boeing Company, Application to Modify Blanket AMSS
    Earth Station Authorization Call Sign E000723, File No.
    SES-MOD-20040301-00304, filed Mar. 1, 2004 ("*Boeing AMSS
    Modification Application*").

[^46]: Amendment of Parts 2 and 25 of the Commission's Rules to Allocate
    Spectrum in the 14-14.5 GHz Band to the Aeronautical
    Mobile-Satellite Service ("AMSS") and To Adopt Licensing and Service
    Rules for AMSS Operations in the Ku-Band, The Boeing Company,
    Petition for Rulemaking, filed July 21, 2003.

[^47]: *See*
    [http://www.connexionbyboeing.com](http://www.connexionbyboeing.com/).

[^48]: *See* Satcom Shakeout, Business & Commercial Aviation, Fred
    George, at 89 (Sept. 2004).

[^49]: *See*
    <http://www.connexionbyboeing.com/index.cfm?p=cbb.aboutservice&l=en.US&ec>.
    Rates for unlimited internet access through the Connexion service
    are based on the flight duration: \$14.95 for short-haul flights
    less than three hours, \$19.95 for medium-haul flights between three
    to six hours, and \$29.95 for long-haul flights over six hours.
    *See*
    <http://www.connexionbyboeing.com/index.cfm?p=cbb.pricing&l=en.US&ec>.
    Alternatively, users can purchase 30 minutes of Internet access for
    an initial fee of \$7.95 on flights under three hours and \$9.95 for
    flights over three hours, and \$0.25 per minute thereafter. *Id.*

[^50]: Connexion has definitive service agreements with Lufthansa,
    Scandinavian Airlines System (SAS), and Japan Airlines to equip
    their long-haul fleets with the Connexion service. In addition,
    British Airways has completed a successful service demonstration,
    and both All-Nippon Airways and Singapore Airlines have announced
    their intent to install the Connexion service on their long-range
    aircraft. *See*
    [http://www.connexionbyboeing.com](http://www.connexionbyboeing.com/).

[^51]: ^?^ *See* Coffee, Tea or Broadband, Quentin Hardy, Forbes (June
    17, 2004), available at
    <http://www.forbes.com/technology/networks/2004/06/17/cz_qh_0617wifi.html>.

[^52]: *See* Stuck in the Air? Surf the Web, Boeing's Internet service
    lands first airline contract, Kelly Quigley, Crain's Chicago
    Business (Mar. 25, 2004).

[^53]: See *id.* at 2; Boeing AMSS Modification Application, Public
    Interest Statement at 5*.*

[^54]: *See* "Battle of the Bands," Flight International (Sept. 22,
    2004).

[^55]: *See*
    <http://www.connexionbyboeing.com/index.cfm?p=cbb.executivejet&l=en.US&ec>.

[^56]: *See* *id.*

[^57]: Aeronautical Radio Inc., Application for Blanket Authority to
    Operate Aboard Aircraft up to 1000 Technically-Identical Transmit
    and Receive Mobile Earth Stations in the 11.7-12.2 and 14.0-14.5 GHz
    Frequency Bands, File No. SES-LIC-20030910-01261, filed Sept. 10,
    2003, and Amendment, File No. SES-AMD-20031223-01860, filed Dec. 23,
    2003.

[^58]: The Commission recently renewed ARINC\'s experimental authority
    to conduct a limited market study of its SKYLink service on 15
    aircraft until May 1, 2006. *See* File No. 0130-EX-RR-2004 (Call
    Sign WC2XPE). A previous grant had modified ARINC\'s experimental
    authority to conduct a limited market study on up to 120 aircraft
    (originally authority was granted for only 15 aircraft). *See* File
    No. 0054-EX-PL-2001, modified by File No. 0029-EX-ML-2003 and File
    No. 0029-EX-ML-2004. Informal objections challenging the increase in
    the number of aircraft requested for the limited market study were
    filed by Boeing and Rockwell Collins Corporation. *See* In the
    Matter of Aeronautical Radio Inc., Experimental License Modification
    to Expand Limited Market Study, Informal Objections of The Boeing
    Company and Rockwell Collins Corporation, filed Sept. 13, 2004. Upon
    consideration of these objections, the Commission again modified
    ARINC\'s experimental authority to allow only 15 aircraft inits
    limited market study.

[^59]: ARINC Comments at 1-2.

[^60]: *See* Press Release, "ARINC Will Show New Broadband Internet
    Solution for Commercial Aircraft at WAEA" (Aug. 24, 2004), available
    at <http://www.arinc.com/news/2004/08-24-04.html>.

[^61]: *See* Press Release, "ARINC SKYLink^SM^ Offers Internet for
    Airline Passengers on the Compact PEA Entertainment Unit" (Sept. 21,
    2004) (statement by Robert Thompson, Senior Director of ARINC
    Satellite Services), available at
    <http://www.arinc.com/news/2004/09-21-04.html>.

[^62]: *See* Press Release, "SKYLink^SM^ Satellite Broadband Demo Shows
    Airlines How to Achieve 'Total Aircraft Communications'" (Sept. 21,
    2004), available at <http://www.arinc.com/news/2004/09-21b-04.html>.

[^63]: *See*
    <http://www.sita.com/index.asp?activeDir=/home/News_Centre/Press_releases/Press_releases_-_2004/&activeFile=Going_On_Air.html>.

[^64]: Over 60 airlines use SITA's current cabin connectivity services
    on 1,100 aircraft, including American Airlines, Air France, Asiana
    Airlines, KLM, Delta Airlines, Emirates, Singapore Airlines, Qantas,
    Saudi Arabian Airlines, Alitalia and Malaysia Airlines. Tenzing's
    cabin connectivity services are currently available on airlines
    including Cathay Pacific Airways, Continental Airlines, Emirates,
    Northwest Airlines, United Airlines, US Airways and Virgin Atlantic
    Airways. Tenzing has developed a system using software and existing
    onboard communications equipment to deliver text and data to and
    from aircraft. *See* <http://www.tenzing.com/about/>. Tenzing email
    and text-messaging systems are on more than 800 commercial aircraft
    flown by Cathay Pacific Airways, Continental Airlines, Iberia,
    Northwest Airlines, United Airlines and Virgin Atlantic. *Id.*

[^65]: *See* <http://www.onair.aero/en/vision/vision_strategy_en.pdf>.

[^66]: *See*
    <http://aero.inmarsat.com/markets/air_transport.aspx?top_level_id=5&sub_level_id=1>.

[^67]: *See*
    <http://aero.inmarsat.com/markets/business_aviation.aspx?top_level_id=5&sub_level_id=2>.

[^68]: *See*
    <http://aero.inmarsat.com/markets/government.aspx?top_level_id=5&sub_level_id=3>.

[^69]: *See*
    <http://aero.inmarsat.com/markets/default.aspx?top_level_id=5>.

[^70]: *Id.*

[^71]: *See*
    <http://aero.inmarsat.com/services/default.aspx?top_level_id=3>.

[^72]: *See*
    <http://aero.inmarsat.com/services/swift_64.aspx?top_level_id=3&sub_level_id=1>.

[^73]: *See*
    <http://aero.inmarsat.com/technology/enabling_technologies.aspx?top_level_id=6&sub_level_id=4>*.*

[^74]: *See id.*

[^75]: *See* <http://www.row44.com/>.

[^76]: *See id.*

[^77]: *See* Press Release, "Row 44 Announces Strategic Relationship
    with Hughes Network Systems" (Sept. 21, 2004), available at
    <http://www.row44.com/press/2004_09_21.htm>*.*

[^78]: *Id.*

[^79]: *Id.*

[^80]: *Id*.

[^81]: *See* <http://www.arianespace.com/site/about/about_index.html>.

[^82]: *See* Press Release, "AirTV Signs With Arianespace to Launch its
    First Broadband In-Flight Entertainment/Communications Satellite in
    2007" (Sept. 23, 2004), available at
    <http://www.airtv.net/press_release_092304.html>.

[^83]: *Id.*

[^84]: *See* <http://www.airtv.net/overview.html>.

[^85]: *Id.*

[^86]: "Big LEO" refers to low Earth orbit mobile-satellite services
    above 1 GHz. Big LEO systems are subject to 47 C.F.R. § 25.136(a)
    ("User transceiver units associated with the 1.6/2.4 GHz
    Mobile-Satellite Service . . . may not be operated on civil aircraft
    unless the earth station has a direct physical connection to the
    aircraft cabin or cockpit communication system."). For more detail
    regarding the Big LEO licensees, *see generally* Review of the
    Spectrum Sharing Plan Among Non-Geostationary Satellite Orbit Mobile
    Satellite Service Systems in the 1.6/2.4 GHz Bands, *Report and
    Order, Fourth Report and Order and Further Notice of Proposed
    Rulemaking*, 19 FCC Rcd 13356 (2004).

[^87]: *See*
    [[http://www.iridium.com/market/iri_market-detail.asp?solutionid=22]{.underline}](http://www.iridium.com/market/iri_market-detail.asp?solutionid=22).

[^88]: *See*
    [[http://www.globalstarusa.com/en/products/aviation.php]{.underline}](http://www.globalstarusa.com/en/products/aviation.php).

[^89]: *Id*.

[^90]: AirCell and its partners have been granted waivers of the
    Commission's rule, 47 C.F.R. § 22.925, prohibiting the use of
    cellular phones on planes in order to implement an air-ground
    service. AirCell\'s system uses specially designed mobile units and
    ground equipment to allow users to access the existing networks of
    AirCell\'s cellular licensee partners without causing the harmful
    interference against which Section 22.925 was designed to protect.
    *See* In the Matter of AirCell, Inc., Petition, Pursuant to Section
    7 of the Act, For a Waiver of the Airborne Cellular Rule, Or, in the
    Alternative, for a Declaratory Ruling, *Order*, 14 FCC Rcd 806 (WTB
    1998), recon. granted in part, denied in part, *Order on
    Reconsideration*, 14 FCC Rcd 18430 (WTB 1999), app. for rev. denied,
    *Memorandum Opinion and Order*, 15 FCC Rcd 9622 (2000), affirmed in
    part and remanded in part sub nom., *AT&T Wireless Services, Inc.,
    et al., v. FCC*, 270 F.3d 959, 968 (D.C. Cir. 2001), pet. for reh'g
    denied Jan. 29, 2002, *Order on Remand*, 18 FCC Rcd (2003), pet. for
    rev. denied sub nom., *AT&T Wireless Services, Inc. v. FCC*, 365
    F.3d 1095 (D.C. Cir. 2004).

[^91]: *See* [www.Aircell.com/about](http://www.Aircell.com/about).

[^92]: *See id.* AirCell has indicated that, to the extent any
    additional or modified waiver authority or experimental license is
    required in order to conduct the desired tests on commercial
    aircraft, it will obtain such necessary authorization. *See* In the
    Matter of AirCell, Inc., Petition, Pursuant to Section 7 of the Act,
    for a Waiver of the Airborne Cellular Rule, or, in the Alternative,
    for a Declaratory Ruling, *Order*, 17 FCC Rcd 19586, 19586-87 ¶2
    (WTB, CWD 2002). Nothing in AirCell's current waiver prohibits
    operation on commercial, as opposed to general aviation, aircraft.

[^93]: Verizon Airfone Comments at 12.

[^94]: *See*
    <http://www22.verizon.com/airfone/service/af_service_genrates.html>.

[^95]: *See*
    <http://www22.verizon.com/airfone/service/af_service_genrates.html#JetConnect>.

[^96]: *Id.*

[^97]: *See*
    <http://www22.verizon.com/airfone/vzw/vzw_airfone_service.html>.

[^98]: *See* American Airlines Letters, *supra* note 35.

[^99]: *See* Joe Sharkey, "Almost here: Cell phones at 37,000 feet,"
    N.Y. Times, Oct. 10, 2004, at C6 (statement of William E. Pallone,
    President, Verizon Airfone) .

[^100]: *Notice*, 18 FCC Rcd at 8389-8390 ¶¶17-21.

[^101]: *Id.* at 8389 ¶17.

[^102]: *Id.*

[^103]: *Id.* at 8390 ¶21.

[^104]: *Notice*, 18 FCC Rcd at 8390 ¶20. The 849-851 MHz air-ground
    band is immediately adjacent to 800 MHz General Category land mobile
    channels at 851-854.75 MHz that are used by both public safety and
    commercial SMR systems and that are discussed in our pending
    proceeding on 800 MHz public safety interference issues. *See*
    Improving Public Safety Communications in the 800 MHz Band;
    Consolidating the 900 MHz Industrial/Land Transportation and
    Business Pool Channels, *Notice of Proposed Rule Making,* 17 FCC Rcd
    4873 (2002), *Erratum*, 17 FCC Rcd 7169 (2002). The Commission
    recently issued an Order in that proceeding, which provides, *inter
    alia*, that the NPSPAC public safety channels will be moved to
    spectrum just above 851 MHz. *See* *Report and Order, Fifth Report
    and Order, Fourth Memorandum Opinion and Order, and Order*, 19 FCC
    Rcd 14969, 15050 at ¶151 (2004), as amended by *Erratum*, 19 FCC Rcd
    19651 (2004), and *Erratum*, 19 FCC Rcd 21818 (2004)  ("*800 MHz
    Order*"), order clarified by *Supplemental Order and Order on
    Reconsideration*, FCC 04-294, 2004 WL 2973805 (F.C.C.) (rel. Dec.
    22, 2004). Below, we adopt a rule that subjects ground stations that
    operate in the 849-851 MHz air-ground band to the cellular
    interference rule adopted in the *800 MHz Order*. *See infra* para.
    67.

[^105]: *Notice*, 18 FCC Rcd at 8390 ¶19.

[^106]: *See* AirCell Comments; AirCell Reply Comments; Letter from
    Michele C. Farquhar, Hogan & Hartson, to Marlene H. Dortch,
    Secretary, Federal Communications Commission, dated July 27, 2004,
    transmitting "Business Structure & Market Outlook for Inflight
    Communications Services"; Letter from Michele C. Farquhar, Hogan &
    Hartson, to Marlene H. Dortch, Secretary, Federal Communications
    Commission, dated Sept. 9, 2004, transmitting "AirCell Response to
    FCC Questions" at 3-7 ("AirCell September 9 Response to FCC");
    Letter from Michele C. Farquhar, Hogan & Hartson, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Sept.
    30, 2004, transmitting "Passenger Benefits from Competition in
    Broadband Airline Communications" and "Providing Deck-to Deck
    Coverage;" Letter from Michele C. Farquhar, Hogan & Hartson, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Oct. 4, 2004, transmitting "AirCell October 1 Presentation to
    FCC;" Letter from Michele C. Farquhar, Hogan & Hartson, to Marlene
    H. Dortch, Secretary, Federal Communications Commission, dated Dec.
    6, 2004, transmitting "Air-to-Ground Myths & Realities" at 4
    ("AirCell Air-to-Ground Myths & Realities"); Declaration of Paul A.
    London on behalf of AirCell, dated Dec. 7, 2004 ("AirCell London
    Declaration").

[^107]: *See* Connexion by Boeing Proposed Rules Governing Operation of
    Multiple 800 MHz Air to Ground Systems (Sept 10, 2004); Letter from
    Howard J. Symons, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 8, 2004 ("Boeing December 8
    *Ex parte*").

[^108]: *See* Space Data Reply Comments; Space Data's Proposed ATG Rules
    (June 10, 2004); Letter from Cheryl A. Tritt, Morrison & Foerster
    LLP, to Marlene H. Dortch, Secretary, Federal Communications
    Commission, dated Sept. 9, 2004, transmitting "Space Data
    Corporation: Air-to-Ground Analysis" ("Space Data September 9
    Analysis"); Letter from Cheryl A. Tritt, Morrison & Foerster LLP, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Nov. 17, 2004, transmitting "Space Data November 16, 2004
    Presentation;" Letter from Cheryl A. Tritt, Morrison & Foerster LLP,
    to Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Nov. 29, 2004, transmitting "AirCell's Criticisms of Space
    Data's ATG Proposals are Inaccurate and Completely Unsubstantiated"
    ("Space Data November 29 Analysis"); *Ex parte* Presentation of
    Gerald Knoblach, CEO, Space Data dated Dec. 8, 2004 ("Space Data
    December 8 *Ex parte*").

[^109]: *See* Verizon Airfone Comments; Verizon Airfone Reply Comments;
    Verizon Airfone has Legal and Equitable Rights as the Only Qualified
    Licensee Providing In-Flight Services to the Public at 5-6 (Sept. 9,
    2004) ("Verizon Airfone September 9 Statement"); Verizon Airfone
    Response to Air-to-Ground Licensing Scenario Under Consideration by
    the FCC at 5 (Sept. 10, 2004) ("Verizon Airfone September 10
    Response to FCC").

[^110]: *See* AirCell Further Notes on the Deployment of Two
    Cross-Polarized Systems in the ATG Band and Response to Verizon
    Airfone/Telcordia at 3 (Nov. 23, 2004) ("AirCell Further Notes on
    the Deployment of Two Cross-Polarized Systems"); Letter from Michele
    C. Farquhar, Hogan & Hartson, to Marlene H. Dortch, Secretary,
    Federal Communications Commission, dated Nov. 12, 2004, transmitting
    "AirCell Two Cross-Polarized Systems in the ATG Band;" Letter from
    Michele C. Farquhar, Hogan & Hartson, to Marlene H. Dortch,
    Secretary, Federal Communications Commission, dated Oct. 21, 2004,
    transmitting "Deployment of two Cross-Polarized Systems in the ATG
    Band" ("AirCell/Boeing Joint Proposal"). *See* Letter from Howard J.
    Symons, to Marlene H. Dortch, Secretary, Federal Communications
    Commission, dated Oct. 21, 2004 (confirming Boeing's concurrence in
    joint proposal with AirCell). AirCell and Boeing each filed several
    separate proposals to reconfigure the air-ground spectrum during the
    course of this proceeding before submitting the AirCell/Boeing Joint
    Proposal.

[^111]: *See* AirCell/Boeing Joint Proposal at 4.

[^112]: *See* *id.* at 3-4.

[^113]: *See* *id.* at 4.

[^114]: *See id.* at 8. *See* 47 C.F.R. § 22.859.

[^115]: *See* AirCell/Boeing Joint Proposal at 8.

[^116]: Verizon Airfone Comments at 8-12.

[^117]: *See, e.g.*, Verizon Airfone September 10 Response to FCC.

[^118]: *See* Space Data November 16, 2004 Presentation at 7-9.

[^119]: *See* *id.* at 8.

[^120]: *See* Space Data October 13 Presentation at 3-6.

[^121]: Space Data also has proposed two exclusive 1.6 MHz licenses for
    GSM, and a single 0.8 MHz license to accommodate the incumbent
    system. *See* Space Data November 16, 2004 Presentation.
    Alternatively, the company suggested that an additional 100
    kilohertz of spectrum be allocated to accommodate 2.5 MHz and 1.6
    MHz spectrum blocks for CDMA and GSM, respectively. *Id.*

[^122]: The band configurations are illustrated above at paragraph 1.

[^123]: Licenses A and B would be vertically and horizontally polarized,
    respectively, and would initially share 1.5 MHz at 849.000-850.500
    MHz paired with 1.5 MHz at 894.000-895.500 MHz. If band plan 1 is
    implemented, the parties may agree to a different implementation
    scheme. Once Verizon Airfone's incumbent system ceases operations in
    the upper 0.5 MHz of each band, licensee B would shift its
    operations to 1.5 MHz at 849.500-851.000 MHz paired with 1.5 MHz at
    894.500-896.000 MHz.

[^124]: License C would be located in the lower 1.5 MHz portion of each
    2 MHz band (1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz at
    894.000-895.500 MHz). License D would be located in the upper 0.5
    MHz portion of each 2 MHz band (0.5 MHz at 850.500-851.000 MHz
    paired with 0.5 MHz at 895.500-896.000 MHz).

[^125]: License E would be located in the lower 0.5 MHz portion of each
    2 MHz band (0.5 MHz at 849.000-849.500 MHz paired with 0.5 MHz at
    894.000-894.500 MHz). License F would be located in the upper 1.5
    MHz portion of each 2 MHz band (1.5 MHz at 849.500-851.000 MHz
    paired with 1.5 MHz at 894.500-896.000 MHz).

[^126]: *See infra* paras. 39-44.

[^127]: *See Notice*, 18 FCC Rcd at 8389 ¶17.

[^128]: Federal Communications Commission, Strategic Plan FY 2003-FY
    2008 at 5 (2002).

[^129]: *See infra* paras. 75-76.

[^130]: AirCell, Boeing, Space Data, and Verizon Airfone each urge us to
    enable the deployment of CDMA. *See,* *e.g.*, AirCell October 13
    Presentation at 5; Boeing Proposed Rules at n.2. Verizon Airfone
    also urges us to enable the deployment of FLASH-OFDM. *See* Verizon
    Airfone Response to FCC at 5.

[^131]: *See* Letter from Dean R. Brenner, Senior Director, Government
    Affairs, QUALCOMM Incorporated, to Marlene H. Dortch, Secretary,
    Federal Communications Commission, dated Sept. 3, 2004, at 2; Letter
    from Michael J. Thornton, Flarion Technologies Inc., to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Sept. 2,
    2004, at 1.

[^132]: *See* AirCell October 13 Presentation at 5; Boeing Proposed
    Rules at n.2; Verizon Airfone Response to FCC at 5. Space Data,
    however, suggests that CDMA could be deployed in 2.5 MHz. *See*
    Space Data December 8 *Ex parte*.

[^133]: *See* 47 C.F.R. § 1.9005.

[^134]: *See* 47 C.F.R. §§ 1.948(e) & (f).

[^135]: The FAA forecasts that, over the ten-year period from 2005
    through 2015, aviation passenger traffic is expected to increase by
    45 percent, to over one billion passengers. *See* Views and
    Estimates of the Committee on Transportation and Infrastructure for
    FY 2005, located at
    <http://www.house.gov/transportation/views2005.html>.

[^136]: Certain spacing requirements are necessary in border areas.

[^137]: In the event that the parties determine that more than six
    months is required to prepare and file the plan, they may request an
    extension of the six-month period.

[^138]: We note that the parties may seek confidential treatment of the
    plan in accordance with the Commission's rules and policies. *See,
    e.g.*, 47 C.F.R. § 0.459.

[^139]: *See* AirCell Further Notes on the Deployment of Two
    Cross-Polarized Systems at 3.

[^140]: *See* Letter from Robert S. Bray, Deputy Assistant Director,
    Federal Air Marshal Service, U.S. Immigration and Customs
    Enforcement, U.S. Department of Homeland Security, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Nov. 2,
    2004.

[^141]: *See*, *e.g.,* AirCell October 1 Presentation to FCC at 3.

[^142]: 47 U.S.C. § 151.

[^143]: AirCell states that a handoff of traffic between an air-ground
    system and a terrestrial system at 500 feet would facilitate the
    provision of deck-to-deck service. *See* AirCell Two Cross-Polarized
    Systems in the ATG Band at 3-5. *See also* AirCell Further Notes on
    the Deployment of Two Cross-Polarized Systems at 4-7.

[^144]: *See* AirCell September 9 Response to FCC at 1-2; Boeing
    Response to Verizon Airfone's *Ex parte* Presentation of September 3
    and 10, 2004 at 4-5.

[^145]: *See* AirCell Air-to-Ground Myths & Realities at 4.

[^146]: *See, e.g.,* Letter from the Honorable Fred Upton, Chairman,
    House Energy and Commerce Subcommittee on Telecommunications and the
    Internet, to Michael Powell, Chairman, Federal Communications
    Commission, dated Dec. 10, 2004 (the Commission should "enable
    competition in the air-to-ground marketplace"); Letter from the
    Honorable Conrad Burns, Deputy Whip, United States Senate, to
    Michael Powell, Chairman, Federal Communications Commission, dated
    Dec. 1, 2004 (the Commission should "formulate a policy that
    promotes competition in air-ground services"); Letter from Robert C.
    Land, Vice President of Government Affairs and Associate General
    Counsel, JetBlue Airways, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 6, 2004; Letter from Luisa L.
    Lancetti, Vice President, Wireless Regulatory Affairs, Sprint, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Dec. 3, 2004; Letter from Edward P. Faberman, Executive
    Director, Air Carrier Association of America, to Marlene H. Dortch,
    Secretary, Federal Communications Commission, dated Oct. 4, 2004.

[^147]: *See* Letter from Thomas J. Sugrue, Vice President, Government
    Affairs, T-Mobile USA, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Nov. 15, 2004.

[^148]: *See* AirCell Air-to-Ground Myths & Realities at 4; Letter from
    Howard J. Symons, Mintz Levin Cohn Ferris Glovsky and Popeo, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Nov. 16, 2004, transmitting "Bidders in an ATG Auction Should
    Be Limited To Acquiring a Single License" ("Boeing November 16 *Ex
    parte*"); Space Data November 16, 2004 Presentation at 7-9.

[^149]: *See* Letter from Donald C. Brittingham,
    Director-Wireless/Spectrum Policy, Verizon, to Marlene H. Dortch,
    Secretary, Federal Communications Commission, dated Dec. 8, 2004.

[^150]: *See Notice*, 18 FCC Rcd at 8389 ¶17.

[^151]: *See supra* paras. 14-20.

[^152]: *See infra* para. 45.

[^153]: *See supra* para. 32.

[^154]: *See supra* para. 31.

[^155]: *See infra* para. 49.

[^156]: *See* AirCell London Declaration at 9 ¶16 (noting that
    "\[c\]ompetition between providers would encourage innovation and
    deployment of new technologies").

[^157]: *See, e.g.*, Allocations and Service Rules for the 71-76 GHz,
    81-86 GHz and 92-95 GHz Bands, *Report and Order*, 18 FCC Rcd 23318,
    23346-47 ¶¶69-70 (2003); Amendment of Parts 2 and 25 of the
    Commission\'s Rules to Permit Operation of NGSO FSS Systems
    Co-Frequency with GSO and Terrestrial Systems in the Ku-Band
    Frequency Range, Amendment of the Commission\'s Rules to Authorize
    Subsidiary Terrestrial Use of the 12.2-12.7 GHz Band by Direct
    Broadcast Satellite Licensees and Their Affiliates, and Applications
    of Broadwave USA, PDC Broadband Corporation, and Satellite
    Receivers, Ltd. to Provide a Fixed Service in the 12.2-12.7 GHz
    Band, *Memorandum Opinion and Order and Second Report and Order*, 17
    FCC Rcd 9614, 9677-82 ¶¶159-70 (2002); Amendment of the
    Commission\'s Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz
    Bands, 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 Rule Making*, 12 FCC Rcd 18600,
    18619-20 ¶¶32-35 (1997).

[^158]: *See, e.g.*, AirCell London Declaration at 16 ¶30 ("the FCC
    should not risk auctioning a single ATG license"); Boeing November
    16 *Ex parte* at 1 (noting that the benefits of competition will be
    negated if a single entity is permitted to occupy the entire
    air-ground band); Space Data November 16, 2004 Presentation at 4
    (noting that a holder of an exclusive 4 MHz license would have no
    incentive to provide a competitor with access to the air-ground
    market).

[^159]: *See* 2000 Biennial Regulatory Review, Spectrum Aggregation
    Limits for Commercial Mobile Radio Services, *Report and Order*, 16
    FCC Rcd 22668, 22669, 22671, 22704-705, 22708-709 ¶¶2, 7, 78, 88-89
    (2001); 1998 Biennial Regulatory Review, Spectrum Aggregation Limits
    for Wireless Telecommunications Carriers, *Report and Order*, 15 FCC
    Rcd 9219, 9256 ¶82 (1999).

[^160]: *De jure* control is evidenced by holdings of greater than 50
    percent of the voting stock of a corporation, or in the case of a
    partnership, general partnership interests. *De facto* control is
    determined on a case-by-case basis.

[^161]: 47 C.F.R. §§ 1.2110(c)(2) & (5). These provisions define
    controlling interests and affiliates for the purpose of determining
    auction applicants' eligibility for small business provisions.

[^162]: 47 C.F.R. § 1.2110(c)(2)(ii)(A)(1).

[^163]: [47 C.F.R. §§ 1.2105(c)(2)(ii)(H) &
    (I)](http://www.westlaw.com/Find/Default.wl?rs=++++1.0&vr=2.0&DB=1000547&DocName=47CFRS1.2105&FindType=L).

[^164]: *See* In the Matter of Service Rules for Advanced Wireless
    Services in the 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and
    2175-2180 MHz Bands, *Notice of Proposed Rulemaking*, 19 FCC Rcd
    19263, 19272 ¶22 (2004) ("*Advanced Wireless Services Notice*").
    Sprint suggests that the Commission specifically designate spectrum
    in these bands for air-ground service. *See* Letter from Luisa L.
    Lancetti, Vice President, Wireless Regulatory Affairs, Sprint, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Dec. 3, 2004.

[^165]: *See* Joints Comments of Sprint Corporation and Verizon
    Wireless, WT Dkt No. 04-356, at 5 (filed Dec. 8, 2004).

[^166]: *See* Comments of T-Mobile USA, Inc., WT Dkt No. 04-356, at 8
    n.17 (filed Dec. 8, 2004). *But cf.* Comments of Nextel
    Communications, WT Dkt No. 04-356, at 6 (filed Dec. 8, 2004)
    (asserting that use of this spectrum for air-ground service has the
    potential to cause interference to services in adjacent spectrum
    bands).

[^167]: American Airlines urges us to view the market for the
    competitive provision of air-ground services as including services
    in the 800 MHz air-ground band and satellite-based services. *See*
    American Airlines Letters, *supra* note 34.

[^168]: *See supra* paras. 14-20.

[^169]: *See id*.

[^170]: *See* Boeing Response to Verizon Airfone's *Ex parte*
    Presentations of September 3 and 10, 2004 at 3.

[^171]: Boeing Reply Comments at 7.

[^172]: *See id.*

[^173]: *See* Satcom Shakeout, Business & Commercial Aviation, Fred
    George, at 89 (Sept. 2004) (noting that Ku-band satellite
    communications systems have the potential to provide 10 Mbps
    satellite-to-aircraft download speeds).

[^174]: *See* Letter from Carlos M. Nalda, Steptoe and Johnson, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Dec.11, 2003, transmitting "Connexion by Boeing Aeronautical
    Broadband" at Slide 9. *See also* Broad Verizon, Shepard's Inflight,
    Vol. 10, No. 3 at 11 (Autumn 2004) (noting that, according to
    Verizon Airfone, terrestrial infrastructure may be more economical
    than satellite infrastructure to serve domestic markets). *See also*
    Amendment of the Commission's Rules Relative to Allocation of the
    849-851/894-896 MHz Bands, *Report and Order*, 5 FCC Rcd 3861, 3863
    ¶19 (1990) (noting that the cost of providing air-ground services
    "via satellite is likely to be greater, at least initially, than the
    cost of such service over terrestrial-based facilities").

[^175]: Latency refers to the delay between when a TCP/IP packet is
    transmitted through the system and when it is received.

[^176]: *See supra* paras. 14-20.

[^177]: *See supra* para. 21.

[^178]: Space Data November 29 Analysis at 2.

[^179]: *See supra* para 22. AirCell serves more than 1,400 customers
    and uses no more than six cellular channels (360 kHz authorized
    bandwidth) per ground station.

[^180]: AGRAS provides two-way telephone service with only 520 kHz of
    authorized bandwidth in the United Sates and Canada.

[^181]: We note there is a wide variety of airborne operations that
    could benefit from air-ground services, such as passenger airlines;
    commercial transport; business jets; general aviation including
    small business, propeller aircraft, pleasure flying, crop dusting,
    power line inspection, police and public safety, emergency medical
    transport, and traffic helicopters; and government aircraft. Many
    aircraft fly at 5,000 to 10,000 feet and would have service demands
    other than broadband internet.

[^182]: *See, e.g.*, AirCell Air-to-Ground Myths & Realities at 2
    (suggesting major airlines might pressure an air-ground licensee not
    to serve some market segments).

[^183]: *See* AirCell London Declaration at 11 ¶20.

[^184]: *See* 47 U.S.C. § 332(c)(1); 47 C.F.R. §§ 20.9(a)(8), 20.15(a).

[^185]: *See* In The Matter of Implementation of Sections 3(n) and 332
    of the Communications Act---Regulatory Treatment of Mobile Services,
    *Second Report and Order*, 9 FCC Rcd 1411 (1994) ("*CMRS Second
    Report and Order*").

[^186]: *See* Personal Communications Industry Association\'s Broadband
    Personal Communications Services Alliance\'s Petition for
    Forbearance for Broadband Personal Communications Services,
    *Memorandum Opinion and Order and Notice of Proposed Rulemaking*, 13
    FCC Rcd 16857 (1998).

[^187]: *See* 47 U.S.C. § 201(a).

[^188]: *See* 47 U.S.C. § 201(b).

[^189]: Verizon Airfone states that, in the event it deploys broadband
    service in the air-ground band, any passenger could access a WiFi
    hot spot installed on an aircraft regardless of their service
    provider though roaming agreements with wireless companies, ISPs,
    and others that provide their customers with WiFi Access. *See*
    Letter from Donald C. Brittingham, Director-Wireless/Spectrum
    Policy, Verizon, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Oct. 21, 2004.

[^190]: Sections 201 and 202 are enforced through the formal complaint
    process established in section 208 of the Act, 47 U.S.C. § 208.
    Under section 208, any aggrieved party may file a petition with the
    Commission complaining of an alleged violation of these provisions.

[^191]: *CMRS Second Report and Order*, 9 FCC Rcd at 1418, 1480.

[^192]: *Id.* at 1480.

[^193]: *Id*. at 1469-1470.

[^194]: *See* *supra* note 29.

[^195]: *Notice*, 18 FCC Rcd at 8390 ¶21.

[^196]: *See* Letter from Thomas J. Sugrue, Vice President, Government
    Affairs, T-Mobile USA, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Nov. 15, 2004.

[^197]: *See* AirCell Air-to-Ground Myths & Realities at 1; Boeing
    December 8 *Ex parte*; Letter from Trey Hanbury, Senior Counsel,
    Nextel Communications, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 8, 2004 (letter regarding
    ancillary spectrum use); Letter from Luisa L. Lancetti, Vice
    President, Wireless Regulatory Affairs, Sprint, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Dec. 3,
    2004. *See also* Cingular Wireless Comments at 6-9; AMTA Comments at
    4.

[^198]: For example, licensees could utilize directional or smart
    antennas to increase capacity.

[^199]: 47 C.F.R. § 22.867.

[^200]: Comments of The Goeken Group Corporation, Gen. Dkt. No. 88-96,
    Exhibit B, ¶9 (filed Aug. 8, 1989).

[^201]: *See, e.g.,* AirCell/Boeing Joint Proposal at 3-8.

[^202]: AirCell actually specifies 23 dBm EIRP, which is equal to
    0.12 Watts ERP.

[^203]: *See* Coexistence Analysis for cross-duplex air-to ground
    system, filed Apr. 12, 2004, at 19. Verizon actually specifies
    43 dBm EIRP, which is equal to 12.2 Watts ERP.

[^204]: *See, e.g.*, AirCell/Boeing Joint Proposal at 3-8.

[^205]: 47 C.F.R § 1.1310.

[^206]: AirCell Response to Nextel's Analysis on Wideband Air-to-Ground
    Inference, filed Nov. 23, 2004 ("AirCell November 23 *Ex parte*").

[^207]: Letter from Christopher Guttman-McCabe, CTIA, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Dec. 6,
    2004 ("CTIA December 6 *Ex parte*")

[^208]: Letter from Steve B. Sharkey, Director, Spectrum and Standards
    Strategy, Motorola, Inc., to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Nov. 4, 2004 ("Motorola November 4
    *Ex parte*")

[^209]: *See* Letter from Trey Hanbury, Senior Counsel, Nextel
    Communications, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 8, 2004 (proposing ten
    adjacent band interference mitigation measures) ("Nextel December 8
    *Ex parte*"); Letter from Trey Hanbury, Senior Counsel, Nextel
    Communications, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 8, 2004 (letter regarding
    ancillary spectrum use); Letter from Trey Hanbury, Senior Counsel,
    Nextel Communications, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Dec. 6, 2004, transmitting "Harmful
    Interference from Wideband Air-to-Ground Systems into Public Safety,
    Specialized Mobile Radio, and Cellular Operations" ("Nextel December
    6 *Ex parte*"); Wideband Air-to-Ground Interference Analysis of
    Nextel Communications, Nov. 16, 2004 ("Nextel November 16 *Ex
    parte*").

[^210]: *See* Letter from Dean R. Brenner, Senior Director, Government
    Affairs, QUALCOMM Incorporated, to Marlene H. Dortch, Secretary,
    Federal Communications Commission, dated Dec. 8, 2004 ("QUALCOMM
    December 8 *Ex parte*").

[^211]: *See* Letter from Robert M. Gurss, Director, Legal & Government
    Affairs, APCO, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, dated Nov. 29, 2004 ("APCO November 29
    *Ex parte*")

[^212]: These services are the Cellular Radiotelephone Service, the 900
    MHz SMR service, and miscellaneous (interleaved) land mobile
    services, including Business, Industrial, Land Transportation and
    Public Safety.

[^213]: *See* Nextel November 16 *Ex parte* at 16. Nextel offers
    worst-case calculations indicating that OOBE from cellular base
    stations could increase the noise floor in air-ground ground station
    receivers. It does not appear that such an increase would cause the
    effects that constitute harmful interference.

[^214]: Existing rules, such as Section 22.917, 47 C.F.R. § 22.917,
    regarding cellular service, and Section 90.210, 47 C.F.R. § 90.210,
    regarding the land mobile services, already provide some
    interference protection to the 800 MHz air-ground band.

[^215]: *See* QUALCOMM December 8 *Ex parte* at 1.

[^216]: Specifically, QUALCOMM asserts that the received power from
    ground station OOBE into cellular receivers should be limited to no
    more than −117 dBm within a 1.25 MHz bandwidth. *Id.* Because
    QUALCOMM apparently based this specification on preventing more than
    a *de minimis* increase to the purported noise floor of a cellular
    base receiver, we do not agree that it is appropriate as a generally
    applicable metric for determining harmful interference to cellular
    systems.

[^217]: *See* QUALCOMM December 8 *Ex parte* at 2.

[^218]: *See id.*

[^219]: QUALCOMM also argues that, in order to protect cellular base
    station receivers, the guard band within the air-ground band and
    adjacent to the cellular band should be even larger than it had
    previously advocated. *See* *id.* at 1-2.

[^220]: The 890-902 MHz band is also allocated to radiolocation
    operations on Government ships, but no new authorizations were to be
    granted for such operations after 1970. By reversing the base and
    mobile receive frequencies between the 849 MHz and 894 MHz bands,
    the potential for ship radiolocation operations to interfere with
    airborne receivers in the 894 MHz band was eliminated and ground
    station receivers would not likely be impacted by shipborne
    radiolocation operations. *See* 47 C.F.R. § 2.106 footnotes G2,
    US116 and US268.

[^221]: The current reversal of the base and mobile transmit bands means
    that the main potential path for interference is from cellular base
    station to air-ground base stations, and vice versa, and from
    airborne mobiles to cellular mobiles, and vice versa. The airborne
    mobiles, however, are generally too far away from terrestrial
    cellular mobiles when operating for mobile-to-mobile interference to
    occur.

[^222]: These technologies include GSM, TDMA, CDMA, and OFDM.

[^223]: *See* 47 C.F.R. § 22.917(d). *See also* *id.* §§ 24.238(d),
    27.53(k).

[^224]: AirCell and Boeing propose to hand off air-ground service to
    terrestrial services (such as PCS) during take-off, landing, and
    while on the ground. *See* AirCell Further Notes on the Deployment
    of Two Cross-Polarized Systems at 4-7.

[^225]: *See* *800 MHz Order*, 19 FCC Rcd at 15050 ¶151.

[^226]: Nextel November 16 *Ex parte* at 12. For example, Nextel
    calculates a 53 dB excess over the recently adopted public safety
    protection level for a public safety receiver located 50 meters (164
    feet) away from a broadband air-ground ground station. Nextel's
    calculations are based on worst-case assumptions with regard to OOBE
    levels and propagation factors.

[^227]: *See* *800 MHz Order* at 15029-30 ¶¶105-107 (to be codified at
    47 C.F.R. §§ 22.970(b), 90.672).

[^228]: *See* AirCell November 23 *Ex parte* at 10-11; APCO November 29
    *Ex parte* at 1; Motorola November 4 *Ex parte* at 2-3; Nextel
    November 16 *Ex parte* at 12. Nextel, however, suggests that we
    adopt additional adjacent band interference mitigation measures.
    *See* Nextel December 6 *Ex parte* at 5 and Nextel December 8 *Ex
    parte*.

[^229]: *See* Letter from William J. Gordon, VP, Regulatory Affairs,
    AirCell, to Marlene H. Dortch, Secretary, Federal Communications
    Commission, dated Dec. 7, 2004.

[^230]: *See* Nextel December 8 *Ex parte;* Nextel December 6 *Ex parte*
    at 5.

[^231]: *See* Nextel December 8 *Ex parte* at 1*.*

[^232]: *See* *id.* at 1, 3.

[^233]: *See* Nextel November 16 *Ex parte* at 15-16. Nextel offers
    worst-case calculations indicating that OOBE from nearby airborne
    mobile stations could increase the noise floor in 900 MHz SMR
    receivers. It does not appear that such an increase would cause the
    effects that constitute harmful interference.

[^234]: *See* Nextel December 6 *Ex parte* at 4.

[^235]: *See* 47 C.F.R. §§ 22.917, 24.238.

[^236]: 47 C.F.R. § 22.863.

[^237]: 47 C.F.R. § 22.865.

[^238]: *See supra* para. 34 & notes 137, 138.

[^239]: Skyway, however, has an STA to continue operating the old
    ClairCom system subject to the outcome of this proceeding. *See
    supra* note 33.

[^240]: Airfone's application for renewal of its authorization is
    pending. *See* File No. 0001716212 (filed Apr. 28, 2004).

[^241]: *See* Verizon Airfone September 9 Statement at n.5.

[^242]: *See supra* para. 52.

[^243]: *See* Amendment of the Commission's Rules to Provide Channel
    Exclusivity to Qualified Private Paging Systems at 929-930 MHz,
    *Report and Order,* 8 FCC Rcd 8318 (1993), recon. granted in part,
    11 FCC Rcd 3091 (1996) ("*929 Paging Order"*).

[^244]: *Id.*

[^245]: *See, e.g.*, AirCell Response to FCC Questions at 7 (noting that
    "the incumbent system will create severe interference upon the
    broadband systems"); Verizon Comments at 10.

[^246]: *See supra* para. 31.

[^247]: We note that the demand for Verizon Airfone service has declined
    80 percent in recent years, from an average of 15 users to only
    three users per flight. *See* Joe Sharkey, "Almost here: Cell phones
    at 37,000 feet," N.Y. Times, Oct. 10, 2004, at C6.

[^248]: Verizon Airfone September 10 Statement at 20.

[^249]: This spectrum includes all of former channel blocks 1 and 2 and
    approximately half of former channel block 3.

[^250]: This spectrum includes all of former channel blocks 10 and 9 and
    approximately half of former channel block 8.

[^251]: Verizon Airfone Comments at 10.

[^252]: Specifically, Sections 22.857, 22.859, 22.863, 22.865, 22.869,
    and 22.871 are deleted. Sections 22.861 and 22.867 are amended to
    provide basic technical parameters for the new licensees.

[^253]: Verizon Airfone September 9 Statement at 5-6.

[^254]: Verizon Airfone Comments at 10.

[^255]: Verizon Airfone September 10 Statement at 20.

[^256]: Verizon Airfone September 9 Statement at 4.

[^257]: The FCC will submit coordination requests seeking any formal
    approvals needed under the existing international agreements, and
    will seek to update these agreements with these countries.

[^258]: 47 C.F.R. § 22.861(b).

[^259]: *See, e.g.*, AirCell Response to FCC Questions at 7 (noting that
    "the incumbent system will create severe interference upon the
    broadband systems"); Verizon Comments at 10.

[^260]: *See supra* para. 31.

[^261]: If band plan 1 is implemented, licensees A and B initially would
    share 1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz at
    894.000-895.500 MHz. Once Verizon Airfone's incumbent system ceases
    operations in the upper 0.5 MHz of each band, licensee B would shift
    its operations to 1.5 MHz at 849.500-851.000 MHz paired with 1.5 MHz
    at 894.500-896.000 MHz.

[^262]: *See supra* para. 76.

[^263]: *Id*.

[^264]: 47 U.S.C. § 309(j)(4)(B).

[^265]: *See*
    [[http://www.faa.gov/arp/regions.cfm]{.underline}](http://www.faa.gov/arp/regions.cfm)
    (FAA regions).

[^266]: *See*
    <http://www.faa.gov/arp/planning/stats/2002/CY02CommSerBoard.pdf>
    (FAA 2002 passenger boarding data).

[^267]: *See* 47 C.F.R. §§ 22.805-22.819.

[^268]: SkyTel Comments at 2.

[^269]: *Id.*

[^270]: In addition to the rules revised or eliminated as discussed
    below, we take this opportunity to update and reorganize the general
    aviation air-ground rules. In particular, we redesignate current
    Section 22.803 of the general rules as new Section 22.807 of the
    general aviation air-ground rules, and delete certain superfluous
    language therein that relates to the Rural Radiotelephone Service.

[^271]: *See infra* paras. 169-178.

[^272]: 47 C.F.R. § 22.3(b)(1).

[^273]: 47 C.F.R. § 1.903(c).

[^274]: FCC Form 409 was adopted in 1976. *See* Amendment of Part 21,
    Domestic Public Radio Services (Other than Maritime Mobile) and
    Adoption of FCC Form 409, *Order*, 63 FCC 2d 228 (1976).

[^275]: *Notice*, 18 FCC Rcd at 8391 ¶25.

[^276]: SkyTel Comments at 2. *See also* Able Communications Comments at
    3.

[^277]: SkyTel Comments at 3.

[^278]: *Notice*, 18 FCC Rcd at 8392 ¶27.

[^279]: 47 C.F.R. §§ 1.1102, 1.2003.

[^280]: 47 C.F.R. § 22.811.

[^281]: *Notice*, 18 FCC Rcd at 8408 ¶73.

[^282]: *Id.*

[^283]: SkyTel Comments at 4.

[^284]: Able Communications Comments at 2. The commenter also states
    that older equipment still uses the idle control tones.

[^285]: 47 C.F.R. § 22.815.

[^286]: 47 C.F.R. § 22.142 (1997).

[^287]: 47 C.F.R. § 1.946.

[^288]: *Notice*, 18 FCC Rcd at 8408 ¶ 74; *see* [Biennial Regulatory
    Review---Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80, 90, 95, 97
    and 101 of the Commission's Rules to Facilitate the Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Services, *Report and Order*, 13 FCC Rcd 21027
    (1998) ("*ULS Report and Order*"); *Memorandum Opinion and Order on
    Reconsideration*, 14 FCC Rcd 11145
    (1998).](http://web2.westlaw.com/Find/Default.wl?DB=4493&SerialNum=1998267573&FindType=Y&AP=&RS=WLW2.78&VR=2.0&SV=Split&MT=Westlaw&FN=_top)

[^289]: 47 C.F.R. § 22.819.

[^290]: *See* "Technical Reference, Air-ground Radiotelephone Automated
    Service (AGRAS), System Operation and Equipment Characteristics,"
    REF: 650-0244-000, dated Apr. 12, 1985.

[^291]: *Id.*

[^292]: *Notice*, 18 FCC Rcd at 8408 ¶74.

[^293]: *Id.* at 8408-09 ¶75.

[^294]: 47 C.F.R. § 22.819.

[^295]: SkyTel Comments at 4.

[^296]: 47 C.F.R. § 22.3(b). Accordingly, end users do not file
    applications with the Commission for authority to use their mobile
    phones.

[^297]: *Notice*, 18 FCC Rcd at 8391 ¶24.

[^298]: *Id.*

[^299]: 47 C.F.R. § 22.7.

[^300]: *Notice*, 18 FCC Rcd at 8392-93 ¶28.

[^301]: *Id.* at 8393 ¶29.

[^302]: *Id.* at 8393 ¶29 n.79.

[^303]: *Id.* at 8391-94 ¶¶24-30.

[^304]: Blooston Comments at 8.

[^305]: *See, e.g.*, AMTA Comments at 6; Cingular Wireless Comments at
    18; Joint Comments at 3-4; and NYSE&GC Reply Comments at 3-4.

[^306]: *See* Able Communications Comments at 4; Arch Wireless Comments
    at 6.

[^307]: Health Insurance Portability and Accountability Act of 1996,
    Pub. L. No. 104-191 (1996).

[^308]: Arch Wireless Comments at 6-7.

[^309]: Able Communications Comments at 4.

[^310]: Blooston Comments at 3, 7.

[^311]: 47 C.F.R. § 17.7 (antenna structures requiring notification to
    the FAA).

[^312]: 47 C.F.R. § 22.143(d)(4).

[^313]: *Notice*, 18 FCC Rcd at 8394 ¶31.

[^314]: *Id*.

[^315]: *See* FCC's Wireless Bureau Announces Reorganization, *Public
    Notice* (rel. Nov. 24, 2003).

[^316]: *Notice*, 18 FCC Rcd at 8394-95 ¶33.

[^317]: *See Notice*, 18 FCC Rcd at 8394 ¶32; 47 C.F.R. §§ 22.157,
    90.309(a)(1).

[^318]: 47 C.F.R. § 73.611.

[^319]: *See Notice*, 18 FCC Rcd at 8394 ¶32.

[^320]: *See* 47 C.F.R. § 1.901.

[^321]: *See* 47 C.F.R. § 1.902.

[^322]: Cingular Wireless Comments at 18; Verizon Airfone Reply Comments
    at 7.

[^323]: The equator is a great circle as are all meridians of longitude.
    This distance calculation method can prove to be more accurate for
    longer distances as it relies on a spherical, not flat, earth.
    However, the Great Circle Route requires hi-precision transcendental
    functions in order to achieve accuracy at shorter distances.

[^324]: If an applicant deems the distance calculation methodology set
    forth in new Section 1.958 to not be accurate, it can always seek a
    waiver to use an alternative methodology under the applicable
    Commission waiver standards.

[^325]: 47 C.F.R. § 22.159.

[^326]: 47 C.F.R. § 90.309(a)(4).

[^327]: 47 C.F.R. § 90.309(a)(4).

[^328]: Parts 20, 21, 87, 95 and 97 have no height above average terrain
    ("HAAT") rules. Section 24.53, 47 C.F.R. § 24.53, is generally the
    same as Section 22.159. Part 27 defines \"average terrain
    elevation\" in Section 27.4, 47 C.F.R. § 27.4, and uses HAAT in
    Section 27.50, 47 C.F.R. § 27.50, but does not specify how to
    calculate it. Section 80.757, 47 C.F.R. § 80.757, provides that
    average terrain elevation may be either computer-generated or
    derived from the use of topographical maps. Section 80.759, 47
    C.F.R. § 80.759, provides details of the manual method, where height
    above average terrain is determined by calculations based on the
    drawing of radials away from the antenna site. Part 101 refers to
    "AAT" in Sections 101.105 and 101.1333, 47 C.F.R. §§ 101.105,
    101.1333, but does not specify how it shall be calculated.

[^329]: *Notice*, 18 FCC Rcd at 8395 ¶34.

[^330]: *Id*.

[^331]: *See* Verizon Wireless Comments at 10; Cingular Wireless
    Comments at 18.

[^332]: *Notice*, 18 FCC Rcd at 8395 ¶34.

[^333]: 47 C.FR. § 90.309(a)(4).

[^334]: 47 C.F.R. § 22.161.

[^335]: *Notice*, 18 FCC Rcd at 8396 ¶35.

[^336]: We also eliminate the reference to this section in the
    definition of "Channel" in Section 22.99. *See* 47 C.F.R. § 22.99.

[^337]: *Notice*, 18 FCC Rcd at 8396 ¶35.

[^338]: 47 C.F.R. § 22.357.

[^339]: 47 C.F.R. § 22.351.

[^340]: This sentence provides: "Except as otherwise provided in this
    part, each channel or channel block is assigned exclusively to one
    common carrier in each service area." 47 C.F.R. § 22.351.

[^341]: *Notice*, 18 FCC Rcd at 8396 ¶36.

[^342]: *See* *supra* paras. 99-103.

[^343]: 47 C.F.R. § 22.352.

[^344]: *Notice*, 18 FCC Rcd at 8396 ¶37.

[^345]: *See id*.

[^346]: 47 C.F.R. § 22.99.

[^347]: 47 C.F.R. § 22.357.

[^348]: 47 C.F.R. § 22.359.

[^349]: 47 C.F.R. § 22.861.

[^350]: *See, e.g.*, 47 C.F.R. §§ 27.53(a)(10) (Wireless Communications
    Services), 22.917 (Cellular), and 24.238 (Broadband PCS); *Cellular
    Year 2000 Biennial Report and Order*, 17 FCC Rcd at 18426 ¶6.

[^351]: *Notice*, 18 FCC Rcd at 8397 ¶38.

[^352]: *Id*.

[^353]: Cingular Wireless Comments at 18; Verizon Wireless Comments at
    10.

[^354]: NTIA Comments at 3. Our definitions specifically define OOBE and
    spurious emissions separately. *See* 47 C.F.R. § 2.1. We recognize
    that our usage of this terminology in Part 22 and other
    wireless parts and in recent wireless proceedings does not precisely
    track the ITU definitions.  We use the term "OOBE" to mean what the
    ITU calls "unwanted emissions."  Although we agree with NTIA that it
    would be preferable to harmonize our terms with those of the ITU,
    doing so is beyond the scope of this proceeding. We look forward,
    however, to addressing this issue in the future.

[^355]: NTIA Comments at 2-3.

[^356]: 47 C.F.R. § 22.361.

[^357]: *Notice*, 18 FCC Rcd at 8397 ¶39.

[^358]: *See* Verizon Wireless Comments at 10.

[^359]: *See, e.g.*, Biennial Regulatory Review---Amendment of Parts 1,
    22, 24, 27, and 90 to Streamline and Harmonize Various Rules
    Affecting Wireless Radio Services, *Notice of Proposed Rule Making*,
    19 FCC Rcd 708 ¶3 (2004).

[^360]: 47 C.F.R. §§ 22.363, 22.361, Table C-2.

[^361]: *Notice*, 18 FCC Rcd at 8397 ¶40.

[^362]: *Id*.

[^363]: Verizon Wireless Comments at 10.

[^364]: 47 C.F.R. § 22.367. This section specifies when vertical,
    horizontal, or circular polarization may be used for Part 22
    Services.

[^365]: *Notice*, 18 FCC Rcd at 8397-98 ¶41. We also noted that other
    CMRS providers, such as PCS and SMR providers, are not subject to a
    wave polarization requirement, and that the Commission recently
    eliminated the vertical wave polarization requirement for base,
    mobile, and auxiliary test transmitters in the Cellular
    Radiotelephone Service. *Cellular Year 2000 Biennial Report and
    Order*, 17 FCC Rcd at 18427 ¶48 (2002).

[^366]: *Notice*, 18 FCC Rcd at 8397 ¶41.

[^367]: Verizon Wireless Comments at 10.

[^368]: 47 C.F.R. § 22.373.

[^369]: *Notice*, 18 FCC Rcd at 8397 ¶41.

[^370]: 47 C.F.R. § 22.379.

[^371]: *Notice*, 18 FCC Rcd at 8398 ¶43.

[^372]: 47 C.F.R. § 22.381.

[^373]: *Id.*

[^374]: *Notice*, 18 FCC Rcd at 8398 ¶44.

[^375]: 47 C.F.R. § 22.99.

[^376]: 47 C.F.R. § 22.383.

[^377]: 47 C.F.R. § 22.352(c)(7).

[^378]: 47 C.F.R. § 17.14(a).

[^379]: 47 C.F.R. § 22.377.

[^380]: *Notice*, 18 FCC Rcd at 8399 ¶45. We also concluded that the
    cross-reference to this section in Section 22.352(c)(7) should be
    eliminated.

[^381]: Verizon Wireless Comments at 11-12.

[^382]: *See id.* at 11.

[^383]: 47 C.F.R. Pt. 22, Subpt. D.

[^384]: *Notice*, 18 FCC Rcd at 8399 ¶46.

[^385]: *Id*.

[^386]: 47 C.F.R. §§ 22.411, 22.531(a).

[^387]: 47 C.F.R. § 22.411(b).

[^388]: *Notice*, 18 FCC Rcd at 8399 ¶47.

[^389]: 47 C.F.R. § 22.415.

[^390]: *Notice*, 18 FCC Rcd at 8399-40 ¶48. In the *Multiple Address
    Systems Order,* the Commission amended Section 22.621 to prohibit
    the issuance of new licenses for any 900 MHz frequencies listed in
    that section. *See* In the Matter of Amendment of the Commission\'s
    Rules Regarding Multiple Address Systems, *Report and Order*, 15 FCC
    Rcd 11,956 (2000) ("*Multiple Address Systems Order*"), *corrected
    by* Amendment of Commission\'s Rules Regarding Multiple Address
    Systems, *Erratum*, 15 FCC Rcd 16415 (WTB, PSPWD 2000).

[^391]: *Notice*, 18 FCC Rcd at 8399-4000 ¶48.

[^392]: *Id.*

[^393]: 47 C.F.R. § 22.417.

[^394]: 47 C.F.R. § 22.725(c).

[^395]: 47 C.F.R. § 22.729.

[^396]: *Notice*, 18 FCC Rcd at 8400 ¶49. Moreover, the 44.20 MHz
    channel is available under Part 22 only on a secondary basis to
    operations authorized under Part 90. *See* 47 C.F.R. § 22.729(a).

[^397]: *Notice*, 18 FCC Rcd at 8400-8401 ¶50.

[^398]: 47 C.F.R. § 22.99.

[^399]: 47 C.F.R. § 22.313(a)(3).

[^400]: 47 C.F.R. § 22.727(f).

[^401]: A CIC connects the outermost points of the intersecting
    interference contours for the base stations in a radio system.

[^402]: 47 C.F.R. §§ 1.929(c)(1), 1.947. *See* Karl A. Rinker, d/b/a
    Rinker's Communications, *Request for Declaratory Ruling*, 14 FCC
    Rcd 19546 (WTB, CWD 1999) (any CIC increase, including an extension
    over water, is a major filing under Section 1.929(c)(1)).

[^403]: Wireless Telecommunications Bureau Seeks Comment On Request For
    Rule Change And Conditionally Waives Section 1.929(C)(1) To Permit
    Expansion Of Paging Contours Over Water On A Secondary Basis,
    *Public Notice*, 16 FCC Rcd 5563 (2001). The conditional waiver was
    granted pending a decision on a Request for Rule Change filed by the
    Personal Communications Industry Association (PCIA). PCIA's Request
    sought to amend Section 1.929(c)(1) so that expansions of paging
    CICs that occur solely (1) beyond the land border of the United
    States, or (2) over large bodies of water (oceans, gulfs, sounds,
    bays, and the Great Lakes, but not rivers) would be treated as minor
    modifications.

[^404]: *Notice*, 18 FCC Rcd at 8402 ¶52.

[^405]: *Id.*

[^406]: *Notice*, 18 FCC Rcd at 8402 ¶53.

[^407]: *Id.*

[^408]: *Id*.

[^409]: *Notice*, 18 FCC Rcd at 8402 ¶52.

[^410]: Arch Wireless Comments at 4-5; *see* Blooston Comments at 9.

[^411]: We emphasize that any site-based licensee in these three
    services that seeks a CIC expansion over land must continue to
    obtain prior Commission approval. We also note that if a CIC
    expansion over water requires frequency coordination pursuant to
    international treaty or agreement, then such an extension would be
    classified as major under Section 1.929(a)(5) and require prior
    Commission approval.

[^412]: Arch Wireless Comments at 5.

[^413]: 47 C.F.R. § 22.531(b).

[^414]: 47 C.F.R. § 22.551.

[^415]: *Notice*, 18 FCC Rcd at 8403 ¶56.

[^416]: In 1996, the Commission expanded permitted offerings of fixed
    wireless service by Commercial Mobile Radio Service providers. *See*
    Amendment of the Commission\'s Rules to Permit Flexible Service
    Offerings in the Commercial Mobile Radio Services, *First Report and
    Order and Further Notice of Proposed Rule Making*, 11 FCC Rcd 8965
    (1996), *Second Report and Order and Order on Reconsideration*, 15
    FCC Rcd 14680 (2000).

[^417]: *See* 47 C.F.R. §§ 22.501-22.529, §§ 22.201-22.299.

[^418]: 47 C.F.R. §§ 22.539, 22.569.

[^419]: 47 C.F.R. §§ 22.539, 22.569. Section 22.569 applies to
    applications proposing to use the channels listed in Section 22.561
    (one-way or two-way mobile operations), except applications that
    propose to use these channels to provide paging service only, which
    are subject to Section 22.539.

[^420]: 47 C.F.R. §§ 22.539, 22.569.

[^421]: 47 C.F.R. §§ 22.539, 22.569.

[^422]: *Notice*, 18 FCC Rcd at 8403 ¶57.

[^423]: *Id.*

[^424]: We note that no comments were filed regarding this issue.

[^425]: Revision of Part 22 and Part 90 of the Commission\'s Rules to
    Facilitate Future Development of Paging Systems; Implementation of
    Section 309(j) of the Communications Act -- Competitive Bidding,
    *Second Report and Order and Further Notice of Proposed Rule
    Making*, 12 FCC Rcd 2732 (1997).

[^426]: *See* 2000 Biennial Regulatory Review Spectrum Aggregation
    Limits For Commercial Mobile Radio Services, *Report and Order*, 16
    FCC Rcd 22668 (2001).

[^427]: 47 C.F.R. § 22.563. The channels are in the frequency ranges
    152.03-152.81, 157.77-158.67, 454.025-454.650, and 459.025-459.650
    MHz.

[^428]: *Notice*, 18 FCC Rcd at 8404 ¶60.

[^429]: *Id*.

[^430]: Indeed, FCC rules provide that cellular and PCS licensees may
    provide fixed services on a co-primary basis. *See* 47 C.F.R. §
    22.901(d) (cellular fixed services); 47 C.F.R. § 24.3 (PCS fixed
    services).

[^431]: 47 C.F.R. § 22.565(g).

[^432]: *Notice*, 18 FCC Rcd at 8405 ¶61. If Section 22.565(g) were
    eliminated, then the maximum ERP for dispatch and auxiliary test
    transmitters would be governed by Section 22.565(a). Under that
    section, fixed stations (such as dispatch and auxiliary test
    transmitters) operating on mobile frequencies may have a maximum ERP
    of 150 watts.

[^433]: *See* AMTA Comments at 7; NYSE&GC Reply Comments at 12-13.

[^434]: *See supra* paras. 130-131.

[^435]: 47 C.F.R. § 22.577.

[^436]: *Notice*, 18 FCC Rcd at 8405 ¶62. We note that, in 1995,
    restrictions on cellular dispatch services were eliminated. *See*
    Eligibility for the Specialized Mobile Radio Services and Radio
    Services in the 220-222 MHz Land Mobile Band and Use of Radio
    Dispatch Communications, *Report and Order*, 10 FCC Rcd 6280, 6297
    ¶29 (1995).

[^437]: 47 C.F.R. § 22.577.

[^438]: *See* AMTA Comments at 6-7; Blooston Comments at 8-9; Joint
    Commenters Comments at 5; NYSE&GC Reply Comments at 12-13.

[^439]: Joint Commenters Comments at 5.

[^440]: *Id.*

[^441]: We note that, while we are eliminating Sections 22.577 and
    22.565(g) of the rules, operations on the mobile designated
    frequencies are subject to the power limitations in Section
    22.565(a) and the channel assignment criteria in Section 22.567(h)
    of the rules.

[^442]: 47 C.F.R. § 22.591.

[^443]: *Notice*, 18 FCC Rcd at 8405 ¶63.

[^444]: The Section 22.591 table incorrectly specifies eight microwave
    channel center frequencies. That table should reflect that there are
    398 microwave channel center frequencies. *See* Revision of Part 22
    of the Commission\'s Rules Governing the Public Mobile Services,
    *Report and Order*, 9 FCC Rcd 6513, 6632 (1994).

[^445]: Redevelopment of Spectrum to Encourage Innovation in the Use of
    New Telecommunications Technologies, *First Report and Order and
    Third Notice of Proposed Rule Making*, 7 FCC Rcd 6886, 6890 ¶21
    (1992).

[^446]: Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, Including Third
    Generation Wireless Systems, *Second Report and Order*, 17 FCC Rcd
    23193 (2002); *see also* Amendment of Part 2 of the Commission's
    Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services
    to Support the Introduction of New Advanced Wireless Services,
    including Third Generation Wireless Systems, [*Third Report and
    Order, Third Notice of Proposed Rulemaking, and Second Memorandum
    Opinion and Order*, 18 FCC Rcd 2223
    (2003)](http://www.lexis.com/research/buttonTFLink?_m=b98391b3c55e6ee66a58200de7b890ab&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B2005 FCC LEXIS 81%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=18&_butInline=1&_butinfo=<cite cc%3D"USA"><!%5BCDATA%5B18 FCC Rcd 2223%5D%5D><%2Fcite>&_fmtstr=FULL&docnum=3&_startdoc=1&wchp=dGLbVlz-zSkAb&_md5=b71dc09a8603b9a96a28148739b61623).

[^447]: *See* 47 C.F.R. § 101.101; *Notice*, 18 FCC Rcd at 8405 ¶64.

[^448]: *Notice*, 18 FCC Rcd at 8406 ¶64.

[^449]: 47 C.F.R. § 22.601.

[^450]: 47 C.F.R. § 22.602.

[^451]: *Notice*, 18 FCC Rcd at 8406-07 ¶¶64-66.

[^452]: 47 C.F.R. § 22.593.

[^453]: *Id.*

[^454]: 47 C.F.R. § 22.655. As explained by the rule itself, the
    reporting requirement was adopted as part of the Commission's
    redesignation of the public mobile channels in the 470-512 MHz band
    from trunked mobile operation to point-to-multipoint operation as
    the demand for trunked mobile service decreased. Only licensees in
    this band providing trunked mobile service are required to submit
    reports, based on the premise that the reports would enable the
    Commission to have the information necessary to know when it may
    redesignate the channels to point-to-multipoint operation. Only this
    category of PMS licensees must file channel usage reports.

[^455]: *Notice*, 18 FCC Rcd at 8407 ¶¶68-70.

[^456]: *See* Reply Comments of APCO, WT Dkt. No. 02-310, at 3 (filed
    Nov. 4, 2002). In that proceeding, APCO questioned Westel's proposal
    to eliminate the requirements that Part 22 licensees report channel
    usage in the 470-512 MHz band, stating that the reports are
    necessary to determine whether spectrum in the 470-512 MHz band is
    underutilized and could be made available for other uses.

[^457]: *Notice*, 18 FCC Rcd at 8407 ¶70.

[^458]: Westel Comments at 3-4.

[^459]: *Notice*, 18 FCC Rcd at 8407 ¶70.

[^460]: 47 C.F.R. § 22.757.

[^461]: *Notice*, 18 FCC Rcd at 8408 ¶71.

[^462]: *Id*.

[^463]: *Notice*, 18 FCC Rcd at 8409 ¶77.

[^464]: *Id.*

[^465]: 47 C.F.R. § 22.1003.

[^466]: *See supra* paras. 99-103.

[^467]: 47 U.S.C. § 309(j).

[^468]: The Balanced Budget Act of 1997, Pub. L. No. 105-33, Title III,
    111 Stat. 251 (1997), amended Section 309(j) to require the
    Commission to award mutually exclusive applications for initial
    licenses or permits using competitive bidding procedures, with very
    limited exceptions. These exceptions are 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 under 47 U.S.C. §
    397(6). *See* 47 U.S.C. §§ 309(j)(1) & (2).

[^469]: This auction will be limited to the parties in each of the nine
    groups of applicants that have filed mutually exclusive
    applications, which constitute closed filing groups. *See* 47 C.F.R.
    § 22.131. These parties will be required to file short-form
    applications (FCC Form 175) and submit upfront payments to
    participate in the auction. *See* 47 C.F.R. §§ 1.2105(a) & (b),
    1.2106.

[^470]: *See* 47 C.F.R. §§ 1.2101-1.2113.

[^471]: *See* Amendment of Part 1 of the Commission's Rules --
    Competitive Bidding Procedures, Allocation of Spectrum Below 5 GHz
    Transferred from Federal Government Use, 4660-4685 MHz, *Third
    Report and Order and Second Further Notice of Proposed Rule Making*,
    13 FCC Rcd 374, 448 ¶¶124-125 (1997) ("*Part 1 Third R&O*")
    (directing WTB to seek comment on specific mechanisms related to
    day-to-day auction conduct such as the structure of bidding rounds
    and stages, establishment of minimum opening bids or reserve prices,
    minimum accepted bids, activity requirements for each stage of the
    auction, and stopping rules); Amendment of Part 1 of the
    Commission's Rules -- Competitive Bidding Procedures, *Order,
    Memorandum Opinion and Order and Notice of Proposed Rule Making*, 12
    FCC Rcd 5686, 5697 ¶16 (1997) (clarifying that, pursuant to Section
    0.131 of the Commission's Rules, 47 C.F.R. § 0.131, the Chief,
    Wireless Telecommunications Bureau, has delegated authority to
    implement all of the Commission's rules pertaining to auctions
    procedures).

[^472]: *See* 47 U.S.C. § 309(j)(4)(D). Such entities are collectively
    described as "designated entities." *See* 47 C.F.R. § 1.2110(a).

[^473]: 47 U.S.C. § 309(j)(3)(B).

[^474]: 47 C.F.R. § 1.2110(c)(1); *see also* *Part 1 Third R&O,* 13 FCC
    Rcd at 388 ¶18; Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding, *Second Memorandum
    Opinion and Order*, 9 FCC Rcd 7245, 7269 ¶145 (1994).

[^475]: *See* Revision of Rules and Policies for the Direct Broadcast
    Satellite Service, *Report and Order*, 11 FCC Rcd 9712 (1995) ("*DBS
    Auction Order*")*;* Establishment of Rules and Policies for the
    Digital Audio Radio Satellite Service in the 2310-2360 MHz Band,
    *Report and Order, Memorandum Opinion and Order and Further Notice
    of Proposed Rulemaking*, 12 FCC Rcd 5754 (1997) ("*DARS Auction
    Order*")*.*

[^476]: *See DBS Auction Order,* 11 FCC Rcd at 9799 ¶217; *DARS Auction
    Order,* 12 FCC Rcd at 5824-25 ¶¶174-76.

[^477]: *See* Announcing the High Bidders in the Auction of Ten
    Nationwide Narrowband PCS Licenses, *Public Notice*, PNWL 94-4 (rel.
    Aug. 2, 1994). In the nationwide narrowband PCS auction (Auction No.
    1), bidding credits on ten nationwide licenses were offered to
    women- and minority-owned businesses. *See also* 1670-1675 MHz Band
    Auction Closes, Winning Bidder Announced, *Public Notice*, 18 FCC
    Rcd 9089 (2003). In the 1670-1675 MHz Band auction (Auction No. 46),
    the Commission offered a bidding credit on a nationwide license in
    the 1670-1675 MHz band to small businesses with average annual
    revenues not exceeding \$40 million and very small businesses with
    average annual revenues not exceeding \$15 million.

[^478]: H.R. Rep. No.103-111, at 254 (1993).

[^479]: Air-ground service may also require fewer ground (base) stations
    than other terrestrial services that are provided on a nationwide
    basis, such as broadband PCS.

[^480]: In *ex parte* comments, AirCell and Space Data urge the
    Commission to adopt small business bidding credits for commercial
    air-ground licenses, arguing that they are small businesses that
    have the resources and expertise to provide air-ground service but
    may not be able to compete for a license without bidding credits.
    Letter from Michele C. Farquhar, Counsel to AirCell, Inc., to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Sept. 17, 2004 (AirCell Sept. 17 *Ex parte* letter); Letter
    from Jerry Knoblach, CEO, Space Data Corporation, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Oct. 28,
    2004 (Space Data Oct. 28 *Ex parte* letter).

[^481]: We are coordinating these size standards with the U.S. Small
    Business Administration.

[^482]: *See* Reallocation and Service Rules for the 698-746 MHz
    Spectrum Band (Television Channels 52-59), *Report and Order,* 17
    FCC Rcd 2153 (2002); Service Rules for the 746-764 and 776-794 MHz
    Bands, and Revisions of Part 27 of the Commission's Rules, *First
    Report and Order,* 15 FCC Rcd 25495 (2000). The country is divided
    into six Economic Area Groupings (EAGs); thus, EAGs are very large
    geographic areas.

[^483]: AirCell Sept. 17 *Ex parte* letter, at 2; Space Data Oct. 28 *Ex
    parte* letter, at 2-3. AirCell and Space Data also suggest that the
    Commission consider higher bidding credits. However, neither company
    makes a specific proposal or supplies specific facts to support such
    a proposal.

[^484]: *See* *United States v. Virginia*, 518 U.S. 515 (1996); *Adarand
    Constructors v. Pena*, 515 U.S. 200 (1995).

[^485]: We note that the Commission did not adopt small business bidding
    credits for cellular unserved area authorizations, which it found
    were valued primarily by a discrete group of small businesses. *See*
    Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, *Ninth Report and Order,* 11 FCC Rcd 14769,
    14791 ¶45 (1996).

[^486]: *See generally* 47 C.F.R. §§ 1.1202, 1.1203, 1.1206.

[^487]: *See* 5 U.S.C. § 604.

[^488]: *See* 5 U.S.C. § 603.

[^489]: *See* 5 U.S.C. § 603(a).

[^490]: *See supra* paras. 79-82.

[^491]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601--612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^492]: Amendment of Part 22 of the Commission\'s Rules to Benefit the
    Consumers of Air-Ground Telecommunications Services, Biennial
    Regulatory Review---Amendment of Parts 1, 22, and 90 of the
    Commission\'s Rules, *Notice of Proposed Rule Making*, 18 FCC Rcd
    8380, 8412 App. A (2003).

[^493]: *See* 5 U.S.C. § 604.

[^494]: Licenses A and B would authorize transmission of radio waves
    that are vertically and horizontally polarized, respectively, and
    would initially share 1.5 MHz at 849.000-850.500 MHz paired with 1.5
    MHz at 894.000-895.500 MHz. Once Verizon Airfone's incumbent system
    ceases operations in the upper 0.5 MHz of each band, licensee B
    would shift its operations to 1.5 MHz at 849.500-851.000 MHz paired
    with 1.5 MHz at 894.500-896.000 MHz. If band plan 1 is implemented,
    the parties may agree to a different implementation scheme.

[^495]: License C would be located in the lower 1.5 MHz portion of each
    2 MHz band (1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz at
    894.000-895.500 MHz). License D would be located in the upper 0.5
    MHz portion of each 2 MHz band (0.5 MHz at 850.500-851.000 MHz
    paired with 0.5 MHz at 895.500-896.000 MHz).

[^496]: License E would be located in the lower 0.5 MHz portion of each
    2 MHz band (0.5 MHz at 849.000-849.500 MHz paired with 0.5 MHz at
    894.000-894.500 MHz). License F would be located in the upper 1.5
    MHz portion of each 2 MHz band (1.5 MHz at 849.500-851.000 MHz
    paired with 1.5 MHz at 894.500-896.000 MHz).

[^497]: 5 U.S.C. § 604(a)(3).

[^498]: 5 U.S.C. § 601(6).

[^499]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small-business concern" in the Small Business Act, 15 U.S.C. §
    632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a
    small business applies "unless an agency, after consultation with
    the Office of Advocacy of the Small Business Administration and
    after opportunity for public comment, establishes one or more
    definitions of such term which are appropriate to the activities of
    the agency and publishes such definition(s) in the Federal
    Register."

[^500]: 15 U.S.C. § 632.

[^501]: 13 C.F.R. § 121.201, NAICS code 513321 (changed to 517211 in
    October 2002).

[^502]: *Id.*

[^503]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued Oct. 2000).

[^504]: *Id.* The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^505]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued Oct. 2000).

[^506]: *Id*. The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^507]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^508]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued Oct. 2000).

[^509]: *Id.* The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^510]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^511]: *Id*.

[^512]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^513]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued Oct. 2000).

[^514]: *Id*. The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^515]: Revision of Part 22 and Part 90 of the Commission's Rules to
    Facilitate Future Development of Paging Systems, *Second Report and
    Order*, 12 FCC Rcd 2732, 2811-2812 ¶¶178-181 ("*Paging Second Report
    and Order"*); *see also* Revision of Part 22 and Part 90 of the
    Commission's Rules to Facilitate Future Development of Paging
    Systems, *Memorandum Opinion and Order on Reconsideration*, 14 FCC
    Rcd 10030, 10085-10088 ¶¶98-107 (1999).

[^516]: *Paging Second Report and Order*, 12 FCC Rcd at 2811, ¶179.

[^517]: *See* *Letter* to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, from Aida
    Alvarez, Administrator, Small Business Administration, dated Dec. 2,
    1998.

[^518]: *See* "929 and 931 MHz Paging Auction Closes," *Public Notice*,
    15 FCC Rcd 4858 (WTB 2000).

[^519]: *See* *id*.

[^520]: *See* "Lower and Upper Paging Band Auction Closes," *Public
    Notice*, 16 FCC Rcd 21821 (WTB 2002).

[^521]: *See* "Lower and Upper Paging Bands Auction Closes," *Public
    Notice*, 18 FCC Rcd 11154 (WTB 2003).

[^522]: *See* Trends in Telephone Service, Industry Analysis Division,
    Wireline Competition Bureau, Table 5.3 (Number of Telecommunications
    Service Providers that are Small Businesses) (May 2002).

[^523]: 13 C.F.R. § 121.201, NAICS code 517211.

[^524]: This service is governed by Subpart I of Part 22 of the
    Commission's Rules. *See* 47 C.F.R. §§ 22.1001-22.1037.

[^525]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^526]: *Id.*

[^527]: The service is defined in Section 22.99 of the Commission's
    Rules, 47 C.F.R. § 22.99.

[^528]: BETRS is defined in Sections 22.757 and 22.759 of the
    Commission's Rules, 47 C.F.R. §§ 22.757, 22.759.

[^529]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^530]: The service is defined in Section 22.99 of the Commission's
    Rules, 47 C.F.R. § 22.99.

[^531]: 13 CFR § 121.201, NAICS codes 513322 (changed to 517212 in
    October 2002).

[^532]: Office of Management and Budget, North American Industry
    Classification System, pages 308-09 (1997) (NAICS code 334220).

[^533]: 13 C.F.R. § 121.201, NAICS code 334220.

[^534]: The number of "establishments" is a less helpful indicator of
    small business prevalence in this context than would be the number
    of "firms" or "companies," because the latter take into account the
    concept of common ownership or control. Any single physical location
    for an entity is an establishment, even though that location may be
    owned by a different establishment. Thus, the numbers given may
    reflect inflated numbers of businesses in this category, including
    the numbers of small businesses. In this category, the Census breaks
    out data for firms or companies only to give the total number of
    such entities for 1997, which was 1,089.

[^535]: U.S. Census Bureau, 1997 Economic Census, Industry Series:
    Manufacturing, "Industry Statistics by Employment Size," Table 4,
    NAICS code 334220 (issued Aug. 1999).

[^536]: *Id*. Table 5.

[^537]: If band plan 1 is implemented as a result of the Commission's
    auction of new 800 MHz commercial Air-Ground Radiotelephone Service
    licenses (*see supra* FRFA n.4), the new licensees will be required
    to jointly file a spectrum sharing and site selection plan with the
    Wireless Telecommunications Bureau. *See supra Report and Order* at
    para. 34.

[^538]: 5 U.S.C. §§ 603(c)(1)--(c)(4).

[^539]: *See* 5 U.S.C. § 801(a)(1)(A).

[^540]: *See* 5 U.S.C. § 604(b).

[^541]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^542]: *See Notice*, Section III, *supra.*

[^543]: *See* 5 U.S.C. § 603(a).

[^544]: *See* *id*.

[^545]: Licenses A and B would authorize transmission of radio waves
    that are vertically and horizontally polarized, respectively, and
    would initially share 1.5 MHz at 849.000-850.500 MHz paired with 1.5
    MHz at 894.000-895.500 MHz. Once Verizon Airfone's incumbent system
    ceases operations in the upper 0.5 MHz of each band, licensee B
    would shift its operations to 1.5 MHz at 849.500-851.000 MHz paired
    with 1.5 MHz at 894.500-896.000 MHz. If band plan 1 is implemented,
    the parties may agree to a different implementation scheme.

[^546]: License C would be located in the lower 1.5 MHz portion of each
    2 MHz band (1.5 MHz at 849.000-850.500 MHz paired with 1.5 MHz at
    894.000-895.500 MHz). License D would be located in the upper 0.5
    MHz portion of each 2 MHz band (0.5 MHz at 850.500-851.000 MHz
    paired with 0.5 MHz at 895.500-896.000 MHz).

[^547]: License E would be located in the lower 0.5 MHz portion of each
    2 MHz band (0.5 MHz at 849.000-849.500 MHz paired with 0.5 MHz at
    894.000-894.500 MHz). License F would be located in the upper 1.5
    MHz portion of each 2 MHz band (1.5 MHz at 849.500-851.000 MHz
    paired with 1.5 MHz at 894.500-896.000 MHz).

[^548]: 47 U.S.C. § 309(j).

[^549]: The Balanced Budget Act of 1997, Pub. L. No. 105-33, Title III,
    111 Stat. 251 (1997), amended Section 309(j) to require the
    Commission to award mutually exclusive applications for initial
    licenses or permits using competitive bidding procedures, with very
    limited exceptions. These exceptions are 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 under 47 U.S.C. §
    397(6). *See* 47 U.S.C. § 309(j)(1), (2).

[^550]: This auction will be limited to the parties in each of the nine
    groups of applicants that have filed mutually exclusive
    applications, which constitute closed filing groups. *See* 47 C.F.R.
    § 22.131. These parties will be required to file short-form
    applications (FCC Form 175) and submit upfront payments to
    participate in the auction. *See* 47 C.F.R. §§ 1.2105(a) & (b),
    1.2106.

[^551]: *See* 47 C.F.R. §§ 1.2101-1.2113.

[^552]: *See* Amendment of Part 1 of the Commission's Rules --
    Competitive Bidding Procedures, Allocation of Spectrum Below 5 GHz
    Transferred from Federal Government Use, 4660-4685 MHz, *Third
    Report and Order and Second Further Notice of Proposed Rule Making*,
    13 FCC Rcd 374, 448 ¶¶124-125 (1997) (*"Part 1 Third R&O"*)
    (directing WTB to seek comment on specific mechanisms related to
    day-to-day auction conduct such as the structure of bidding rounds
    and stages, establishment of minimum opening bids or reserve prices,
    minimum accepted bids, activity requirements for each stage of the
    auction, and stopping rules); Amendment of Part 1 of the
    Commission's Rules -- Competitive Bidding Procedures, *Order,
    Memorandum Opinion and Order and Notice of Proposed Rule Making*, 12
    FCC Rcd 5686, 5697 ¶16 (1997) (clarifying that, pursuant to Section
    0.131 of the Commission's Rules, 47 C.F.R. § 0.131, the Chief,
    Wireless Telecommunications Bureau, has delegated authority to
    implement all of the Commission's rules pertaining to auctions
    procedures).

[^553]: We are coordinating these size standards with the U.S. Small
    Business Administration.

[^554]: Air-ground service may also require fewer ground (base) stations
    than other terrestrial services that are provided on a nationwide
    basis, such as broadband PCS.

[^555]: In *ex parte* comments, AirCell and Space Data urge the
    Commission to adopt small business bidding credits for commercial
    air-ground licenses, arguing that they are small businesses that
    have the resources and expertise to provide air-ground service but
    may not be able to compete for a license without bidding credits.
    Letter from Michele C. Farquhar, Counsel to AirCell, Inc., to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    dated Sept. 17, 2004 (AirCell Sept. 17 *Ex parte* letter); Letter
    from Jerry Knoblach, CEO, Space Data Corporation, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, dated Oct. 28,
    2004 (Space Data Oct. 28 *Ex parte* letter).

[^556]: *See* Reallocation and Service Rules for the 698-746 MHz
    Spectrum Band (Television Channels 52-59), *Report and Order,* 17
    FCC Rcd 2153 (2002); Service Rules for the 746-764 and 776-794 MHz
    Bands, and Revisions of Part 27 of the Commission's Rules, *First
    Report and Order,* 15 FCC Rcd 25495 (2000). The country is divided
    into six Economic Area Groupings (EAGs); thus, EAGs are very large
    geographic areas.

[^557]: AirCell Sept. 17 *Ex parte* letter, at 2; Space Data Oct. 28 *Ex
    parte* letter, at 2-3. AirCell and Space Data also suggest that the
    Commission consider higher bidding credits. However, neither company
    makes a specific proposal or supplies specific facts to support such
    a proposal.

[^558]: *See* *United States v. Virginia*, 518 U.S. 515 (1996); *Adarand
    Constructors v. Pena*, 515 U.S. 200 (1995).

[^559]: We note that the Commission did not adopt small business bidding
    credits for cellular unserved area authorizations, which it found
    were valued primarily by a discrete group of small businesses. *See*
    Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, *Ninth Report and Order,* 11 FCC Rcd 14769,
    14791 ¶45 (1996).

[^560]: 5 U.S.C. § 603.

[^561]: 5 U.S.C. § 601(6).

[^562]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small-business concern" in the Small Business Act, 15 U.S.C. §
    632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a
    small business applies "unless an agency, after consultation with
    the Office of Advocacy of the Small Business Administration and
    after opportunity for public comment, establishes one or more
    definitions of such term which are appropriate to the activities of
    the agency and publishes such definition(s) in the Federal
    Register."

[^563]: 15 U.S.C. § 632.

[^564]: 13 C.F.R. § 121.201, NAICS code 513321 (changed to 517211 in
    October 2002).

[^565]: Id.

[^566]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued Oct. 2000).

[^567]: *Id.*. The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^568]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued Oct. 2000).

[^569]: *Id*. The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^570]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^571]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued Oct. 2000).

[^572]: *Id.* The census data do not provide a more precise estimate of
    the number of firms that have employment of 1,500 or fewer
    employees; the largest category provided is "Firms with 1000
    employees or more."

[^573]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^574]: *Id*.

[^575]: The service is defined in Section 22.99 of the Commission's
    Rules, 47 C.F.R. § 22.99.

[^576]: 13 CFR § 121.201, NAICS codes 513322 (changed to 517212 in
    October 2002).

[^577]: 5 U.S.C. §§ 603(c)(1)-(c)(4).

[^578]: *See Notice* at ¶¶ 175 & 178, *supra*.