Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | ) | WT Docket No. 99-87          |
|                                  |   |                              |
| Implementation of Sections       | ) | RM-9332                      |
| 309(j) and                       |   |                              |
|                                  | ) | RM-9405                      |
| 337 of the Communications Act of |   |                              |
| 1934                             | ) | RM-9705                      |
|                                  |   |                              |
| as Amended                       | ) |                              |
|                                  |   |                              |
| Promotion of Spectrum Efficient  | ) |                              |
|                                  |   |                              |
| Technologies on Certain Part 90  | ) |                              |
|                                  |   |                              |
| Frequencies                      | ) |                              |
|                                  |   |                              |
| Establishment of Public Service  | ) |                              |
| Radio                            |   |                              |
|                                  | ) |                              |
| Pool in the Private Mobile       |   |                              |
|                                  | ) |                              |
| Frequencies Below 800 MHz        |   |                              |
|                                  | ) |                              |
| Petition for Rule Making of The  |   |                              |
| American Mobile                  | ) |                              |
| Telecommunications Association   |   |                              |
|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
+----------------------------------+---+------------------------------+

**REPORT AND ORDER**

**AND FURTHER NOTICE OF PROPOSED RULE MAKING**

**Adopted:** November 9, 2000 **Released:** November 20, 2000

**Comment Date:** 60 days after publication in the Federal Register

**Reply Comment Date:** 90 days after publication in the Federal
Register

By the Commission:

Table of Contents

Paragraph \#

I. INTRODUCTION AND EXECUTIVE SUMMARY 1

II\. BACKGROUND 10

A. Commission Implementation of the 1993 Auction Standard 10

B. The Balanced Budget Act of 1997 13

III\. Report and Order 18

A. Framework for Determining Whether Licenses Are Subject to Auction 18

1\. Obligation to Avoid Mutual Exclusivity 19

2\. License Scope 28

3\. Band Manager Licenses 34

B. Auction Design for Private Radio Spectrum Deemed Subject to Auction
51

1\. Competitive Bidding Methodology and Design 52

2\. Eligibility Requirements 54

3\. Processing of New Applications 57

C. Exemption from Competitive Bidding for Public Safety Radio Services
62

1\. Scope of Public Safety Radio Services Exemption 63

2\. Resolution of Mutually Exclusive Applications for Services Exempt
from Competitive Bidding 88

D. Proposals Regarding Private Land Mobile Radio Services 92

1\. Licensing of "Refarming" Bands 93

2\. UTC Proposal To Establish a New Public Safety Radio Pool in the
Private Mobile Bands Below 470 MHz 97

3\. AMTA Proposal To Restructure Licensing Framework for PLMR Services
in the 450-470 MHz Band 104

4\. Licensing of PLMR Channels in the 800 MHz Band for Use in Commercial
SMR Systems 108

5\. Revision of Part 90 Multiple Licensing Rules 120

E. Section 337 Licensing for Public Safety Services 127

IV\. Further Notice of Proposed Rule Making 137

A. AMTA Proposal to Require New Spectrum Efficient Technologies 137

B. Licensing of PLMR Channels in the 900 MHz Band for Use in Commercial
SMR Systems 143

V. Procedural Matters 145

A. Ex Parte Presentations 145

B. Regulatory Flexibility Act Analyses 146

C. Final Paperwork Reduction Act of 1995 Analysis 147

D. Filing Procedures 149

E. Further Information 153

VI\. ordering clauses 154

APPENDIX a: comments and reply comments filed in wt docket 99-87

APPENDIX B: FINAL RULES

APPENDIX C: FINAL REGULATORY FLEXIBILITY ANALYSIS

APPENDIX D: INITIAL REGULATORY FLEXIBILITY ANALYSIS

# INTRODUCTION AND EXECUTIVE SUMMARY

1.  In this Report and Order and Further Notice of Proposed Rule
    Makin*g*, we adopt rules and policies to implement Sections 309(j)
    and 337 of the Communications Act of 1934 ("Communications Act"), as
    amended by the Balanced Budget Act of 1997 ("Balanced Budget
    Act"),[^1] which was signed into law on August 5, 1997. The Balanced
    Budget Act significantly revised Section 309(j) of the
    Communications Act, which is the principal statutory provision that
    governs the Commission's auction authority for the licensing of
    radio services. With the *Notice of Proposed Rule Making* in WT
    Docket No. 99-87, we initiated this proceeding and requested comment
    on changes to the Commission's rules and policies to implement our
    revised auction authority.[^2]

2.  Specifically, this Report and Order sets out the general framework
    for exercise of the Commission's auction authority in light of the
    Balanced Budget Act's revisions to Section 309(j) of the
    Communications Act. [^3] First, we examine how the Balanced Budget
    Act revised the statutory language of Section 309(j). In particular,
    we consider amended Section 309(j)(1)'s directive to use competitive
    bidding to resolve mutually exclusive license applications for those
    radio services that do not fall within one of Section 309(j)(2)'s
    auction exemptions. These statutory changes are considered in light
    of our continuing obligation under Section 309(j)(6)(E) to avoid
    mutual exclusivity and to fulfill the public interest objectives
    enumerated in Section 309(j)(3).

3.  In this Report and Order, we conclude that in non-exempt services,
    the Commission's authority under the Balanced Budget Act continues
    to permit it to adopt licensing processes that result in the filing
    of mutually exclusive applications where the Commission determines
    that such an approach would serve the public interest. We do not,
    however, make any changes to license assignment procedures in
    existing services that preclude or limit the likelihood of mutually
    exclusive applications, nor do we make any specific determination
    about what licensing procedures to adopt for future services.
    Rather, we will reserve for future service-specific rulemaking
    proceedings the question of what type of licensing mechanism to use
    in each case, *e.g*., geographic area licensing, site-by-site
    licensing, or any other licensing process. Moreover, any
    consideration of whether we should use licensing procedures in a
    particular service that increase the likelihood of mutually
    exclusive applications will be based on careful analysis of the
    public interest considerations of Section 309(j)(3) as they apply to
    the specific characteristics, uses, and demands of the service.

4.  We also conclude that in addition to other licensing mechanisms we
    have used previously, we should consider the use of band manager
    licensing as a future option for private as well as commercial
    services. We used the band manager concept for the first time in the
    700 MHz guard bands,[^4] and believe that it has the potential in
    other new spectrum allocations to provide private users with greater
    flexibility to access spectrum in amounts of bandwidth, periods of
    time, and geographic areas that best suit their needs. For example,
    we have recently initiated a proceeding to reallocate 27 MHz of
    spectrum in bands below 3 GHz from Federal Government to
    non-government use, and have sought comment on whether this spectrum
    could address demand in the congested private radio bands.[^5] In
    that proceeding, we seek comment on the possibility of using band
    managers for some of those bands, as well as other licensing
    options.

5.  We also define the scope of the Balanced Budget Act's exemption from
    auctions for licenses and permits issued for "public safety radio
    services." We conclude that this "public safety" exemption from
    auctions was intended to apply not only to traditional public safety
    services such as police, fire, and emergency medical services, but
    also to spectrum usage by entities such as utilities, railroads,
    transit systems, and others that provide essential services to the
    public at large and that need reliable communications in order to
    prevent or respond to disasters or crises affecting their service to
    the public. We also conclude, however, that the public safety
    exemption applies only to services in which these public safety
    uses, *i.e.*, protection of safety of life, health, and property
    within the meaning of Section 309(j)(2)(A), comprise the dominant
    use of the spectrum. Thus, services in which such uses are not
    dominant (and in which mutual exclusivity occurs) will not be exempt
    from auctions, even if some individual licensees in the service use
    the spectrum for public safety purposes as defined by the statute.

6.  The Report and Order also addresses a number of proposals to amend
    our licensing and eligibility rules for existing private
    services.[^6] In general, we conclude that the existing rules should
    be retained. Specifically, we decline a request by the American
    Mobile Telecommunications Association ("AMTA") to establish
    geographic area licensing and competitive bidding rules in the
    450-470 MHz band. We also decline the Utilities Telecommunications
    Council's ("UTC's")[^7] request to create a separate radio pool of
    private land mobile frequencies for entities that do not qualify for
    the existing Public Safety Radio Pool spectrum, but that fall within
    the broader "public safety" exemption established by Section
    309(j)(2)(A).

7.  We do make a limited change, however, to our use restrictions
    affecting 800 MHz Business and Industrial/Land Transportation
    ("BI/LT") channels, which currently prohibit commercial use by
    licensees. We conclude that subject to certain safeguards, BI/LT
    licensees should be allowed to modify their licenses to permit
    commercial use, or to assign or transfer their licenses to CMRS
    operators for commercial use. To prevent trafficking, we will not
    allow such modifications, assignments, or transfers until five years
    after the initial grant date of the license, and we will prohibit a
    licensee who modifies or transfers a license under this provision
    from obtaining new BI/LT spectrum in the same location for one year.

8.  In addition, we address issues relating to the awarding of licenses
    under Section 337 of the Communications Act, which allows public
    safety entities (defined more narrowly than in Section 309(j)(2)(A))
    to apply for "unassigned" spectrum not otherwise allocated for
    public safety use. We conclude that where the Commission has
    proposed rules for the licensing of particular spectrum by auction,
    requests for licensing under Section 337 should not be deemed in the
    public interest once the competitive bidding process has begun
    except under extraordinary circumstances. Moreover, we conclude that
    Section 337 relief should only be available if the applicant
    demonstrates that there is no available public safety spectrum in
    any band in the geographic area where the public safety use is
    proposed.

9.  Finally, in the *Further Notice of Proposed Rule Making*, we seek
    comment on a petition for rulemaking filed by AMTA proposing that
    certain Part 90 licensees be required to employ new
    spectrum-efficient technologies.[^8] In particular, we seek further
    comment on the effectiveness of the Part 90 rules that have been
    adopted in the course of the Commission's *Refarming* proceeding, PR
    Docket No. 92-235,[^9] the current pace of migration to narrowband
    technology, and on whether enough time has elapsed to allow us to
    evaluate the effectiveness of our current rules. We also seek
    comment on whether to permit 900 MHz BI/LT licensees to modify their
    licenses to permit CMRS use.

# BACKGROUND

## Commission Implementation of the 1993 Auction Standard

10. The Omnibus Budget Reconciliation Act of 1993 ("1993 Budget
    Act")[^10] added Section 309(j) to the Communications Act,
    authorizing the Commission to award licenses for use of the
    electromagnetic spectrum through competitive bidding where mutually
    exclusive applications are filed. The 1993 Budget Act expressly
    authorized, but did not require, the Commission to use competitive
    bidding to choose among mutually exclusive applications for initial
    licenses or construction permits.[^11] As we described in detail in
    the *Notice*, the Commission in a series of rulemaking proceedings
    adopted rules and policies to implement Section 309(j).[^12]

11. Pursuant to the 1993 Budget Act, Section 309(j)(1), \"General
    Authority,\" only permitted the Commission to use competitive
    bidding for subscriber-based services if mutual exclusivity existed
    among initial license applications. Section 309(j)(6)(E) also made
    clear that the Commission was not relieved of its obligation in the
    public interest to continue to use engineering solutions,
    negotiation, threshold qualifications, service regulations and other
    means to avoid mutual exclusivity.[^13] The Commission has
    determined that applications are "mutually exclusive" if the grant
    of one application would effectively preclude the grant of one or
    more of the other applications.[^14] Where the Commission receives
    only one application that is acceptable for filing for a particular
    license that is otherwise auctionable, there is no mutual
    exclusivity, and thus no auction. Therefore, mutual exclusivity is
    established when competing applications for a license are filed.

12. Section 309(j)(1) also restricted the use of competitive bidding to
    applications for "initial" licenses or permits.[^15] In addition,
    Section 309(j)(2) set forth conditions beyond mutual exclusivity
    that had to be satisfied in order for spectrum to be
    auctionable.[^16] Generally speaking, these conditions subjected to
    auction those services in which the licensee was to receive
    compensation from subscribers for the use of the spectrum.[^17]
    Former Section 309(j)(2) further directed the Commission, in
    evaluating the "uses to which bidding may apply," to determine
    whether "a system of competitive bidding will promote the \[public
    interest\] objectives described in \[Section 309(j)(3)\]."[^18]
    Employing these criteria, the Commission identified a number of
    services and classes of services that were auctionable and not
    auctionable under the 1993 Budget Act, provided mutually exclusive
    applications were filed.[^19] As we explained in the *Notice*, the
    services deemed nonauctionable under the 1993 Budget Act were
    non-subscriber based, private and noncommercial offerings operating
    on a variety of frequency bands.[^20]

## The Balanced Budget Act of 1997

13. In 1997, Congress revised the Commission's auction authority.
    Specifically, the Balanced Budget Act of 1997 amended Section
    309(j)(1) to require the Commission to award mutually exclusive
    applications for initial licenses or permits using competitive
    bidding procedures, except as provided in Section 309(j)(2).
    Sections 309(j)(1) and 309(j)(2) now state:

> \(1\) General Authority.\--If, consistent with the obligations
> described in paragraph (6)(E), mutually exclusive applications are
> accepted for any initial license or construction permit, then, except
> as provided in paragraph (2), the Commission shall grant the license
> or permit to a qualified applicant through a system of competitive
> bidding that meets the requirements of this subsection.
>
> \(2\) Exemptions.\--The competitive bidding authority granted by this
> subsection shall not apply to licenses or construction permits issued
> by the Commission\--
>
> \(A\) for public safety radio services, including private internal
> radio services used by State and local governments and non‑government
> entities and including emergency road services provided by
> not‑for‑profit organizations, that\--
>
> \(i\) are used to protect the safety of life, health, or property; and
>
> \(ii\) are not made commercially available to the public;
>
> \(B\) for initial licenses or construction permits for digital
> television service given to existing terrestrial broadcast licensees
> to replace their analog television service licenses; or
>
> \(C\) for stations described in section 397(6)[^21] of this
> title.[^22]

As mentioned above, prior to the Balanced Budget Act of 1997, Sections
309(j)(1) and 309(j)(2) granted the Commission the authority to use
competitive bidding to resolve mutually exclusive applications for
initial licenses or permits if the principal use of the spectrum was for
subscription-based services and competitive bidding would promote the
objectives described in Section 309(j)(3).[^23] As amended by the
Balanced Budget Act of 1997, Section 309(j)(1) states that the
Commission *shall* use competitive bidding to resolve mutually exclusive
initial license or permit applications, unless one of the three
exemptions provided in the statute applies.[^24]

14. As noted above, the Balanced Budget Act of 1997 left unchanged the
    restriction that competitive bidding may only be used to resolve
    mutually exclusive applications. Moreover, the general auction
    authority provision of Section 309(j)(1) now references the
    obligation under Section 309(j)(6)(E) to use engineering solutions,
    negotiation, threshold qualifications, service regulations, or other
    means to avoid mutual exclusivity where it is in the public interest
    to do so. In addition, the portion of the Conference Report that
    accompanies this section of the legislation emphasizes that
    notwithstanding the Commission's expanded auction authority, its
    determinations regarding mutual exclusivity must still be consistent
    with and not minimize its obligations under Section
    309(j)(6)(E).[^25]

15. Section 309(j)(2), as amended by the Balanced Budget Act of 1997,
    exempts from auctions licenses and construction permits for public
    safety radio services, digital television service licenses and
    permits given to existing terrestrial broadcast licensees to replace
    their analog television service licenses, and licenses and
    construction permits for noncommercial educational broadcast
    stations and public broadcast stations. The Commission has found
    that the list of exemptions from our general auction authority set
    forth in Section 309(j)(2) is exhaustive, rather than merely
    illustrative, of the types of licenses or permits that may not be
    awarded through a system of competitive bidding.[^26] Left unchanged
    by the Balanced Budget Act of 1997 is Section 309(j)(3)'s directive
    to consider the public interest objectives in identifying classes of
    licenses and permits to be issued by competitive bidding.

16. The Conference Report for Section 3002(a) of the Balanced Budget Act
    of 1997 states that the exemption for public safety radio services
    includes "private internal radio services" used by utilities,
    railroads, metropolitan transit systems, pipelines, private
    ambulances, volunteer fire departments, and not-for-profit
    organizations that offer emergency road services, such as the
    American Automobile Association ("AAA").[^27] The Conference Report
    also notes that the exemption is "much broader than the explicit
    definition for 'public safety services'" included in Section
    337(f)(1) of the Communications Act,[^28] for the purpose of
    determining eligibility for licensing in the 24 MHz of spectrum
    reallocated for public safety services.[^29]

17. As we discuss in greater detail below, the statutory changes to the
    Commission's auction authority brought about by Balanced Budget Act
    primarily affect those classes of radio service that are referred to
    generically as "private services." Our use of the term "private
    services" in the context of the 1993 Budget Act's auction exemption
    referred to those radio services "that did not involve the payment
    of compensation to the licensee by subscribers, *i.e.*, that were
    for internal use."[^30] Generally, the private radio services are
    used by government or business entities to meet their own internal
    communications needs or by individuals for personal communications,
    rather than to provide communications services to others.[^31] In
    this Report and Order, we use the term "private services" broadly to
    refer to the family of non-broadcast, non-subscriber based fixed or
    mobile radio services (*i.e.,* radio services that are for internal
    uses).[^32] This Report and Order does not revisit any
    determinations made pursuant to the 1993 Budget Act of those radio
    services subject to competitive bidding. Rather, here we establish a
    framework for our future determinations of which radio services may
    be subject to competitive bidding. For example, we intend to use
    this framework to guide our decisions in regard to the spectrum
    bands that are the subject of a separate *Notice of Proposed Rule
    Making* in which we are proposing to reallocate 27 MHz of spectrum
    in bands below 3 GHz from Federal Government to non-government
    use.[^33]

# Report and Order

## Framework for Determining Whether Licenses Are Subject to Auction

18. In this Report and Order, we evaluate the scope of our spectrum
    auction authority under Section 309(j) and establish a framework for
    determining whether licenses are subject to auction. First, we
    consider how the Balanced Budget Act's revision of our auction
    authority under Section 309(j) of the Communications Act affects
    future determinations of which services may be subject to auction.
    In particular, this analysis focuses on the application of the
    public interest factors enumerated in Section 309(j)(3) and the
    Commission's Section 309(j)(6)(E) obligation in the public interest
    to avoid mutual exclusivity in application and licensing proceedings
    for those radio services that are not specifically exempt from
    auction under Section 309(j)(2).[^34] We also recognize the
    potential for band manager licensing of auctionable private radio
    services where that licensing mechanism is likely to serve the
    public interest and otherwise satisfy the Commission's overall
    spectrum management responsibilities and obligations under the
    Communications Act.

### Obligation to Avoid Mutual Exclusivity

19. [Background]{.underline}. In the *Notice*, the Commission sought
    comment broadly on how the Balanced Budget Act's amendments to
    Section 309(j) affect its determinations of which services may be
    subject to auction.[^35] In particular, we asked whether the express
    reference in Section 309(j)(1) to the Commission's obligation to
    avoid mutual exclusivity under Section 309(j)(6)(E) changes the
    scope or content of that obligation.[^36] We also asked how we
    should apply the public interest factors in Section 309(j)(3) in
    establishing licensing schemes or methodologies under the Balanced
    Budget Act for both new and existing, commercial and private
    services.[^37] We inquired whether the Commission's previous
    analysis of its obligation under Section 309(j)(6)(E) is still
    appropriate in view of the revisions to Section 309(j)(1) and
    309(j)(2), *i.e.,* whether we should continue to evaluate our
    obligation to avoid mutual exclusivity by weighing the public
    interest objectives of Section 309(j)(3).[^38] With respect to
    services currently using licensing schemes in which mutually
    exclusive applications are not filed, we asked whether Congress, in
    emphasizing our obligation to avoid mutual exclusivity, intended
    that we give greater weight to that obligation and less to other
    public interest objectives.[^39]

20. [Discussion]{.underline}. Private radio service interests generally
    argue that the Balanced Budget Act has not expanded the Commission's
    auction authority, particularly as it applies to private wireless
    services.[^40] They argue that the added reference in Section
    309(j)(1) to the Commission's obligation under Section 309(j)(6)(E)
    to consider alternatives to mutual exclusivity requires the
    Commission to give greater weight to the goal of avoiding mutual
    exclusivity and less to other public interest objectives in
    determining which wireless services are potentially
    auctionable.[^41] Under these commenters' proposed interpretation,
    the Commission's first objective in establishing a licensing
    mechanism for any non-auction exempt service must be to seek a
    method that avoids mutual exclusivity.[^42] In the view of these
    commenters, only if the Commission determines that mutual
    exclusivity cannot be avoided, *i.e.,* that the service can *only*
    be licensed through processes that result in the filing of mutually
    exclusive applications, can it consider the public interest factors
    set forth in Section 309(j)(3) for purposes of determining the
    appropriate methodology to award licenses through competitive
    bidding.[^43]

21. We disagree with the interpretation of amended Section 309(j)(1)
    advanced by these commenters. The obligation to consider
    alternatives to mutual exclusivity set forth in Section 309(j)(6)(E)
    has existed since the Commission was first authorized to conduct
    auctions of spectrum licenses by the 1993 Budget Act.[^44] The
    Commission has consistently interpreted this provision to mean that
    it has an obligation to attempt to avoid mutual exclusivity by the
    methods prescribed therein only when doing so would further the
    public interest goals of Section 309(j)(3).[^45] We conclude that
    the amendment of Section 309(j)(1) by the Balanced Budget Act to add
    a cross-reference to Section 309(j)(6)(E) serves to underscore the
    Commission's pre-existing obligation, but did not change its
    fundamental scope or content.[^46] More specifically, we conclude
    that the Balanced Budget Act amendments to Section 309(j) do not
    preclude the Commission from using licensing mechanisms for private
    services that permit the filing of mutually exclusive license
    applications if the Commission determines that it is in the public
    interest to do so.

22. We base our conclusion on several factors. First, nothing in the
    statutory language suggests that Congress intended to narrow the
    Commission's discretion to use licensing mechanisms based on mutual
    exclusivity. The addition of a cross-reference to Section
    309(j)(6)(E) does not turn avoidance of mutual exclusivity into the
    paramount goal of the statute, but simply underscores that the
    Commission should continue to consider alternatives to mutual
    exclusivity as it did prior to the Balanced Budget Act, *i.e.*,
    based on whether such alternatives would promote the public interest
    objectives in Section 309(j)(3). Moreover, Congress did not change
    the language of Section 309(j)(6)(E) itself, indicating that it did
    not intend to change the scope of the Commission's obligation under
    that provision. Indeed, Section 309(j)(6)(E) itself continues to
    state -- as it did prior to the Balanced Budget Act -- that the
    Commission has the "obligation in the *public interest*... to avoid
    mutual exclusivity,[^47] which underscores that the Commission is
    required to avoid mutual exclusivity only if it is in the public
    interest to do so.

23. Finally, the plain language of Section 309(j)(3) negates the
    contention that Congress intended that section to be subordinate to
    Section 309(j)(6)(E). Specifically, Section 309(j)(3) directs the
    Commission to consider the public interest objectives specified
    therein in "identifying classes of licenses and permits to be issued
    by competitive bidding, in specifying the eligibility and other
    characteristics of such licenses and permits, and in designing
    methodologies for use under this subsection."[^48] This language
    makes clear that the public interest objectives of Section 309(j)(3)
    apply broadly to the threshold issue of which licenses should be
    subject to auction, which necessarily requires consideration in each
    case of whether to adopt a licensing mechanism based on mutual
    exclusivity.

24. Our interpretation of Section 309(j) is also supported by the
    legislative history of the Balanced Budget Act. In the Conference
    Report, Congress explicitly stated that the Balanced Budget Act
    *expanded* the scope of the auction authority previously conferred
    by the 1993 Budget Act.[^49] However, Congress also expressed
    concern that the Commission not interpret its expanded auction
    authority in a way that would reduce its Section 309(j)(6)(E)
    obligations:

> \[T\]he conferees emphasize that, notwithstanding its expanded auction
> authority, the Commission must still ensure that its determinations
> regarding mutual exclusivity are consistent with the Commission\'s
> obligations under section 309(j)(6)(E). The conferees are particularly
> concerned that the Commission might interpret its expanded competitive
> bidding authority in a manner that minimizes its obligations under
> section 309(j)(6)(E), thus overlooking engineering solutions,
> negotiations, or other tools that avoid mutual exclusivity.[^50]

This language from the Conference Report makes clear that Congress
sought continuity rather than change in the Commission's application of
Section 309(j)(6)(E). Contrary to the assertions of some private
services commenters,[^51] Congress did not intend to create a new and
greater obligation to avoid mutual exclusivity, but rather sought to
ensure that in exercising its expanded auction authority, the Commission
would continue to give Section 309(j)(6)(E) the same weight it had prior
to the Balanced Budget Act.[^52]

25. We also conclude that this interpretation of the Balanced Budget Act
    is consistent with the Commission's spectrum management
    responsibilities. Section 309(j)(3)(D) requires the Commission to
    promote efficient use of the spectrum, which is a valuable and
    finite public resource.[^53] To accomplish these objectives, the
    Commission must have the freedom to consider all available spectrum
    management tools and the discretion to evaluate which licensing
    mechanism is most appropriate for the services being offered.[^54]
    Thus, as the D.C. Circuit has recognized, the Commission is not
    required to adopt a licensing process that avoids mutual exclusivity
    but undermines the public interest goals embodied in the statute.
    [^55] Subsequent to the adoption of the Balanced Budget Act, the
    D.C. Circuit concluded that the Section 309(j)(6)(E) obligation does
    not foreclose new licensing schemes that are likely to result in
    mutual exclusivity.[^56] If the Commission finds such schemes to be
    in the public interest, the court states, it may implement them
    "without regard to \[S\]ection 309(j)(6)(E) which imposes an
    obligation only to minimize mutual exclusivity 'in the public
    interest' and 'within the framework of existing policies.'"[^57] In
    the past, the Commission has found with respect to many services
    that the adoption of a licensing scheme that results in the filing
    of mutually exclusive applications encourages efficient use of the
    spectrum as mandated by Section 309(j)(3).[^58] In other instances,
    the Commission has determined that a licensing approach that avoids
    mutual exclusivity, *e.g.,* site-based, first-come, first-served
    licensing, best serves the public interest. For instance, we
    recently decided to license certain bands of spectrum designated for
    Multiple Address Systems ("MAS") on a first-come, first-served,
    site-by-site basis.[^59] We conclude that the Balanced Budget Act
    did not change the nature of the public interest analysis required
    of the Commission when deciding the licensing process for a
    particular service. Therefore, in establishing processes for
    assigning initial licenses, the Commission will continue to fulfill
    its obligation under Section 309(j)(6)(E) and consider the public
    interest goals of Section 309(j)(3).

26. We emphasize that our conclusion applies to decisions regarding the
    licensing of existing services as well as future services. We
    recognize that many private wireless licensees contend that we
    should avoid auctioning private wireless spectrum that is currently
    licensed through processes that avoid mutual exclusivity.[^60] These
    commenters assert that where the Commission has used licensing
    methods in the private services that avoid the filing of mutually
    exclusive applications (*e.g*., first-come, first-served licensing,
    shared use, frequency coordination), the Balanced Budget Act
    requires us to continue using these methods and prohibits us from
    converting to licensing methods that would result in mutual
    exclusivity.[^61]

27. We reject this interpretation of the statute. Prohibiting the
    Commission from considering changes to licensing methodologies
    applicable to existing services would contravene the intent of the
    Balanced Budget Act and restrict the Commission's ability to act in
    the public interest.[^62] Thus, we believe it remains fully within
    the Commission's authority to convert from a licensing method that
    avoids mutual exclusivity to one that is based on mutual exclusivity
    and auctions, as we have done in the case of certain services in the
    past.[^63] At the same time, as discussed below, we believe that in
    order for this option to be considered in any service, the
    Commission, as part of its public interest analysis, should give
    significant consideration to the effectiveness of existing licensing
    mechanisms that avoid mutual exclusivity, and should weigh the
    potential costs of changing such mechanisms against the potential
    benefits.

### License Scope

28. [Background]{.underline}. In the *Notice*, the Commission sought
    comment on whether the use of geographic area licensing for
    non-exempt private radio services would further the public interest
    goals of Section 309(j)(3).[^64] We solicited comment on the costs
    and benefits of implementing geographic area licensing in the
    private radio frequency bands and asked whether licensing schemes
    other than geographic area licensing would better serve the public
    interest.[^65] In deciding if geographic area licensing would be
    appropriate for a given radio service or class of frequencies, we
    asked whether we should consider the actual purpose for which the
    spectrum is used or proposed to be used, as well as the purpose for
    which the spectrum is currently allocated.[^66] We inquired whether
    the use of geographic area licensing would speed the assignment of
    new channels and facilitate further build-out of wide-area
    systems.[^67] We also suggested that the shared private service
    bands may be so heavily used that adopting a geographic area
    licensing scheme may not serve any purpose because so little "white
    space" would be available to geographic area licensees that there
    would be no interest in applying for the geographic area
    licenses.[^68] The Commission further sought comment on the likely
    effects of geographic area licensing on incumbent systems and
    potential new entrants for private radio services.[^69]

29. [Discussion]{.underline}. The Commission has previously concluded
    with respect to many commercial services that geographic area
    licensing is a highly efficient licensing scheme.[^70] Among other
    benefits, it facilitates aggregation by licensees of smaller service
    areas into seamless regional and national service areas, allows
    development of strategic and regional business plans, provides
    licensees with greater build-out flexibility and is efficient for
    the Commission to administer. Our decisions to establish geographic
    area licensing in commercial services have been based on our
    commitment to serve the public interest as required by Section
    309(j)(3).

30. Private wireless licensees generally urge the Commission to retain
    the current non-geographic licensing schemes employed in the private
    radio bands.[^71] They assert that existing methodologies based on
    first come/first served, site-by-site licensing, and frequency
    coordination effectively serve the communications needs of private
    radio licensees.[^72] They further argue that geographic area
    licensing would be inappropriate and counterproductive in the
    private radio bands.[^73] Private wireless licensees state that
    unlike commercial service providers that seek to offer the widest
    possible coverage, the majority of private radio licensees are
    interested in tailoring their operations to specific geographically
    confined needs.[^74] These licensees point out that they serve
    themselves in the areas in which they conduct their core activities,
    not the public at large across broad market areas.[^75] A number of
    commenters also argue that the use of geographic area licensing
    violates Section 309(j)(6)(E), claiming that it creates mutual
    exclusivity rather than avoids it.[^76]

31. As discussed above, we have concluded that Section 309(j)(6)(E) does
    not prevent the Commission from adopting licensing processes, such
    as geographic area licensing, that serve the public interest but
    happen to result in the filing of mutually exclusive license
    applications.[^77] We have also rejected commenters' arguments that
    the Commission is required by the Balanced Budget Act to retain
    current site-based licensing schemes in existing private
    services.[^78] Nonetheless, we recognize, as many commenters have
    pointed out, that the decision to convert from current site-based
    licensing methods to geographic licensing should not be made unless
    it is clear that the benefits of making the change outweigh the
    costs.[^79] Based on the record in this proceeding, we see no reason
    to make such an across-the-board change to existing licensing
    processes in private services. Therefore, we will not adopt
    geographic area licensing rules for existing private services in
    this rulemaking. Instead, with respect to private services, the
    Commission will continue to make determinations on a
    service-by-service basis of whether to adopt geographic area
    licensing, site-by-site licensing, or any other licensing scheme
    based on its obligation under Section 309(j)(6)(E) and the public
    interest considerations of Section 309(j)(3).

32. We recognize that some private licensees oppose geographic area
    licensing because they equate it with the use of competitive
    bidding, which they strongly oppose in the private services.[^80]
    Blooston, for example, contends that the adoption of auctions in
    private services would make it difficult for many traditional
    private users to obtain licenses because they would be unable to
    outbid commercial service providers seeking to use the spectrum for
    subscriber-based services.[^81] This view incorrectly assumes that
    if the Commission were to adopt geographic area licensing for
    private radio services, it would also eliminate eligibility
    restrictions for such services and permit commercial entities to bid
    for private spectrum for commercial use. In fact, with one limited
    exception in the 800 MHz band,[^82] we have concluded that we should
    not change existing eligibility and use rules for services that are
    currently restricted to private radio eligibles.[^83]

33. Moreover, even where we choose to retain eligibility restrictions on
    private spectrum, there may be ways in which geographic licensing
    could be employed to accommodate the needs of private radio users.
    For example, as noted above, we intend to use the framework adopted
    in this Report and Order to guide our decisions in regard to the
    separate *Notice of Proposed Rule Making* in which we are proposing
    to transfer 27 MHz of spectrum in bands below 3 GHz to
    non-government use.[^84] In addition, as discussed below, the use of
    band managers could be an effective means of providing private radio
    users the flexibility to obtain access to the amount of spectrum, in
    terms of quantity, length of time, and geographic area, that best
    suits their needs.[^85] In addition, we could tailor our auction
    designs and procedures in ways that serve the specialized needs of
    the private wireless industry.[^86]

### Band Manager Licenses

34. [Background]{.underline}. In the *Notice*, we sought comment on
    whether to establish a new class of licensee called a "band manager"
    in the private radio services.[^87] We described band managers in
    the *Notice* as a class of Commission licensee that engages in the
    business of making its spectrum available for use by others through
    private, written contracts.[^88] We solicited comment on a broad
    range of issues relating to how band manager licenses should be
    defined, and whether the public interest would be served by using
    band manager licensing to address current and projected needs for
    private internal radio services.[^89] We inquired whether the
    concept of a band manager fits within the Commission's overall
    spectrum management responsibilities and obligations under the
    Communications Act.[^90] We also asked a number of questions about
    whether and when a band manager licensing approach may be more
    effective relative to alternative methods of licensing private
    internal communications services.[^91] Finally, we sought comment on
    a full range of license implementation issues, including whether it
    would be necessary to have more than one band manager in each
    geographic license area and what types of ownership and control
    requirements might be appropriate for band managers in the private
    services.[^92]

35. [Discussion]{.underline}. For the reasons discussed below, we
    believe that band manager licensing is a viable mechanism that
    should be considered for licensing in spectrum allocated for the
    private services.[^93] This Report and Order sets forth a framework
    to guide our determination in future proceedings concerning private
    services as to the circumstances under which we might use band
    manager licensing as an alternative or an addition to other
    licensing methods. We also review some of the considerations that we
    might take into account in defining a band manager's rights and
    responsibilities in the context of particular services. We emphasize
    that this Report and Order does not adopt band manager licensing in
    any existing private service, nor do we make any specific decision
    to do so in any future service. Rather, we reserve for future
    service-specific rulemaking proceedings the question of whether to
    use band manager licensing in each case. Such determinations will be
    based on careful analysis of the public interest considerations of
    Section 309(j) of the Communications Act as they apply to the
    specific characteristics, uses, and demands of the service.

36. Since the *Notice* was adopted, we have implemented a form of band
    manager licensing for the first time in the *700 MHz Second Report
    and Order*. [^94] In that proceeding, we concluded that band manager
    licensing would be an effective and efficient way to manage the 700
    MHz Guard Band spectrum while minimizing the potential for harmful
    interference to public safety operations in adjacent bands.[^95] We
    also found that band manager licensing in the 700 MHz guard bands
    would enable parties to more readily acquire spectrum with a minimum
    of Commission involvement.[^96] We adopted licensing rules for Guard
    Band Managers that were based on specific policy objectives that we
    considered relevant to those bands. To ensure that Guard Band
    Managers would make their spectrum available to third parties, we
    required that Guard Band Managers act solely as spectrum brokers,
    prohibited them from using spectrum for their own private internal
    communications or to provide telecommunications services, and
    limited the amount of spectrum that they may lease to affiliated
    entities. [^97] To further our objective of making the 700 MHz guard
    band spectrum available to a wide range of users, we adopted certain
    requirements to ensure fair and nondiscriminatory access to the
    spectrum by potential users.[^98]

37. Our recent adoption of Guard Band Manager licensing in the 700 MHz
    proceeding should help guide us in evaluating whether to adopt band
    manager licensing in future proceedings.[^99] Nevertheless, a number
    of private radio commenters in the present proceeding argue that
    band manager licensing of private services is contrary to the public
    interest. [^100] We agree that the use of band managers in spectrum
    restricted to private services may raise different issues from those
    that led to our decision for the 700 MHz guard band spectrum, which
    was open to all users, including commercial service providers and
    private radio eligibles.[^101] There may be instances where we
    determine that band manager licensing is not appropriate, and where
    band manager licensing is adopted, we may adopt rules governing band
    manager activity that differ from those applicable to Guard Band
    Managers. As discussed below, however, we reject the view that band
    managers are inappropriate for private services generally.

38. A principal argument advanced by opponents of band manager licensing
    in private services is that in comparison to other licensing
    methods, band manager licensing will necessarily make it more
    difficult and costly for private spectrum users to obtain
    spectrum.[^102] We do not agree. Band manager licensing is a
    potential response to the underlying scarcity of spectrum for
    private radio services. Repeatedly, we have recognized this problem
    and have attempted to address it through regulatory initiatives
    aimed at increasing spectral and economic efficiencies in the use of
    private radio spectrum.[^103] In the absence of market-based
    mechanisms to promote efficient spectrum use, however, private radio
    spectrum has become congested and "users have little incentive to
    use that resource more efficiently because any privately initiated
    attempt to improve efficiency would confer benefits on all users of
    the shared spectrum, with only a fraction of these benefits accruing
    to the party undertaking the effort."[^104] By contrast, band
    manager licensing is a market-based mechanism that can create
    incentives for efficient spectrum use. Because band managers would
    be able to charge private users for spectrum use, users would likely
    be discouraged from engaging in spectrally inefficient and low value
    uses. In addition, band managers may realize greater economies of
    scale than existing private radio licensees. Finally, as in the case
    of the 700 MHz guard bands, we have the option of licensing more
    than one band manager in each license area, if we think it important
    to ensure that potential spectrum users have a choice of band
    managers. These factors will help ensure that efficiencies and cost
    savings associated with band manager licensing are passed on to
    private spectrum users.

39. We also disagree with the view that band manager licensing
    inevitably results in a concentration of private spectrum in the
    hands of a few licensees while depleting the spectrum available to
    others. [^105] To the contrary, we believe that band manager
    licensing can increase the diversity of users of private spectrum.
    With a band manager, different types of spectrum users would have
    broad flexibility to satisfy their particular spectrum needs with
    fewer transactional costs and regulatory burdens than are associated
    with acquiring a full-term license under the Commission's existing
    license assignment and partial assignment procedures. Because band
    manager licensing may result in different types of users being able
    to access the same spectrum, we believe that this mechanism is
    consistent with the congressional intent underlying Section 309(j)'s
    directive to encourage diversity in licensing.[^106]

40. In addition to allowing for wider variety of users, band manager
    licensing is intended to facilitate apportionment of spectrum in a
    more dynamic fashion than existing licensing procedures permit, thus
    making spectrum more responsive to market demands and technological
    changes.[^107] We note that the marketplace is increasingly
    responding to such demands, with system operators increasingly
    offering services that have historically been provided only over
    private radio frequencies.[^108] Band manager licensing is likely to
    accelerate this trend toward more efficient use of private radio
    spectrum. Rather than deplete spectrum, band manager licensing
    approaches will be developed with the objective of affording
    spectrum users additional options to access spectrum to meet their
    particularized needs.

41. In light of these considerations, we find no merit in SBT's
    assertion that band manager licensing would be "an economic disaster
    for local users" and small businesses.[^109] We see no reason to
    believe that small businesses would not be awarded band manager
    licenses. Indeed, in our recently-concluded auction of 700 MHz Guard
    Band Manager licenses, five of the nine winning bidders claimed
    small business status.[^110] When licenses are awarded through
    competitive bidding, the Commission may -- and usually does -- award
    bidding credits and other preferences to small businesses.[^111] We
    also disagree with SBT's assertion that band managers would have no
    incentive to deal with small businesses. Band managers would be in
    the business of marketing and providing access to spectrum directly
    to eligible entities, which would give rise to economic incentives
    to intensively use the spectrum and permit access to as many users
    and types of users as possible.

42. Some commenters argue that band manager licensing is an improper
    delegation of the Commission's spectrum management and licensing
    authority under the Communications Act.[^112] We previously
    concluded in the 700 MHz guard band proceeding that band manager
    licensing is fully consistent with our statutory spectrum management
    obligations.[^113] For a number of reasons, we continue to believe
    that conclusion is correct, and we reiterate it today. First,
    because band managers are to be licensed and regulated by the
    Commission, the Commission fulfills its statutory obligation under
    Section 309(a) to determine whether licensing of spectrum will serve
    the public interest, convenience, and necessity. [^114] Second, we
    do not regard the creation of band managers as an improper
    delegation of our regulatory authority over the use of spectrum.
    Band managers must operate and make spectrum available subject to
    the Commission's rules and oversight. Allowing band managers to make
    frequencies available to end users is analogous to the present
    frequency coordination process that requires applicants in some
    private services to use a frequency coordinator to select a
    frequency that will most effectively meet the applicant's needs
    while minimizing interference to licensees already using a given
    frequency band.[^115] We view band managers as engaging in
    activities similar to those of a coordinator, though with greater
    rights and responsibilities to manage the spectrum covered by its
    license, consistent with technical limitations and other regulations
    for the licensed radio bands.

43. We also reject the view that band manager licensing is inherently
    inconsistent with the requirements of Section 310(d) of the
    Communications Act.[^116] Section 310(d) prohibits the transfer of a
    radio license or any rights thereunder without Commission
    approval.[^117] Generally speaking, one of the Commission's primary
    concerns in any analysis under Section 310(d) is to determine what
    party or parties may be held accountable for activities undertaken
    pursuant to a Commission license.[^118] In the *700 MHz Second
    Report and Order*, we concluded that our Guard Band Manager rules
    allowing licensees to lease spectrum to third parties were
    consistent with the requirement that licensees retain ultimate
    control of their licenses.[^119] For example, we provided Guard Band
    Managers with full authority and the duty to take whatever actions
    are necessary to ensure third-party compliance with the Act and our
    rules.[^120] We also stated that a Guard Band Manager has the right
    to suspend or terminate its lessee's operations if the lessee's
    system is causing harmful interference or otherwise violating
    Commission rules.[^121] We believe that the approach taken in the
    700 MHz Guard Band proceeding demonstrates that band manager
    licensing can be implemented consistently with the requirements of
    Section 310(d). To the extent that we adopt alternative models for
    band manager licensing in future service-specific proceedings, we
    believe that issues relating to the statutory framework for such
    models can and should be addressed in those proceedings.[^122]

44. While we conclude that band manager licensing should be considered
    as an option in the licensing of private services, we recognize that
    there are also arguments in favor of retaining the current
    site-by-site licensing approach in existing private radio services,
    as many commenters advocate.[^123] Commenters raise legitimate
    concerns about the costs to spectrum users, both in terms of
    financial costs and delays in making spectrum accessible, that may
    be associated with changing a licensing scheme in an existing
    service. In light of these considerations, we have no plans at this
    time to implement band manager licensing in existing private radio
    bands that are licensed on a site-by-site basis.[^124] We will
    continue to evaluate this issue on an ongoing basis, however. As
    many of the commenters who oppose band manager licensing
    acknowledge, demand for private radio spectrum is increasing and
    available spectrum is scarce.[^125] Thus, while existing licensing
    schemes in the private radio services may tend to avoid mutually
    exclusive applications, such approaches may also raise barriers to
    new demands for access to private radio spectrum that may have
    significant public benefits. Compared with transactional costs and
    time periods associated with acquiring a full-term license under the
    Commission's existing licensing regimes, band manager licensing may
    have advantages because band managers may be able to complete
    frequency coordination and authorize wireless operations with
    significantly lower transactional costs and in less time. A number
    of commenters have observed that past Commission initiatives, such
    as refarming and authorization of infrastructure sharing, have
    increased spectral efficiency in the private radio services.[^126]
    We believe that band manager licensing is another method that under
    some circumstances can help us progress towards greater efficiency
    in the use of private radio bands.[^127]

45. While we are hopeful that band manager licensing can yield
    efficiencies in existing spectrum use, we also agree with private
    radio users that this is a complement to rather than a substitute
    for pursuing new spectrum allocations.[^128] We therefore intend to
    continue to explore the need for new spectrum allocations to address
    the needs of private and public safety users. We also believe that
    band manager licensing should be carefully considered as a licensing
    option for newly-allocated spectrum. For example, we have recently
    initiated a proceeding to reallocate 27 MHz of spectrum in bands
    below 3 GHz from Federal Government to non-government use, and have
    sought comment on proposals for band manager licensing in portions
    of that spectrum.[^129]

46. We also believe that band manager licensing can be structured to
    prevent the types of problems that some commenters contend will
    occur, including problems of interference,[^130] loss of spectrum
    efficiency,[^131] and inadequacy of user access and service.[^132]
    Although the rights and obligations of band managers may vary
    somewhat from service to service, we anticipate that band managers
    will generally have economic incentives to eliminate interference so
    as to ensure that end users receive quality service. Band managers
    will also be required to coordinate the use of frequencies among end
    user clients to minimize interference, and will be obligated to
    ensure that their lessees satisfy the interference protection
    requirements set forth in the Commission's rules both as to
    incumbent private radio licensees and licensees in adjacent
    frequency bands. Band managers will also be responsible for
    resolving interference conflicts among their customers and, in the
    first instance, among their customers and neighboring users of
    spectrum licensed to other band managers or other licensees. We have
    recognized that one way to allow greater flexibility in the use of
    spectrum is to permit licensees to negotiate arrangements among
    themselves to control interference rather than rely on mandatory
    technical rules.[^133]

47. Band managers also have the potential to promote more efficient use
    of their licensed spectrum due to their financial incentive to
    maximize spectral efficiency and use. This incentive is likely to
    encourage band managers to reach private commercial agreements with
    incumbents, other band managers and adjacent licensees on effective
    spectrum management. The band manager will be responsible for
    managing a significant portion of spectrum and will attempt to
    maximize its use by finding additional third party users. In this
    way, band manager licensing may achieve greater efficiencies than
    existing licensing schemes in appropriate circumstances. Similarly,
    we find little merit in assertions that band managers will engage in
    unfair or discriminatory behavior[^134] and warehouse
    spectrum.[^135] We are confident that band managers will have
    incentives to open the use of the spectrum for all eligible users.
    Nonetheless, we will consider whether it is appropriate for band
    managers in other bands to be subject to the same types of rules as
    700 MHz Guard Band Managers regarding fair and nondiscriminatory
    access to the band manager's spectrum, and limits on the type of
    restrictions that band managers may impose on their customers' use
    of the spectrum.[^136] If circumstances warrant, moreover, the
    Commission might consider imposing reasonable access standards or
    other requirements to forestall anticompetitive behavior.[^137]

48. In assessing whether a band manager licensing mechanism may be
    appropriate for a specific private services band, we intend to look
    at a number of factors. For example, we might consider whether there
    are entities who can effectively perform the functions of a band
    manager, and whether other licensing options may be overly
    cumbersome or inefficient. Our decisions on whether and how to
    license band managers in other bands may also be guided by our
    experience with the 700 MHz Guard Bands. However, the band manager
    rules we adopt in other bands may differ in some or all respects
    from our Guard Band Manager rules. As an initial matter, if we
    decide to license band managers in other bands, we will determine
    whether the spectrum should be licensed exclusively to band managers
    or to band managers along with other types of licensees. In
    considering band manager licensing, we will decide whether the band
    manager may be solely a broker of spectrum or may also use its
    licensed spectrum for its own internal communications or to provide
    telecommunications services.

49. If we permit band managers to use their spectrum in addition to
    leasing it, we will also consider whether rules are needed to ensure
    that band managers continue to perform their core spectrum
    management functions. Thus, if we determine that a band manager will
    not be limited to acting as a spectrum broker, we will also consider
    whether it is appropriate to limit the amount of spectrum that a
    band manager may retain for its own use.[^138] In addition, we will
    consider whether to adopt rules concerning the types of entities
    that may lease spectrum from a band manager. For example, if we
    decide to limit the amount of spectrum that a band manager may
    employ for its own communications needs or service offerings, we
    might advance that regulatory objective by limiting the amount of
    spectrum that a band manager leases to affiliated entities. We may
    provide the band manager in a given band flexibility to lease its
    spectrum for a wide range of uses, including fixed or mobile,
    private or commercial radio services. Alternatively, we could adopt
    eligibility restrictions for the band managers similar to those we
    have historically adopted for licensees in existing private radio
    services.[^139]

50. We believe that the framework outlined above presents a workable set
    of guidelines in our future considerations of whether and how to
    license band managers in private radio services, and how to advance
    the policy objectives we establish for the bands under
    consideration. We emphasize that, where we find band manager
    licensing to be appropriate, we intend to seek input on how band
    manager licenses can be most appropriately defined for the service
    in a manner that affords users the broad flexibility to access
    spectrum, maximizes efficient use of the spectrum, and yields
    greater benefits than site-by-site or other traditional licensing
    techniques.

## Auction Design for Private Radio Spectrum Deemed Subject to Auction

51. We next discuss issues of auction design and implementation for
    those services that were not subject to auction under the 1993
    Budget Act but may be determined to be subject to auction under our
    revised auction authority. The services that may be determined to be
    subject to auction under our expanded auction authority are, by and
    large, private radio services which are presently licensed under
    procedures that generally do not result in the filing of mutually
    exclusive applications. Thus, we next consider issues of auction
    design and implementation for those services that may be subject to
    auction in the future.

### Competitive Bidding Methodology and Design

52. [Background]{.underline}. We have concluded above that Section
    309(j), as amended by the Balanced Budget Act, gives the Commission
    authority to conduct auctions in the private services if, subject to
    its obligation to avoid mutual exclusivity, the Commission
    determines that the use of competitive bidding would serve the
    public interest.[^140] In the event that the Commission adopts a
    licensing scheme that results in mutual exclusivity, the Commission
    seeks to develop a competitive bidding process that is tailored to
    the specific characteristics of the private radio services, the
    various purposes for which spectrum in those services is used, and
    the needs of the various types of entities holding licenses in those
    services.[^141] In the *Notice*, we stated that Section 1.2103(a) of
    our rules sets forth the various types of auction designs from which
    we may choose to award licenses for services or classes of services
    subject to competitive bidding.[^142] We also pointed out that under
    Section 309(j) the Commission has authority to design and test other
    auction methodologies.[^143] In light of these options, we sought
    comment generally on the types of competitive bidding designs and
    methodologies to be considered for any private radio services that
    may be determined to be auctionable as a result of the Balanced
    Budget Act.[^144] We also asked about the frequency with which we
    should conduct auctions of private radio services spectrum that we
    determine is auctionable, and whether we should conduct auctions at
    regularly scheduled intervals.[^145] In addition, we asked whether
    certain procedures such as bidding credits and spectrum caps would
    be appropriate in the private radio services.[^146]

53. [Discussion]{.underline}. Although we received little public comment
    on these issues, we believe that the specialized nature of private
    radio services merits consideration of changes to our general
    auction design and procedures. We intend to consider proposals to
    amend our competitive bidding methodology for specific private radio
    services on a service-by-service basis. We may, for instance, decide
    to implement procedures such as bidding credits, spectrum caps, and
    auctions at regularly scheduled intervals. We have provided bidding
    credits to eligible applicants in many of our previous
    auctions[^147] and believe that applicants for licenses in the
    auctionable private radio services should also be eligible to
    receive such financial benefits provided they meet the necessary
    criteria. We further believe that scheduling auctions for licenses
    in the private services at regular intervals would be particularly
    beneficial to the private wireless industry. We recognized in the
    *Notice* that private internal radio service licensees using
    spectrum to conduct their day-to-day business operations may not be
    able to wait a significant amount of time to obtain authorizations
    for the frequencies they need to conduct their businesses.[^148]
    Conducting auctions at regularly scheduled intervals of whatever
    spectrum we determine to be available in our inventory would ensure
    that private users have the opportunity to acquire the spectrum they
    need to operate their businesses. Further, we confirm our
    determination made in the *Part I Third Report and Order* to
    continue to define small businesses for purpose of private wireless
    auction rules based on the characteristics and capital requirements
    of the specific service.[^149]

### Eligibility Requirements

54. [Background]{.underline}. The *Notice* solicited comment on a broad
    range of questions relating to eligibility for participation in
    spectrum auctions for private radio services.[^150] In particular,
    we sought comment on whether to restrict eligibility to participate
    in auctions for private wireless services so that we might be able
    to tailor a competitive bidding system to afford private wireless
    users reasonable opportunities to obtain sufficient spectrum to meet
    the needs of their day-to-day business operations. We requested
    comment on whether participation in private wireless spectrum
    auctions should be limited to certain types of entities, such as
    small businesses, non-commercial entities or public safety
    organizations, and whether to afford certain classes of applicants
    priority status in an auction.

55. [Discussion]{.underline}. With respect to services that are
    currently restricted to private radio eligibles, we have no plans to
    change existing eligibility and use rules. Our decision of whether
    to use competitive bidding to assign licenses is independent of any
    determination relating to licensee eligibility.

56. As to newly allocated spectrum, we will make decisions on
    eligibility at the time we promulgate specific service rules for
    those bands. In recent years, the Commission has generally favored
    open eligibility rather than eligibility restricted to particular
    types of entities. We have taken this approach based on the finding
    that open eligibility generally promotes efficiency in spectrum
    markets and results in the award of licenses to those who value them
    most highly.[^151] Nevertheless, we recognize that this general
    approach may not be appropriate in all cases and we may decide to
    restrict eligibility in particular cases if such restrictions are
    consistent with our spectrum management responsibilities under
    Section 309(j).

### Processing of New Applications

57. [Background]{.underline}. In the *Notice*, we posed a number of
    questions concerning the implementation of competitive bidding for
    services in which licenses will be assigned by auction for the first
    time.[^152] In particular, we requested comment on measures that
    might be necessary to prevent applicants from using the current
    application and licensing processes to engage in speculative
    activity prior to our adoption of auction rules, such as temporary
    application freezes or interim rules imposing shorter time periods
    for construction or build-out.[^153]

58. [Discussion]{.underline}. In the event we decide to adopt
    competitive bidding for a private radio service, we will continue to
    make service-by-service determinations as to whether to temporarily
    suspend acceptance of applications for new licenses, amendments, or
    major modifications, or adopt interim rules imposing shorter time
    periods for construction or build-out. Commenters uniformly oppose
    the use of application freezes,[^154] noting that they can be
    disruptive to existing operations and can often last longer than
    initially anticipated. We are mindful that even short-term freezes
    have the potential to harm incumbents as well as potential new
    entrants and, by extension, the public.[^155]

59. We observe that the Commission has delegated authority to impose
    application filing freezes in the private wireless services to the
    Chief of the Wireless Telecommunications Bureau.[^156] While we
    defer to the Bureau's expertise and experience in making such
    determinations, we believe that the Bureau should be guided by a
    principle of using the least restrictive means available to deter
    speculative applications. Generally, the Bureau has carefully
    balanced the benefits and costs to incumbent users, new entrants and
    the public of applying such measures.

60. In exercising its delegated authority, the Bureau has generally
    refrained from imposing licensing freezes upon applications for
    private, internal use facilities on the grounds that such
    applications are not subject to the same speculative pressures that
    may be present in commercial contexts.[^157] In commercial contexts
    our practice has been to temporarily suspend the acceptance of
    applications upon the adoption of competitive bidding rules and new
    geographic licensing schemes;[^158] however, in the private wireless
    services the Bureau has previously found that incentives for
    speculative abuse are limited.[^159] Most commenters contend that
    the private radio services are not likely to be targeted by
    speculators and oppose the use of freezes in these services.[^160]
    Nevertheless, we are concerned that for private services in which we
    decide licenses will be assigned by competitive bidding for the
    first time, it may be necessary to adopt temporary licensing freezes
    to prevent applicants from using the current application and
    licensing processes to engage in speculative activity prior to our
    adoption of auction rules, thus limiting the effectiveness of our
    decision.

61. Commenters are divided on the issue of whether short construction
    deadlines should be used to deter speculative licensing
    activity.[^161] For example, Cinergy asserts that "\[t\]he current
    construction periods represent the perfect balance of being short
    enough to prevent speculation but long enough to allow all types of
    licensees to secure funding, order equipment and build new
    communications facilities."[^162] AWWA finds this proposal
    "problematic" for utilities and public agencies which, it asserts,
    would be unable to complete the bidding, contracting and
    construction processes within time frames any shorter provided for
    under existing rules.[^163] Others favor shortened construction
    periods in the event of a transition to a new licensing
    scheme,[^164] but differ on whether extension requests should be
    permitted.[^165] We have previously recognized that shortened
    construction deadlines may serve as an effective deterrent to
    potential speculation by those with no sincere interest in
    constructing radio facilities.[^166] With respect to private radio
    services, we remain convinced that reduced construction periods may
    be an appropriate spectrum management tool. However, given the broad
    range of private services involved in this rulemaking and those
    services' differing objectives and needs, the Commission will not
    adopt a new framework here for making such determinations. Rather,
    we will retain the discretion to adopt temporary licensing freezes
    or shorter construction periods as a means of deterring speculative
    licensing activity on a service-by-service basis.

## Exemption from Competitive Bidding for Public Safety Radio Services

62. Since it initially became law, Section 309(j)(2) of the
    Communications Act has contained provisions qualifying the
    Commission's auction authority.[^167] As is discussed above, the
    Balanced Budget Act significantly revised Section 309(j)(2) to
    enumerate three types of spectrum licenses to which our competitive
    bidding authority does not apply.[^168] Two of the three exemptions
    relate to categories of broadcast licenses.[^169] The auction
    exemptions for those categories of broadcast licenses have been
    addressed in other Commission decisions and will not be discussed
    any further here.[^170] Rather, the following discussion focuses on
    the scope of Section 309(j)(2)(A)'s exemption for "public safety
    radio services,"[^171] and mechanisms that may be used in the event
    we receive mutually exclusive applications for public safety radio
    services.

### Scope of Public Safety Radio Services Exemption

63. [Background]{.underline}. Section 309(j)(2)(A), as amended by the
    Balanced Budget Act, states that the Commission's auction authority
    does not extend to licenses and permits issued

\(A\) For public safety radio services, including private internal radio
services used by State and local governments and non-government entities
and including emergency road services provided by not-for-profit
organizations, that --

> used to protect the safety of life, health, or property; and
>
> \(ii\) are not made commercially available to the public;

As we stated in the *Notice,* this exemption from the Commission's
auction authority is of particular importance to determining the
auctionability of wireless spectrum.[^172] In the *Notice*, we sought
comment on the various elements of the statutory exemption.

64. [Discussion.]{.underline} As discussed in greater detail below, we
    conclude that the statutory exemption for public safety services
    applies not only to traditional public safety services such as
    police, fire, and emergency medical services, but also to services
    designated for non-commercial use by entities such as utilities,
    railroads, transit systems, and others that provide essential
    services to the public at large and that need reliable internal
    communications in order to prevent or respond to disasters or crises
    affecting their service to the public. We also conclude that the
    public safety exemption applies only to services in which these
    public safety uses comprise the dominant use of the spectrum. Thus,
    services in which such uses are not dominant (and in which mutual
    exclusivity occurs) are not statutorily exempt from auctions, even
    if some individual licensees in the service may choose to use the
    spectrum for public safety purposes as defined by the statute.

65. As set forth in greater detail below, in applying this analysis to
    existing private services, we conclude that spectrum currently
    allocated to the Public Safety Radio Pool, to the extent it is
    licensed on an exclusive basis, is within the scope of the statutory
    exemption. We also conclude that the exemption does not apply to
    exclusively licensed spectrum in the 220, 800, and 900 MHz bands
    allocated to Industrial/Land Transportation and Business Radio use,
    nor does it apply to exclusive private land mobile radio frequencies
    in the 470-512 MHz band,[^173] because the dominant use of these
    bands is not "public safety" use as defined by Section 309(j)(2)(A).
    With respect to other private services that are not exclusively
    licensed, we do not need to determine the applicability of the
    public safety exemption at this time because mutual exclusivity does
    not occur in these services.

66. We do provide, however, the following guidance regarding our
    interpretation of the public safety exemption, and discuss the
    factors we will consider in assessing its applicability to future
    situations. As a threshold matter, we find that the exemption should
    be evaluated in terms of its application to particular services
    rather than to particular classes or groups of licensees within a
    service. The statutory language provides that the exemption applies
    to "public safety radio *services*."[^174] While the legislative
    history of the Balanced Budget Act refers to particular "users" as
    being exempt, we believe that this language is best interpreted as
    illustrating the types of services that fall within the new
    statutory term, *i.e.,* services like those used by the entities
    referenced in the legislative history. Because the applicability of
    the exemption to any service must be decided before the service is
    licensed, our analysis in each case must be based on the use and
    eligibility rules that we establish for the service. We therefore
    agree with the majority of commenters that delineating the scope of
    the exemption is a matter of determining whether the rules for a
    particular service cause it to fall within the definition of a
    "public safety radio service," rather than attempting to predict the
    uses of spectrum that will develop after licensing occurs.[^175] We
    therefore conclude that the exemption can apply only to spectrum
    that the Commission specifically allocates for the particular uses
    that Congress intended to benefit.[^176] We note that the public
    safety radio services exemption does not preclude the Commission
    from allocating additional spectrum only for traditional public
    safety services as defined by Part 90 of the Commission's Rules. We
    discuss each of the elements of the statutory exemption in turn.

67. *Private Internal Radio Services.* The statutory public safety
    exemption includes "private internal radio services" used for public
    safety purposes.[^177] In the *Notice,* we proposed to define
    "private internal radio services" by adapting the Part 90 definition
    of "internal system" to also include fixed services (which are
    governed by Part 101).[^178] The commenters broadly support adopting
    the Part 90 definition for purposes of determining this element of
    the statutory exemption. We therefore adopt this definition, *i.e.*,
    we define a "private internal radio service" as a service in which
    the licensee does not make a profit, and all messages are
    transmitted between fixed operating positions located on premises
    controlled by the licensee and the associated fixed or mobile
    stations or other transmitting or receiving devices of the licensee,
    or between mobile stations or other transmitting or receiving
    devices of the licensee.[^179]

68. We also requested comment on whether the "private internal" use
    definition should include services in which licensees operate
    systems on a not-for-profit basis and under a cost-sharing
    agreement, on a cooperative basis, or as a multiple-licensed system
    for internal communications to support their own operations.[^180]
    Consistent with most of the comments addressing this issue, we now
    decide that once we deem a particular service to be a public safety
    radio service, the spectrum will be auction-exempt even if some of
    the users operate their systems under some type of cost-sharing
    arrangement or through multiple licensing.[^181] We note, however,
    that the services on which such use is permitted currently (*e.g.,*
    Private Land Mobile Radio Services) are licensed in a manner that
    does not give rise to mutual exclusivity, so that it is not
    necessary at this time to consider the applicability of the
    exemption to these services.[^182]

69. *State and Local Governments.* The exemption includes "private
    internal radio services" used by both public and private entities,
    *i.e.,* "state and local governments and non-government
    entities."[^183] In the *Notice,* we requested comment on our
    tentative conclusion that we should presume that all state and local
    government entities are eligible for licensing in the public safety
    radio services without any further showing as to eligibility, rather
    than require all state and local government entities to demonstrate
    their eligibility for licensing in the public safety radio
    services.[^184] In establishing eligibility for licensing in the
    public safety spectrum in the 700 MHz band, the Commission concluded
    that all state and local government entities would be presumed
    eligible without further showing as to eligibility.[^185] The
    Conference Report accompanying the Balanced Budget Act makes clear
    that Congress intended the public safety radio services exemption to
    be broader than the definition of "public safety services" eligible
    for licensing in the 700 MHz band, *i.e.*, to include a larger
    universe of services.[^186] Commenters addressing this issue agree
    that the Commission should presume eligibility for state and local
    government entities.[^187] Consequently, we conclude that all state
    and local government entities are eligible for licensing in the
    public safety radio services without any further showing as to
    eligibility, subject to the statutory requirements for spectrum to
    be deemed auction-exempt.

70. *Non-government Entities.* In the *Notice*, we requested comment on
    whether we should establish any eligibility criteria for
    non-government entities (NGOs) to ensure that public safety radio
    services spectrum licensed to these entities is used to protect the
    safety of life, health, or property and is not made commercially
    available to the public.[^188] Most commenters addressing this issue
    oppose the imposition of eligibility restrictions, such as
    governmental approval requirements.[^189] We agree. A statutory
    analysis supports this conclusion. The definition for "public safety
    services" in Section 337(f) of the Communications Act requires NGOs
    to be authorized by a governmental entity in order to be eligible
    for public safety spectrum in the 764-776/794-806 MHz (700 MHz)
    band, but the public safety radio services exemption in Section
    309(j)(2) contains no such condition. This distinction indicates
    that Congress did not intend to subject NGOs to such requirements in
    order to be eligible for public safety radio service spectrum.[^190]
    Accordingly, we conclude that we shall not establish any eligibility
    criteria for NGOs separate and apart from the eligibility
    requirements for each public safety radio service.[^191]

71. Section 309(j)(2)(A) also provides that the exemption includes
    services used by not-for-profit organizations providing emergency
    road services. The legislative history to the Balanced Budget Act
    reflects that this service exemption includes "radio services used
    by not-for-profit organizations that offer emergency road services,
    such as the American Automobile Association," and explains that the
    Senate "included this particular exemption in recognition of the
    valuable public safety service provided by emergency road services."
    [^192] The Conference Report specifies that this exemption was not
    meant to include "internal radio services used by automobile
    manufacturers and oil companies to support emergency road services
    provided by those parties as part of the competitive marketing of
    their products."[^193] Commenters were divided[^194] in response to
    our question in the *Notice* regarding whether we should exclude
    providers of emergency road services that are not organized as
    not-for-profit entities from using auction-exempt spectrum.[^195]
    The statute makes a specific distinction between for-profit and
    not-for-profit entities in this context. The statute does not make
    this distinction in any other context with respect to the exemptions
    from competitive bidding. We conclude that a radio service used by
    for-profit entities providing emergency road services is not
    auction-exempt. The for-profit nature of such entities takes them
    outside the scope of the emergency road services exemption, even if
    they arguably otherwise meet the statutory criteria.[^196]

72. *Protection of Life, Health, or Property.* Congress requires that
    the exemption apply to private internal services used by state and
    local governments and non-government entities to protect life,
    health, or property. Thus, the most prominent issue in delineating
    the scope of the exemption is to determine which services are "used
    to protect the safety of life, health, or property" within the
    meaning of the statute.[^197]

73. As a threshold question, we must determine what proportion of users
    in a given service must be the type of user that Congress intended
    to be able to make use of exempt spectrum, in order for the service
    to be deemed a public safety radio service. For example, is a
    service auction-exempt so long as *any* of the users within that
    service are qualified to obtain such spectrum? Or must all*,* or the
    majority, of the entities within the service, be qualified to obtain
    such spectrum? In the Multiple Address System proceeding, we looked
    to the "dominant" or "primary" use of each band to determine whether
    to assign it by competitive bidding.[^198] In other words, we
    examined whether the majority of users within a given band are
    qualified to obtain auction-exempt spectrum, in order to determine
    whether that band should be designated as auction-exempt. We will
    use the same approach here.

74. In order to determine whether a given service is primarily utilized
    by the type of user Congress intended to exempt from competitive
    bidding, we must determine what users Congress intended to include
    within the exemption. In the *Notice,* we tentatively concluded that
    Congress intended to include those users of spectrum currently
    allocated for traditional public safety uses.[^199] Specifically, we
    proposed to designate the following spectrum as exempt from
    assignment by competitive bidding procedures:

> 1\. Private Land Mobile Radio Services currently assigned to the
> Public Safety Radio Pool. This pool is comprised of those services
> formerly[^200] housed in the Public Safety Radio Services[^201] and
> the Special Emergency Radio Services.[^202]
>
> 2\. Public safety spectrum in the 700 MHz band.[^203]
>
> 3\. The ten 220 MHz band non-nationwide channel pairs allocated for
> the exclusive use of Public Safety eligibles*.*[^204]
>
> 4\. The two contiguous channel pairs in each of the thirty-three
> inland VHF Public Coast areas set aside for public safety users.[^205]

Commenters agree that Congress clearly intended to include this spectrum
within the exemption.[^206] We now conclude that the portions of
spectrum listed above are public safety radio services for purposes of
eligibility for the exemption. We also find that the five channel pairs
in the 932/941 MHz Multiple Address Systems bands designated for Federal
Government and/or public safety use as defined by Part 90 of the
Commission's rules[^207] fall within the exemption.

75. As stated earlier, we believe that Congress intended for the
    exemption to include a larger universe of uses than traditional
    public safety and the legislative history of the Balanced Budget Act
    provides guidance regarding the intended further scope of the
    exemption. Specifically, the Conference Report states that the
    exemption for public safety radio services includes the private
    internal radio services used by "utilities, railroads, metropolitan
    transit systems, pipelines, private ambulances, and volunteer fire
    departments."[^208] The inclusion of private ambulances and
    volunteer fire departments is due to the fact that the services they
    perform supplement or, in some areas, replace traditional public
    safety functions ordinarily provided by local governments.
    Accordingly, we conclude that spectrum bands, the dominant use[^209]
    of which are by entities that use their communications systems to
    perform such public safety services, should be exempt from auction.

76. However, the other entities identified in the Conference Report \--
    utilities, pipelines, metropolitan transit systems and railroads --
    do not have, as their primary missions, traditional public safety
    functions. Utilities and pipelines exist to bring, among other
    things, gas, water and electricity to consumers; transit systems and
    railroads exist to transport people and goods. In determining what
    common characteristics they do have, and thus what other entities
    Congress intended the exemption to encompass, we find helpful the
    Final Report of the Public Safety Wireless Advisory Committee
    (PSWAC), which the Commission, jointly with the National
    Telecommunications and Information Administration, chartered to
    provide advice and recommendations on the current and future
    requirements for public safety communications.[^210] PSWAC
    recommended a definition of "Public Services" as services "that
    furnish, maintain, and protect the nation's basic infrastructures
    which are required to promote the public's safety and
    welfare."[^211] It stated, "Public service providers, such as
    transportation companies and utilities\[,\] rely extensively on
    radio communications in their day-to-day operations, which involve
    safeguarding safety and preventing accidents from occurring."[^212]
    The Commission relied on a similar concept when it established
    special frequency coordination requirements for spectrum formerly
    used exclusively by the power, petroleum, and railroad industries
    because, in these industries, radio is used as a critical tool for
    responding to emergencies that could impact hundreds or thousands of
    people. Although the primary functions of these organizations is not
    necessarily to provide safety services, the nature of their
    day-to-day operations provides little or no margin for error and in
    emergencies they can take on an almost quasi-public safety function.
    Any failure in their ability to communicate by radio could have
    severe consequences on the public welfare. For example, the failure
    or inability of trains to communicate with each other or a central
    dispatcher could result in unsafe conditions and an increased risk
    of derailment. Also, utility companies need to possess the ability
    to coordinate critical activities during or following storms or
    other natural disasters that disrupt the delivery of vital services
    to the public such as provision of electric, gas, and water
    supplies.[^213]

77. Against this background, we observe that the entities identified in
    the Conference Report which do not use their communications
    principally for the protection of life, health or property \--
    utilities, railroads, metropolitan transit systems and pipelines \--
    have two characteristics in common. First, these entities have an
    infrastructure that they use primarily for the purpose of providing
    essential public services to the population at large. In this
    context, an infrastructure can be described as fixed physical
    facilities that extend beyond the licensee's place of business to
    areas where the public at large live and work and are therefore
    exposed to adverse results stemming from a breakdown in the
    licensee's infrastructure. The second common characteristic is that
    the reliability and availability of the communications systems for
    these entities is necessary for them, as part of their regular
    mission, to prevent or respond to a disaster or crisis affecting the
    public at large.[^214] Specifically, the public depends on these
    services, which affect the daily lives of members of the public and
    interruption in the service may have dangerous consequences.
    Accordingly, we conclude that a radio service not allocated for
    traditional public safety uses will be deemed to protect the safety
    of life, health or property within the meaning of Section
    309(j)(2)(A)(i) if the dominant use of the service is by entities
    that (1) have an infrastructure that they use primarily for the
    purpose of providing essential public services to the public at
    large; and (2) need, as part of their regular mission, reliable and
    available communications in order to prevent or respond to a
    disaster or crisis affecting the public at large.

78. For instance, an electric utility meets both prongs of the two-part
    standard. Power lines extend far beyond the utility's power plant
    and into areas where members of the public live and work. A
    breakdown in the electric utility's infrastructure or fixed physical
    facilities (*e.g.,* a live wire) creates a dangerous condition for
    members of the public. Additionally, a dependable communications
    system is necessary for an electric utility to respond to an
    interruption in service that may hinder the delivery of vital
    services (*e.g.,* without power, a home may lack heat in the winter
    or air conditioning in the summer). Similarly, a metropolitan
    transit system meets both parts of the standard . A metropolitan
    transit system has an infrastructure or fixed physical facilities
    (*e.g.,* railroad tracks) where a breakdown in the system (*e.g.,*
    derailment) creates a dangerous condition that would adversely
    affect the public at large. Moreover, a reliable communications
    system is essential for a metropolitan transit system to enable
    quick response to any disruption in service as an interruption can
    create a dangerous condition and would impede the delivery of vital
    transportation services to the public.

79. Some commenters argue that all private wireless communications, in
    some respect, protect the safety of life, health, and property of
    the public, and therefore all private wireless services should be
    auction-exempt.[^215] They note that individuals in virtually every
    industry rely upon their private wireless radio systems to ensure
    the safety of their employees and enhance their productivity and
    operations and contribute to the continued growth and vibrancy of
    the economy.[^216] As a general matter, we agree with these
    characterizations. We conclude, however, that extending the
    exemption to all private wireless services would go beyond the
    legislative intent. As noted earlier, Section 309(j) formerly
    applied only to subscriber-based services, and thus exempted the
    private wireless services because these services were generally not
    subscriber-based. The Balanced Budget Act amended the statute to
    direct the Commission to use auctions to resolve mutually exclusive
    applications for all radio services, unless they fall within a
    specific exemption. To interpret the exemption for public safety
    radio services in Section 309(j)(2)(A) in a manner that effectively
    negates the changes to Section 309(j)(1) would not be reasonable.

80. It is apparent that Congress deemed utilities, railroads,
    metropolitan transit systems and pipelines to be entities that
    protect the safety of life, health, or property for purposes of
    public safety radio services. We agree with the commenters, however,
    that the list in the Conference Report was presented for
    illustrative purposes and not as an exhaustive listing.[^217]
    Nonetheless, we believe that only spectrum used for the provision of
    services similar to those listed in the Conference Report should be
    included in the exemption, and that only similar entities can
    satisfy the aforementioned two-part standard.[^218] For instance,
    telephone maintenance, although not specifically mentioned in the
    Conference Report, meets the two-part standard. In applying the
    standard, providers of such services have an infrastructure that
    serves the public where a breakdown in the system (*e.g.,* cut wire)
    impedes the ability to communicate by telephone, which is a vital
    service in today's society. In addition, a reliable communications
    system is necessary for telephone maintenance to enable quick
    response to an interruption in the delivery of telephone service in
    an emergency situation. On the other hand, for example, taxi cabs do
    not meet both prongs of the two-part standard and are therefore
    unlike those entities listed in the Conference Report. Although taxi
    cabs arguably provide essential services to the public, the
    providers of this service do not have an infrastructure or fixed
    physical facility where a breakdown in its system (*e.g.,* a
    disabled taxi cab) adversely affects the public at large.

81. While we will not at this time attempt to provide an extensive list
    of exempt public safety radio services, we do conclude that the
    Industrial/Land Transportation and Business Radio categories within
    the 800 MHz band[^219] and 900 MHz band,[^220] and the private land
    mobile radio frequencies in the 470-512 MHz band, shall not be
    exempt from auction under the public safety radio service exemption.
    The dominant use of these frequencies is by persons primarily
    engaged in the operation of a commercial activity, to support
    day-to-day business operations (such as dispatching and diverting
    personnel or work vehicles, coordinating the activities of workers
    and machines on location, or remotely monitoring and controlling
    equipment). The dominant use is not by entities with an
    infrastructure that they use primarily for the purpose of providing
    essential public services to the public at large, and that need, as
    part of their regular mission, such spectrum to prevent or respond
    to a disaster or crisis affecting the public at large. Accordingly,
    we conclude that the 470-512,[^221] 800, 900 MHz bands shall be
    subject to auction to the extent that mutually exclusive
    applications are filed. However, we emphasize that we will continue
    to utilize existing licensing approaches for these bands, which tend
    to avoid mutual exclusivity, thereby minimizing the possibility of
    competitive bidding.

82. *Noncommercial Proviso.* The public safety radio services exemption
    requires that the radio services not be made commercially available
    to the public.[^222] We sought comment on how the term "not made
    commercially available to the public" should be defined.[^223] The
    Commission has interpreted similar language in implementing the
    congressional definition of "commercial mobile service." In that
    context, the Commission interpreted the term "for profit,"[^224]
    which we believe is inherent to "commercial" use, as including any
    service that is provided with the intent of receiving monetary
    gain.[^225] The Commission also found that a service is available
    "to the public" if it is offered to the public without restriction
    as to who can receive it.[^226] Because the purpose of that
    proceeding was to determine the meaning of commercial mobile
    service, as defined in Section 332(d) of the Communications Act, the
    Commission was required to include in its definition those services
    "effectively available to a substantial portion of the
    public."[^227] The Commission concluded that if service is provided
    exclusively for internal use or is offered only to a significantly
    restricted class of eligible users, it is made available only to
    insubstantial portions of the public, and cited as an example of
    this, the Public Safety Radio Services.[^228] We shall apply a
    definition of "commercially available to the public" that is
    consistent with these definitions*.* Accordingly, for the purposes
    of the auction exemption under Section 309(j) of the Communications
    Act, we find that "not made commercially available to the public"
    means that the service is not provided with the intent of receiving
    compensation, and is not available to a substantial portion of the
    public.[^229]

83. In the *Notice,* we also asked whether commercial service providers
    intending to provide telecommunications services to public safety
    entities should be able to apply for auction-exempt spectrum.[^230]
    We agree with the commenters who argue that commercial service
    providers and public safety agencies have very different goals and
    incentives regarding spectrum use, and caution that if licenses for
    scarce public safety radio spectrum are assigned to commercial
    providers, public safety entities may find it virtually impossible
    to secure sufficient spectrum for their own internal needs. Also, if
    we expand eligibility to commercial providers declaring an intent to
    serve public safety entities, it would be difficult to ensure that
    the dominant use of this spectrum would be by entities that protect
    the safety of life, health, or property.[^231] In addition, we
    conclude that permitting such use of public safety radio service
    spectrum would be contrary to Congress's intent. We believe that
    Congress created the exemption to give entities that protect the
    safety of life, health, or property, at a minimum, an opportunity to
    secure access to spectrum without having to pay for it. Assigning
    public safety radio service spectrum to commercial providers could
    conflict with this intention by compelling public safety radio
    service eligibles to pay for access to auction-exempt
    spectrum.[^232] We agree with Nextel that including commercial
    third-party providers within the exemption would enlarge it beyond
    all limits of reasonableness.[^233] Thus, we believe that creating
    an opportunity for commercial operators to obtain public safety
    radio service spectrum would contravene congressional intent.

84. *Restrictions on Use.* Another important issue is the scope of
    permissible uses for public safety radio services spectrum, and more
    specifically, whether such licensees are required to use their
    auction-exempt frequencies exclusively for safety-related
    purposes.[^234] Section 337(f)(1) of the Communications Act defines
    a "public safety service" for determining eligibility for licensing
    in the 24 MHz of spectrum reallocated for public safety services, as
    a service the "sole or principal purpose" of which is to protect the
    safety of life, health or property.[^235] By contrast, the auction
    exemption under Section 309(j)(2) contains no such restriction. The
    majority of commenters oppose the imposition of a requirement that
    spectrum be *solely* or *principally* used for public safety
    communications.[^236] They argue that it is difficult to draw the
    line where public safety ends and routine business begins because
    day-to-day business communications often have a safety-related
    purpose.

85. We conclude that because utilities, pipelines and railroads do not
    use their frequencies exclusively for safety-related purposes,
    Congress could not have intended that entities using exempt spectrum
    use that spectrum exclusively for such purposes. Furthermore, it
    would be overly burdensome to require licensees to differentiate
    between, and use different frequencies for, pure public safety
    communications and business communications, which may also serve a
    safety-related purpose. Accordingly, we agree that we should not, at
    this time**,** impose an additional restriction upon licensees in
    auction-exempt services to limit their use of their assigned
    frequencies to be exclusively for safety-related purposes. We do,
    however, expect that licensees making use of auction-exempt spectrum
    will be using that spectrum primarily to protect the safety of life,
    health or property. This is so because, given our principles for
    determining what frequencies are in public safety radio services, we
    anticipate that the spectrum will be used by entities with
    reasonably predictable (in frequency and types of occurrences, if
    not in exact timing) public safety-related needs. When such needs
    arise, licensees should dedicate their public safety radio service
    spectrum to addressing the situation. We also expect users of
    auction-exempt spectrum to make efficient use of that spectrum for
    safety-related purposes, and to use other available spectrum, or
    commercial providers, for more general business-related purposes
    that are not primarily safety-related.

86. *Eligibility Requirements.* In the *Notice*, we noted that
    applicants seeking spectrum for public safety radio services without
    bidding competitively are able to apply for such designated spectrum
    or, if they meet the requirements of Section 337(f), file a waiver
    request for unassigned spectrum pursuant to Section 337(c). [^237]
    In this connection, we sought comment on whether entities eligible
    for licenses in the public safety radio services should also be
    eligible to bid competitively for spectrum that has been designated
    for private or commercial radio use.[^238]

87. We do not believe that it was Congress's intent to forbid entities
    eligible to be licensed on public safety radio services from
    voluntarily participating in auctions for spectrum that is not
    exempted from our competitive bidding authority. Hence, we conclude
    that entities eligible for licenses in the public safety radio
    services are eligible to participate in auctions of other spectrum.
    We note that the licensing mechanisms adopted in this Report and
    Order would not enable entities eligible for public safety radio
    services to select auctionable spectrum and exercise an exemption
    privilege. Therefore, those entities eligible for licenses in the
    public safety radio services that desire to participate in the
    auction of other spectrum will be required to comply with the same
    regulations, including filing and payment requirements, to which
    every other bidder is subject. Accordingly, the Commission will not
    make any special provisions for entities eligible for the public
    safety radio services that choose to competitively bid for
    auctionable spectrum. Further, if a public safety radio service
    eligible voluntarily chooses to seek licenses in auctionable
    spectrum, the spectrum will not thereby become auction-exempt.

### Resolution of Mutually Exclusive Applications for Services Exempt from Competitive Bidding 

88. [Background]{.underline}. In the *Notice*, we requested comment on
    how to resolve mutual exclusivity between applications for spectrum
    exempt from competitive bidding.[^239] We noted that the Balanced
    Budget Act terminated the Commission's authority to use lotteries to
    choose among mutually exclusive applications and concluded that we
    are precluded from using random selection procedures to resolve
    mutually exclusive applications for auction-exempt public safety
    radio services.[^240] Thus, we specifically sought comment on
    whether engineering solutions, negotiation, threshold
    qualifications, service regulations, or other means, such as
    comparative hearings and first-come, first-served licensing, should
    be used to resolve mutual exclusivity in cases where frequency
    coordination is unsuccessful in avoiding mutual exclusivity.[^241]

89. [Discussion.]{.underline} Commenters overwhelmingly express support
    for the Commission's continued use of frequency coordination as a
    mechanism to limit instances of mutually exclusive
    applications.[^242] Although frequency coordination greatly reduces
    instances of mutual exclusivity, we acknowledge the possibility that
    it may not resolve all conflicts. Commenters offered various
    proposals to address situations where frequency coordination is not
    adequate. For instance, several commenters suggest that mutually
    exclusive applications may be resolved through first-come,
    first-served procedures.[^243] We agree with these commenters that
    first-come, first-served procedures may resolve some cases of
    mutually exclusive applications. However, such procedures may not be
    as useful if applications are received on the same day from
    different coordinators, or if the Commission opens a filing window.
    During a filing window, each application is given a filing status
    equal to any other application filed during the window. Hence,
    frequency coordination, coupled with first-come, first-served
    licensing procedures may not prevent every case of mutual
    exclusivity.

90. Other commenters suggest alternative approaches, such as private
    negotiations, shared use procedures and engineering solutions.[^244]
    Specifically, CII Joint Commenters and United Telecom Council
    present a detailed procedure involving private negotiations to
    encourage the resolution of mutually exclusive applications without
    the Commission's involvement.[^245] In this suggested procedure,
    applicants who file mutually exclusive applications must, within a
    specified time period, such as sixty to ninety days, resolve the
    conflict through private negotiation.[^246] According to the
    commenters, the parties could devise engineering solutions and/or
    coordination procedures that would enable spectrum sharing.[^247]
    Additionally, if the parties are unsuccessful at reaching an
    agreement by the end of the negotiation period, the applicants could
    be provided with the option of expedited alternative dispute
    resolution procedures, such as binding arbitration or
    mediation.[^248] In the event that these procedures prove
    unsuccessful, the commenters indicate that the Commission should
    dismiss the applications and deem the requested frequencies
    unavailable for licensing by any party for a period of at least
    ninety days, as an incentive for the parties to reach an
    agreement.[^249]

91. We are aware that there may be instances where frequency
    coordination and/or first-come, first-served licensing will be
    inadequate and the Commission will receive mutually exclusive
    applications for licenses in the public safety radio services.
    However, we believe that such instances will be rare and conclude
    that the Commission should continue to rely on the regulatory tools
    already available to it to resolve mutually exclusive applications
    that may not be resolved by competitive bidding. In addition to
    commenters' suggestion that we provide a time period during which
    mutually exclusive applicants may negotiate a mutually agreeable
    solution, the Commission can also work with the relevant frequency
    coordinators to find alternative spectrum, develop engineering
    solutions, dismiss the applications with or without prejudice, or
    refer the matter to a comparative hearing. These tools have been
    sufficient heretofore to resolve mutually exclusive applications for
    non-auctionable spectrum, and, particularly given the expectation
    that such situations will continue to be rare, there does not appear
    to be sufficient grounds to implement a new procedural framework.

## Proposals Regarding Private Land Mobile Radio Services

92. A number of issues have been raised regarding our auction authority
    in the context of licensing in the private radio services. First, we
    consider whether geographic licensing and competitive bidding should
    be employed on the PLMR frequencies below 470 MHz that are currently
    licensed under a scheme developed in our "refarming" docket. Next,
    we consider a proposal advanced by a coalition of private radio
    users to create a third radio pool to accommodate the needs of
    "critical infrastructure industries." We also rule on a proposal
    advanced by the American Mobile Telecommunications Association, Inc.
    ("AMTA") to restructure the licensing framework for the 450-470 MHz
    band. This Report and Order also analyzes a proposal to permit the
    incorporation of PLMR spectrum in the 800 MHz band into commercial
    mobile radio services ("CMRS") systems. Finally, we address the
    issue of whether the Part 90 multiple licensing rules should be
    changed in light of our revised auction authority.

### Licensing of "Refarming" Bands

93. [Background]{.underline}. In the *Notice*, we sought comment on
    whether the public interest would best be served by retaining our
    current licensing scheme, rather than adopting geographic licensing
    and competitive bidding, for the PLMR frequencies below 470
    MHz.[^250] We noted that the current licensing scheme for these
    frequencies came out of the lengthy "Refarming" proceeding,[^251] in
    which the Commission, *inter alia,* consolidated the twenty PLMR
    services into two broad frequency pools,[^252] and implemented
    procedures that will result in the transition to more spectrally
    efficient, narrowband technologies by requiring that future
    equipment meet increasingly efficient standards.[^253]

94. [Discussion]{.underline}. The commenters were nearly uniform in
    their opposition to the introduction of geographic area licensing in
    the Refarming bands.[^254] The National Association of Manufacturers
    ("NAM") and MFRAC, Inc., for example, note that the Commission and
    the private radio community have spent the better part of the past
    eight years formulating and refining the policies for
    Refarming.[^255] They caution that with the process nearly complete,
    users and equipment vendors would be subject to great uncertainty
    and displacement, should the current licensing scheme be changed, as
    the private land mobile community has relied on the Commission's
    Refarming decisions to date in forming investment plans.[^256] We
    agree. Moreover, we believe that there simply has not been enough
    time since the adoption of the Refarming provisions to reap the full
    benefit of the revised procedures.

95. Moreover, we note that the refarmed bands below 470 MHz are
    currently licensed on a shared, rather than exclusive, basis.[^257]
    Many licensees operate on the same channels in most geographic
    areas. These channels are heavily congested in most major urban
    areas, so the number of incumbents, particularly in the areas where
    geographic overlay licenses would be most desirable, would create
    nearly impossible due diligence requirements and would make the
    spectrum, at best, only marginally useful to a geographic area
    licensee. We believe that this militates against geographic overlay
    licensing of this spectrum.

96. Thus, we conclude that the public interest would best be served by
    retaining our current licensing scheme. Accordingly, we shall not,
    at this time, reexamine the licensing scheme for the PLMR
    frequencies below 470 MHz. We emphasize, however, that this decision
    applies only to the existing allocation and not to any spectrum that
    might subsequently be allocated for PLMR services.[^258] In
    addition, we would not be precluded from revisiting the licensing
    scheme for the Refarming bands at some later date and adopting a new
    approach, such as the use of band managers.[^259]

### UTC Proposal To Establish a New Public Safety Radio Pool in the Private Mobile Bands Below 470 MHz

97. [Background]{.underline}. In the *Notice,* we requested
    comment[^260] on a rulemaking petition submitted by UTC, The
    Telecommunications Association ("UTC"),[^261] the American Petroleum
    Institute ("API"), and the Association of American Railroads ("AAR")
    (jointly referred to as the "Critical Infrastructure Industries" or
    "CII").[^262] UTC represents electric, gas, water, and steam
    utilities, and natural gas pipelines.[^263] API represents companies
    in all phases of the petroleum and natural gas industries.[^264] AAR
    represents railroads operating in the United States, Canada, and
    Mexico.[^265] The petition proposes to create a third radio pool, in
    addition to the Public Safety and Industrial/Business (I/B) Radio
    Pools already used for private radio frequencies below 470 MHz. We
    also sought comment on whether this approach would be feasible for
    other frequency bands.[^266] For the reasons set forth below, we
    find that a third pool is not called for at this time, and we deny
    the petition for rule making.

98. [Discussion]{.underline}. The petition urges the Commission to
    create a Public Service Radio Pool in the PLMR bands below 800 MHz
    open to entities that do not qualify for Public Safety Radio Pool
    spectrum, but are eligible to use the public safety radio service
    spectrum exempted from the Commission's auction authority under the
    Balanced Budget Act.[^267] The CII propose to form the proposed
    Public Service Pool from all of the channels formerly allocated
    exclusively to the Power, Petroleum and Railroad Radio Services
    before those services (and others) were consolidated into the I/B
    Pool in the *Refarming Second Report and Order.*[^268] The CII also
    propose moving a portion of the channels formerly shared by these
    services with one or more of the other services now in the I/B
    Pool.[^269] The CII further state that the Public Service Pool
    should also include frequencies formerly allocated to services used
    by any other industries that we conclude are eligible for
    auction-exempt public safety radio service spectrum. The CII
    recommend that the Commission should examine claims of eligibility
    for any new Public Service Pool closely.[^270]

99. The CII argue that a pool to accommodate the needs of critical
    infrastructure industries is needed to protect the availability of
    spectrum for qualified entities, because of the public safety
    components of their requirements.[^271] While critical
    infrastructure industries have legitimate spectrum needs, we do not
    believe these needs warrant removing frequencies from the I/B Pool.
    The I/B Pool was created to address the scarcity of PLMR spectrum,
    by consolidating spectrum to make fallow frequencies available to
    parties in need.[^272] We are not persuaded that creating a third
    pool would not exacerbate the shortage of PLMR spectrum, overall,
    for the entire set of eligibles for the I/B Pool.

100. The CII also argue that a third pool is needed because the power,
     petroleum and railroad industries' radio operations need greater
     protection from interference caused by other users than the
     Commission has provided.[^273] The CII note that the *Refarming
     Second Report and Order* requires entities that apply for
     frequencies formerly allocated solely to the Power, Petroleum, and
     Railroad Radio Services to obtain coordination from the frequency
     coordinator for the respective service.[^274] They argue, however,
     that greater protection is needed in light of increasing instances
     of interference by new systems being licensed near utility and
     pipeline operations.[^275] Critics of the petition argue that there
     is insufficient evidence of widespread interference problems to
     justify the creation of a third pool, and that isolated incidences
     of interference do not create a justification.[^276] We agree that
     the number of instances of actual electrical interference do not
     appear so large as to justify the inefficiencies that could arise
     from creating a third pool.

101. Furthermore, several commenters contend that the exclusive
     coordination prerogative granted to the CII creates a *de facto*
     separate pool for these entities, and that therefore a separate
     pool for the CII is not necessary.[^277] We also note that the
     question of whether that exclusive coordination prerogative should
     be expanded to include frequencies formerly allocated to the Power,
     Petroleum, and Railroad Radio Services on a shared basis is pending
     in the *Refarming* proceeding.[^278] We believe that the issue of
     how to protect these services from interference is more
     appropriately addressed there.

102. Finally, the CII contend that because Congress specifically
     intended to include within the exemption to competitive bidding the
     private internal radio services used by utilities, pipelines and
     railroads, the creation of a Public Service Radio Pool for the CII
     would effectuate Congressional intent by protecting those services
     from encroachment by non-essential services.[^279] The purpose of
     the exemption from our competitive bidding authority for public
     safety radio services is to relieve entities that protect the
     safety of life, health, and property from having to purchase
     spectrum at auction.[^280] There is no basis upon which to infer
     other or additional congressional intent with respect to this
     provision. Finally, the CII's argument that we should create a
     third pool in order to avoid complications due to the potential
     introduction of auctions in the I/B Pool is not persuasive.[^281]
     Because PLMR frequencies below 470 MHz currently are licensed in a
     manner that tends to avoid mutually exclusive applications, such
     complications generally do not arise.[^282]

103. Accordingly, for all the reasons stated above, we deny the
     petition. We note, however, that our decision not to create a third
     pool below 470 MHz does not preclude us from using other mechanisms
     (*e.g*., Bands Managers or a change of licensing schemes) in these
     or other bands, in order to appropriately respond to the concerns
     set forth by the CII.

### AMTA Proposal To Restructure Licensing Framework for PLMR Services in the 450-470 MHz Band

104. *Background*. On July 30, 1999, after we released the *Notice*,
     AMTA, a trade association representing the specialized wireless
     communications industry, filed a petition for rule making proposing
     to fundamentally restructure the licensing framework for PLMR
     frequencies in the 450-470 MHz band.[^283] Currently, this band is
     licensed by 6.25 kilohertz frequency pairs assigned on a
     site-by-site basis. The frequencies are licensed on a shared basis,
     and frequency coordination is required.[^284] The frequencies are
     divided between the Public Safety Radio Pool (8 MHz) and the
     Industrial/Business (I/B) Radio Pool (12 MHz).[^285]

105. AMTA proposes that we divide the 450-470 MHz band I/B Radio Pool so
     that 2 megahertz would be available for site-based licensing on a
     shared basis, and 10 megahertz would be licensed by geographic area
     in .5 megahertz paired blocks (creating twenty licenses per
     market).[^286] Five of the twenty licenses would be set aside for
     private, internal systems, leaving the remaining fifteen available
     for either internal or commercial systems.[^287] In addition, any
     incumbent that is not a winning bidder for its frequency and area
     would be required either to move to the shared channels or elect to
     receive service from a commercial geographic licensee.[^288] The
     petition was placed on public notice on August 24, 1999.[^289] We
     believe that it is appropriate to consider these proposals as part
     of the instant proceeding.

106. *Discussion*. Although we believe that geographic licensing is
     generally a highly efficient means of assigning spectrum, in this
     instance we agree with the commenters that do not believe such an
     approach is warranted in the 450-470 MHz band.[^290] First, as we
     stated above in our discussion of the Refarming bands (which
     include the 450-470 MHz band), the benefits of geographic overlay
     licensing of this spectrum may be limited because these channels
     are heavily congested in most urban areas.[^291] In addition, we
     note that many commenters were concerned by the AMTA proposal's
     effect on incumbent operations.[^292] Motorola, for example,
     believes the relocation choices offered to incumbents in many cases
     will not provide a legitimate option.[^293] Similarly, the Industry
     Coalition states that even if relocation were possible, the
     logistics would be staggering, causing devastating disruptions in
     service and severe levels of interference as a result of
     compressing tens of thousands of private wireless communications
     facilities within a limited amount of spectrum.[^294]

107. In light of these concerns, we conclude that it is not advisable to
     revisit the licensing scheme for the 450-470 MHz band at this time.
     Moreover, we believe that not enough time has elapsed in order to
     reap the benefits of the licensing reforms that were adopted as
     part of the Refarming proceeding.[^295] We therefore deny AMTA's
     petition. This decision does not, however, preclude us from
     deciding in the future that some alternative approach is warranted.

### Licensing of PLMR Channels in the 800 MHz Band for Use in Commercial SMR Systems

108. [Background]{.underline}. In the *Notice*, we noted that some
     spectrum currently allocated for private internal use is also used
     to provide subscriber-based services, pursuant to intercategory
     sharing or rule waiver.[^296] We referred to a request by Nextel
     Communications, Inc. (Nextel) for waivers to permit it to acquire
     by assignment Part 90 PLMR services frequencies, and utilize those
     frequencies for CMRS operation in its 800 MHz SMR systems.[^297]
     Subsequently, the Wireless Telecommunications Bureau (Bureau)
     granted Nextel's request in part and denied in part.[^298]
     Specifically, the Bureau granted those waivers and assignments
     where Nextel would use the spectrum for relocation of incumbent
     licensees on the upper 200 channels of the 800 MHz band.[^299] The
     Bureau also permitted Nextel to use PLMR frequencies in its SMR
     network, but only on the condition that at least seventy-five
     percent of the channels involved in the waiver requests would be
     used to relocate upper 200 channel incumbents.[^300] The Bureau
     declined to address broader issues raised by Nextel's request to
     acquire channels without relocating an upper 200 incumbent, and
     determined that incorporation into the instant proceeding would be
     the more appropriate avenue to resolve such a proposal.[^301]
     Consequently, the Bureau released a *Public Notice* incorporating
     the record of the Nextel matter into the instant proceeding and
     seeking comment on whether the Commission's licensing rules for
     PLMR channels in the 800 MHz band should be amended to allow their
     use in CMRS systems.[^302]

109. [Discussion]{.underline}. We first address whether our Rules should
     be amended to allow PLMR licensees to assign or transfer spectrum
     to CMRS licensees for use in CMRS operations. Commenters were split
     on this issue. Commenters supporting such a change argue that
     licensees should be permitted to enter into voluntary assignment
     agreements that alter the use of the spectrum[^303] because such
     voluntary transactions, wherein the licensee is willing to forego
     use of the spectrum for the consideration offered by the other
     party, result in the most economically efficient use of the
     spectrum.[^304] That is, they contend that if a PLMR licensee finds
     advantageous the terms of commercial service, including the
     assignment of its frequency(ies) to the CMRS operator, then we
     should allow such transactions because the CMRS operator values the
     frequency(ies) more highly than the PLMR licensee.[^305] We note
     that the 800 MHz band is particularly suited to such flexibility
     because 800 MHz PLMR and CMRS channels are interleaved, rather than
     grouped into separate subbands.[^306] In addition, a review of our
     licensing database indicates a greater presence in the 800 MHz
     Business and I/LT channels of licenses on which CMRS operations are
     permitted, through rule waivers or inter-category sharing, than in
     other PLMR bands. We therefore find that permitting such
     transactions would create additional flexibility for both PLMR
     licensees seeking to fill their communications needs and for CMRS
     licensees seeking additional spectrum.

110. Consequently, we will amend our Rules to allow 800 MHz Business and
     I/LT licensees to assign or transfer their spectrum to CMRS
     licensees for use in CMRS operations.[^307] Moreover, unlike the
     Bureau's decision in the *Nextel Order*, we will not require that
     any portion of the channels transferred or assigned to CMRS
     licensees be used to relocate upper 200 channel incumbents. We are
     not persuaded that we should require the relocation of upper 200
     channel incumbents as a condition of approving the transaction.
     That the spectrum at issue would be used predominantly for
     relocation purposes was important to the Bureau's public interest
     analysis of Nextel's waiver request.[^308] In this broader
     proceeding, however, we conclude that permitting such assignments
     and transfers will be beneficial for other reasons. We are
     convinced that alienability of PLMR licenses will enhance spectral
     use and efficiency. Limiting the flexibility of spectrum use to
     relocating upper 200 channel incumbents does not serve the public
     interest, and would merely erect another barrier to achieving
     maximum spectral efficiency.

111. Similarly, we also will permit these PLMR licensees to modify their
     PMRS licenses to allow CMRS use in their own systems. Just as with
     assignments and transfers, spectral efficiencies and technological
     developments will be aided by providing PLMR licensees with this
     same flexibility. Allowing PLMR licensees the flexibility to modify
     their licenses for CMRS use permits the PLMR licensee to assess
     marketplace needs and economic factors when determining the best
     and most efficient use of spectrum.[^309]

112. We disagree with those commenters opposed to permitting the
     incorporation of PLMR spectrum into CMRS systems, who argue that it
     will reduce the available supply of PLMR spectrum.[^310] They note
     that the Commission's purpose in eliminating intercategory sharing
     of non-SMR spectrum by SMR applicants[^311] was to stop
     encroachment on PLMR frequencies by commercial SMR licensees and
     eligibles,[^312] and argue that allowing CMRS use of 800 MHz PLMR
     spectrum would further exacerbate the current shortage of private
     spectrum.[^313] We do not find these concerns persuasive. These
     objections seem to envision a scenario in which current PLMR
     licensees voluntarily surrender their rights to frequencies they
     are not using or are using inefficiently and these frequencies are
     then returned to the PLMR pool so as to be available for licensing
     to other private users. It has been our experience, however, that
     licensees do not in any large measure turn back to the Commission
     PLMR frequencies they no longer need or are using inefficiently;
     rather, they continue to hold the spectrum. Consequently, we
     believe that allowing licensees to modify their licenses for CMRS
     use or assign or transfer these frequencies to CMRS entities will
     not materially affect the supply of available spectrum for
     licensing from the PLMR pool.

113. However, we deny Nextel's proposal to eliminate the distinction
     between CMRS spectrum and non-Public Safety PLMR spectrum with
     respect to initial licensing.[^314] We believe that the existing
     PLMR pool of unassigned frequencies should remain available on an
     initial basis to PLMR eligibles only, to construct new systems or
     expand existing systems. Therefore, we maintain the eligibility
     criteria for all new applications.

114. While we will allow incumbent PLMR licensees to transfer or modify
     their licenses for CMRS use, we do not want to facilitate
     trafficking of PLMR spectrum (*e.g.,* PLMR eligibles acquiring new
     licenses from the existing pool of unassigned frequencies for the
     purpose of selling them to CMRS providers).[^315] Several methods
     are employed to avoid trafficking, including holding periods,
     random audits, moratoria on acquiring new frequencies and reporting
     requirements.[^316] In that connection, PCIA,[^317] supported by
     several other commenters,[^318] suggests that we discourage
     trafficking by adopting a rule providing that a licensee that
     transfers or assigns 800 MHz PLMR spectrum to a CMRS licensee may
     not apply for new spectrum for six months after the Commission
     consents to the transfer or assignment. We do not believe that this
     proposal is sufficient to reduce potential trafficking of PLMR
     services licenses. Instead, we will preclude a licensee that
     modifies its license or transfers or assigns its license to a CMRS
     operator, or an affiliate of the modifying or assigning licensee,
     from applying for 800 MHz PLMR spectrum in the same area[^319] for
     one year.[^320]

115. In addition, we will allow modification to CMRS use or assignment
     to a CMRS operator only in the case of PLMR licenses that were
     initially granted at least five years prior to the modification,
     transfer, or assignment.[^321] We believe a five-year holding
     period is appropriate because such a requirement has been applied
     to other situations where speculation and trafficking were
     concerns. For example, our rules provide that licensees are subject
     to unjust enrichment payments for any license transfer that occurs
     within five years of the license grant.[^322] In this regard, we
     also note that 800 MHz PLMR licensees can receive an extended
     implementation period for of up to five years, if they demonstrate
     that such a period is required to construct the proposed wide-area
     system.[^323] One of our goals in requiring a holding period is to
     ensure that these channels will continue to be initially licensed
     only to entities that will use them for PLMR communications. A
     holding period of less than five years could undermine this goal by
     allowing many wide-area licensees to modify or transfer their
     licenses for CMRS use before they finish construction.

116. We will not apply this five year holding period to licenses already
     granted, or for which the application already was filed, as of the
     adoption date of this Report and Order. It is our belief that no
     purpose would be served by applying the holding period to licenses
     obtained or requested before we amended our rules to permit
     assignment and/or transfer of 800 MHz Business and I/LT channels
     for CMRS use, because prior to adoption of this Report and Order,
     no speculative incentive to acquire Business and I/LT frequencies
     can be inferred.

117. We are confident that the rules adopted herein, coupled with
     existing requirements in our rules,[^324] provide the necessary
     safeguards against trafficking in PLMR licenses for the purpose of
     assigning the license to a CMRS operator or using the spectrum to
     provide a CMRS service. We note that neither the one-year
     moratorium nor the five-year holding requirement is applicable to
     PLMR-to-PLMR assignments and/or transfers.

118. In addition, we note that there have been incidents of interference
     to public safety licensees in this band even though CMRS providers
     operate within their licensed paramaters. To address this issue, an
     FCC/public safety/industry task force is investigating solutions
     for preventing and fixing interference to 800 MHz public safety
     operations. We seek to avoid the potential for future incidents of
     such interference that could result from the modification of PLMR
     facilities to CMRS. Consequently, we will require 800 MHz licensees
     seeking to use spectrum for CMRS, upon submitting a modification
     application, to: (a) certify that the co- or adjacent channel 800
     MHz public safety licensees in the same geographic area have been
     notified of the application; and (b) commit that they will take
     affirmative steps to avoid harmful interference[^325] to such
     public safety licensees.[^326] We believe that these actions
     together will reduce the risk of increased interference in this
     band.

119. All 800 MHz PLMR licenses, including those granted before the rule
     change, may be assigned, transferred or modified in accordance with
     the new rules set forth herein. In addition, all new and pending
     applications for assignment, transfer, or modification will be
     subject to these new rules. However, other transactions were
     approved under previous and arguably more flexible terms and
     conditions. In this connection, we note that an application for
     review is pending with respect to the prior Nextel applications and
     associated waiver requests.[^327] Thus, in that regard, we believe
     that we should defer any decision affecting the transactions
     associated with the Nextel waivers to the disposition of the
     application for review. We believe that this approach will provide
     us with flexibility with respect to our treatment of the issues
     raised in the application for review

### Revision of Part 90 Multiple Licensing Rules

120. [Background]{.underline}. In the *Notice,* we sought comment on
     whether eliminating or modifying the multiple licensing rules would
     be appropriate in light of the potential expansion of our auction
     authority to include private radio services.[^328] The multiple
     licensing rules provide that two or more entities may be licensed
     for the same land station, provided that each licensee complies
     with the Commission's Rules regarding permissible communications
     and each licensee is eligible for the frequency(ies) on which the
     land station operates. [^329]

121. A "multiple-licensed" system, also known as a "community repeater,"
     is a base station in the Part 90 private land mobile radio services
     which functions as a mobile relay, enabling low power mobile units
     to communicate with one another over a wide area by picking up a
     signal from one unit and repeating it to another.[^330] Generally,
     the licensees who share a multiple-licensed facility have been
     brought together by a third party, often the manufacturer of the
     land mobile equipment or a retailer, who operates the station on a
     profit-making basis.[^331] The Commission does not usually regulate
     this third party's activity and the third party is not licensed by
     the Commission.[^332] Multiple licensing has been a widespread
     practice in the land mobile services since the 1960s.[^333]

122. In 1982, the Commission re-examined the multiple licensing of
     facilities in the private land mobile radio services and found such
     practices to be permissible as a matter of law and desirable as a
     matter of public policy.[^334] The Commission noted that SMRs
     provide a possible substitute for multiple licensing, but concluded
     that the record did not support commenters' claims that third-party
     managers were competing unfairly with radio common carriers.[^335]

123. In 1992, in connection with the Refarming proceeding, the
     Commission proposed eliminating multiple licensing because (1) from
     a user's standpoint, such facilities were indistinguishable from
     SMR facilities; and (2) the users' needs could adequately be met by
     SMR and private carrier licensees, which were more widely available
     than they were ten years earlier.[^336] When the Commission
     implemented the 1993 Budget Act, however, it concluded that
     Congress recognized the benefits of allowing private radio users to
     enter into legitimate cost-sharing arrangements, and did not intend
     such arrangements to be classified as for-profit CMRS.[^337] This
     conclusion was based upon the definition of "mobile service"
     adopted in the 1993 Budget Act.[^338] The Commission determined
     that the legislative intent was to provide for shared use[^339] and
     multiple licensed "private" communications systems exempt from the
     competitive bidding process.[^340] Despite concern that these
     systems are often indistinguishable from commercial systems, the
     Commission deemed it appropriate at that time to retain multiple
     licensing as a non-auction, private radio licensing
     alternative.[^341] The Commission stated, however, that it would
     closely monitor the use of multiple licensing in order to ensure
     that unlicensed station managers did not attempt to provide
     for-profit service in competition with CMRS licensees.[^342]

124. [Discussion]{.underline}. We agree with the American Mobile
     Telecommunication Association, Inc. ("AMTA") that multiple
     licensing is still permissible as a matter of law and desirable as
     a matter of public policy because the "practical realities" which
     led to the development of community repeaters continue to
     prevail.[^343] AMTA states that most Part 90 licensees cannot
     independently afford the monthly site rent for a tower or rooftop
     which could provide the necessary coverage, and that if each entity
     had to construct a separate system, it would be difficult to
     coordinate.[^344]

125. MRFAC, on the other hand, states that the relevant rules for
     multiple licensing are widely ignored, little enforced, and an
     invitation to abuse.[^345] Some recent decisions support the view
     that not every multiple licensing application represents a
     legitimate private radio cost-sharing proposal. For example, in
     *East River Electric Power Cooperative*,[^346] East River, which
     previously had applied unsuccessfully for SMR frequencies, sought a
     waiver of the multiple licensing rules to permit use of its excess
     capacity by entities not otherwise eligible to use those
     frequencies.[^347] Opponents of the proposal argued that East River
     simply intended to provide a for-profit commercial communications
     service to other parties.[^348] The Wireless Telecommunications
     Bureau (Bureau) agreed, and found that East River's proposal was
     not a legitimate multiple licensing arrangement under Section
     90.185 of the Commission's Rules.[^349] While East River's use of
     its system for internal communications remained PMRS, the proposed
     sale of excess capacity to third parties did not. More recently, in
     *Viking Dispatch Services, Inc.*, we rejected a purported sharing
     proposal on the grounds that it really was a for-profit CMRS.
     [^350] Viking proposed to operate forty-two sites for PMRS two-way
     mobile dispatch systems as a third-party provider on a
     not-for-profit, cost-shared basis.[^351] We concluded that Viking's
     proposal was not PMRS because it intended only to provide service
     to others.[^352] We also concluded that it was not a true
     not-for-profit arrangement, because the system manager and
     equipment vendor was an affiliate of Viking.[^353] Therefore,
     Viking's request was denied.

126. Given the light response to our request for comment on whether to
     modify the multiple licensing rules, however, we conclude that
     cases such as these are exceptional, and do not warrant eliminating
     multiple licensing. Furthermore, eliminating multiple licensing
     would be contrary to our current efforts to introduce more, not
     less, flexibility in how licensees use their spectrum.[^354] Thus,
     as in *Viking* and *East River*, we will continue to closely
     monitor multiple-licensed systems and judge their validity on a
     case-by-case basis.

## Section 337 Licensing for Public Safety Services

127. *Background.* The Balanced Budget Act added a new Section 337 to
     the Communications Act. Section 337 of the Communications Act,
     *inter alia*, provides certain public safety entities the
     opportunity to apply for unused spectrum not otherwise allocated
     for public safety use. For purposes of applying Section 337 and
     determining who may invoke its provisions, subsection 337(f)
     defines the term "public safety services" as "services --

```{=html}
<!-- -->
```
(A) the sole or principal purpose of which is to protect the safety of
    life, health or property;

(B) that are provided\--

\(i\) by State or local government entities; or

> \(ii\) by nongovernmental organizations that are authorized by a
> governmental entity whose primary mission is the provision of such
> services; and

\(C\) that are not made commercially available to the public by the
provider."[^355]

128. The terms and conditions under which an eligible entity may apply
     to the Commission for spectrum under Section 337 are provided at
     subsection (c)(1) of Section 337 as follows:

\(c\) Licensing of Unused Frequencies for Public Safety Services.\--

> \(1\) Use of unused channels for public safety services.\--Upon
> application by an entity seeking to provide public safety services,
> the Commission shall waive any requirement of this Act or its
> regulations implementing this Act (other than its regulations
> regarding harmful interference) to the extent necessary to permit the
> use of unassigned frequencies for the provision of public safety
> services by such entity. An application shall be granted under this
> subsection if the Commission finds that\--
>
> \(A\) no other spectrum allocated to public safety services is
> immediately available to satisfy the requested public safety service
> use;
>
> \(B\) the requested use is technically feasible without causing
> harmful interference to other spectrum users entitled to protection
> from such interference under the Commission's regulations;
>
> \(C\) the use of the unassigned frequency for the provision of public
> safety services is consistent with other allocations for the provision
> of such services in the geographic area for which the application is
> made;
>
> \(D\) the unassigned frequency was allocated for its present use not
> less than 2 years prior to the date on which the application is
> granted; and

(E) granting such application is consistent with the public
    interest.[^356]

```{=html}
<!-- -->
```
129. If the Commission finds that the applicant satisfies the statutory
     criteria, the authorization pursuant to Section 337 is
     granted.[^357] Providers of public safety services may obtain
     spectrum via Section 337(c) without engaging in competitive
     bidding.[^358]

130. In the *Notice*, we sought comment on how to apply the statutory
     criteria. We specifically requested commenters to address the
     statutory requirement that the frequency applied for be
     "unassigned" and that the showing necessary to demonstrate that
     granting the application would be in the public interest, with
     particular attention to the question of whether it would be in the
     public interest for applicants seeking to provide public safety
     services to apply for frequencies that, while not yet licensed to
     another entity, already have been identified and designated by the
     Commission as frequencies to be licensed by auction.[^359] Since
     enactment of the statute, we have issued several decisions on
     Section 337 applications.[^360]

131. *Discussion*. Some commenters suggest that an applicant need not
     satisfy all five statutory criteria to satisfy the requirements of
     Section 337(c), if it makes a particularly strong showing for the
     factors it does meet. [^361] We disagree. We do not find any
     statutory basis or legislative history supporting such a
     conclusion. Indeed, the legislative history clearly states, "Before
     granting applications under this subsection, the Commission must
     make five specific findings."[^362] All five statutory criteria
     must be satisfied to receive authorization based on a Section 337
     request.[^363]

132. In addition, we believe that further exposition regarding two of
     the criteria is warranted. With regard to the statutory requirement
     that "no other spectrum allocated to public safety services is
     immediately available to satisfy the requested public safety
     service use,"[^364] several Section 337 applicants apparently have
     interpreted this provision as only requiring a showing that no
     public safety frequencies are currently available in the same band
     as the frequencies being requested.[^365] We disagree with this
     interpretation. We believe that the statutory language is clear in
     that it expressly requires that no other spectrum allocated to
     public safety services be available without any qualification.
     Thus, we believe that the statute requires that there be no
     unassigned public safety spectrum, or not enough for the proposed
     public safety use, in any band in the geographic area in which the
     Section 337 applicant seeks to provide public safety
     services.[^366]

133. With regard to the statutory requirement that "granting such
     application is consistent with the public interest,"[^367] we
     believe that our analysis under this criterion generally will
     entail a balancing of various public interest factors. For
     instance, some commenters assert that unlicensed spectrum should be
     available to entities seeking to provide public safety services,
     even if the spectrum is in the process of being auctioned.[^368] We
     agree that spectrum does not *per se* become unavailable to Section
     337 applicants once we have initiated the competitive bidding
     process. Competing spectrum management goals may be implicated by
     Section 337 requests, depending upon when such requests are filed
     during the competitive bidding process. On the one hand, we do not
     believe that Congress intended for Section 337 applications to
     compromise or frustrate the competitive bidding process generally.
     On the other hand, there may be circumstances in which the public
     interest would warrant grant of a Section 337 request on spectrum
     that is subject to competitive bidding. Thus, we conclude that the
     state of the competitive bidding process when the Section 337
     application is received is relevant to our determination of whether
     grant of the waiver request and the associated application(s) is in
     the public interest, as required by subsection (c)(1)(E).

134. As a result, we will balance such determinations on a case-by-case
     basis. In a number of cases to date we have granted Section 337
     requests utilizing the five criteria for spectrum that was
     potentially subject to auction. For example, we granted such a
     request by South Bay Regional Communications Authority for channels
     in the 470-512 MHz band.[^369] As part of that grant we assigned
     auctionable narrowband PCS channels to a third party that applied
     for the same channels South Bay requested. This resolution enabled
     South Bay to gain access to spectrum it needed for important public
     safety needs. In another instance, the Wireless Telecommunications
     Bureau granted a Section 337 request for channels that had been
     designated for auction in the 900 MHz band.[^370] The Bureau
     weighed the five factors in the statute, and determined that a
     grant was warranted, despite the fact the spectrum was subject to
     an application freeze and a paging auction. Significantly, at the
     time the Section 337 request was filed in this case, the auction
     date had not yet been established for the frequencies at issue.

135. Therefore, in reviewing Section 337 waiver requests, we will
     balance a variety of public interest factors such as the likelihood
     that the spectrum will be auctioned, the likely timetable for such
     an auction, and the effect that grant of the request may have on
     such a future auction *against* the stated needs of the applicant
     and our obligation to promote public safety.[^371] Section 337
     requests received early in the competitive bidding process, before
     an auction is announced, will likely weigh more in favor of a grant
     than requests received on the eve of an auction. For example, at
     the rulemaking stage, when we are soliciting comments on whether to
     auction a particular spectrum band, we may give more weight to the
     public interest considerations of the public safety applicant than
     to our concerns about the impact on the auction process. However,
     once the mechanisms for a particular spectrum auction are in place,
     beginning with the issuance of a public notice announcing the date
     of the auction (typically four to six months before the auction),
     the competitive bidding process is substantially underway. At this
     juncture, we believe that accepting Section 337 applications would
     substantially impair our ability to conduct an orderly auction, on
     which prospective bidders depend in planning their auction
     strategies. Consequently, such requests will be subject to stricter
     review than those received earlier, and we anticipate that only in
     highly extraordinary circumstances will they be found to satisfy
     the requirements of Section 337(c)(1)(E).[^372] In these
     situations, Section 337 applicants will be expected to provide a
     showing that grant of their requests would result in significant
     public interest benefits that outweigh the uncertainty and
     disruption to the auction process that would be associated with a
     grant of their requested waiver.

136. Finally, we take this opportunity streamline our processing of
     Section 337 requests by amending our rules to require that Section
     337 requests be filed in the same manner and on the same form(s) as
     ordinary applications requesting the subject spectrum.
     Specifically, Section 337 waiver requests and applications for
     commercial spectrum must be filed through the Universal Licensing
     System using Form 601 Main Form and Schedules B and J,[^373] and
     applicants will need to register their Taxpayer Identification
     Number or Employer Identification Number.[^374] Additionally,
     antennas that require registration must be registered prior to
     filing the request.[^375]

# Further Notice of Proposed Rule Making

## AMTA Proposal to Require New Spectrum Efficient Technologies

137. *Background.* On June 19, 1998, AMTA filed a petition for rule
     making proposing that certain Part 90 licensees be required to
     employ new spectrum-efficient technologies.[^376] Specifically,
     AMTA urges that non-Public Safety licensees in the bands between
     222 MHz and 896 MHz be required to deploy technology that achieves
     the equivalent of two times the capacity of most current
     operations.[^377] The gain in efficiency would result in one voice
     path per 12.5 kilohertz of spectrum, using a 25 kilohertz
     frequency.[^378] AMTA proposes that the requirement be phased in
     from 2003 to 2020, beginning with the most congested areas.[^379]
     Licensees not deploying this new equipment would be required to
     accept secondary status.[^380]

138. AMTA contends that such requirements are needed because, under the
     current rules, it is financially imprudent for a licensee to invest
     in new, more efficient technology, since doing so results in
     additional costs without additional benefits.[^381] The current
     rules, which were adopted in the Refarming proceeding, provide
     that, in order to effect a transition to a narrowband channel plan,
     we will type certify only increasingly efficient equipment.[^382]
     Specifically, since February 14, 1997, we have certified equipment
     for 25 kilohertz channels only if it is also capable of operating
     on 12.5 kilohertz and/or narrower channels.[^383] After January 1,
     2005, only new equipment that operates on 6.25 kilohertz channel
     bandwidths will be certified.[^384] New equipment that operates on
     25 and/or 12.5 kilohertz channels will be certified only if it is
     also capable of operating on 6.25 kilohertz or narrower
     channels.[^385] The rules do not require users to replace existing
     systems.[^386]

139. AMTA's petition was placed on public notice on July 31, 1998.[^387]
     Because the issues raised in that petition are relevant to the
     instant proceeding, the petition was included in the
     *Notice*.[^388]

140. *Discussion.* When the Commission adopted the current rules in
     1995, it specifically declined to implement a comprehensive set of
     dates mandating strict manufacturing and licensing
     requirements.[^389] The Commission concluded that the type
     certification process itself could provide the catalyst for
     transition from one technology to another by promoting a natural
     migration to new technologies.[^390] The Commission concluded that
     this approach was preferable to requiring manufacturing or
     licensing of narrowband equipment by certain dates, because it
     would provide users immediate flexibility in equipment decisions,
     provide a period for the development of new technologies, and avoid
     creating an unreasonable burden for licensees.[^391]

141. AMTA and other commenters argue that a new approach is needed,
     because the migration to narrowband technology is not occurring as
     rapidly as the Commission intended.[^392] Other commenters believe
     that the Refarming rules should be retained at least for the time
     being, because not enough time has elapsed in order to reap the
     benefits of the well-considered compromises the Commission adopted
     in that proceeding.[^393] After considering the record and comments
     in this proceeding, we are inclined to agree with AMTA that the
     current pace of migration to more spectrally efficient technology
     is not rapid enough. We seek comment on this tentative conclusion,
     as well as whether enough time has elapsed to allow us to evaluate
     the effectiveness of our current rules.

142. Commenters believing that the rules need to be revised should also
     discuss what action the Commission should take. We tentatively
     conclude that that we should encourage the migration to narrowband
     technology by prohibiting the manufacture or importation of
     equipment that does not meet certain efficiency standards by
     certain dates.[^394] We continue to be concerned that requiring the
     employment of new spectrum-efficient technologies by certain dates,
     as proposed by AMTA, would impose unreasonable burdens on
     licensees, and we acknowledge the concerns raised by opponents of
     AMTA's proposal that it would be unfair to require users to replace
     systems in which they have recently invested substantial
     amounts.[^395] On the other hand, a user that continues to employ
     spectrally inefficient equipment, when more efficient alternatives
     are available, is harming other users with whom it is sharing the
     frequencies in these bands. Therefore, we are also concerned with a
     system that permits users to remain on spectrally inefficient
     systems indefinitely. We request comment on these issues and on the
     comparative merits of alternative approaches to addressing these
     concerns. We also request comment on what timetable would be
     appropriate for implementing any new requirement. One alternative
     would be to prohibit the manufacture or importation of equipment
     that does not meet certain efficiency standards by January 1, 2005,
     which, as noted above, is the date after which, under our current
     rules, only new equipment that operates on 6.25 kilohertz channel
     bandwidths will be certified. We seek comment on this proposal and
     alternative dates for this proposal to become effective. Commenters
     are encouraged to suggest specific dates and specific efficiency
     requirements, and to explain their recommendations.

## Licensing of PLMR Channels in the 900 MHz Band for Use in Commercial SMR Systems

143. In the Report and Order portion of this item, we amended our rules
     to allow 800 MHz BI/LT licensees to assign or transfer their
     spectrum to CMRS licensees for use in CMRS operations, or to modify
     the licenses to CMRS use in their own systems.[^396] We also
     adopted rules to safeguard against trafficking in 800 MHz BI/LT
     licenses, and notification procedures to avoid interference to 800
     MHz public safety operations. We did not ask commenters to address
     whether we should also extend this flexibility to any other
     frequency bands, and therefore did not consider any such rule
     amendments.

144. We now seek comment on whether this flexibility in use of PLMR
     channels should be extended to the 900 MHz band. We believe that
     such an action would promote the statutory objective of regulatory
     symmetry among CMRS providers.[^397] We intend, if we introduce
     such flexibility for licensees in the 900 MHz band, to impose an
     appropriate holding period requirement on all licenses the
     application for which is filed on or after the date we adopt this
     item. We would take such an action in order to ensure that our
     request for comment on this issue does not motivate prospective
     licensees to apply for vacant PLMR spectrum with the sole intent of
     using it for CMRS operations. Given the unique characteristics of
     the 800 MHz PLMR bands, however,[^398] we also seek comment as to
     whether there are any reasons we should continue to treat the 800
     MHz and 900 MHz bands differently.

# Procedural Matters 

## Ex Parte Presentations

145. This is a permit-but-disclose notice and comment rule making
     proceeding. *Ex parte* presentations are permitted, except during
     the Sunshine Agenda period, provided they are disclosed as provided
     in the Commission's rules.[^399]

## Regulatory Flexibility Act Analyses

146. A Final Regulatory Flexibility Analysis, pursuant to the Regulatory
     Flexibility Act ("RFA"),[^400] is contained in Appendix C. An
     Initial Regulatory Flexibility Analysis, pursuant to the RFA, is
     contained in Appendix D.[^401]

## Final Paperwork Reduction Act of 1995 Analysis

147. This Report and Order contains a new information collection, and
     the Further Notice of Proposed Rule Making contains a proposed
     information collection. As part of its continuing effort to reduce
     paperwork burdens, we invite the general public and the Office of
     Management and Budget ("OMB") to take this opportunity to comment
     on the information collections contained in this Report and Order
     and Further Notice of Proposed Rule Making as required by the
     Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and
     agency comments are due 60 days after publication of the Report and
     Order and Further Notice of Proposed Rule Making in the Federal
     Register. Comments should address: (a) whether the proposed
     collection of information is necessary for the proper performance
     of the functions of the Commission, including whether the
     information shall have practical utility; (b) the accuracy of the
     Commission\'s burden estimates; (c) ways to enhance the quality,
     utility and clarity of the information collected; and (d) ways to
     minimize the burden of the collection of information on the
     respondents, including the use of automated collection techniques
     or other forms of information technology.

148. In addition to filing comments on the information collections
     contained in this Report and Order and Further Notice of Proposed
     Rule Making with the Secretary, a copy of any comments on the
     information collections should be submitted to Judy Boley, Federal
     Communications Commission, Room 1-C804, 445 12^th^ Street S.W.,
     Washington, DC 20554, or via the Internet to <jboley@fcc.gov> and
     to Edward Springer, OMB Desk Officer, 10236 NEOB, 725 -- 17^th^
     Street, N.W., Washington, DC 20503 or via the Internet to
     edward.springer@omb.eop.gov."

## Filing Procedures

149. 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 on or
     before 60 days after publication in the Federal Register, and reply
     comments on or before 90 days after publication in the Federal
     Register. Comments may be filed using the Commission\'s Electronic
     Comment Filing System ("ECFS") or by filing paper copies. *See
     Electronic Filing of Documents in Rulemaking Proceedings,* 13 FCC
     Rcd 11322, 11326 (1998).

150. Comments filed through the ECFS can be sent as an electronic file
     via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>.
     Generally, only one copy of an electronic submission must be filed.
     If multiple docket or rulemaking numbers appear in the caption of
     this proceeding, however, commenters must transmit one electronic
     copy of the comments to each docket or rulemaking number referenced
     in the caption. In completing the transmittal screen, commenters
     should include their full name, Postal Service mailing address, and
     the applicable docket or rulemaking number. Parties may also submit
     an electronic comment by Internet e-mail. To obtain filing
     instructions for e-mail comments, commenters should send an e-mail
     to ecfs@fcc.gov, and should include the following words in the body
     of the message, "get form \<your e-mail address\>." A sample form
     and directions will be sent in reply.

151. Parties choosing to file by paper must file an original and four
     copies of each filing. If participants want each Commissioner to
     receive a personal copy of their comments, an original plus nine
     copies must be filed. All filings must be sent to the Commission\'s
     Secretary, Magalie Roman Salas, Office of the Secretary, Federal
     Communications Commission, The Portals, 445 12th Street, S.W., Room
     TW-A325, Washington, D.C. 20554. In addition, courtesy copies
     should be delivered to Leora Hochstein, Auctions and Industry
     Analysis Division, Wireless Telecommunications Bureau, Federal
     Communications Commission, 445 12th Street, S.W., Room #4-A633,
     Washington, D.C. 20554 and Scot Stone, Public Safety and Private
     Wireless Division, Federal Communications Commission, 445 12th
     Street, S.W., Room #4-B408, Washington, D.C. 20554.

152. All relevant and timely comments will be considered by the
     Commission before final action is taken in this proceeding.
     Comments and reply comments will be available for public inspection
     and duplication during regular business hours in the FCC Reference
     Information Center, Room CY-A257, 445 12th Street, S.W.,
     Washington, DC 20554. Copies also may be obtained from
     International Transcription Services, Inc., 445 12th Street, S.W.,
     Room CY-B400, Washington, DC 20554, (202) 314-3070.

## Further Information

153. For further information concerning this Report and Order and
     Further Notice of Proposed Rule Making, contact Gary D. Michaels or
     Leora Hochstein of the Auctions and Industry Analysis Division
     at (202) 418-0660 (voice), (202) 418-7233 (TTY), or Shellie
     Blakeney of the Public Safety and Private Wireless Division
     at (202) 418-0680 (voice), (202) 418-7233 (TTY), Wireless
     Telecommunications Bureau, Washington, DC 20554.

# ordering clauses

154. Accordingly, pursuant to Sections 1, 2, 4(i), 5(c), 7(a), 11(b),
     301, 302, 303, 307, 308, 309(j) , 310, 312a, 316, 319, 323, 324,
     332, 333, 336, 337, and 351 of the Communications Act of 1934, as
     amended, 47 U.S.C. §§ 151, 152, 154(i), 155(c), 157(a), 161(b),
     301, 302, 303, 307, 308, 309(j), 310, 312a, 316, 319, 323, 324,
     332, 333, 336, 337, and 351, the Balanced Budget Act of 1997,
     Pub. L. No. 105-33, Title III, 111 Stat. 251 (1997), and Sections
     1.421 and 1.425 of the Commission's Rules, 47 C.F.R. §§ 1.421 and
     1.425, IT IS ORDERED that the REPORT AND ORDER AND FURTHER NOTICE
     OF PROPOSED RULE MAKING is hereby adopted.

155. IT IS FURTHER ORDERED that NOTICE IS HEREBY GIVEN of the proposed
     regulatory changes contained in the Further Notice of Proposed Rule
     Making, and that comment is sought on these proposals.

156. IT IS FURTHER ORDERED that Parts 1 and 90 of the Commission's Rules
     ARE AMENDED as set forth in Appendix B, and that these Rules shall
     be effective **\[60 days after publication in the Federal
     Register\]**, except that the information collection contained in
     these rules become effective 70 days after publication in the
     Federal Register, following OMB approval, unless a notice is
     published in the Federal Register stating otherwise.

157. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4(i), and
     303 of the Communications Act of 1934, as amended, 47 U.S.C. §§
     151, 152, 154(i) and 303, and Section 1.425 of the Commission's
     Rules, 47 C.F.R. § 1.425, the Petition for Rulemaking filed by the
     American Mobile Telecommunications Association, Inc. on July 30,
     1999 (RM-9705) IS DENIED.

158. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4(i), 303,
     and 337 of the Communications Act of 1934, as amended, 47 U.S.C. §§
     151, 152, 154(i), 303, and 337, the Petition for Rulemaking filed
     by UTC, The Telecommunications Association, the American Petroleum
     Institute, and the Association of American Railroads on August 14,
     1998 (RM-9405) IS DENIED.

159. IT IS FURTHER ORDERED that the Commission's Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     Report and Order and Further Notice of Proposed Rule Making,
     including the Initial Regulatory Flexibility Analysis and Final
     Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
     of the U.S. Small Business Administration.

     FEDERAL COMMUNICATIONS COMMISSION

     Magalie Roman Salas

Secretary

# APPENDIX a: comments and reply comments filed in wt docket 99-87 {#appendix-a-comments-and-reply-comments-filed-in-wt-docket-99-87 .unnumbered}

> **Comments**[^402]

1.  Aeronautical Radio, Inc. (ARINC)

2.  Alliant Energy (Parent to : Wisconsin Power and Light, Interstate
    Power Company & IES Utilities, Inc.)

3.  American Automobile Association (AAA)

4.  American Electric Power Service Corporation (AEP)

5.  The American Mobile Telecommunications Association (AMTA)

6.  The American Petroleum Institute (API)

7.  American Water Works Association (AWWA)

8.  American Water Works Association Government Affairs

9.  Amtech Systems Division of Intermec Technologies Coporation (Amtech)

10. Anchorage Water & Wastewater Utility (AWWU)

11. APW Electronics, Inc.

12. Arizona Public Service Company

13. Association of American Railroads (AAR)

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

15. Baltimore Gas and Electric Company (BGE)

16. Basin Electric Power Cooperative

17. Benton County Public Utility District

18. The Boeing Company (Boeing)

19. Blooston, Mordkofsky, Jackson & Dickens (Blooston I)

> Representing:
>
> Automobile Club of Southern California
>
> Betteroads Asphalt Corporation
>
> Clarkson Construction Company, Inc.
>
> Cross Timbers Oil Company
>
> Flash Cab Company
>
> Foster Engineering Company
>
> Hill County Electric Cooperative, Inc.
>
> Hutchinson Telephone Company, Inc.
>
> Lubbock Radio Paging Service, Inc.
>
> Mankato Citizens Telephone Company
>
> Midwest Mobile Radio Service
>
> Minnesota Mining and Manufacturing Co.
>
> Mobilephone of Humboldt, Inc.
>
> Mobile Phone of Texas, Inc.
>
> Nemont Telephone Cooperative
>
> North Pittsburgh Telephone Company
>
> Pond Branch Telephone Company
>
> Supreme Security Systems
>
> TXU Communications Telephone Company
>
> Webster Calhoun Cooperative Telephone Association
>
> The Wilkinsburg-Penn Joint Water Authority
>
> XIT Rural Telephone Cooperative, Inc.
>
> Zirkelbach Refrigeration, Inc.

20. Blooston, Mordkofsky, Jackson & Dickens (Blooston II)

> Representing:
>
> Betteroads Asphalt Corporation
>
> Clarkson Construction Company, Inc.
>
> Cross Timbers Oil Company
>
> Flash Cab Company
>
> Foster Engineering Company
>
> Hill County Electric Cooperative, Inc.
>
> Hutchinson Telephone Company, Inc.
>
> Lubbock Radio Paging Service, Inc.
>
> Mankato Citizens Telephone Company
>
> Midwest Mobile Radio Service
>
> Mobilephone of Humboldt, Inc.
>
> Mobile Phone of Texas, Inc.
>
> Nemont Telephone Cooperative
>
> North Pittsburgh Telephone Company
>
> Pond Branch Telephone Company
>
> Supreme Security Systems
>
> TXU Communications Telephone Company
>
> Webster Calhoun Cooperative Telephone Association
>
> The Wilkinsburg-Penn Joint Water Authority
>
> XIT Rural Telephone Cooperative, Inc.
>
> Zirkelbach Refrigeration, Inc.

21. Dixie Ten Broeck

22. Jack Campitelli

23. CellNet Data Systems, Inc. (CellNet)

24. Central and South West Corporation (CSW)

25. Central Nebraska Public Power and Irrigation (Central)

26. Central Station Alarm Association (CSAA)

27. Chadmoore Wireless Group, Inc. (Chadmoore)

28. Cinergy Corporation (Cinergy)

29. Citizens Water Resources (Citizens Water)

30. City of Calhoun, Georgia Water System (City Administrator)

31. City of Calhoun, Georgia Water System (Director of Public Works)

32. City of Calhoun, Georgia Water System (Mayor)

33. Clay Electric Co-Op

34. Columbus (Georgia) Water Works

35. Commonwealth Edison Company (ComEd)

36. ComSpace Corporation (Comspace)

37. Consumer's Energy

38. Council Of Independent Communications Suppliers (CICS)

39. Allen Crawford

40. The Critical Infrastructure Industries (CII). Representing: United
    Telecom Council, American Petroleum Institute (API) and Association
    of American Railroads (AAR)

41. DeKalb County, Georgia Water and Sewer Division

42. Allan Dersham

43. East Bay Municipal Utility District (EBMUD)

44. Entergy Services, Inc. (Entergy)

45. Ford Communications, Inc. (Ford)

46. Forest Industries Telecommunications (FIT)

47. Ronald K. Greenhalgh

48. Henry Radio, Inc.

49. Hewlett-Packard Company (HP)

50. Houston Lighting & Power Company (HL&P)

51. Industrial Telecommunications Association, Inc.(ITA), the Council of
    Independent Communications Suppliers (CICA), and The Taxicab &
    Livery Communications Council (TLCC)

52. International Association of Fire Chiefs, Inc (IAFC)

> International Municipal Signal Association (IMSA)

53. International Bridge, Tunnel and Turnpike Association

54. International Communications Association (ICA)

55. Intek Global Corp. (Intek)

56. Kansas City, Missouri Water Services Department

57. Kay Communications, Inc.

58. Kenwood Communications Corporation (Kenwood)

59. Land Mobile Communications Council (LMCC)

60. Lincoln Water System (LWS)

61. Lubrizol Corporation

62. Mark IV Industries Ltd. (Mark IV)

63. David B. Marricle

64. Maryland Transportation Authority (MDTA)

65. McCook Public Power District

66. Midwest Energy, Inc.(Midwest)

67. Minnesota Power, Inc.

68. Motorola

69. MRFAC, Inc. (MRFAC)

70. MTA Bridges & Tunnels (MTA)

71. National Association of Water Companies (NAWC)

72. National Fuel Gas Company

73. National Rural Electric Cooperative Association (NRECA)

74. New England Power Service Company

75. New Jersey Highway Authority (NJHA)

76. New Jersey Turnpike Authority (NJTA)

77. New York State Electric & Gas Corporation (NYSEG)

78. New York State Technology Enterprise Corporation (NYSTEC)

79. New York State Thruway Authority (NYSTA)

80. Nextel Communications, Inc. (Nextel)

81. Niagara Mohawk Power Corporation

82. Northeast Missouri Electric Power Cooperative

83. Northeast Utilities Service Company (NU)

84. North Marine Water District (NMWD)

85. The North Texas Communications Council (NTCC)

86. On Site Communications (OSC)

87. Pacific Gas and Electric (PG&E)

88. PacifiCorp

89. The Peace Bridge Authority

90. The Personal Communications Industry Association, Inc. (PCIA)

91. The Private Internal Radio Service Coalition (PIRSC)

92. Ponca City Refinery

93. Public Service Electric and Gas Company (PSE&G)

94. Radscan, Inc.

95. Rappahannock Electric Cooperative (REC)

96. Ray's Radio Shop, Inc. (RRS)

97. Rees Communications

98. City of Sacramento, Department of Utilities

99. San Francisco Public Utilities Commission

100. San Francisco Public Utilities Commission, Water Quality Bureau

101. San Juan Water District

102. SCANA Corporation (SCANA)

103. Mr. Merrill T. See (Mr. See)

104. Small Business In Telecommunications (SBT)

105. Thomas C. Smith

106. South Jersey Transportation Authority (SJTA)

107. The Texas Section of the American Water Works Association

108. Transportation Operations Coordinating Committee (Transcom)

109. Trimble Navigation Limited (Trimble)

110. Turlock Irrigation District (TID)

111. Union Electric Company d/b/a Ameren UE and Central Illinois Public
     Service Company d/b/a Ameren Cips (Ameren)

112. U.S. Department of Transportation (DOT)

113. United States Small Business Administration, Office of Advocacy
     (Advocacy)

114. The United Telecom Council (UTC)

115. United Water Idaho

116. United Water New York (UWNY)

117. United Water New Jersey (UWNJ)

118. United Water Resources

119. USMSS, Inc. (USMSS)

120. Virginia Electronic and Power Company (Virginia Power)

121. Washington Gas Light Company (Washington Gas)

122. Joseph T. Wehrkamp

123. Western Communications (WC)

124. Western Resources (WR)

125. West Virginia Parkways Economic Development and Tourism
     Authority(WVPA)

126. WinStar Communications, Inc. (WinStar)

127. Wisconsin Department of Transportation, Division of State Patrol

128. Wisconsin Public Service Corporation (WPSC)

> **Reply Comments**

1.  American Automobile Association (AAA)

2.  The American Mobile Telecommunications Association (AMTA)

3.  The American Petroleum Institute (API)

4.  Association of American Railroads (AAR)

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

6.  Atlantic City Electric Company(Atlantic), Cinergy Corp.(Cinergy),
    Delmarva Power & Light Company (Delmarva), Entergy Services,
    Inc.(Entergy), and Indianapolis Power & Light Company (IPL)
    (collectively "the Utilities")

7.  Automobile Club of Southern California (ACSC)

8.  The Boeing Company (Boeing)

9.  Blooston, Mordkofsky, Jackson & Dickens (Blooston II- Reply)

> Representing:
>
> Betteroads Asphalt Corporation
>
> Bobier Electronics
>
> Caprock Communications
>
> Citizens Telephone Company
>
> Clarkson Construction Co./Total Risk Mgt.
>
> Cross Timbers Oil Company
>
> Electronic Specialties
>
> First Communications
>
> Flash Cab Company
>
> Foster Engineering Company
>
> Hill County Electric Cooperative, Inc.
>
> Hutchinson Telephone Company, Inc.
>
> IMC Agrico Co.
>
> Instant Signal & Alarm Co., Inc.
>
> Lubbock Radio Paging Service, Inc.
>
> Mankato Citizens Telephone Company
>
> Midwest Mobile Radio Service
>
> Minnesota Mining and Manufacturing Co.
>
> Mobilcom
>
> Mobilephone of Humboldt, Inc.
>
> Mobile Communications Service of Miami
>
> Mobile Phone of Texas, Inc.
>
> Nemont Telephone Cooperative
>
> North Pittsburgh Telephone Company
>
> Penasco Valley Telephone
>
> Platte Valley Communications of Kearney, Inc.
>
> Pond Branch Telephone Company
>
> Sanborn Telephone Company
>
> Supreme Security Systems
>
> Teletouch Communications, Inc.
>
> TXU Communications Telephone Company
>
> UBTA Communications
>
> Webster Calhoun Cooperative Telephone Association
>
> Western Atlas International, Inc.
>
> The Wilkinsburg-Penn Joint Water Authority
>
> W.T. Services, Inc.
>
> XIT Rural Telephone Cooperative, Inc.
>
> Zirkelbach Refrigeration, Inc.

10. California State Automobile Association (Cal State)

11. Central Station Alarm Association (CSAA)

12. CellNet Data Systems, Inc. (CellNet)

13. Chadmoore Wireless Group, Inc. (Chadmoore)

14. Cinergy Corporation (Cinergy)

15. Columbia Energy Group (Columbia)

16. Commonwealth Edison Company (ComEd)

17. ComSpace Corporation (ComSpace)

18. Consolidated Edison Company of New York, Inc.(ConEdison)

19. Entergy Services, Inc. (Entergy)

20. Ford Communications, Inc.

21. Forest Industries Telecommunications (FIT)

22. Florida Fruit & Vegetable Association (FFVA)

23. Joint Comments of the Industrial Telecommunications Association,
    Inc., the Council of Independent Communications Suppliers, The
    Taxicab 7 Livery Communications Council, and the Telephone
    Maintenance Frequency Advisory Committee (Joint Commenters)

24. Mark IV Industries, Limited. I.V.H.S. Division (Mark IV)

25. Minnesota Power

26. Motorola

27. MRFAC, Inc.(MRFAC)

28. The National Association of Manufacturers and MRFAC, Inc.
    (NAM/MRFAC)

29. National Propane Gas Association (NPGA)

30. National Ready Mixed Concrete Association (NRMCA)

31. National Utility Contractors Association (NUCA)

32. Nextel Communications, Inc. (Nextel)

33. Nextel/ Attachment: Comments by Dr. Rosston

34. Otter Tail Power Company

35. Personal Communications Industry Association, Inc. (PCIA)

36. Radscan, Inc. (Radscan)

37. Rocky Mountain Motorists (Rocky Mountain)

38. SCANA Corporation (SCANA)

39. Small Business In Telecommunications (SBT)

40. Southern Company

41. Trimble Navigation Limited (Trimble)

42. Union Electric Company d/b/a Ameren UE and Central Illinois Public
    Service Company d/b/a Ameren Cips (Ameren)

43. United Telecom Council (UTC)

44. UTC, The Telecommunications Association

**Ex Parte Submissions**

1.  AEP Communications, LLC

2.  Ameren, Cinergy Corporation, Commwealth Edison, Entergy Services,
    and Cinergy

3.  American Mobile Telecommunications Association (AMTA)

4.  American Petroleum Institute (API)

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

6.  The Boeing Company (Boeing)

7.  Cellnet Data Systems, Inc.

8.  Central Station Alarm Association

9.  CoServ Security, LLC

10. FM Communications, Inc. (FM)

11. Forest Industries Telecommunications (FIT)

12. Global Frontiers, Inc. (Global)

13. Keller and Heckman on behalf of Colorado Interstate Gas Company,
    American Petroleum Institute (API), Shell Oil Company

14. Thomas R. Koeing d/b/a Interphone Co. (Interphone)

15. Mark IV Industries Ltd. (Mark IV)

16. Merchants Alarm Systems

17. Mobex Communications, Inc. (Mobex)

18. Motorola, Inc. (Motorola)

19. MRFAC, Inc. (MRFAC)

20. Nextel Communications, Inc. (Nextel)

21. Pacific Wireless Technologies, Inc.

22. Personal Communications Industry Association (PCIA)

23. Representative Steven R. Rothman

24. Representative Cliff Stearns

25. Representative Edolphus Towns

26. Senator Tom Daschle

27. Senator Peter G. Fitzgerald

28. Senator Frank R. Lautenberg

29. Sentry Watch, Inc.

30. Southern Communications Services, Inc. (Southern)

31. Staley Communications, Inc.

32. U.S.A Central Station Alarm Corp.

33. U.S. Environmental Protection Agency (EPA)

34. United Telecom Council (UTC)

35. UTC, The Telecommunciations Association

36. Wiley, Rein & Fielding

> Representing:
>
> Industrial Telecommunications Associations, Inc. (ITA)
>
> Motorola, Inc. (Motorola)

**Extension of Time to File Reply Comments Submissions**

1.  Land Mobile Communications Council (LMCC)

2.  William R. Miller dba Russ Miller Rental

**Petition for Rulemaking RM-9332**

1\. American Mobile Telecommunications Association, Inc.(AMTA)

2.  UTC, The Telecommunications Association (UTC), Association of
    American

Railroads(AAR), and the American Petroleum Institute (API)

**Support to Petition for Rulemaking RM-9332**

1\. American Petroleum Institute (API)

**Opposition to Petition for Rulemaking RM-9332**

1.  Atlantic City Electric Company(Atlantic), Cinergy Corp.(Cinergy),
    Delmarva Power & Light Company (Delmarva), Entergy Services,
    Inc.(Entergy), and Indianapolis Power & Light Company (IPL)
    (collectively "the Utilities")

2.  Industrial Telecommunications Association, Inc.(ITA), the Council of
    Independent Communications Suppliers (CICs), The Taxicab & Livery
    Communications Council (TLCC), and the Telephone Maintenance
    Frequency Advisory Committee (TELFAC) and USMSS, Inc. (collectively,
    "Joint Commenters")

3.  MRFAC, Inc.(MRFAC)

4.  Petroleum Communications, Inc.

5.  SCANA Communications, Inc. (SCANA)

## Comments Filed in Response to RM-9705 {#comments-filed-in-response-to-rm-9705 .unnumbered}

1.  Aeronautical Radio, Inc. (ARINC)

2.  American Hospital Association (AHA)

3.  American Mobile Telecommunications Association, Inc. (AMTA)

4.  Association of American Railroads (AAR)

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

6.  Blooston, Mordkofsky, Jackson & Dickens (Blooston)

> Representing:
>
> Automobile Club of Southern California
>
> AAA Colorado
>
> Betteroads Asphalt Corporation
>
> Bobier Electronics
>
> Caprock Communications
>
> Citizens Telephone Company
>
> Clarkson Construction Co./Total Risk Mgt.
>
> Cross Timbers Oil Company
>
> Electronic Specialties
>
> First Communications
>
> Flash Cab Company
>
> Foster Engineering Company
>
> Hill County Electric Cooperative, Inc.
>
> Hutchinson Telephone Company, Inc.
>
> IMC Agrico Co.
>
> Instant Signal & Alarm Co., Inc.
>
> Lubbock Radio Paging Service, Inc.
>
> Mankato Citizens Telephone Company
>
> Midwest Mobile Radio Service
>
> Minnesota Mining and Manufacturing Co.
>
> Mobilcom
>
> Mobilephone of Humboldt, Inc.
>
> Mobile Communicaitons Service of Miami
>
> Mobile Phone of Texas, Inc.
>
> Nemont Telephone Cooperative
>
> North Pittsburgh Telephone Company
>
> Penasco Valley Telephone
>
> Platte Valley Communications of Kearney, Inc.
>
> Pond Branch Telephone Company, Inc.
>
> Sanborn Telephone Company
>
> Supreme Security Systems, Inc.
>
> Teletouch Communications, Inc.
>
> TXU Communications Telephone Company
>
> UBTA Communications
>
> Webster-Calhoun Cooperative Telephone Association
>
> Western Atlas International, Inc.
>
> Wilkinsburg-Penn Joint Water Authority
>
> W.T. Services, Inc.
>
> XIT Rural Telephone
>
> Zirkelbach Refrigeration, Inc.

7.  ComSpace Corporation (ComSpace)

8.  Fisher Wireless Services, Inc.

9.  Industry Coalition

> Comprised of:
>
> Aeronautical Radio, Inc.
>
> Alliance of Motion Picture and Television Producers
>
> American Automobile Association (AAA)
>
> American Petroleum Institute (API)
>
> American Trucking Associations
>
> Associated Builders & Contractors, Inc.
>
> Association of American Railroads
>
> Council of Independent Communications Suppliers (CICA)
>
> Forest Industries Telecommunications (FIT)
>
> Industrial Telecommunications Association, Inc. (ITA)
>
> International Taxicab and Livery Association
>
> MRFAC, Inc. (MRFAC)
>
> National Food Processors Association
>
> National Mining Association
>
> National Propane Gas Association
>
> National Ready Mixed Concrete Association
>
> National Utility Contractors Association
>
> New England Fuel Institute
>
> Newspaper Association of America
>
> Personal Communications Industry Association (PCIA)
>
> Telephone Maintenance Frequency Advisory Committee (TELEFAC)
>
> United Telecom Council (UTC)
>
> USMSS, Inc. (USMSS)

10. Mobex Communications, Inc. (Mobex)

11. Motorola, Inc. (Motorola)

12. Qualicom, Inc. (Qualicom)

13. Small Business in Telecommunications (SBT)

14. The Boeing Company (Boeing)

**Reply Comments Filed in Response to RM-9705**

1.  American Mobile Telecommunications Association, Inc. (AMTA)

2.  Chadmoore Wireless Group, Inc. (Chadmoore)

3.  Industrial Telecommunications Association, Inc. (ITA)

# APPENDIX B: FINAL RULES {#appendix-b-final-rules .unnumbered}

[Section 1.913 is amended by adding a new paragraph (g) to read as
follows:]{.underline}

**§1.913 Application forms; electronic filing and manual filing**

\*\*\*\*

\(g\) *Section 337 Requests*. Applications to provide public safety
services submitted pursuant to 47 U.S.C. 337 must be filed on the same
form and in the same manner as other applications for the requested
frequency(ies).

[Section 90.179 is amended by revising paragraph (g) to read as
follows:]{.underline}

**§ 90.179 Shared use of stations.**

\* \* \* \* \*

\(g\) The provisions of this section do not apply to licensees
authorized to provide commercial mobile radio service under this part,
including licensees authorized to use channels transferred or assigned
pursuant to § 90.621(e)(2) of this part.

[Section 90.621 is amended by revising paragraph (e)(2) to read as
follows:]{.underline}

**§ 90.621 Selection and assignment of frequencies.**

\* \* \* \* \*

\(e\) \* \* \*

\(2\) Notwithstanding paragraph (e)(5) of this section, licensees of
channels in the Industrial/Land Transportation and Business categories
may request a modification of the license, *see* § 1.947 of this part,
to authorize use of the channels for commercial operation. The licensee
may also, at the same time or thereafter, seek authorization to transfer
or assign the license, *see* § 1.948 of this part, to any person
eligible for licensing in the General or SMR categories. Applications
submitted pursuant to this paragraph must be filed in accordance with
the rules governing other applications for Industrial/Land
Transportation and Business channels, and will be processed in
accordance with those rules, except that the modification application
and the assignment application will be placed on public notice in
accordance with § 1.933 of this chapter. Grant of requests submitted
pursuant to this paragraph is subject to the following conditions:

\(i\) A licensee that modifies its license to authorize commercial
operations will not be authorized to obtain additional 800 MHz Business
or Industrial/Land Transportation category channels for sites located
within 113 km (70 mi.) of the station for which the license was
modified, for a period of one year from the date the license is
modified. This provision applies to the licensee, its controlling
interests and their affiliates, as defined in § 1.2110 of this part.

\(ii\) With respect to licenses the initial application for which was
filed on or after November 9, 2000, requests submitted pursuant to
paragraph (e)(2) of this section may not be filed until five years after
the date of the initial license grant. In the case of a license that is
modified on or after November 9, 2000 to add 800 MHz Industrial/Land
Transportation or Business frequencies or to add or relocate base
stations that expand the licensee's the interference contour, requests
submitted pursuant to paragraph (e)(2) of this section for these
frequencies or base stations may not be filed until five years after
such modification.

\(iii\) Requests submitted pursuant to paragraph (e)(2) of this section
must include a certification that written notice of the modification
application has been provided to all Public Safety licensees, *see* §
90.20(a) of this part, with base stations within 113 km (70 mi.) of the
site of the channel(s) for which authorization for commercial use is
sought that operate within 25 kHz of the center of those channel(s). If,
pursuant to paragraph (e)(2), modification and assignment or transfer
applications are filed at different times, the written notice required
by this paragraph must be provided each time.

\(iv\) The applicant must certify that it will take reasonable
precautions to avoid causing harmful interference to Public Safety
licensees, *see* § 90.20(a) of this part, and to take such action as may
be necessary to eliminate interference to such licensees caused by its
operations. (When an assignment or transfer application is filed
pursuant to paragraph (e)(2) of this paragraph, this representation is
required only of the assignee or transferee.) Licensees of stations
suffering or causing harmful interference are expected to cooperate and
resolve this problem by mutually satisfactory arrangements. If the
licensees are unable to do so, the Commission may impose restrictions
including specifying the transmitter power, antenna height, or area or
hours of operation.

\* \* \* \* \*

# Appendix C: FINAL REGULATORY FLEXIBILITY ANALYSIS {#appendix-c-final-regulatory-flexibility-analysis .unnumbered}

1.  As required by the Regulatory Flexibility Act ("RFA"),[^403] an
    Initial Regulatory Flexibility Analysis ("IRFA") was incorporated in
    the *Notice of Proposed Rule Making* in WT Docket 99-87.[^404] The
    Commission sought written public comment on the issues and proposals
    in the *Notice,* including comment on the IRFA. The comments
    received are discussed below. This Final Regulatory Flexibility
    Analysis ("FRFA") conforms to the RFA.[^405]

## Need for, and Objectives of, the Report and Order

160. This Report and Order was initiated to evaluate the Commission's
     auction authority for wireless telecommunications services
     following the enactment of the Balanced Budget Act of 1997. The
     Balanced Budget Act revised the original spectrum auction standard
     that had been established under the Omnibus Budget Reconciliation
     Act of 1993. In this Report and Order, we develop a framework for
     making certain determinations for future licensing of the private
     wireless services and the scope of the Balanced Budget Act's
     exemption from competitive bidding for licenses and permits issued
     for public safety radio services. In attempting to maximize the use
     of private radio spectrum, we continue our efforts to improve the
     efficiency of spectrum use, maintain public safety services, reduce
     the regulatory burden on spectrum users, facilitate technological
     innovation, and provide opportunities for development of
     competitive new service offerings. The policies adopted in this
     Report and Order are also designed to implement Congress' goal of
     giving small businesses the opportunity to participate in the
     provision of spectrum-based services in accordance with Section
     309(j) of the Communications Act of 1934, as amended.[^406]

161. The Report and Order also amends certain Part 1 and 90 rules to
     conform the application and licensing procedures in the private
     radio services with the new policies described in the Report and
     Order. In particular, these amendments adopt filing procedures for
     license applications submitted pursuant to Section 337 of the
     Communications Act, describe procedures by which mutually exclusive
     applications for licenses in the public safety radio services will
     be resolved, and revise certain Part 90 regulations applicable to
     the Private Land Mobile Radio ("PLMR") services.

## Summary of Significant Issues Raised by Public Comments in Response to the IRFA

162. There were two timely filed comments in response to the IRFA.[^407]
     The Office of Advocacy of the U.S. Small Business Administration
     ("SBA") claims that the *Notice* offers no rationale for changing
     licensing procedures for PLMR services, and did not consider the
     impact of the proposed rules on small businesses.[^408] SBA also
     argues that the *Notice* and the IRFA do not describe the impact of
     the rules on small businesses and does not provide significant
     alternatives designed to minimize this impact.[^409] The law firm
     of Blooston, Mordkofsky, Jackson & Dickens contends that the
     adoption of geographic licensing and competitive bidding will
     adversely impact small businesses, particularly those in rural
     areas.[^410]

163. We believe that the *Notice* provided ample justification for
     changes in our traditional approaches to licensing the private
     radio services. The *Notice* observed that significant efficiency
     gains might be expected from a move to new license assignment
     mechanisms. In particular, the Commission noted:

> We have previously observed that the use of competitive bidding to
> assign geographic overlay licenses in private radio services would
> promote spectrum efficiency. This approach would promote competition
> among licensees, which, in turn, would provide market-based incentives
> for efficient spectrum use. In particular, incumbents would be able to
> continue existing operations without harmful interference, and overlay
> licensees would be able to negotiate voluntary mergers, buyouts,
> frequency swaps, or similar arrangements with incumbents. Thus, the
> overlay licensee would incur an opportunity cost if spectrum is not
> used as efficiently as possible and would have incentives to promote
> spectrum efficiency.[^411]

Implicit in this discussion is an understanding (shared by many
commenters) that private radio spectrum is scarce and is in great
demand.[^412] In addition, the IRFA described how the notice sought
comment on how the Balanced Budget Act's amendments to Section 309(j)
affect the Commission's determinations of what services are auctionable.
The IRFA also pointed out that the *Notice* was requesting comment on
whether the Balanced Budget Act's amendments to Section 309(j) require
the Commission to revise its licensing schemes and license assignment
methods to provide for competitive bidding in services that it
previously determined were not auctionable, and on how such schemes for
new services might be established. Further, the IRFA stated that the
*Notice* was considering issues relating to a petition for rulemaking
arising from the statutory exemption from competitive bidding for public
safety radio services. In short, the IRFA and the *Notice* described the
reasons beyond the statutory mandates that provided the basis for the
Commission's consideration of such licensing mechanisms, and gave
commenters adequate opportunity to address the issues affecting small
businesses and others.

164. As can be seen throughout the *Notice*, the Commission has
     thoroughly considered the impact on small businesses of the
     Balanced Budget Act's amendments to the Commission's auction
     authority under Section 309(j) of the Communications Act.[^413] For
     example, the *Notice* sought comment on whether it would be
     appropriate to limit auction eligibility to certain classes of
     small business entities.[^414] Specifically, the *Notice* inquired
     as to possible standards to be considered in establishing
     eligibility, and asked whether it would be appropriate to adopt the
     SBA's size standards under the Standard Industrial Classifications
     ("SIC"), or service-specific size standards, taking into account
     the characteristics and capital requirements of particular private
     services.[^415] The Commission also observed that 96 percent of the
     governmental entities in the U.S. qualify as small businesses under
     SBA definitions.[^416] Governmental entities are primary users of
     spectrum for public safety radio services. Thus, in devoting
     considerable attention in the *Notice* to the exemption from the
     Commission's auction authority for public safety radio services and
     its impact on public safety users, the Commission was
     simultaneously considering impacts on small businesses.[^417]

165. Likewise, the Commission considered significant alternatives
     designed to minimize impacts on small business users of private
     radio spectrum. The RFA requires the Commission to provide an
     analysis that discusses significant alternatives, including, among
     others, "an exemption from coverage of the rule, or any part
     thereof, for such small entities."[^418] As is discussed above, a
     significant portion of the *Notice* was devoted to our
     consideration of exemptions from the statute's auction
     mandate.[^419] Thus, we adequately considered the effect on small
     business from the outset and ultimately developed policies which
     apply equally to all parties.

166. SBA and Blooston also suggest that auctions are inherently unfair
     to small businesses. In drawing that conclusion, SBA fails to
     mention that the Commission, in consultation with SBA, has
     developed designated entity preferences, such as bidding credits,
     to facilitate participation by small businesses in spectrum
     auctions, [^420] and routinely makes bidding credits available to
     encourage the award of licenses to small businesses.[^421] Contrary
     to SBA's assertions,[^422] we believe that band manager licensing
     is an approach that may benefit small businesses by making more
     efficient use of the private radio spectrum. We expect that band
     manager licensing will allow small business users to obtain access
     to spectrum in amounts that are tailored to meet their
     particularized needs or to outsource their communications
     requirements to a third party who may be able to provide service at
     lower cost. Blooston argues that auctions are burdensome to small
     businesses because they may require small entities to hire
     personnel to manage day-to-day business affairs while the small
     business' managers are participating in the auction.[^423] However,
     we believe that band manager licensing may alleviate this problem
     by alleviating the need for small businesses to participate in the
     auction and instead allow all types of users to more readily secure
     access to spectrum in post-auction markets.

167. We find little merit in Blooston's criticism that small entities
     may be required to submit detailed financial showings, which might
     then be available to competitors.[^424] As Blooston acknowledges,
     such showings are required only where a small business claims
     eligibility for a designated entity benefit, such as a bidding
     credit.[^425] If a small business applicant does not wish to risk
     disclosing such information to obtain a bidding discount, it may
     simply elect not to seek such benefits.[^426] Further, the
     Commission's designated entity rules call for the submission of
     financial data that has presumably already been tabulated for
     reasons not related to Commission regulations, thus reducing
     burdens on small business applicants which seek to claim these
     benefits.[^427] Finally, of course, financial showings are
     necessary to ensure that only qualified entities receive this
     particular form of government assistance.

168. We disagree with the premise of Blooston's argument that auctions
     will lead to a concentration of licenses in the hands of a few
     licensees.[^428] Rather, where licensees are afforded the
     flexibility to maximize use of the spectrum during their license
     tenure, as under a band manager licensing scheme, those licensees
     will have an economic incentive not to discriminate or warehouse,
     and will instead maximize use of the spectrum. The Report and Order
     observes that the Commission will consider whether it is
     appropriate for band managers in other bands to be subject to the
     same types of rules as 700 MHz Guard Band Managers regarding fair
     and nondiscriminatory access to the band manager's spectrum, and
     limits on the type of restrictions that band managers may impose on
     their customers' use of the spectrum.[^429] If circumstances
     warrant, moreover, the Commission might consider imposing
     reasonable access standards or other requirements to forestall
     anticompetitive behavior.[^430]

169. We have also stated that it may be necessary to consider the
     licensing of more than one licensee in a given geographic area to
     promote competition, or the imposition of reasonable access
     standards or other such requirements. Our experiences in promoting
     competition in other wireless services leads us to believe that
     competition among band managers would serve to regulate price,
     quality, and availability of spectrum.[^431]

## Description and Estimate of the Number of Small Entities To Which the Rules Will Apply

170. 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 proposed rules, if adopted.[^432] Under the RFA,
     small entities may include small organizations, small businesses,
     and small governmental jurisdictions.[^433] The RFA generally
     defines the term "small business" as having the same meaning as the
     term "small business concern" under the Small Business Act.[^434] 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 SBA.[^435] A
     small organization is generally "any not-for-profit enterprise
     which is independently owned and operated and is not dominant in
     its field."[^436] Nationwide, as of 1992, there were approximately
     275,801 small organizations.[^437]

171. The rule changes effectuated by this Report and Order apply to
     users of public safety radio services, and private radio licensees
     that are regulated under Part 90 of the Commission's rules, and may
     also affect manufacturers of radio equipment. An analysis of the
     number of small entities affected follows.

172. *Public Safety radio services and Governmental entities.* Public
     Safety radio services include police, fire, local governments,
     forestry conservation, highway maintenance, and emergency medical
     services.[^438] The SBA rules contain a definition for small
     radiotelephone (wireless) companies, which encompasses business
     entities engaged in radiotelephone communications employing no more
     that 1,500 persons.[^439] There are a total of approximately
     127,540 licensees within these services. Governmental entities as
     well as private businesses comprise the licensees for these
     services. The RFA also includes small governmental entities as a
     part of the regulatory flexibility analysis.[^440] "Small
     governmental jurisdiction" generally means "governments of cities,
     counties, towns, townships, villages, school districts, or special
     districts, with a population of less than 50,000."[^441] As of
     1992, there were approximately 85,006 such jurisdictions in the
     United States.[^442] This number includes 38,978 counties, cities
     and towns; of these, 37,566, or 96 percent, have populations of
     fewer than 50,000.[^443] The Census Bureau estimates that this
     ratio is approximately accurate for all governmental entities.
     Thus, of the 85,006 governmental entities, the Commission estimates
     that 81,600 (91 percent) are small entities.

173. *Specialized Mobile Radio ("SMR").* The Commission awards bidding
     credits in auctions for geographic area 800 MHz and 900 MHz SMR
     licenses to two tiers of firms: (1) "small entities," those with
     revenues of no more than \$15 million in each of the three previous
     calendar years; and (2) "very small entities," those with revenues
     of no more than \$3 million in each of the three previous calendar
     years. The regulations defining "small entity" and "very small
     entity" in the context of 800 MHz SMR (upper 10 MHz and lower 230
     channels) and 900 MHz SMR have been approved by the SBA. The
     Commission does not know how many firms provide 800 MHz or 900 MHz
     geographic area SMR service pursuant to extended implementation
     authorizations, nor how many of these providers have annual
     revenues of no more than \$15 million. One firm has over \$15
     million in revenues. We assume, for our purposes here, that all of
     the remaining existing extended implementation authorizations are
     held by small entities, as that term is defined by the SBA. The
     Commission has held auctions for geographic area licenses in the
     800 MHz (upper 10 MHz) and 900 MHz SMR bands. There were 60 winning
     bidders that qualified as small and very small entities in the 900
     MHz auction. Of the 1,020 licenses won in the 900 MHz auction, 263
     licenses were won by bidders qualifying as small and very small
     entities. In the 800 MHz SMR auction, 38 of the 524 licenses
     awarded were won by small and very small entities.

174. *Estimates for PLMR Licensees.* Private land mobile radio systems
     serve an essential role in a vast range of industrial, business,
     land transportation, and public safety activities. These radios are
     used by companies of all sizes operating in all U.S. business
     categories. Because of the vast array of PLMR users, the Commission
     has not developed a definition of small entities specifically
     applicable to PLMR users, nor has the SBA developed any such
     definition. The SBA rules do, however, contain a definition for
     small radiotelephone (wireless) companies.[^444] Included in this
     definition are business entities engaged in radiotelephone
     communications employing no more that 1,500 persons.[^445]
     According to the Bureau of the Census, only twelve radiotelephone
     firms of a total of 1,178 such firms which operated during 1992 had
     1,000 or more employees. For the purpose of determining whether a
     licensee is a small business as defined by the SBA, each licensee
     would need to be evaluated within its own business area. The
     Commission\'s fiscal year 1994 annual report indicates that, at the
     end of fiscal year 1994, there were 1,101,711 licensees operating
     12,882,623 transmitters in the PLMR bands below 512 MHz.[^446]

175. *Equipment Manufacturers*. We anticipate that at least six radio
     equipment manufacturers will be affected by our decisions in this
     proceeding. According to the SBA\'s regulations, a radio and
     television broadcasting and communications equipment manufacturer
     must have 750 or fewer employees in order to qualify as a small
     business concern.[^447] Census Bureau data indicate that there are
     858 U.S. firms that manufacture radio and television broadcasting
     and communications equipment, and that 778 of these firms have
     fewer than 750 employees and would therefore be classified as small
     entities.[^448]

## Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

176. This Report and Order establishes a framework for making certain
     determinations for future licensing of the private wireless
     services and the scope of the Balanced Budget Act's exemption from
     competitive bidding for licenses and permits issued for public
     safety radio services. This Report and Order also imposes new
     compliance requirements for Part 90 PLMR licensees seeking to
     modify their licenses to for use in CMRS systems.

177. We make minor revisions to the compliance requirements in Parts 1
     and 90 of the Commission's Rules to conform the application and
     licensing procedures in the private and public safety radio
     services with the policies described in the Report and Order. These
     amendments require public safety applicants seeking licenses
     Section 337 of the Communications Act to file using the
     Commission's Web-based Universal Licensing System, and require PLMR
     licensees seeking to modify 800 MHz non-Public Safety PLMR licenses
     for use in CMRS systems to demonstrate that they meet the
     requirements to be eligible for such modifications.

178. Also, in response to incidents of interference to public safety
     licensees, a joint task force composed of members of the public
     safety community, Commission licensees, and Commission
     representatives is investigating solutions for preventing and
     fixing interference to 800 MHz public safety operations. We seek to
     avoid the potential for further incidents of such interference that
     could result from the conversion to CMRS. Consequently, we will
     require licensees seeking to convert to CMRS, upon submitting a
     modification application, to: (a) certify that the co- or
     adjacent-channel 800 MHz public safety licensees in the same
     geographic area have been notified of the application; and (b)
     commit that they will take affirmative steps to avoid harmful
     interference to such public safety licensees. We believe that these
     actions together will reduce the risk of increased interference in
     this band.

## Steps Taken to Minimize Significant Economic Impact on Small Entities and Significant Alternatives Considered

179. 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 (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 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.[^449]

180. The Part 1 rule adopted in this Report and Order clarifies our
     policies with regard to the processing of applications for licenses
     in the public safety radio services under Section 337 of the
     Communications Act. While we considered the alternative of
     accepting Section 337 requests on an *ad hoc* basis, such an
     approach would not eliminate the procedural uncertainties faced by
     public safety entities seeking spectrum. Further, clarification of
     the process and use of the electronic ULS will greatly reduce the
     cost of preparing wireless applications and pleadings, while
     increasing the speed of the licensing process. We expect that these
     changes will benefit all public safety entities, including those
     96% of governmental entities considered to be small entities.
     Further, use of the ULS will present tremendous advantages for
     small businesses because it permits access to licensing information
     at tremendously reduced costs. Finally, we observe that we continue
     to review the burdens imposed by these and other regulations in our
     biennial review processes in an effort to minimize regulatory
     impacts.

181. The Part 90 regulations amended by this Report and Order permit the
     conversion of 800 MHz non-Public Safety PLMRS licensees be
     permitted to convert their spectrum to CMRS use under certain
     circumstances, and clarify that spectrum in the 800 MHz non-Public
     Safety PLMRS may not be shared under our Part 90 multiple licensing
     rule. We denied a proposal to eliminate the distinction between
     CMRS spectrum and non-Public Safety PLMR spectrum with respect to
     initial licensing. We believe that the existing PLMR pool of
     unassigned frequencies should remain available on an initial basis
     to PLMR eligibles only, to construct new systems or expand existing
     systems. Therefore, we maintain the eligibility criteria for all
     new applications. Similarly, we considered an alternative of
     permitting PLMRS licensees to convert their spectrum without
     restriction, but rejected that idea because it would undercut
     important public interest objectives. The Report and Order imposes
     a holding period to prevent trafficking of PLMR spectrum (*e.g.,*
     PLMR eligible acquiring new PLMR licenses from existing pool of
     unassigned frequencies for the purpose of selling them to CMRS
     providers). Rather than negatively impact small businesses, we
     believe that this rule change is likely to benefit small business
     PLMR licensees by giving them greater ability to assess marketplace
     needs and economic factors when determining the best and most
     efficient use of spectrum. We believe that the benefits of this
     rule change the costs that may be associated with providing the
     required notice to potentially affected public safety licensees.
     Further, the Report and Order finds that allowing licensees to
     convert their frequencies to CMRS use or assign or transfer these
     frequencies to CMRS entities will not affect the supply of
     available PLMR spectrum for licensing from the PLMR pool, and thus
     should not further exacerbate the current shortage of private
     spectrum available to small business entities and other PLMR
     eligibles.

182. *Report to Congress*: The Commission will send a copy of this
     Report and Order, including this FRFA, in a report to be sent to
     Congress pursuant to the Congressional Review Act.[^450] In
     addition, the Commission will send a copy of this Report and Order,
     including the FRFA, to the Chief Counsel for Advocacy of the SBA. A
     copy of this Report and Order and FRFA (or summaries thereof) will
     also be published in the *Federal Register*.[^451]

# Appendix D: INITIAL REGULATORY FLEXIBILITY ANALYSIS for *Further Notice of Proposed Rule Making* {#appendix-d-initial-regulatory-flexibility-analysis-for-further-notice-of-proposed-rule-making .unnumbered}

1.  As required by the Regulatory Flexibility Act ("RFA"),[^452] the
    Commission has prepared this present Initial Regulatory Flexibility
    Analysis ("IRFA") of the possible significant economic impact on
    small entities by the policies and rules proposed in this Further
    Notice of Proposed Rule Making ("Further Notice"). 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 this Further Notice provided above in paras. 149-152,
    *supra*. The Commission will send a copy of the Further Notice,
    including this IRFA, to the Chief Counsel for Advocacy of the Small
    Business Administration ("SBA").[^453] In addition, the Further
    Notice and IRFA (or summaries thereof) will be published in the
    Federal Register.[^454]

## Need for, and Objectives of, the Proposed Rules:

183. The purpose of this Further Notice is to determine whether it would
     be in the public interest, convenience, and necessity to amend our
     rules governing non-public safety private land mobile radio
     ("PLMR") licensees in the bands between 222 MHz and 896 MHz in
     order to expedite the transition to narrowband technology. As is
     described in the Further Notice, AMTA urges that non-Public Safety
     licensees in the bands between 222 MHz and 896 MHz be required to
     deploy technology that achieves the equivalent of two times the
     capacity of most current operations. AMTA asserts that the gain in
     efficiency would result in one voice path per 12.5 kilohertz of
     spectrum, using a 25 kilokertz frequency. AMTA proposes that the
     requirement be phased in from 2003 to 2020, beginning with the most
     congested areas. Other commenters believe that the Refarming rules
     should be retained at least for the time being, because not enough
     time has elapsed in order to reap the benefits of the
     well-considered compromises the Commission adopted in that
     proceeding. The Report and Order tentatively concludes that we
     should encourage the migration to narrowband technology by
     prohibiting the manufacture or importation of equipment that does
     not meet certain efficiency standards by certain dates and requests
     comment on these issues and the comparative merits of alternative
     approaches to addressing the concerns that have been raised,
     including what timetable would be appropriate for implementing any
     new requirement.

184. The Further Notice also seeks comment on whether to permit 900 MHz
     Business and Industrial/Land Transportation ("BI/LT") licensees to
     modify their licenses to permit CMRS use. The Commission believes
     that extending this flexibility to 900 MHz BI/LT licensees would
     promote the statutory objective of regulatory symmetry among CMRS
     providers.

## Legal Basis:

185. Authority for issuance of this Further Notice is contained in
     Sections 4(i), 303(r), and 332(a)(2) of the Communications Act of
     1934, as amended.[^455]

## Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply:

186. 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 proposed rules, if adopted.[^456] Under the RFA,
     small entities may include small organizations, small businesses,
     and small governmental jurisdictions.[^457] The RFA generally
     defines the term "small business" as having the same meaning as the
     term "small business concern" under the Small Business Act.[^458] 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 SBA.[^459] A
     small organization is generally "any not-for-profit enterprise
     which is independently owned and operated and is not dominant in
     its field."[^460] Nationwide, as of 1992, there were approximately
     275,801 small organizations.[^461]

187. The proposed rule amendments may affect users of public safety
     radio services and private radio licensees that are regulated under
     Part 90 of the Commission's rules, and may also affect
     manufacturers of radio equipment. An analysis of the number of
     small entities affected follows.

188. *Public Safety radio services and Governmental entities.* Public
     Safety radio services include police, fire, local governments,
     forestry conservation, highway maintenance, and emergency medical
     services.[^462] The SBA rules contain a definition for small
     radiotelephone (wireless) companies, which encompasses business
     entities engaged in radiotelephone communications employing no more
     that 1,500 persons.[^463] There are a total of approximately
     127,540 licensees within these services. Governmental entities as
     well as private businesses comprise the licensees for these
     services. The RFA also includes small governmental entities as a
     part of the regulatory flexibility analysis.[^464] "Small
     governmental jurisdiction" generally means "governments of cities,
     counties, towns, townships, villages, school districts, or special
     districts, with a population of less than 50,000."[^465] As of
     1992, there were approximately 85,006 such jurisdictions in the
     United States.[^466] This number includes 38,978 counties, cities
     and towns; of these, 37,566, or 96 percent, have populations of
     fewer than 50,000.[^467] The Census Bureau estimates that this
     ratio is approximately accurate for all governmental entities.
     Thus, of the 85,006 governmental entities, the Commission estimates
     that 81,600 (91 percent) are small entities.

189. *Specialized Mobile Radio ("SMR").* The Commission awards bidding
     credits in auctions for geographic area 800 MHz and 900 MHz SMR
     licenses to two tiers of firms: (1) "small entities," those with
     revenues of no more than \$15 million in each of the three previous
     calendar years; and (2) "very small entities," those with revenues
     of no more than \$3 million in each of the three previous calendar
     years. The regulations defining "small entity" and "very small
     entity" in the context of 800 MHz SMR (upper 10 MHz and lower 230
     channels) and 900 MHz SMR have been approved by the SBA. The
     Commission does not know how many firms provide 800 MHz or 900 MHz
     geographic area SMR service pursuant to extended implementation
     authorizations, nor how many of these providers have annual
     revenues of no more than \$15 million. One firm has over \$15
     million in revenues. We assume, for our purposes here, that all of
     the remaining existing extended implementation authorizations are
     held by small entities, as that term is defined by the SBA. The
     Commission has held auctions for geographic area licenses in the
     800 MHz (upper 10 MHz) and 900 MHz SMR bands. There were 60 winning
     bidders that qualified as small and very small entities in the 900
     MHz auction. Of the 1,020 licenses won in the 900 MHz auction, 263
     licenses were won by bidders qualifying as small and very small
     entities. In the 800 MHz SMR auction, 38 of the 524 licenses
     awarded were won by small and very small entities.

190. *Estimates for PLMR Licensees.* Private land mobile radio systems
     serve an essential role in a vast range of industrial, business,
     land transportation, and public safety activities. These radios are
     used by companies of all sizes operating in all U.S. business
     categories. Because of the vast array of PLMR users, the Commission
     has not developed a definition of small entities specifically
     applicable to PLMR users, nor has the SBA developed any such
     definition. The SBA rules do, however, contain a definition for
     small radiotelephone (wireless) companies.[^468] Included in this
     definition are business entities engaged in radiotelephone
     communications employing no more that 1,500 persons.[^469] Entities
     engaged in telegraph and other message communications with no more
     than \$5 million in annual receipts also qualify as small business
     concerns.[^470] According to the Bureau of the Census, only twelve
     radiotelephone firms of a total of 1,178 such firms which operated
     during 1992 had 1,000 or more employees. For the purpose of
     determining whether a licensee is a small business as defined by
     the SBA, each licensee would need to be evaluated within its own
     business area. The Commission\'s fiscal year 1994 annual report
     indicates that, at the end of fiscal year 1994, there were
     1,101,711 licensees operating 12,882,623 transmitters in the PLMR
     bands below 512 MHz.[^471]

191. *Equipment Manufacturers*. We anticipate that at least six radio
     equipment manufacturers will be affected by our decisions in this
     proceeding. According to the SBA\'s regulations, a radio and
     television broadcasting and communications equipment manufacturer
     must have 750 or fewer employees in order to qualify as a small
     business concern.[^472] Census Bureau data indicate that there are
     858 U.S. firms that manufacture radio and television broadcasting
     and communications equipment, and that 778 of these firms have
     fewer than 750 employees and would therefore be classified as small
     entities.[^473]

## Description of Projected Reporting, Recordkeeping and Other Compliance Requirements:

192. Possible requirements under consideration in this Further Notice
     would impose new compliance requirements for certain 900 MHz PLMR
     licensees regulated under Part 90 of the Commission's rules that
     seek to modify their licenses to for use in CMRS systems. Assuming
     the rules adopted in the Report and Order are a good model for 900
     MHz PLMR (which assumption has yet to be established), the
     Commission might require applicants, upon submitting a modification
     application, to: (a) certify that the co- or adjacent channel 800
     MHz public safety licensees in the same geographic area have been
     notified of the application; and (b) commit that they will take
     affirmative steps to avoid harmful interference to such public
     safety licensees. These steps may be necessary to reduce risks of
     increased interference.

## Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered:

193. 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 (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 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.[^474]

194. The Commission believes that migration to narrowband technologies,
     *see* paras. 137-42, *supra*, should benefit all entities, as it
     will result in more efficient use of the spectrum by allowing a
     greater number of entities to share existing spectrum. However,
     requiring the use of narrowband equipment by a date certain, or
     prohibiting the manufacture or import of non-compliant equipment,
     could impact some small entities requiring them to upgrade their
     communications systems before they would otherwise do so. An
     alternative would be to maintain the current rules, which are
     intended to foster migration to narrowband technology by way of
     progressively more stringent type certification requirements. We
     issue this Further Notice in order to consider whether a change in
     the Rules would benefit small entities and other PLMR licensees.

195. In the Report and Order portion of this item, we amended our rules
     to allow 800 MHz BI/LT licensees to assign or transfer their
     spectrum to CMRS licensees for use in CMRS operations, or to modify
     the licenses to CMRS use in their own systems. We also adopted
     rules to safeguard against trafficking in 800 MHz Business and I/LT
     licenses, and notification procedures to avoid interference to 800
     MHz public safety operations. This Further Notice now seeks comment
     on whether this flexibility in use of PLMR channels should be
     extended to the 900 MHz band.

196. In the context of 800 MHz PLMR, we have found that allowing
     licensees to convert their frequencies to CMRS use or assign or
     transfer these frequencies to CMRS entities will not affect the
     supply of available PLMR spectrum for licensing from the PLMR pool,
     and thus should not further exacerbate the current shortage of
     private spectrum available to small business entities and other
     PLMR eligibles. An alternative approach might permit such
     modifications without restriction;[^475] however, this might affect
     the supply of available PLMR spectrum which might, in turn, have
     possible adverse effects on small businesses.

## Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules: 

197. None.

[^1]: Pub. L. No. 105-33, Title III, 111 Stat. 251 (1997).

[^2]: *See* Implementation of Sections 309(j) and 337 of the
    Communications Act of 1934 as Amended; Promotion of Spectrum
    Efficient Technologies on Certain Part 90 Frequencies; Establishment
    of Public Service Radio Pool in the Private Mobile Frequencies Below
    800 MHz, WT Docket No. 99-87, RM-9332, RM-9405, *Notice of Proposed
    Rule Making*, 14 FCC Rcd 5206 (1999) ("*Notice*"). For the reasons
    discussed in the *Notice*, this proceeding does not address
    satellite services. *See Notice* at ¶ 65.

[^3]: *See* 47 U.S.C. § 309(j) (1999).

[^4]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *Second Report and Order*, 15 FCC Rcd 5299, 5311-12 at ¶ 26
    (2000) ("*700* *MHz Second Report and Order*") (establishing
    specific requirements for Guard Band Manager licenses for the 700
    MHz guard bands).

[^5]: *See* Reallocation of 27 Megahertz of Spectrum Transferred from
    Government Use, ET Docket No. 00-221, RM-9267, RM-9692, RM-9797,
    RM-9854, *Notice of Proposed Rule Making*, FCC 00-395, at ¶ 1 (rel.
    Nov. 20, 2000) ("*27 MHz Reallocation Order*").

[^6]: A list of the parties that filed pleadings and *ex parte* notices
    in the captioned proceedings, and the abbreviations used to refer to
    such parties, is attached at Appendix A.

[^7]: UTC is now known as the United Telecom Council.

[^8]: AMTA Petition for Rulemaking (RM-9332) at 3 (filed June 19, 1998)
    ("AMTA Petition I").

[^9]: *See* Replacement of Part 90 by Part 88 to Revise the Private Land
    Mobile Radio Services and Modify the Policies Governing Them, PR
    Docket No. 92-235, *Report and Order and Further Notice of Proposed
    Rule Making,* 10 FCC Rcd 10,076 (1995) ("*Refarming Report and Order
    and Further Notice*"); *Memorandum Opinion and Order*, 11 FCC Rcd
    17,676 (1996); *Second Report and Order*, 12 FCC Rcd 14,307 (1997);
    *Second Memorandum Opinion and Order*, 14 FCC Rcd 8642 (1999);
    *Third Memorandum Opinion and Order*, 14 FCC Rcd 10,922 (1999);
    *Report and Order and Further Notice of Proposed Rule Making*, 15
    FCC Rcd 16,673 (2000) (collectively, the "*Refarming Proceeding*").

[^10]: Pub. L. No. 103-66, Title VI, § 6002(a), 107 Stat. 312, 387
    (1993).

[^11]: 47 U.S.C. § 309(j)(1) (1996). As added by the 1993 Budget Act,
    Section 309(j)(1) stated:

    \(1\) General Authority. \-- If mutually exclusive applications are
    accepted for filing for any initial license or construction permit
    which will involve a use of the electromagnetic spectrum described
    in paragraph (2), then the Commission shall have the authority,
    subject to paragraph (10), to grant such license or permit to a
    qualified applicant through the use of a system of competitive
    bidding that meets the requirements of this subsection.

    Paragraph (10) provided a number of conditions precedent and
    conditions subsequent to the Commission\'s use of competitive
    bidding, which are moot. *See* 47 U.S.C. § 309(j)(10).

[^12]: *See Notice* at 5208-21 ¶¶ 3-22. *See also* Implementation of
    Section 309(j) of the Communications Act - Competitive Bidding, PP
    Docket No. 93-253, *Second Report and Order*, 9 FCC Rcd 2348 (1994)
    (\"*Competitive Bidding Second Report and Order*\"); Implementation
    of Section 309(j) of the Communications Act - Competitive Bidding,
    PP Docket No. 93-253, *Second Memorandum Opinion and Order*, 9 FCC
    Rcd 7245 (1994) (\"*Competitive Bidding Second M O & O*\").

[^13]: 47 U.S.C. § 309(j)(6)(E).

[^14]: *See* *Notice* at 5210 ¶ 4 (citing *Competitive Bidding Second
    Report and Order*, 9 FCC Rcd at 2350 n.5).

[^15]: Renewal licenses were excluded from the auction process. *See*
    H.R. Rep. No. 103-111, at 253. *See also id.* at 2355.

[^16]: *See* 47 U.S.C. § 309(j)(2)(A) (1996).

[^17]: Among the services found to be auctionable under the 1993 Budget
    Act were narrowband and broadband Personal Communications Services,
    Public Mobile Services, 218-219 MHz Service, Specialized Mobile
    Radio Services (SMR), Private Carrier Paging (PCP) Services,
    Multipoint Distribution Service (MDS), Local Multipoint Distribution
    Service (LMDS), 2.3 GHz Wireless Communications Service (WCS),
    satellite Digital Audio Radio Service (DARS), Direct Broadcast
    Satellite (DBS) Service,^?^ 220-222 MHz radio service, Location and
    Monitoring Service (LMS), and VHF Public Coast Stations, all of
    which involve commercial use of the spectrum. *See Notice* at
    5212-13 ¶ 8; *see also Competitive Bidding Second Report and Order*,
    9 FCC Rcd at 2359 ¶¶ 62-63. The plain language of the 1993 Budget
    Act also excluded traditional broadcast services from competitive
    bidding, because broadcast licensees do not receive compensation
    from subscribers. *See Competitive Bidding Second Report and Order*,
    9 FCC Rcd at 2352 ¶ 22.

[^18]: 47 U.S.C. § 309(j)(2)(B) (1996). Section 309(j)(3), entitled
    "Design of Systems of Competitive Bidding," directs that these
    factors be addressed in both identifying classes of licenses to be
    issued by competitive bidding, and designing particular
    methodologies of competitive bidding. The objectives are listed as
    follows:

    the development and rapid deployment of new technologies, products,
    and services for the benefit of the public, including those residing
    in rural areas, without administrative or judicial delays;

    promoting economic opportunity and competition and ensuring that new
    and innovative technologies are readily accessible to the American
    people by avoiding excessive concentration of licenses and by
    disseminating licenses among a wide variety of applicants, including
    small businesses, rural telephone companies, and businesses owned by
    members of minority groups and women;

    recovery for the public of a portion of the value of the public
    spectrum resource made available for commercial use and avoidance of
    unjust enrichment through the methods employed to award uses of that
    resource; and

    efficient and intensive use of the electromagnetic spectrum.

    47 U.S.C. § 309(j)(3)(A)-(D).

[^19]: ^?^ *See Notice* at 5212-14 ¶¶ 8-9.

[^20]: *See Notice* at 5214-19 ¶¶ 10-17.

[^21]: 47 U.S.C. § 397(6). Section 397(6) defines the terms
    \"noncommercial educational broadcast station\" and \"public
    broadcast station.\"

[^22]: 47 U.S.C. § 309(j)(1), (2) (as amended by Balanced Budget Act, §
    3002) (footnote added).

[^23]: *See* 47 U.S.C. § 309(j)(1) and (2) (1996).

[^24]: *See* 47 U.S.C. § 309(j)(2) (emphasis added)*.*

[^25]: The conferees expressed concern that the Commission not interpret
    its expanded auction authority in a manner that overlooks
    engineering solutions or other tools that avoid mutual exclusivity.
    *See* H.R. Conf. Rep. No. 105-217, 105th Cong., 1st Sess., at 572
    (1997) ("Conference Report").

[^26]: Implementation of Section 309(j) of the Communications Act \--
    Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service Licenses, MM Docket No. 97-234, *First
    Report and Order*, 13 FCC Rcd 15920, 16000 ¶ 199 (1998)
    ("*Commercial Broadcast Competitive Bidding First Report & Order*").

[^27]: *See* Conference Report at 572. The 1997 amendments also
    eliminate the Commission's authority to issue licenses or permits by
    random selection after July 1, 1997, with the exception of licenses
    or permits for noncommercial educational radio and television
    stations. *See* Balanced Budget Act at § 3002(a)(2)(B)(5).

[^28]: ^?^ 47 U.S.C. § 337(f)(1), *added by* Balanced Budget Act § 3004.
    *See* Conference Report at 572.

[^29]: ^?^ Conference Report at 572. For purposes of comparison, the
    definition of \"public safety services\" included in Section
    337(f)(1) provides:

    The term \"public safety services\" means services‑‑

    > \(A\) the sole or principal purpose of which is to protect the
    > safety of life, health, or property;
    >
    > \(B\) that are provided‑‑
    >
    > \(i\) by State or local government entities; or
    >
    > \(ii\) by nongovernmental organizations that are authorized by a
    > governmental entity whose primary mission is the provision of such
    > services; and
    >
    > \(C\) that are not made commercially available to the public by
    > the provider.

    47 U.S.C. § 337(f)(1).

[^30]: *See Competitive Bidding Second Report and Order*, 9 FCC Rcd at
    2352 ¶¶ 23-25.

[^31]: Many different entities use private systems for a variety of
    purposes, and the systems themselves operate on a number of
    different spectrum bands. As was explained in detail in the
    *Notice*, to date, the Commission has employed a variety of
    alternative licensing approaches for these private radio services.
    *See* *Notice* at 5214-19 ¶¶ 11-17.

[^32]: Broadly speaking, the category of "private services" includes the
    Private Land Mobile Radio Services; parts of the Maritime and
    Aviation Services; the Private Operational Fixed Service; Amateur
    and Personal Radio Services. When used in this general sense,
    "private services" also includes the public safety radio services
    (which fall within the three aforementioned service classifications)
    as well as frequencies allocated to the Public Safety Radio Pool.

[^33]: Among other things, that *Notice of Proposed Rule Making* seeks
    comment on whether that spectrum could address demand in the
    congested private radio bands. *See* *27 MHz Reallocation Order.*

[^34]: *See* 47 U.S.C. §§ 309(j)(6)(E), 309(j)(2). *See also Competitive
    Bidding Second Report and Order*, 9 FCC Rcd at 2352-53 ¶¶ 21-28.

[^35]: *Notice*, 14 FCC Rcd at 5222 ¶ 25.

[^36]: *Id.* at 5235 ¶ 60.

[^37]: *Id.*

[^38]: *Id.* at 5239 ¶ 64.

[^39]: *Id.* at 5235 ¶ 60.

[^40]: *See, e.g.,* AAR Comments at 8; API Comments at 14-16; API Reply
    Comments at 3-4; Blooston Comments at 5-10; Blooston Reply Comments
    at 2-3; Boeing at 2, 4 ("\[a\]ny implementation of the Balanced
    Budget Act amendments of 1997 must first acknowledge that Congress
    flatly restricted the Commission's competitive bidding authority
    with Section 309(j)(6)(E)..."); Boeing Reply Comments at 1-2;
    CellNet Reply Comments at 2-4; Cinergy Comments at 4-5; Cinergy
    Reply Comments at 2-3; ComEd Comments at 4-6; ComEd Reply Comments
    at 2-3; CSAA Reply Comments at 4; Entergy Comments at 4-5; Entergy
    Reply Comments at 2-3; Ford Reply Comments at 2; FIT Comments at
    1-4; Intek Comments at 4-6; ITA Comments at 4-7; ITA Reply Comments
    at 2-5; Kenwood Comments at 2-3; LMCC Comments at 5-6; Motorola
    Comments at 7-8; Motorola Reply Comments at 2; MRFAC Comments at
    6-8; NTCC Comments at 4-5; PCIA Comments at 4-5; SCANA Comments at
    5-6; SCANA Reply Comments at 2-3; Trimble Comments at 3-6; UEC
    Comments at 4-5; UTC Comments at 6.

[^41]: *See, e.g.,* AAR Comments at 8 ("the Commission's first
    obligation under Section 309(j)(1) (referencing Section
    309(j)(6)(E)) is to use all appropriate methods to avoid mutual
    exclusivity"); API Comments at 15 ("the Commission must give prior,
    independent consideration to its obligation to avoid mutual
    exclusivity, rather than continuing to weigh this obligation against
    the 'public interest factors' set forth in Section 309(j)(3)");
    Boeing Comments at 4-5 ("Congress intended the obligations specified
    in the Commission's general auction authority of Section 309(j)(1)
    to take priority over the public interest criteria found in Section
    309(j)(3)"); Boeing Reply Comments at 2; CellNet Reply Comments at
    2-4; Cinergy Comments at 5; Cinergy Reply Comments at 2-3; ComEd
    Comments at 6; ComEd Reply Comments at 2-3; Entergy Comments at 5;
    Entergy Reply Comments at 2-3; Intek Comments at 4-5; ITA Comments
    at 4; ITA Reply Comments at 3 ("before using competitive bidding as
    a licensing mechanism, the Commission *must* first consider ways to
    avoid mutual exclusivity"); Kenwood Comments at 2-3; LMCC Comments
    at 6 ("it is clear that the Commission must first seek to avoid
    mutual exclusivity); Motorola at 4-8; MRFAC Comments at 6-8; NTCC
    Comments at 4-5; PCIA Comments at 4-5; PIRSC Comments at 3, 10; SBT
    Comments at 8; SCANA Comments at 6; SCANA Reply Comments at 2-3; UEC
    Comments at 5; UTC Comments at 6.

[^42]: *See, e.g.,* API Comments at 15; Boeing Comments at 4-5; Boeing
    Reply Comments at 2 ("the Commission has a threshold responsibility
    to resolve mutual exclusivity before ever considering the use of
    competitive bidding"); CellNet Reply Comments at 2-4; Cinergy
    Comments at 5; ComEd Comments at 6; CSAA Comments at 5; Entergy
    Comments at 5; Ford Reply Comments at 2; Intek Comments at 4-5; ITA
    Comments at 4-7; ITA Reply Comments at 3; Kenwood Comments at 2-3;
    MRFAC Comments at 6-8; NTCC Comments at 4-5; PCIA Comments at 4-5;
    PIRSC Comments at 7; SBT Comments at 8; SBT Reply Comments at 32;
    SCANA Comments at 6; UTC Comments at 6.

[^43]: *See, e.g.,* API Comments at 15; Boeing Comments at 4-5; Boeing
    Reply Comments at 2; CellNet Reply Comments at 2-4; Cinergy Comments
    at 5; ComEd Comments at 6; Entergy Comments at 5; Kenwood Comments
    at 2-3; LMCC Comments at 5-6; PCIA Comments at 4-5; SCANA Comments
    at 6; SBT Reply Comments at 32; UEC Comments at 4-5; UTC Comments at
    7; UTC Reply Comments at 2.

[^44]: *See* 47 U.S.C. § 309(j)(6)(E) (1994).

[^45]: *See*, *e.g*., Amendment of the Commisson's Rules Regarding the
    37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183,
    Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, 37.0-38.6 GHz and 38.6-40.0 GHz Bands, PR
    Docket No. 93-253, *Memorandum Opinion and Order*, 14 FCC Rcd 12428,
    12441-12445 ¶¶ 22-28 (1999); Revision of Part 22 and Part 90 of the
    Commission's Rules to Facilitate Future Development of Paging
    Systems, WT Docket No. 96-18; Implementation of Section 309(j) of
    the Communications Act -- Competitive Bidding, PR Docket No. 93-253,
    *Memorandum Opinion and Order on Reconsideration and Third Report
    and Order*, 14 FCC Rcd 10030 (1999); Amendment of Part 90 of the
    Commission's Rules to Facilitate Future Development of SMR Systems
    in the 800 MHz Frequency Band, PR Docket No. 93-144, *Second Report
    and Order*, 12 FCC Rcd 19079, 19104 ¶ 62, 19154 ¶ 230 (1997);
    Amendment of Part 90 of the Commission's Rules to Facilitate Future
    Development of SMR Systems in the 800 MHz Frequency Band,
    *Memorandum Opinion and Order on Reconsideration*, 12 FCC Rcd 9972,
    10009-10 ¶ 115 (1997).

[^46]: *See, e.g., DIRECTV, Inc. v. FCC,* 110 F.3d 816 (D.C. Cir.
    1997)(affirming FCC decision establishing an auction procedure for
    assigning DBS spectrum, and noting that "\[n\]othing in 309(j)(6)(E)
    requires the FCC to adhere to a policy it deems outmoded 'in order
    to avoid mutual exclusivity in \... licensing proceedings'")(decided
    prior to enactment of the Balanced Budget Act); *Benkelman Telephone
    Co. v. FCC*, 220 F.3d 601, *petition for rehearing on other grounds
    pending* (D.C. Cir. 2000) (denying petitions for review of FCC
    rulemaking orders establishing geographic area licensing system for
    certain paging licenses and adopting a competitive bidding procedure
    for mutually exclusive applications) (decided after enactment of the
    Balanced Budget Act).

[^47]: 47 USC § 309(j)(6)(E) (emphasis added).

[^48]: 47 U.S.C. § 309(j)(3) (emphasis added).

[^49]: The portion of the Conference Report that discusses the statute's
    amendments to the Commission's auction authority is entitled
    "Section 3002(a) \-- *extension and expansion* of auction
    authority." Conference Report, at 572 (emphasis added).

[^50]: *Id.*

[^51]: *See, e.g.,* Cinergy Comments at 5; ComEd Comments at 6; Entergy
    Comments at 5; PIRSC Comments at 7; SCANA Comments at 6; UEC
    Comments at 4-5.

[^52]: H.R. Conf. Rep. No. 105-217, 105^th^ Cong., 1^st^ Sess., at 572
    (1997) ("Conference Report") (emphasis added).

[^53]: 47 U.S.C. § 309(j)(3)(D).

[^54]: *See* Amendment of the Commission's Rules Regarding Multiple
    Address Systems, WT Docket No. 97-81, *Report and Order*, 15 FCC Rcd
    11,956, 11,962-63 ¶¶ 12, 13-15 (2000) ("*MAS Report and Order*")
    ("\[W\]e believe that Section 309(j)(6)(E) allows us to determine
    the licensing approach that is most appropriate for the services
    being offered, taking into account the dominant use of the spectrum,
    administrative efficiency and other related licensing issues.").

[^55]: ^?^ *See DIRECTV, Inc. v. FCC,* 110 F.3d 816, 828 (D.C. Cir.
    1997) (Section 309(j)(6)(E) does not require Commission to adhere to
    policy it deems outmoded in order to avoid mutual exclusivity in
    licensing proceedings); *Benkelman Telephone Co., et al. v. FCC*,
    220 F.3d 601, 606 *petition for rehearing on other grounds pending*
    (D.C. Cir. 2000).

[^56]: *Benkelman Telephone Co., et al. v. FCC*, 220 F.3d 601, 606,
    *petition for rehearing on other grounds pending* (D.C. Cir. 2000).

[^57]: *Id.* (citations omitted) (citing *DIRECTV, Inc. v. FCC,* 110
    F.3d 816, 828 (D.C. Cir. 1997).

[^58]: *See, e.g*., Amendment of Part 90 of the Commission's Rules to
    Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band, PR Docket No. 93-144, *Memorandum Opinion and Order
    on Reconsideration*, 12 FCC Rcd 9972, 10009-10010 ¶ 115 (1997).

[^59]: ^?^ *MAS Report and Order*, 15 FCC Rcd at 11,973-74 ¶ 45. *See
    also* *Commercial Broadcast Competitive Bidding* *First Report and
    Order*, 13 FCC Rcd at 15,920 ¶ 17 (allowing a limited period for
    engineering solutions or settlements by competing applicants).

[^60]: *See, e.g.,* AAA Comments at 6 ("the existing system has worked
    well for private radio licensees, generally enabling widespread and
    efficient use of shared channels by many different users without
    interference."); API Comments at 16; API Reply Comments at 3-4;
    Blooston Comments at 7-10; ITA Comments at 24; ITA Reply Comments at
    4; Blooston Comments at 10 ("\[t\]he current system of frequency
    coordination and first-come, first- served filing is fast, efficient
    and rarely results in mutual exclusivity"); Boeing Comments at 4-8;
    Boeing Reply Comments at 1-3; CellNet Comments at 6-9; CellNet Reply
    Comments at 2-4; Cinergy Reply Comments at 2-3; ComEd Reply Comments
    at 2-3; CSAA Reply Comments at 4; Entergy Reply Comments at 2-3; FIT
    Comments at 1-4; Intek Comments at 4-5; ITA Comments at 4-7; ITA
    Reply Comments at 2-5; Kenwood Comments at 3-5; LMCC Comments at
    3-6; Mark IV Comments at 5, 10-11; Motorola Comments at 7-8;
    Motorola Reply Comments at 2; MRFAC Comments at 5; NTCC Comments at
    2-5; PCIA Comments at 2-4; SCANA Reply Comments at 2-3; Trimble
    Comments at 3-6.

[^61]: *See, e.g.,* API Comments at 16; Blooston Comments at 7 ("\[t\]he
    express language of Section 309(j), and its legislative history,
    unequivocally establish that the Commission is obligated to preserve
    the shared use licensing methodology in the private internal radio
    services"); Blooston Reply Comments at 3; Boeing Comments at 4-8;
    Boeing Reply Comments at 1-3; CellNet Comments at 6-9; CellNet Reply
    Comments at 2-4; ITA Comments at 4-6;

[^62]: *See* *Benkelman Telephone Co., et al. v. FCC*, 220 F.3d 601,
    606, *petition for rehearing on other grounds pending* (D.C. Cir.
    2000) (Section 309(j)(6)(E) imposes an obligation only to minimize
    mutual exclusivity in the public interest and within the framework
    of existing policies); *Orion Communications Ltd. v. FCC*, 213 F.3d
    761, 763 (D.C. Cir. 2000) (notwithstanding other means of avoiding
    mutual exclusivity, "the statute cannot be read to direct the FCC to
    adopt *all* other means available").

[^63]: *See, e.g.,* Amendment of Part 90 of the Commission\'s Rules to
    Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band, PR Docket No. 93-144, *Second Report and Orde*r, 12
    FCC Rcd 19079 (1997); Amendment of the Commission\'s Rules Regarding
    the 37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183,
    *Report and Order and Second Notice of Further Rule Making*, 12 FCC
    Rcd 18600 (1997)("*39 GHz Report and Order*").

[^64]: *Notice*, 14 FCC Rcd at 5241 ¶¶ 66-67.

[^65]: *Id.*

[^66]: *Id.* at 5241-5242 ¶ 69.

[^67]: *Id.* at 5241 ¶ 67.

[^68]: *Id.*

[^69]: *Id*.

[^70]: *See, e.g.,* Revision of Part 22 and Part 90 of the Commission\'s
    Rules to Facilitate Future Development of Paging Systems, WT Docket
    No. 96‑18, *Second Report and Order and Further Notice of Proposed
    Rulemaking*, 12 FCC Rcd 2732, 2744 ¶ 15 (1997). In addition, in the
    rule making proceeding implementing competitive bidding to award
    licenses in the 39 GHz band, the Commission concluded that
    predetermined service areas provide a more orderly structure for the
    licensing process and foster efficient utilization of the spectrum
    in an expeditious manner. *39 GHz Report and Order*, 12 FCC Rcd at
    18647 ¶ 101. *See also* *800 MHz Second Report and Order*, 12 FCC
    Rcd 19079, 19087 ¶ 10.

[^71]: *See, e.g.,* Advocacy Comments at 2-3; API Comments at 12-14; API
    Reply Comments at 3-4; Blooston Comments at 7-10; Blooston Reply
    Comments at 3-4; Boeing Comments at 4-8; Boeing Reply Comments at
    1-3; CellNet Comments at 7-9; CellNet Reply Comments at 2-4; Cinergy
    Comments at 8, 11; Cinergy Reply Comments at 2-3; ComEd Comments at
    9, 13; ComEd Reply Comments at 2-3; CSAA Reply Comments at 4;
    Entergy Comments at 8, 11; Entergy Reply Comments at 2-3; FIT
    Comments at 1-4; ICA Comments at 2, 4; Intek Comments at 4-6; ITA
    Comments at 4-7; ITA Reply Comments at 2-5;Kenwood Comments at 3-5;
    LMCC Comments at 3-6; Mark IV Comments at 5, 10-11; Motorola
    Comments at 7-8; Motorola Reply Comments at 2; MRFAC Comments at 5;
    NTCC Comments at 2-5; PCIA Comments at 2-4; SBT Reply Comments at 2,
    7-8, 26; SCANA Comments at 9, 12-13; SCANA Reply Comments at 2-3;
    Trimble Comments at 3-6; UEC Comments at 8, 11; UTC Comments at 20.

[^72]: *See, e.g.,* AAA Comments at 6; Advocacy Comments at 3; API
    Comments at 12-14; Blooston Comments at 7-12; Blooston Reply
    Comments at 3-4; Boeing Comments at 4-8; Boeing Reply Comments at
    1-3; CellNet Comments at 7-9; CellNet Reply Comments at 2-4; Cinergy
    Comments at 9, 11; Cinergy Reply Comments at 2-3; ComEd Comments at
    11, 13; ComEd Reply Comments at 2-3; Entergy Comments at 9, 11;
    Entergy Reply Comments at 2-3; FIT Comments at 1-4, 7; Ford Reply
    Comments at 8; ICA Comments at 2, 4; Intek Comments at 4-6; ITA
    Comments at 24; ITA Reply Comments at 4; Kenwood at 3-5; LMCC
    Comments at 3-6; Motorola Comments at 7-8; Motorola Reply Comments
    at 2; NTCC Comments at 2-3; PCIA at 2-4; PIRSC Comments at 19; SCANA
    Comments at 10, 13; SCANA Reply Comments at 2-3; UEC Comments at 9,
    11; UTC Comments at 20-21; UTC Reply Comments at 3.

[^73]: *See, e.g*., API Comments at 12-14; Blooston Comments at 7-12;
    Blooston Reply Comments at 3-12; CellNet Comments at 8-9; CellNet
    Reply Comments at 2-4; Cinergy Comments at 10-11; ComEd Comments at
    12-13; Entergy Comments at 10, 11; FIT Comments at 4-7; ICA Comments
    at 3; Intek Comments at 5; ITA Comments at 16-17; LMCC Comments at
    4-5; MRFAC Comments at 5; SBT Reply Comments at 3; SCANA Comments at
    11-12; UEC Comments at 10-11; UTC Comments at 20-21; UTC Reply
    Comments at 4.

[^74]: *See, e.g*., API Comments at 12-14; Blooston Comments at 7-12;
    Blooston Reply Comments at 3-4; CellNet Comments at 8-9; Cinergy
    Comments at 9; ComEd Comments at 11; Entergy Comments at 9; MRFAC
    Comments at 5; SCANA Comments at 10-11; UEC Comments at 9.

[^75]: *See, e.g*., API Comments at 12-14; Blooston Comments at 8,
    10-12; Blooston Reply Comments at 3-4; CellNet Comments at 8-9;
    MRFAC Comments at 5;

[^76]: *See, e.g*., AAR Comments at 7-8; API Comments at 16; Blooston
    Comments at 7, 10-12; Blooston Reply Comments at 3; Boeing Comments
    at 4; Boeing Reply Comments at 3; CellNet Comments at 7; CellNet
    Reply Comments at 3; Intek Comments at 5; ITA Comments at 6.

[^77]: *See* Section III.B.2. *supra* (discussing obligation to avoid
    mutual exclusivity under Section 309(j)(6)(E)). Furthermore, even
    where we decide in a specific service that it is in the public
    interest to continue site-by-site licensing, such a decision does
    not necessarily preclude the use of auctions where competing
    applicants seek to operate at the same site on the same frequency.
    *See Commercial Broadcast Competitive Bidding First Report and
    Order*, 13 FCC Rcd 15920.

[^78]: *See* *supra* ¶¶ 25-27.

[^79]: *See e.g.,* Blooston Comments at 10-17;

[^80]: *See, e.g*., Blooston Comments at 5-13; CellNet Comments at 7-9;
    Cinergy Comments at 11; ComEd Comments at 13; Entergy Comments at
    11; ITA Comments at 10; SBT Reply Comments at 26; SCANA Comments at
    12-13; UEC Comments at 11; UTC Reply Comments at 1.

[^81]: Blooston Comments at 13; *see also* Boeing Comments at 6-7; PIRSC
    Comments at 13.

[^82]: *See* Section III.C.4. *infra* (discussing limited availability
    of B/ILT channels in the 800 MHz band for use in CMRS systems).

[^83]: *See* Section III.B.2. *infra* (discussing eligibility
    requirements for auctionable services currently allocated for
    private radio use).

[^84]: *See* *27 MHz Reallocation Order*.

[^85]: *See infra* ¶¶ 35-50.

[^86]: *See infra* ¶¶ 51-61.

[^87]: *See Notice,* 14 FCC Rcd at 5247-49 ¶¶ 88-95.

[^88]: *See id.* at 5247 ¶ 89.

[^89]: *See id.* at 5247-48 ¶¶ 90-92.

[^90]: *See id.* at 5247-48 ¶ 90.

[^91]: *See id.* at 5248 ¶ 92.

[^92]: *See id.* at 5248-49 ¶¶ 91-94.

[^93]: We also regard band manager licensing as an option to be
    considered in spectrum in which commercial services are authorized,
    as evidenced by our recent decision to license band managers in the
    700 MHz guard bands. (The lessees of 700 MHz guard band spectrum may
    be either commercial service providers or private users.) In
    addition, we have sought comment on whether band managers licensing
    would be appropriate in the 3650-3700 MHz band (and in the 4.9 GHz
    band should we find that the public interest supports the pairing of
    these bands). *See* Amendment of the Commission's Rules With Regard
    to the 3650-3700 MHz Government Transfer Band, ET Docket No. 98-237;
    4.9 GHz Band Transferred from Federal Government Use, WT Docket No.
    00-32, *First* *Report and Order and Second Notice of Proposed Rule
    Making*, FCC 00-363 ¶ 81 (rel. Oct. 24, 2000). However, because
    licensees in commercial services typically operate with fewer
    restrictions and in a more market-driven environment than private
    licensees, there may be less need in some commercial services to
    designate band managers as a specific "class" of licensees. Instead,
    a potential issue is the degree to which all commercial licensees
    should have the option to use some or all of their spectrum in the
    same manner as a band manager, *i.e.*, to make spectrum available to
    third party users without the need for prior Commission approval,
    while retaining primary responsibility for compliance with the
    Commission\'s rules. We plan to address this issue more broadly in
    our upcoming secondary markets proceeding, which will address issues
    related to spectrum leasing in wireless services generally. *See*
    Promoting Efficient Use of Spectrum Through Elimination of Barriers
    to the Development of Secondary Markets, WT Docket No. 00-230,
    *Notice of Proposed Rule Making*, FCC 00-402 (adopted Nov. 9, 2000)
    ("*Secondary Markets Notice*") (Commission initiative to develop
    rules and policies to promote secondary markets in radio spectrum).
    Therefore, we defer further discussion of band managers in the
    commercial services context to that proceeding.

[^94]: *See 700* *MHz Second Report and Order*, 15 FCC Rcd at 5311-12 at
    ¶ 26.

[^95]: *Id.* at 5313 ¶ 30.

[^96]: *See id.*

[^97]: *See id.* at 5324-26 ¶¶ 56-60.

[^98]: *See id.* at 5327-28 ¶¶ 63-67.

[^99]: *See id.* at 5311-23 ¶¶ 25-51.

[^100]: *See* Boeing Comments at 11; FIT Comments at 6; RRS Comments at
    7; SBT Comments at 21; API Reply Comments at 7.

[^101]: We note that, even if we choose to restrict band managers in a
    particular service to lease only to private radio eligibles for
    permissible private uses, a band manager would still be considered
    to be engaged in a commercial activity.

[^102]: *See generally* Boeing Comments at 10-14; Western Resources 4-5;
    AWWA Comments at 9.

[^103]: *See, e.g., Refarming Proceeding.*

[^104]: Gregory L. Rosston & Jeffrey S. Steinberg, *Using Market-Based
    Spectrum Policy to Promote the Public Interest*, 50 Fed. Comm. L.J.
    87, 109 (1997)("*Market-Based Spectrum Policy*").

[^105]: *See, e.g.,* Blooston Reply Comments at 10-11; SBT Comments at
    23; Boeing Comments at 11.

[^106]: *See* 47 U.S.C. §309(j)(3)(B).

[^107]: *See* Principles for Reallocation of Spectrum To Encourage the
    Development of Telecommunications Technologies For the New
    Millenium, *Policy Statement*, 14 FCC Rcd 19,868, 19,871-72 ¶ 12
    (1999)("*Spectrum Policy Statement*").

[^108]: Some commenters note that they are increasing relying on
    commercial service providers to supply some of their communications
    needs. *See, e.g.,* AAR Reply Comments at 9. On a similar note, News
    Corp. has unveiled plans to develop set-top boxes capable of linking
    electric meters to networks, a telemetry function which has
    historically been handled wirelessly via private radio spectrum.
    *See* "Murdoch Sees Satellites as Way to Keep News Corp. Current,"
    *New York Times* C1, C7 (June 16, 2000).

[^109]: *See* SBT Comments at 18.

[^110]: *See* "700 MHz Guard Band Auction Raises \$519,892,575.00,"
    *News Release* (Sept. 21, 2000). Additional information on the
    results of this auction may be found on the Commission's Auctions
    Web page: \<http://www.fcc.gov/wtb/auctions/\>.

[^111]: *See* 47 C.F.R. §1.2109(e).

[^112]: *See* Cinergy Comments at 25; ComEd Comments at 26; Entergy
    Comments at 24; SCANA Comments at 26-27; SBT Comments at 19; Ameren
    Comments at 25; Boeing Reply Comments at 3; Blooston II Reply
    Comments at 11. *See generally* AWWA Comments at 9; PIRSC Comments
    at 18.

[^113]: *See 700 MHz Second Report and Order*, 15 FCC Rcd at 5319-21 ¶¶
    42-47.

[^114]: *See* 47 U.S.C. § 309(a)(Commission authority to grant
    applications found to serve the public interest, convenience, and
    necessity).

[^115]: *See* *700 MHz Second Report and Order*, 15 FCC Rcd at 5320-21 ¶
    45.

[^116]: *See* 47 U.S.C. §§ 310(d). *See also id.* at 5321 ¶ 46.

[^117]: 47 U.S.C. §§ 310(d). In any examination of control, the
    Commission considers both legal (*de jure*) and actual (*de facto*)
    control.

[^118]: *Id*. For example, in the case of broadcast auxiliary
    facilities, the Commission has emphasized that it would hold the
    broadcast licensee responsible for any interference or misuse of the
    facilities that occurs during operation by the non-licensed user.
    *See* Amendment of Part 74, Subpart F of the Commission\'s Rules to
    Permit Shared Use of Broadcast Auxiliary Facilities with Other
    Broadcast and Non-broadcast Entities and to Establish New Licensing
    Policies for Television Broadcast Auxiliary Stations, BC Docket No.
    81-794, *Report and Order*, FCC 83-153, at 12, 53 Rad. Reg. 2d (P &
    F) 1101, 1983 WL 183062 (1983). The principle of licensee
    responsibility may be found throughout the Commission's rules. *See,
    e.g.,* Implementation of Section 3(n) of the Communications Act --
    Regulatory Treatment of Mobile Services, GN Docket No. 93-252,
    *Second Report and Order*, 9 FCC Rcd 1411, 1430-31 (1994); 47 C.F.R.
    §§ 90.179(b)(licensee of shared radio station is responsible for
    assuring that facility is used in compliance with Commission rules);
    21.13(f)(licensee must retain effective control where day-to-day
    management and operation of facilities are carried out by manager).
    We emphasize, however, that any analysis of *de facto* control over
    a band manager license must be considered in the context of this
    unique licensing scheme, and our express authorization of these
    activities pursuant to a band manager license application.

[^119]: *See 700 MHz Second Report and Order*, 15 FCC Rcd at 5321 ¶ 46.
    We also required Guard Band spectrum use agreements to contain
    provisions under which the spectrum lessee agrees to comply with all
    applicable Commission rules, accept FCC oversight and enforcement
    consistent with the Guard Band Manager\'s license, and cooperate
    fully with any investigation or inquiry conducted by either the
    Commission or the Guard Band Manager. *Id.* These provisions ensure
    that the Commission has an additional means of enforcing its rules
    directly against the lessee. They do not, however, diminish the
    rights or obligations of the Guard Band Manager to exercise control
    as licensee.

[^120]: *Id.*, 15 FCC Rcd at 5322-23 ¶ 50*.*

[^121]: *See* *700 MHz Second Report and Order*, 15 FCC Rcd at 5322-23 ¶
    50. We also required Guard Band spectrum use agreements to contain
    provisions under which the spectrum lessee agrees to comply with all
    applicable Commission rules, accept FCC oversight and enforcement
    consistent with the Guard Band Manager\'s license, and cooperate
    fully with any investigation or inquiry conducted by either the
    Commission or the Guard Band Manager. *Id*. These provisions ensure
    that the Commission has an additional means of enforcing its rules
    directly against the lessee. They do not, however, diminish the
    rights or obligations of the Guard Band Manager to exercise control
    as licensee.

[^122]: We also address issues relating to Section 310(d) as it applies
    to spectrum leasing in our secondary markets proceeding. *See*
    *Secondary Markets Notice* at ¶¶ 70-82.

[^123]: *See, e.g.,* PCIA Comments at 2-5; SBT Reply Comments at 17; API
    Reply Comments at 7.

[^124]: Our experience is that the use of geographic overlay licenses in
    private radio services may promote spectrtum efficiency. *See, e.g.,
    Refarming Report and Order*, 10 FCC Rcd at 10138-39 ¶¶ 141-143.
    Indeed, one may conceive of many scenarios under which this flexible
    licensing tool might be employed to alleviate congestion in
    encumbered frequency bands. By way of illustration, a band manager
    overlay licensee might aggregate unencumbered spectrum from one band
    with spectrum leased from an incumbent licensee in another frequency
    band within in its geographic license service area. The band manager
    could then lease the aggregated spectrum to third parties. This is
    not to imply that the incumbent would suffer a degradation in
    service, as the band manager might provide the incumbent with
    equipment that is more spectrally efficient or might offer to
    operate the incumbent's system over other licensed frequencies as
    part of its bargain, provided such uses are otherwise consistent
    with the Commission's rules.

[^125]: *See, e.g.,* Cinergy Comments at ii ("Private radio spectrum is
    already insufficient to meet the needs of eligibles..."); API
    Comments at 22; PCIA Comments at 21-22; Motorola Comments at 9.

[^126]: *See* Motorola Comments at 9; NTCC Comments at 7-8.

[^127]: Indeed, we are currently considering a proposal advanced by the
    Association of American Railroads under which a large number of
    incumbent private radio licenses would be aggregated into a single
    band manager-type license. *See* "Wireless Telecommunications Bureau
    Seeks Comment on Association of American Railroads Petition for
    Modification of Licenses for Use in Advanced Train Control Systems
    and Positive Train Control Systems," *Public Notice*, DC 00-1171
    (rel. May 26, 2000)(seeking authority to modify 1069 land mobile
    base stations using six 900 MHz channel pairs into single geographic
    license whose total area would be defined as a 140-mile zone
    centered on the rights-of-way of all operating rail lines in the
    United States). We also note that some public safety and private
    radio users have been required to seek regulatory relief from
    certain regulatory requirements in order to have the flexibility to
    engage in some of the types of arrangements that might be
    accommodated under a band manager licensing. *See, e.g.,* "Wireless
    Telecommunications Bureau Seeks Comment on Western Resources, Inc.
    Request for Waiver to Permit Sharing of Its 900 MHz Industrial and
    Land Transportation Trunked Radio System With Public Safety
    Users*,*" *Public Notice,* DA 00-1405 (rel. June 23, 2000).

[^128]: Some commenters support the use of band manager licensing only
    for new spectrum allocations. *See, e.g.,* USMSS Comments at 14;
    Joint Filers Comments at 21-22.

[^129]: *See* *27 MHz Reallocation Order* at ¶¶ 26, 31-32.

[^130]: *See, e.g.,* UTC Comments at 41.

[^131]: *See, e.g.,* AWWA Comments at 9.

[^132]: *See, e.g.,* *id.* at 8-9.

[^133]: *See Spectrum Policy Statement*, 14 FCC Rcd at 19,870-71 at ¶ 9.

[^134]: *See, e.g.,* API Comments at 17; SBT Comments at 18; Cinergy
    Comments at 25; Entergy Comments at 25; SCANA Comments at 27; Ameren
    Comments at 26; ComEd Comments at 28.

[^135]: *See* SBT Comments at 17; OSC Comments at 1. *See generally* API
    Reply Comments at 7.

[^136]: *See, e.g., id.* at 5327-28 ¶¶ 63-67 (establishing standards of
    fair and nondiscriminatory access for Guard Band Manager leasing
    activities).

[^137]: In the 700 MHz proceeding, for example, we require Guard Band
    Managers to lease the predominant amount of their spectrum to
    non-affiliates. *See* *700 MHz Second Report and Order*, 15 FCC Rcd
    at 5325 ¶ 59. We also remind licensees and spectrum users that state
    and federal antitrust and consumer protection laws may apply to
    their conduct.

[^138]: *See, e.g., id.* at 5326 ¶ 59 (limiting amount of spectrum Guard
    Band Managers may lease to affiliates).

[^139]: *See, e.g.,* 47 C.F.R. §90.35(a) (eligibility for Part 90
    licenses on Industrial/Business Pool frequencies).

[^140]: *See* Section III.A.1. *supra*.

[^141]: *See Notice*, 14 FCC Rcd at 5244 ¶ 77.

[^142]: *Id.* at 5244-45 ¶ 78; 47 C.F.R. § 1.2103(a). Alternative
    designs include: (1) sequential multiple-round auctions, using
    either oral ascending, remote and/or on-site electronic bidding; and
    (2) sequential or simultaneous single round auctions, using either
    remote and/or on-site electronic bidding, or sealed bids. *See
    generally* 47 C.F.R. § 1.2103(a).

[^143]: *Id.* at 5244-45 ¶ 78 (citing Amendment of Part 1 of the
    Commission's Rules \-- Competitive Bidding Procedures, WT Docket No.
    97-82, *Order, Memorandum Opinion and Order and Notice of Proposed
    Rule Making*, 12 FCC Rcd 5686, 5691 ¶ 6 (1997)).

[^144]: *Id.* at 5245 ¶ 79.

[^145]: *Id.* at 5245 ¶ 80.

[^146]: *Id.* at 5247 ¶ 87.

[^147]: *See, e.g.,* Amendment of Part 1 of the Commission\'s Rules \--
    Competitive Bidding Procedures, WT Docket No. 97-82, Allocation of
    Spectrum Below 5 GHz Transferred from Federal Government Use, ET
    Docket No. 94-32, *Third Report and Order and Second Further Notice
    of Proposed Rule Making*, 13 FCC Rcd 374 (1997) (modified by
    *Erratum*, DA 98-419 (rel. Mar. 2, 1998)) (adopting small business
    bidding credits). *See also* 47 C.F.R. § 1.2110 (definition of small
    business designated entities for purposes of FCC's competitive
    bidding processes).

[^148]: *Notice*, 14 FCC Rcd at 5245 ¶ 80.

[^149]: *See* *Part 1 Third Report and Order*, 13 FCC Rcd at 388 ¶ 18.

[^150]: *See Notice*, 14 FCC Rcd at 5245-47 ¶¶ 81-87.

[^151]: *See generally Market-Based Spectrum Policy*, at 92-111.

[^152]: *See Notice,* 14 FCC Rcd at 5249 ¶¶ 96-97.

[^153]: *See id.*

[^154]: *See, e.g.,* Cinergy Comments at 26-27; UTC Comments at 24-25;
    MRFAC Comments at 13; Ameren Comments at 26-28; CellNet Comments at
    17-19; UTC Reply at 20-22.

[^155]: *See, e.g.,* 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, *First Report and Order*, 11 FCC Rcd 16,570,
    16,581-82 (1996). Thus, in declining requests to impose a freeze on
    certain private wireless license applications, we noted that we are
    "reluctant to freeze the acceptance of applications without evidence
    that there is a serious problem that cannot be resolved under
    current rules and procedures." Replacement of Part 90 by Part 88 to
    Revise the Private Land Mobile Radio Services and Modify the
    Policies Governing Them and Examination of Exclusivity and Frequency
    Assignment Policies of the Private Land Mobile Services, PR Docket
    No. 92-235, *Second Memorandum Opinion and Order*, 14 FCC Rcd 8642,
    8649-50 ¶ 14 (1999)(denying requests by API and UTC for imposition
    of freeze on channels adjacent to those used by Power or Petroleum
    Radio Services).

[^156]: *See* 47 C.F.R. §§ 0.131; 0.331. Such decisions are procedural
    in nature and therefore not subject to the notice and comment
    requirements of the Administrative Procedure Act. *See* 5 U.S.C. §§
    553(b)(A); *see* *also* *Neighborhood TV Co. v. FCC*, 742 F.2d 629,
    637-38 (D.C. Cir. 1984) (holding Commission\'s filing freeze is a
    procedural rule not subject to the notice and comment requirements
    of the Administrative Procedures Act); *Buckeye Cablevision, Inc. v.
    United States*, 438 F.2d 948, 952-53 (6th Cir. 1971) (same);
    *Kessler v. FCC*, 326 F.2d 673, 680-82 (D.C. Cir. 1963) (same).

[^157]: *See Notice,* 14 FCC Rcd at 5249 n. 224.

[^158]: *See, e.g., MAS* *Report and Order*, 15 FCC Rcd at 12,005 ¶115
    (2000).

[^159]: *See, e.g.,* 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 Rulemaking*, 12 FCC Rcd 2732, 2757-58 ¶ 43 (1997)
    (exempting private radio applications from paging licensing freeze
    and prohibiting conversion of private facilities to commercial use).
    Licensing freezes are not unheard of in the private services,
    however. For example, the Bureau imposed a temporary freeze on the
    acceptance of PLMR applications ancillary to its freeze on
    applications for public coast stations sharing the same spectrum.
    (Public coast licensees are CMRS providers that allow ships at sea
    to send and receive messages and interconnect with the public
    switched network.) *See* Amendment of the Commission\'s Rules
    Concerning Maritime Communications, PR Docket No. 92-257, *Second
    Report and Order and Second Further Notice of Proposed Rulemaking*,
    12 FCC Rcd 16949, 17015 ¶ 32(1997). *See also* Amendment of the
    Commission's Rules Regarding Multiple Address Systems, WT Docket No.
    97-81, *Notice of Proposed Rule Making and Order*, 12 FCC Rcd 7973,
    8003-8004 ¶¶ 68-71 (1997).

[^160]: *See, e.g.,* CellNet Comments at 19; UTC Comments at 24-26.

[^161]: *See id.* at 25-26;

[^162]: Cinergy Comments at 28. *See* Ameren Comments at 28 (same);
    SCANA Comments at 29 (same); Entergy Comments at 27 (same); ComEd
    Comments at 30 (same);

[^163]: *See* AWWA Comments at 10.

[^164]: *See, e.g.,* UTC Comments at 10.

[^165]: *Compare* NTCC Comments at 21 ("reducing the construction period
    is not as critical as ensuring that construction deadlines are not
    extended for just any reason.") *with* CellNet Comments at 20
    (urging waiver of deadlines where wide-area or complex networks are
    involved).

[^166]: *See, e.g., 220 MHz Third Report and Order*, 12 FCC Rcd 10,943,
    11,085¶ 336 (1997)(requiring full construction and operation of
    Phase I non-nationwide 220 MHz facilities prior to beginning primary
    fixed or paging operations); Amendment of Part 90 of the
    Commission's Rules to Provide for the Use of the 220-222 MHz Band by
    the Private Land Mobile Radio Service, PR Docket No. 89-552, *Fifth
    Report and Order,* 13 FCC Rcd 24,615, 24,629 (1998)(requiring
    construction and operation of Phase I non-nationwide 220 MHz systems
    prior to disaggregation or partitioning).

[^167]: *See* discussion at Section II, *supra*. *See also* *Competitive
    Bidding Second Report and Order*, 9 FCC Rcd at 2352-54.

[^168]: *See* discussion at Section II, *supra*.

[^169]: *See* 47 U.S.C. § 309(j)(2)(B) and (C) (as amended by Balanced
    Budget Act, § 3002) (exemptions for digital television services,
    noncommercial educational broadcast stations, and public broadcast
    stations).

[^170]: We addressed Section 309(j)(2)(C)'s statutory exemption for
    noncommercial and public broadcast stations in the First Report and
    Order in MM Docket 97-234. *See* In the Matter of Implementation of
    Section 309(j) of the Communications Act -- Competitive Bidding for
    Commercial Broadcast and Instructional Television Fixed Service
    Licenses; Reexamination of the Policy Statement on Comparative
    Broadcast Hearings; Proposals to Reform the Commission\'s
    Comparative Hearing Process to Expedite the Resolution of Cases, MM
    Docket No. 97-234, GC Docket No. 92-52, Gen Docket No. 90-264,
    *First Report and Order*, 13 FCC Rcd 15,920, 15,928-31 ¶¶ 20-25
    (1998).

    The statute also exempts initial licenses for digital television
    (DTV) services. The Commission issued initial DTV licenses
    simultaneously to all eligible full-power permitees and licensees in
    the Fifth Report and Order in the DTV proceeding (MM Docket 87-268).
    *See* Advanced Television Systems and Their Impact upon the Existing
    Television Broadcast Service, *Fifth Report and Order*, 12 FCC Rcd
    12809 (1997). The DTV license assignments were made pursuant to
    Section 336(a)(1) of the Communications Act, which was added by the
    Telecommunications Act of 1996; these assignments were made prior to
    the enactment of the Balanced Budget Act. As we observed in our
    *Notice of Proposed Rule Making* in MM Docket No. 97-234,
    competitive bidding procedures for future digital television
    services that do not fall within Section 309(j)(2)(B)'s exemption
    for DTV licenses will be the subject of a future rulemaking. *See*
    In the Matter of Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding for Commercial Broadcast
    and Instructional Television Fixed Service Licenses; Reexamination
    of the Policy Statement on Comparative Broadcast Hearings; Proposals
    to Reform the Commission\'s Comparative Hearing Process to Expedite
    the Resolution of Cases, MM Docket No. 97-234, GC Docket No. 92-52,
    Gen Docket No. 90-264, *Notice of Proposed Rule Making*, 12 FCC Rcd
    22,363, at 22,368-69 ¶ 10 (1997).

[^171]: *See* 47 U.S.C. § 309(j)(2)(A).

[^172]: *Notice,* 14 FCC Rcd at 5222 ¶ 26.

[^173]: *See* 47 C.F.R. § 90.311(a)(1) (permitting a wide variety of
    users in the 470-512 MHz band, including Business Radio Service
    eligibles).

[^174]: 47 U.S.C. § 309(j)(2)(A) (emphasis supplied).

[^175]: ^?^ The majority of commenters agree that the exemption applies
    to "services." *See, e.g.,* Alliant Energy Comments at 2; AAA
    Comments at 10; API Comments at 4-8; CellNet Comments at 10; Georgia
    Comments at 3; DeKalb County, Georgia Water and Sewer and Division
    Comments at 2; EBMUD Comments at 3. *But see* Cinergy Comments at 13
    (exemption applies to certain licensees); *accord* ComEd Comments at
    19; Entergy Comments at 13.

[^176]: *Notice,* 14 FCC Rcd at 5224-25 ¶ 30.

[^177]: 47 U.S.C. § 309(j)(2)(A).

[^178]: *Notice,* 14 FCC Rcd at 5225-26 ¶ 32.

[^179]: *Id.*

[^180]: *Id.* at 5226 ¶ 33. See *infra* at Section III.D.5. regarding
    multiple licensing.

[^181]: *See, e.g.,* ARINC Comments at 3-4; Arizona Public Service
    Company Comments at 3; BGE Comments at 2; Georgia Comments at 2-3;
    DeKalb County, Georgia Water and Sewer Division Comments at 3; EBMUD
    Comments at 3; ITA Joint Commenters Comments at 10-11; SCANA Reply
    Comments at 5; Ameren omments at 22-24; UTC Comments at 14.

[^182]: *See infra* at Section III.D.5. for a discussion on multiple
    licensing.

[^183]: 47 U.S.C. § 309(j)(2)(A).

[^184]: *See Notice,* 14 FCC Rcd at 5227 ¶ 36.

[^185]: *See* The Development of Operational, Technical and Spectrum
    Requirements For Meeting Federal, State and Local Public Safety
    Agency Communication Requirements through the Year 2010, WT Docket
    No. 96-86, *First Report and Order and Third Notice of Proposed Rule
    Making,* 14 FCC Rcd 152, 180-81 ¶ 54 (1998).

[^186]: Conference Report at 572.

[^187]: *See, e.g.,* APCO Comments at 2-6; MDTA Comments at 4; NJHA
    Comments at 3; NJTA Comments at 3-4; NYSTA Comments at 3-4; Nextel
    Reply Comments at 11; The Peace Bridge Authority Comments at 3; UTC
    Comments at 15.

[^188]: *Notice,* 14 FCC Rcd at 5228 ¶ 37.

[^189]: *See, e.g.,* CII Comments at 13-14; UTC Comments at 15.

[^190]: *See* McGarry v. Secretary of the Treasury, 853 F.2d 981, 986
    (D.C. Cir. 1988) (statutory provisions should be construed as to be
    consistent with each other) (citing Citizens to Save Spencer County
    v. United States Environmental Protection Agency, 600 F.2d 844, 870
    (D.C. Cir. 1979)).

[^191]: Commercial service providers are not NGOs in this context.
    Commercial service providers intending to provide telecommunications
    services to public safety entities will not be able to apply for
    auction-exempt spectrum. *See infra* ¶¶82-83.

[^192]: Conference Report at 572.

[^193]: *Id.*

[^194]: *See* AAA Comments at 3 (Commission should only include
    not-for-profit entities under this exemption); *accord* Cal State
    Reply Comments at 5. *But see* Rocky Mountain Reply Comments at 4-5
    (Commission should allow for-profit entities within this exemption).

[^195]: *See Notice,* 14 FCC Rcd at 5227 ¶ 35.

[^196]: AAA's contentions that the Commission may not auction spectrum
    allocated to either the former Auto Emergency Radio Services (AERS),
    nor spectrum outside of the former AERS frequencies used by AAA and
    other non-profit auto emergency users, AAA Comments at 4, are
    related to this issue. AAA notes that in many locations, the AERS
    frequencies are so crowded that AAA clubs have been forced to obtain
    licenses in different private land mobile frequency bands, and
    contends that under the language of Balanced Budget Act, these
    frequencies also are included in the exemption when they are used by
    AAA or another not-for-profit emergency road service provider. *Id.*
    These comments relate to the larger issues of whether the exemption
    applies to blocks of spectrum or to classes of users. As explained
    above, we conclude that the exemption applies to blocks of spectrum,
    not classes of users. AAA's concerns regarding frequencies used by
    non-profit auto emergency users will be addressed at a future date,
    when we make a service-by-service determination of which services
    fall within the exemption.

[^197]: 47 U.S.C. § 309(j)(2)(A)(i).

[^198]: *MAS Report and Order*, 15 FCC Rcd 11,965, 11,967 ¶¶ 20, 25.

[^199]: *Notice,* 14 FCC Rcd at 5223-24 ¶¶ 27-29.

[^200]: The former services were consolidated in the Public Safety Pool
    in 1997. In the Matter of Replacement of Part 90 by Part 88 to
    Revise the Private Land Mobile Radio Services and Modify the
    Policies Governing Them, *Second Report and Order,* 12 FCC Rcd
    14307, 14317-18 ¶ 20 (1997) ("*Refarming Second Report and Order*").

[^201]: *See* 47 C.F.R. § 90.16. The Public Safety Radio Services
    included the Local Government, Police, Fire, Highway Maintenance,
    Forestry-Conservation, and Emergency Medical Radio Services. *See*
    47 C.F.R. Part 90, Subpart B, Note, former § 90.15 (1997).

[^202]: *See* 47 C.F.R. § 90.16. The Special Emergency Radio Service
    covered the licensing of radio communications of hospitals and
    clinics, ambulance and rescue services, veterinarians, persons with
    disabilities, disaster relief organizations, school buses, beach
    patrols, persons or organizations in isolated areas, and emergency
    standby and repair facilities for telephone and telegraph systems.
    *See* 47 C.F.R. Part 90, Subpart C, Note, former § 90.33 (1997).

[^203]: *See Notice,* 14 FCC Rcd at 5224 ¶ 28.

[^204]: Amendment of Part 90 of the Commission's Rules to Provide for
    the Use of the 220-222 MHz Band by the Private Land Mobile Radio
    Service, PR Docket No. 89-552, *Third Report and Order; Fifth Notice
    of Proposed Rule Making,* 12 FCC Rcd 10943, 10973-74 ¶ 61 (1997).
    *See Notice,* 14 FCC Rcd at 5224 ¶ 29.

[^205]: Amendment of the Commission's Rules Concerning Maritime
    Communications, *Third Report and Order and Memorandum Opinion and
    Order,* PR Docket No. 92-257, 13 FCC Rcd 19853 (1988). *See Notice,*
    14 FCC Rcd at 5224 ¶ 29.

[^206]: *See, e.g.,* APCO Comments at 3-4; Motorola Comments at 5;
    Nextel Comments at 8-9.

[^207]: *See MAS Report and Order*, 15 FCC Rcd at 11,971 ¶ 37.

[^208]: Conference Report at 572.

[^209]: *See supra* ¶ 74.

[^210]: Public Safety Wireless Advisory Committee, *Final Report* at 7
    (1996).

[^211]: *Id.* at 45.

[^212]: *Id.* at 33.

[^213]: *Refarming Second R&O,* 12 FCC Rcd at 14329-30 ¶ 41.
    Subsequently in this proceeding, the Commission amended the rules to
    require that frequencies formerly allocated to the power, petroleum,
    and railroad industries on either an exclusive or shared basis be
    coordinated only by the frequency coordinator of the relevant
    service, or, at the relevant frequency coordinator's discretion,
    with its written concurrence. Replacement of Part 90 by Part 88 to
    Revise the Private Land Mobile Radio Services and Modify the
    Policies Governing Them, *Second Memorandum Opinion and Order,* PR
    Docket No. 92-235, 14 FCC Rcd 8642, 8647-48 ¶ 9 (1999) ("*Refarming
    Second MO&O*"). The *Refarming Second MO&O* is currently on
    reconsideration, and has been stayed with respect to frequencies
    formerly allocated on a shared basis to these industries.
    Replacement of Part 90 by Part 88 to Revise the Private Land Mobile
    Radio Services and Modify the Policies Governing Them, *Fourth
    Memorandum Opinion and Order*, 15 FCC Rcd 7051 (1999) ("*Refarming
    Fourth MO&O*").

[^214]: *See, e.g.,* ComEd Comments at 16-19; Entergy Comments at 14-16;
    Joint Commenters Comments at 7; API Reply Comments at 7.

[^215]: *See* Cinergy Comments at 18, 21; Entergy Comments at 17, 20;
    Joint Commenters Comments at 8-9, 14; SBT Comments at 3-4; USMSS
    Comments at 5-6.

[^216]: Indeed, virtually all of the commenters argue that the specific
    radio services they use, or that are used by the entities they
    represent, fall within the "public safety radio services" exemption
    because such radio uses in some way enhance the safety of their
    employees or the public safety. *See, e.g.,* ARINC Comments at 9
    (airlines and aviation support); AAR Reply Comments at 3
    (railroads); CellNet Comments at 2-3 (gas, electric and water);
    ComEd Comments at 2-5 (electric utilities); Florida Fruit &
    Vegetable Association Reply Comments (RM-9405) at 2-3 (Florida
    agricultural producers); FIT Comments at 8 (forest products); Ford
    Reply Comments at 6-8 (automotive); HP Comments (RM-9405) at 1
    (medical telemetry); LMCC Comments at 6-8 (land mobile); Motorola
    Comments at 3-10 (private land mobile); NRMCA Reply Comments
    (RM-9405) at 2 (concrete); NPGA Reply Comments (RM-9405) at 3
    (propane); NUCA Reply Comments (RM-9405) at 2 (water and wastewater
    infrastructure).

[^217]: *See, e.g.,* Joint Commenters Comments at 8. Indeed, the
    Conference Report states that the exemption "includes" the above
    listed-services, and does not state that the exemption is "limited
    to" those services. Conference Report at 572.

[^218]: *See supra* ¶ 77.

[^219]: The "800 MHz Band" is a reference to the frequencies in the
    806-824 and 851-869 MHz bands. *See* 47 C.F.R. Part 90, Subpart S.

[^220]: The "900 MHz Band" is a reference to the frequencies in the
    896-901 and 935-940 MHz bands. *See id.*

[^221]: We recognize that, unlike the 800 and 900 MHz Industrial/Land
    Transportation and Business Radio categories, the 470-512 MHz band
    is available to Public Safety users. *See* 47 C.F.R. § 90.311(a). We
    do not believe, however, that the level of use by such users is
    sufficient to require a different conclusion with respect to the
    applicability of the public safety radio service exemption to the
    470-512 MHz band.

[^222]: 47 U.S.C. § 309(j)(2)(A)(ii).

[^223]: *Notice,* 14 FCC Rcd at 5230 ¶¶ 45-46, 5232-33 ¶ 51.

[^224]: *See* 47 U.S.C. § 332(d)(1).

[^225]: In the Matter of Implementation of Sections 3(n) and 332 of the
    Communications Act, Regulatory Treatment of Mobile Services, *Second
    Report and Order,* GN Docket No. 93-252, 9 FCC Rcd 1411, 1427 ¶ 43
    (1994) (*CMRS Second R &O*).

[^226]: *Id.* at 1439 ¶ 65.

[^227]: *See* 47 U.S.C. § 332(d)(1)(B).

[^228]: *CMRS Second R &O,* 9 FCC Rcd at 1440 ¶ 67. *See also id.* at
    1509-10 ¶¶ 265-268. While we have held that provision of service to
    eligibles in the Business Radio Service category is essentially
    service to the public, this is because the class of eligibles in
    this pool is extremely broad. Specifically, this pool encompasses
    users engaged in commercial activities and clergy activities, as
    well as, those that operate educational, philanthropic, or
    ecclesiastical institutions, hospitals, clinics and medical
    associations. 47 C.F.R. § 90.31.

[^229]: We also requested comment on whether services on which entities
    operate their systems under a nonprofit cost-sharing or cooperative
    agreement, or as a multiple licensed system, should be considered
    commercially available to the public. *Notice,* 14 FCC Rcd at 5230 ¶
    46. As we decided in the previous paragraph, once we have determined
    that a particular radio service is a public safety radio service,
    the spectrum will be auction-exempt even if some users operate their
    systems using such licensing arrangements.

[^230]: *Notice,* 14 FCC Rcd at 5228 ¶ 38.

[^231]: *See Notice,* 14 FCC Rcd at 5228 ¶ 38*.*

[^232]: We recognize that there may be situations where public safety
    radio service eligibles find it more cost effective to contract out
    their commercial needs to a commercial service provider, rather than
    construct their own systems. We believe that leaving this choice in
    the hands of the public safety radio service eligibles best comports
    with congressional intent.

[^233]: Nextel Reply Comments at 12-13.

[^234]: *See Notice,* 14 FCC Rcd at 5224-25 ¶ 30.

[^235]: 47 U.S.C. § 337(f)(1)(A).

[^236]: S*ee, e.g.,* AAA Reply Comments at 4; AAR Comments at 5-7;
    CellNet Comments at 11; CII Comments at 11-13; ComEd Comments at
    9-12; Ford Reply Comments at 6-7; Joint Commenters Comments at 8;
    LMCC Comments at 6-7; PCIA Comments at 5-6; UTC Comments at 16-18.
    *But see* Nextel Comments at 8-9 (arguing that only bands which are
    used exclusively or almost exclusively for public safety should be
    auction-exempt). *See also* ARINC Comments at 2 and 7 (supporting a
    principal use standard).

[^237]: *Notice*, 14 FCC Rcd at 5246 ¶ 85.

[^238]: *Id.*

[^239]: *Notice*, 14 FCC Rcd at 5233 ¶ 52.

[^240]: *Id.* at 5233 ¶ 53.

[^241]: *Id*.

[^242]: *See, e.g.,* AAR Comments at 8; Blooston Comments at 10; Boeing
    Comments at 5; NAM/ MRFAC, Inc. Reply Comments at 7; Motorola
    Comments at 3; Radscan Reply Comments at 6; RRS Comments at 4; Rocky
    Mountain Reply Comments at 6; SCANA Comments at 8.

[^243]: *See, e.g*., Joint Commenters Comments at 7; Joint Commenters
    Reply Comments at 4; Intek Comments at 6; LMCC Comments at 3-4.

[^244]: *See, e.g.,* Boeing Comments at 5; CII Comments at 23-24; UTC
    Comments at 19.

[^245]: CII Comments at 23-24; UTC Comments at 19.

[^246]: CII Comments at 23-24; UTC Comments at 19.

[^247]: CII Comments at 23-24; UTC Comments at 19.

[^248]: CII Comments at 23-24; UTC Comments at 19.

[^249]: CII Comments at 23-24; UTC Comments at 19.

[^250]: *Notice*, 14 FCC Rcd at 5241 ¶ 68.

[^251]: *See, e.g., Refarming Second R&O,* 12 FCC Rcd 14307; Replacement
    of Part 90 by Part 88 to Revise the Private Land Mobile Radio
    Services and Modify the Policies Governing Them, PR Docket No.
    92-235, *Memorandum Opinion and Order*, 11 FCC Rcd 17676 (1996);
    Replacement of Part 90 by Part 88 to Revise the Private Land Mobile
    Radio Services and Modify the Policies Governing Them, PR Docket No.
    92-235, R*eport and Order and Further Notice of Proposed Rule
    Making*, 10 FCC Rcd 10076 (1995) ("*Refarming Report and Order and
    Further Notice*").

[^252]: *See Refarming Second R&O*, 12 FCC Rcd at 14315 ¶ 15.

[^253]: *Refarming Report and Order and Further Notice*, 10 FCC Rcd at
    10098 ¶ 36.

[^254]: *See, e.g.*, AEP Comments at 4; API Comments at 12; AAR Comments
    at 7; Blooston Comments at 10; Cal State Reply Comments at 5; LMCC
    Comments at 4-6; Motorola Comments at 8. *But see* AMTA Comments at
    2;

[^255]: NAM/MFRAC Reply Comments at 15.

[^256]: *Id.; accord, e.g.,* PCIA Comments at 4.

[^257]: *See* 47 C.F.R. § 90.173(a).

[^258]: *See, e.g.*, Principals for Reallocation of Spectrum to
    Encourage the Development of Telecommunications Technologies for the
    New Millennium, *Policy Statement*, 14 FCC Rcd 19868, 19878-79 ¶ 24
    (1999).

[^259]: *See, e.g.*, Service Rules for the 746-764 and 776-794 MHz Bands
    and Revisions to Part 27 of the Commission's Rules, *Second Report
    and Order*, 15 FCC Rcd 5299, 5311-14 ¶¶ 26-32 (2000).

[^260]: *See Notice,* 14 FCC Rcd at 5229 ¶ 41.

[^261]: UTC is now known as the United Telecom Council.

[^262]: UTC, The Telecommunications Association, American Petroleum
    Institute, and Association of American Railroads Petition for
    Rulemaking (RM-9405) (filed August 14, 1998) (UTC Petition).

[^263]: *Id.* at 2.

[^264]: *Id.*

[^265]: *Id.* at 3.

[^266]: *See Notice,* 14 FCC Rcd at 5229 ¶ 41.

[^267]: UTC Petition at 19.

[^268]: *See Refarming Second R&O,* 12 FCC Rcd at 14315-16 ¶ 15.

[^269]: UTC Petition at 21. The CII specifically propose that 61% of the
    shared low band frequencies, 8% of the shared frequencies in the 70
    MHz band, 52% of the shared frequencies in the VHF high band, and
    61% of the shared UHF frequencies should be allocated to the
    proposed new pool, in addition to all of the channels exclusively
    used by the CII.

[^270]: *Id.* at 19-20. A number of commenters urge that if we were to
    create a separate pool, they should also be included within that
    pool. *See, e.g.,* ARINC Comments at 9 (airlines and aviation
    support); FFVA Reply Comments (RM-9405) at 2-3 (Florida agricultural
    producers); FIT Comments at 8 (forest products); HP Comments
    (RM-9405) at 1 (medical telemetry); NRMCA Reply Comments (RM-9405)
    at 2 (concrete); NPGA Reply Comments (RM-9405) at 3 (propane); NUCA
    Reply Comments (RM-9405) at 2 (water and wastewater infrastructure).

[^271]: UTC Petition at 7-8.

[^272]: *See Refarming Second R&O,* 12 FCC Rcd at 14315-16 ¶ 15.

[^273]: UTC Petition at 8.

[^274]: *See Refarming Second R&O*, 12 FCC Rcd at 14330 ¶ 42.

[^275]: UTC Petition at 9. *See also* API Reply Comments (RM-9405) at
    3-5; AWWA Comments (RM-9405) at 1; AWWA Comments at 5-6; National
    Fuel Gas Company Comments (RM-9405) at 2; NRECA Comments (RM-9405)
    at 2-3; NU Comments (RM-9405) at 3; UTC Comments (RM-9405) at 7-9.

[^276]: *See, e.g,* PCIA Reply Comments (RM-9405) at 3; Petroleum
    Communications, Inc. Comments (RM-9405) at 2.

[^277]: *Refarming Fourth MO&O*, 15 FCC Rcd 7051. *See, e.g.,* Joint
    Commenters Comments at 12; NAM /MRFAC Reply Comments at 3.

[^278]: *See Refarming Fourth MO&O*, 15 FCC Rcd at 7056 ¶ 14. (staying
    *Refarming Second MO&O,* 14 FCC Rcd at 8647-48 ¶ 9 (1999) (expanding
    the rule to formerly shared frequencies), pending resolution of
    petitions for reconsideration).

[^279]: UTC Petition at 7.

[^280]: *See* Conference Report at 572.

[^281]: UTC Petition at 17-18.

[^282]: *Notice,* 14 FCC Rcd at 5217 ¶ 14.

[^283]: AMTA Petition for Rulemaking (RM-9705) at 11 (filed July 30,
    1999) (AMTA Petition II). AMTA filed a previous petition for rule
    making on June 19, 1998, proposing that certain Part 90 licensees be
    required to employ new spectrum-efficient technologies. AMTA
    Petition for Rulemaking (RM-9332) (filed June 19, 1999) (AMTA
    Petition I). Because the issues raised in that petition are relevant
    to the instant proceeding, we included it in the *Notice*. *See
    Notice*, 14 FCC Rcd at 5242 ¶ 71. We discuss AMTA Petition I *infra*
    in the *Further Notice of Proposed Rule Making*.

[^284]: *See* 47 C.F.R. §§ 90.173(a), 90.175.

[^285]: *See* 47 C.F.R. §§ 90.20(c)(3), 90.35(b)(3).

[^286]: AMTA Petition II at 13.

[^287]: *Id*.

[^288]: *Id*. at 16. An incumbent electing to obtain such service would
    receive replacement equipment paid for by the commercial geographic
    licensee. *Id*.

[^289]: Public Notice, Report No. 2356 (rel. Aug. 24, 1999).

[^290]: *See, e.g.,* Blooston Comments (RM-9705) at 4; AAR Opposition
    (RM-9705) at 4 (implementation of the AMTA proposal will neglect
    railroad critical safety functions); APCO Comments (RM-9705) at 2;
    ARINC Comments (RM-9705) at 3; Mobex Opposition (RM-9705) at 4-5;
    Industry Coalition Joint Opposition (RM-9705) at 6 (the adoption of
    AMTA's proposals would merely suppress marketplace choice for no
    purpose other than to create new business opportunities for AMTA's
    members).

[^291]: *See supra* ¶ 95.

[^292]: *See, e.g.,* SBT Comments (RM-9705) at 2; Motorola Opposition
    (RM-9705) at 4-5; Chadmoore Reply Comments (RM-9705) at 3 (forced
    migration of incumbents is unreasonable and would not serve the
    public interest); Mobex Opposition (RM-9705) at 6-7 (forced
    relocation would cause harmful and devastating disruptions in
    service as well as massive interference).

[^293]: Motorola Opposition (RM-9705) at 4-5; Chadmoore Reply Comments
    (RM-9705) at 3.

[^294]: Industry Coalition Joint Opposition (RM-9705) at 5.

[^295]: *See, e.g.,* Blooston Comments (RM-9705) at 7; ARINC Comments
    (RM-9705) at 2.

[^296]: *See Notice*, 14 FCC Rcd at 5241 ¶ 69.

[^297]: *See id*. at 5241 n.201.

[^298]: *See* Applications of Nextel Communications, Inc. and Associated
    Waiver Request of 47 C.F.R. §§ 90.617(c) and 90.619(b), *Order*, 14
    FCC Rcd 11678 (WTB 1999) (*Nextel Order*), *reconsideration pending*
    (filed Aug. 20, 1999).

[^299]: *See id*. at 11689 ¶ 26.

[^300]: *See id*. at 11691 ¶ 30.

[^301]: *See id*. at 11691-92 ¶¶ 31-32.

[^302]: *See* Wireless Telecommunications Bureau Incorporates Nextel
    Communications, Inc. Waiver Record into WT Docket No. 99-87, *Public
    Notice*, 14 FCC Rcd 11795 (WTB 1999). In response to this public
    notice comments and reply comments were filed by the following: AAA,
    AMTA, API, APCO, Blooston I, Boeing, Chadmoore, ComEd, FM
    Communications, Inc. (FM) Ex Parte Letter, FIT, Joint Commenters,
    MRFAC, NAM/MRFAC, Nextel, NTCC, PCIA, Rocky Mountain, SBT, and
    Ameren.

[^303]: AMTA Comments at 14; APCO Reply Comments at 7; Chadmoore
    Comments at 4-5; Chadmoore Reply Comments at 2-4; FM Ex Parte
    Letter; Nextel Comments at 14-15; Nextel Reply Comments at 22-23;
    NTCC Comments at 14-15; PCIA Comments at 21-23.

[^304]: *See*, *e.g.*, Nextel Comments at 15; Chadmoore Comments at 4.

[^305]: *See*, *e.g.*, AMTA Comments at 14; Chadmoore Reply Comments at
    2; Nextel Comments at 15; PCIA Comments at 23.

[^306]: *See* 47 C.F.R. § 90.617.

[^307]: This decision resolves the related issue raised elsewhere by the
    Southern Company. *See* Letter from Christine M. Gill, McDermott,
    Will & Emery to David Furth, Senior Legal Advisor, Wireless
    Telecommunications Bureau (dated May 18, 2000). Southern seeks a
    determination that the Commission's Rules permit a CMRS licensee
    that obtained 800 MHz PLMR spectrum via intercategory sharing to
    transfer that spectrum to another CMRS licensee for use in its CMRS
    system. Pursuant to our decision above, we will permit CMRS use of
    assigned 800 MHz PLMR channels, whether the transferor/assignor is a
    PLMR or CMRS licensee. We emphasize that CMRS use will be limited to
    the 800 MHz PLMR channels because most of the other PLMR spectrum is
    shared spectrum. In this context, freer channel transferability in
    this band is warranted. In addition, the *Refarming* proceeding
    significantly affected a substantial portion of the PLMR spectrum
    below 512 MHz. As a result, we are reluctant to introduce additional
    policy changes with respect to the PLMR spectrum until more time has
    passed and we have the opportunity to fully analyze the benefits of
    the licensing reforms that were adopted as part of the *Refarming*
    proceeding. Similarly, we are not applying the decision above to
    PLMR spectrum at 900 MHz, but we seek comment in the Further Notice
    of Proposed Rule Making on whether we should do so. The approach we
    adopt today is new, and we believe that we should examine its
    results with respect to the availability of spectrum for future PLMR
    needs before we consider extending this approach to other bands.

[^308]: *See* *Nextel Order*, 14 FCC Rcd at 11691 ¶ 30.

[^309]: *See* Chadmoore Reply Comments at 2-3; Nextel Comments at 7.

[^310]: *See, e.g.*, AAA Comments at 12; API Comments at 20-22; API
    Reply Comments at 6; Blooston I Comments at 13-17; Boeing Comments
    at 11-12; Boeing Ex Parte Letter at 4-5; Boeing Reply Comments at 6;
    ComEd Comments at 21-22; FIT Comments at 9-10; ITA Comments at 23;
    Intek Comments at 6; MFRAC Comments at 9-10; NAM/MRFAC Reply
    Comments at 16; Rocky Mountain Comments at 9; SBT Reply Comments at
    12-13.

[^311]: *See* Amendment of Part 90 of the Communications Act Regulatory
    Treatment of Mobile Services, *First Report and Order, Eighth Report
    and Order and Second Further Notice of Proposed Rulemaking*, PR
    Docket 93-144, 11 FCC Rcd 1463, 1536-37 ¶¶ 138-142 (1995); 47 C.F.R.
    § 90.621(e) (1996). In 1997, the Commission affirmed its decision to
    eliminate intercategory sharing by SMR eligibles. Amendment of Part
    90 of the Commission's Rules to Facilitate Future Development of SMR
    Systems in the 800 MHz Frequency Band, PR Docket No. 93-144,
    *Memorandum Opinion and Order on Reconsideration*, 12 FCC Rcd 9972,
    10,005-06 ¶ 106 (1997).

[^312]: *See* API Comments at 20; Boeing Letter at 4-5; FIT Comments at
    9-10; ITA Comments at 23 and SBT Reply Comments at 12-13.

[^313]: *See* AAA Comments at 12-13; API Comments at 21-22; ITA Comments
    at 23; SBT Reply Comments at 12-13.

[^314]: *See* Nextel Comments at 14-15; Nextel Reply Comments at 2,
    22-23.

[^315]: The Commission has defined as trafficking as "speculation,
    barter or trade in licenses." *See* KaStar 73 Acquisition, LLC and
    KaStar 109.2 Acquisition, LLC, Applications for Consent to Transfer
    Control, *Memorandum Opinion and Order*, 15 FCC Rcd 1615, 1619-20 ¶
    12 (1999).

[^316]: *See id*. (explaining that the Commission's anti-trafficking
    rule was designed to discourage speculators and prevent the unjust
    enrichment of those who do not implement their proposed systems);
    *see also* Implementation of Section 309(j) of the Communications
    Act -- Competitive Bidding, PP Docket No. 93-253, *Fifth Report and
    Order*, 9 FCC Rcd 5532, 5583-84 ¶ 117 (1994) ("*Competitive Bidding
    Fifth Report and Order*") (explaining that a holding period would be
    imposed to avoid sham arrangements with broadband PCS licenses);
    Reexamination of the Comparative Standards for Non-Commercial
    Educational Applicants, MM Docket No. 95-31, *Report and Order*, 15
    FCC Rcd 7386, 7424-25 ¶¶ 93, 94 (1999) (explaining that holding
    periods, random audits and certifications are used to ensure that
    the selection process is not undermined by the rapid re-assignment
    or transfer of broadcast stations); Amendment of Part 90, Subparts M
    and S, of the Commission's Rules, PR Docket No. 86-404, *Report and
    Order,* 3 FCC Rcd 1838, 1847 ¶79 (1988) (prohibiting application for
    new channels for one year to stem circumvention of channel recovery
    rules).

[^317]: *See* PCIA Comments at 20-23.

[^318]: *See* AMTA Comments at 14; APCO Reply Comments at 7; Chadmoore
    Comments at 4; Chadmoore Reply Comments at 3; NTCC Comments at 15.

[^319]: We will define the area as 70 miles from the subject station.
    *See* 47 C.F.R. § 90.621(b).

[^320]: We note that a one-year moratorium has been imposed upon General
    Category licensees that make partial assignment of a station's
    frequencies to stem trafficking in licenses. *See* 47 C.F.R. §
    90.609(c); *see also* Amendment of Part 90, Subparts M and S, of the
    Commission's Rules, PR Docket No. 86-404, 3 FCC Rcd 1838, 1847 ¶ 79
    (1988)

[^321]: *See Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at
    5583-84 ¶ 117 (explaining that a holding period would be imposed to
    avoid sham arrangements with broadband PCS licenses).

[^322]: *See* 47 C.F.R. § 1.2111(b)(1).

[^323]: *See* 47 C.F.R. § 90.629.

[^324]: Section 90.155 requires the licensee to have its station placed
    in operation within twelve months from the date of grant to avoid
    automatic cancellation. 47 C.F.R. § 90.155. Moreover, Section 90.609
    requires complete construction of the radio facility prior to any
    transfer or assignment. 47 C.F.R. § 90.609. Additionally, Section
    90.157 provides that a license will cancel automatically if there is
    discontinuance of station operation for twelve months or more. 47
    C.F.R. § 90.157.

[^325]: *See also* 47 C.F.R. §§ 90.173(b), 90.403(e) (requiring
    licensees to undertake precautions to avoid harmful interference).

[^326]: *See* Letter from Robert M. Gurss, counsel for APCO, to Magalie
    Roman Salas, Secretary, FCC (dated Nov. 6, 2000).

[^327]: *See Nextel Order*, 14 FCC Rcd 11678.

[^328]: *Notice*, 14 FCC Rcd at 5232 ¶ 50.

[^329]: *See* 47 C.F.R. § 90.185.

[^330]: In the Matter of an Inquiry Concerning the Multiple Licensing of
    Land Mobile Radio Systems ('Community Repeaters') in the Bands
    806-812 and 851-866 MHz, PR Docket No. 79-107, *Notice of Inquiry,*
    71 FCC 2d 1391, 1392 ¶ 4 (1979).

[^331]: *Id.* at 1392 ¶ 5.

[^332]: *Id.* The third-party equipment provider is also sometimes one
    of the multiple licensees in order to serve its own internal
    communications need, but this is an infrequent scenario.

[^333]: *Id.* at 1392 ¶ 6.

[^334]: Amendment of Parts 89, 91, 93 and 95 of the Commission's Rules
    and Regulations to Adopt New Practices and Procedures for
    Cooperative Use and Multiple Licensing of Stations in the Private
    Land Mobile Radio Services, Docket No. 18921, *Report and Order,* 89
    FCC 2d 766, 771 ¶ 7 (1982).

[^335]: *Id.*

[^336]: Replacement of Part 90 by Part 88 to Revise the Private Land
    Mobile Radio Services and Modify the Rules Governing Them, PR Docket
    No. 92-235, *Notice of Proposed Rule Making*, 7 FCC Rcd 8105, 8131
    (1992).

[^337]: *CMRS Second Report and Order,* 9 FCC Rcd at 1430 ¶ 47.

[^338]: *See id.* at 1430 n.75. The definition of "mobile service" in 47
    U.S.C. § 153(27) refers to communications that may be licensed on an
    "individual, cooperative, or multiple basis."

[^339]: *See* 47 C.F.R. § 90.185. Multiple licensing (licensed under
    code FB4) must be distinguished from shared use. Section 90.179 of
    the Commission's Rules discusses shared use of radio stations.
    Shared use of facilities, licensed under code FB7, occurs when
    persons not licensed for the station control the station for their
    own use pursuant to the licensee's authorization. Shared use may be
    either on a non-profit, cost-shared basis or on a for-profit private
    carrier basis depending on the spectrum being used. Thus, shared use
    involves one licensee who shares its systems with other
    non-licensees who could get their own license but choose not to.

[^340]: *CMRS Second R & O*, 9 FCC Rcd at 1430 ¶ 47.

[^341]: *Id*.

[^342]: *Id.* at 1430-31 ¶ 49.

[^343]: *See* AMTA Comments at 7.

[^344]: *Id*.

[^345]: MRFAC Comments at 8 n.2.

[^346]: East River Electric Power Cooperative, *Order*, 13 FCC Rcd 5871
    (WTB 1997).

[^347]: *Id.* at 5873-74 ¶¶ 5-6.

[^348]: *Id.* at 5876 ¶ 9.

[^349]: *Id.* at 5876-78 ¶¶ 10-11

[^350]: Viking Dispatch Services, Inc., *Memorandum Opinion and Order*,
    14 FCC Rcd 18814 (1999).

[^351]: *Id.* at 18815 ¶ 2.

[^352]: *Id.* at 18817-18 ¶ 7.

[^353]: *Id.* at 18818-19 ¶ 8.

[^354]: *See* *Spectrum Policy Statement,* 14 FCC Rcd 19868 (1999).

[^355]: 47 U.S.C. § 337(f).

[^356]: 47 U.S.C. § 337(c)(1).

[^357]: *Notice*, 14 FCC Rcd at 5234 ¶ 56.

[^358]: *Id*. at 5233 ¶ 54.

[^359]: *Notice*, 14 FCC Rcd at 5234 ¶ 57.

[^360]: *See e.g.,* South Bay Regional Public Communications Authority,
    *Memorandum Opinion and Order*, 13 FCC Rcd 23,781 (1998) (*South
    Bay*) (granting Section 337 application); *see also*, *e.g.*, New
    Hampshire Department of Transportation, *Memorandum Opinion and
    Order*, 14 FCC Rcd 19,438 (WTB 1999) (*New Hampshire*) (denying
    Section 337 application); *see also* Hennepin County, *Order*, 14
    FCC Rcd 19,418 (WTB 1999); County of Sacramento, California, *Order
    on Reconsideration*, 15 FCC Rcd 12,600 (WTB 2000) ("*Sacramento*")
    (granting Section 337 application).

[^361]: APCO Comments at 13-14; IAFC/IMSA Comments at 6-7.

[^362]: Conference Report at 579.

[^363]: *See*, *e.g.*, *South Bay*, 13 FCC Rcd at 23796 ¶ 33 (applicant
    demonstrated all 5 criteria); County of San Mateo, California,
    *Memorandum Opinion and Order*, 14 FCC Rcd 19002, ¶ 10 (WTB 1999)
    (applicant demonstrated all 5 criteria); City of Pomona, California,
    *Order*, 15 FCC Rcd 15,597 ¶ 7 (WTB 2000) (applicant demonstrated
    all 5 criteria).

[^364]: 47 U.S.C. § 337(c)(1)(A).

[^365]: *See*, *e.g.*, *New Hampshire*, 14 FCC Rcd at 19,439 ¶ 4, 19,442
    ¶ 8; County of Burlington, New Jersey, *Order on Reconsideration*,
    15 FCC Rcd 16,569 ¶ 7 (WTB 2000).

[^366]: *See* 47 U.S.C. §§ 337(c)(1)(A); *see also* Conference Report at
    579-80 ("spectrum must not be immediately available on a frequency
    already allocated to public safety services."). We note that an
    applicant that could not obtain relief pursuant to Section 337
    because public safety spectrum was available in other bands could
    nonetheless seek a rule waiver pursuant to Section 1.925 of the
    Commission's Rules, 47 C.F.R. § 1.925.

[^367]: 47 U.S.C. § 337(c)(1)(E).

[^368]: *See, e.g.*, APCO Comments at 12-13; APCO Reply Comments at 7-8;
    IAFC/IMSA Comments at 5-8; NYSTEC Comments at 12-13.

[^369]: *See* *South Bay*, 13 FCC Rcd at 23796 ¶ 33.

[^370]: *See* *Sacramento*, 15 FCC Rcd 12600, 12607 ¶ 19.

[^371]: *See* 47 U.S.C. § 151.

[^372]: We also note that the legislative history of Section 337
    indicates that its intent was to ensure that "public safety agencies
    . . . are not denied use of unassigned frequencies that have lain
    fallow for an extended period of time." Conference Report at
    579-580. We question whether spectrum in the process of being
    auctioned can fairly be said to be lying fallow, and thus still
    within the scope of Section 337 requests contemplated by Congress.

[^373]: *See* Amendment of Parts 0, 1, 13, 22, 26, 27, 80, 87, 90, 95,
    97 and 101 of the Commission's Rules to Facilitate Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Service, WT Docket No. 98-20, *Report and Order*,
    13 FCC Rcd 21027, Appendix C (1998).

[^374]: *Id*. at 21087-91 ¶¶ 132-142.

[^375]: Streamlining the Commission's Antenna Structure Clearance
    Procedure, *Report and Order*, WT Docket No. 95-5, 11 FCC Rcd 4272
    (1995); *see also* Streamlining the Commission's Antenna Structure
    Clearance Procedure, WT Docket No. 95-5, *Memorandum Opinion and
    Order on Reconsideration*, 15 FCC Rcd 8676 (2000).

[^376]: AMTA Petition for Rulemaking (RM-9332) at 3 (filed June 19,
    1998) (AMTA Petition I).

[^377]: *Id*. at 6. AMTA would exclude from this proposal all channel
    blocks awarded by competitive bidding, as well as Part 90 spectrum
    at 220 and 900 MHz, because bandwidth requirements are already
    strict in those bands. *Id.*

[^378]: AMTA Petition I at 6.

[^379]: *Id*. The timetable for compliance with this proposal, which is
    based on urban area rankings under Part 90 of the Commission's
    Rules, is December 31, 2003 for markets 1-50; December 31, 2008 for
    markets 51-100; and December 31, 2020 for all other markets. *See*
    47 C.F.R. § 90.741.

[^380]: AMTA Petition I at 7. Secondary operations may not cause
    interference to operations authorized on a primary basis and are not
    protected from interference from those primary operations. 47 C.F.R.
    § 90.7.

[^381]: AMTA Petition I at 3. AMTA argues that when commercial licensees
    operate on shared spectrum, any increased capacity would merely
    become available to co-channel licensees who have not made a
    comparable investment. *Id.*

[^382]: *Refarming Report and Order and Further Notice*, 10 FCC Rcd at
    10081 ¶ 7.

[^383]: *Id*.; 47 C.F.R. § 90.203(j)(2) We also certify new equipment
    with a maximum bandwidth of 25 kHz if it meets the efficiency
    standards set forth in 47 C.F.R. § 90.203(j)(3).

[^384]: 47 C.F.R. § 90.203(j)(4).

[^385]: *Id.*

[^386]: *Refarming Report and Order and Further Notice*, 10 FCC Rcd at
    10081 ¶ 7.

[^387]: Public Notice, Report No. 2288 (rel. July 31, 1998).

[^388]: *See Notice*, 14 FCC Rcd at 5242 ¶ 71.

[^389]: *Refarming Report and Order and Further Notice*, 10 FCC Rcd at
    10099 ¶ 37.

[^390]: *Id.* at 10097-98 ¶¶ 34-36.

[^391]: *Id.* at 10099 ¶ 37.

[^392]: *See* AMTA Petition I at 5; PCIA Comments (RM-9332) at 2-3
    (conversion to more efficient technologies proceeding slowly); UTC
    Comments (RM-9332) at 12 (refarming process has caused significant
    delays due to regulatory uncertainty); MFRAC Comments (RM-9332) at
    3-4 (supporting mandatory conversion to narrowband technology for
    the "top-20" markets.); ComSpace Reply Comments (RM-9332) at 4
    (current regulatory scheme has resulted in unbalanced uncertainty, a
    delayed transition, and ever increasing congestion).

[^393]: *See* Chadmoore Reply Comments (RM-9332) at 3; CICS Comments
    (RM-9332) at 2; SCANA Opposition (RM-9332) at 5; USMSS Comments
    (RM-9332) at 2; *see also*, *e.g.*, MRFAC Partial Opposition at 5
    (the unresolved Refarming issues should be resolved before any new
    rules are adopted); PCIA Comments at 5-6 (Commission should wait to
    impose any type of mandatory conversion until the Refarming rules
    are in place and have had time to take effect).

[^394]: We note that the Commission took such an approach with respect
    to fixed microwave equipment. *See* Redevelopment of Spectrum to
    Encourage Innovation in the Use of New Telecommunications
    Technologies, *Second Report and Order*, ET Docket No. 92-9, 8 FCC
    Rcd 6495, 6514 ¶ 53 (1993). The deadline would not apply to
    equipment manufactured for export. *See id.* at 6514 n.26. *See
    also* Amendment of Part 90 of the Commission's Rules to Restrict the
    Use of Radio Transmitters with External Frequency Controls, PR
    Docket No. 86-37, 2 FCC Rcd 7221 (1987). *See generally* 47 C.F.R. §
    302(b) ("No person shall manufacture, import, sell, offer for sale,
    or ship devices or home electronic equipment and systems, or use
    devices, which fail to comply with regulations promulgated pursuant
    to this section.").

[^395]: *See* AEP Comments (RM-9332) at 4; APSC Comments (RM-9332) at 5;
    BGE Comments (RM-9332) at 3; CSW Comments (RM-9332) at 2.

[^396]: *See supra* at ¶¶ 110, 111.

[^397]: 47 U.S.C. § 332; *see*, *e.g.*, Revision of Part 22 and Part 90
    of the Commission\'s Rules to Facilitate Future Development of
    Paging Systems, *Second Report and Order and Further Notice of
    Proposed Rulemaking*, WT Docket No. 96-18, 12 FCC Rcd 2732, 2737
    (1997).

[^398]: *See supra* at ¶ 109.

[^399]: *See generally* 47 C.F.R. §§ 1.1202, 1.1203, 1.1206.

[^400]: *See* 5 U.S.C. § 604.

[^401]: *See* 5 U.S.C. § 603.

[^402]: This list includes comments and reply comments submitted in
    response to RM-9405.

[^403]: *See* 5 U.S.C. § 601 *et seq*. The RFA has been amended by the
    Contract With America Advancement Act of 1996, Pub. L. No. 104-121,
    110 Stat. 847 (1996) ("CWAAA"). Title II of the CWAAA is the Small
    Business Regulatory Enforcement Fairness Act of 1996 ("SBREFA").

[^404]: *See* Implementation of Sections 309(j) and 337 of the
    Communications Act of 1934 as Amended; Promotion of Spectrum
    Efficient Technologies on Certain Part 90 Frequencies; Establishment
    of Public Service Radio Pool in the Private Mobile Frequencies Below
    800 MHz, WT Docket No. 99-87, RM-9332, RM-9405, *Notice of Proposed
    Rule Making*, FCC 99-52, 14 FCC Rcd 5206 (1999) ("*Notice*").

[^405]: *See* 5 U.S.C. § 604.

[^406]: 47 U.S.C. § 309(j)(3)(B); *see also* 47 U.S.C. § 257.

[^407]: *See* Comment of the Office of Advocacy, U.S. Small Business
    Administration on the Notice of Proposed Rulemaking and the Initial
    Regulatory Flexibility Analysis of the Notice of Proposed
    Rulemaking, CC Docket 99-87 (sic) (filed Aug. 2, 1999) ("SBA
    Comments"); Initial Regulatory Flexibility Analysis Comments of
    Blooston, Mordkofsky, Jackson & Dickens, WT Docket 99-87, RM-9332
    (filed Aug. 2, 1999) ("Blooston IRFA Comments").

[^408]: *See* SBA comments at 1, 2-3.

[^409]: *See* *id.* at 1, 4-6.

[^410]: *See* Blooston IRFA Comments at 1.

[^411]: *Notice* at ¶ 76.

[^412]: *See, e.g.,* Cinergy Comments at ii; API Comments at 22; PCIA
    Comments at 21-22; Motorola Comments at 9.

[^413]: *See, e.g., Notice*, 14 FCC Rcd. at 5242, 5244, 5246 ¶ 72, 77,
    83-84.

[^414]: *See id.*, 14 FCC Rcd. at 5246 ¶ 83-84.

[^415]: *See id.*

[^416]: *See id.*, 14 FCC Rcd. at 5261 ¶ 23 (IRFA).

[^417]: *See id.*, 14 FCC Rcd. at 5222-34 ¶ 26-57.

[^418]: *See* 5 U.S.C. § 603(c).

[^419]: *See id.*, 14 FCC Rcd. at 5222-34 ¶ 26-57.

[^420]: *See, e.g.,* Amendment of Part 1 of the Commission\'s Rules \--
    Competitive Bidding Procedures, WT Docket No. 97-82, Allocation of
    Spectrum Below 5 GHz Transferred from Federal Government Use, ET
    Docket No. 94-32, *Third Report and Order and Second Further Notice
    of Proposed Rule Making*, 13 FCC Rcd 374 (1997) (modified by
    *Erratum*, DA 98-419 (rel. Mar. 2, 1998)) (adopting small business
    bidding credits). *See also* 47 C.F.R. § 1.2110 (definition of small
    business designated entities for purposes of FCC's competitive
    bidding processes).

[^421]: *See, e.g.,* Amendment of Parts 1, 2, 21 and 25 of the
    Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
    To Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules
    and Policies for the Local Multipoint Distribution Service and for
    Fixed Satellite Services; Petitions for Reconsideration of the
    Denial of Applications for Waiver of the Commission's Common Carrier
    Point-to-Point Microwave Service Rules; Suite 12 Group Petition for
    Pioneer Preference, CC Docket No. 92-297, *Second Report and Order,
    Order on Reconsideration, and Fifth Notice of Proposed Rulemaking*,
    12 FCC Rcd 12545, 12,686-96 ¶¶ 340-63 (1997)(adopting small business
    credits for LMDS auction).

[^422]: *See* SBA Comments at 4.

[^423]: *See* Blooston IRFA Comments at 4.

[^424]: *See id.*

[^425]: *See id.*

[^426]: We note that applicants may request that trade secrets and
    privileged information be withheld from public inspection. *See* 47
    C.F.R. § 0.459. However, we generally do not grant routinely such
    requests with regard to financial information that is necessary to
    establish eligibility for designated entity benefits.

[^427]: *See, e.g.,* 47 C.F.R. § 1.2110(m) (generally requiring
    submission of audited financial statement to prove small business
    status).

[^428]: *See* Blooston IRFA Comments at 5.

[^429]: *See* *supra* ¶ 47.

[^430]: *See id.*

[^431]: *See* Implementation of Section 6002(b) of the Omnibus
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *First Report*, 10 FCC Rcd 8844, 8846, 8872 ¶¶ 7, 83
    (1995).

[^432]: *See* 5 U.S.C. § 603(b)(3).

[^433]: *See* 5 U.S.C. § 601(6).

[^434]: *Compare* 5 U.S.C. § 601(3) (RFA) *with* 15 U.S.C. § 632 (SBA).

[^435]: Small Business Act, 5 U.S.C. § 632 (1996).

[^436]: 5 U.S.C. § 601(4).

[^437]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to the Office of Advocacy
    of the Small Business Administration).

[^438]: ^?^ With the exception of the special emergency service, these
    services are governed by Subpart B of Part 90 of the Commission\'s
    rules. 47 C.F.R. §§ 90.15 through 90.27. The police service includes
    26,608 licensees that serve state, county and municipal enforcement
    through telephony (voice), telegraphy (code) and teletype and
    facsimile (printed material). The fire radio service includes 22,677
    licensees comprised of private volunteer or professional fire
    companies as well as units under governmental control. The local
    government service that is presently comprised of 40,512 licensees
    that are state, county or municipal entities that use the radio for
    official purposes not covered by other public safety services. There
    are 7,325 licensees within the forestry service which is comprised
    of licensees from state departments of conservation and private
    forest organizations who set up communications networks among fire
    lookout towers and ground crews. The 9,480 state and local
    governments are licensed to highway maintenance service provide
    emergency and routine communications to aid other public safety
    services to keep main roads safe for vehicular traffic. The 1,460
    licensees in the Emergency Medical Radio Service (EMRS) use the 39
    channels allocated to this service for emergency medical service
    communications related to the actual delivery of emergency medical
    treatment. 47 C.F.R. §§ 90.15 through 90.27. The 19,478 licensees in
    the special emergency service include medical services, rescue
    organizations, veterinarians, handicapped persons, disaster relief
    organizations, school buses, beach patrols, establishments in
    isolated areas, communications standby facilities and emergency
    repair of public communication facilities. 47 C.F.R. §§ 90.33
    through 90.55.

[^439]: *See* 13 C.F.R. § 121.201 (SIC Code 4812).

[^440]: *See* 5 U.S.C. § 601(5) (including cities, counties, towns,
    townships, villages, school districts, or special districts).

[^441]: 5 U.S.C. § 601(5).

[^442]: U.S. Dept. of Commerce, Bureau of the Census, \"1992 Census of
    Governments.\"

[^443]: *Id.*

[^444]: *See* 13 C.F.R. § 121.201 (SIC Code 4812).

[^445]: *Id.*

[^446]: *See* Federal Communications Commission, 60th Annual Report,
    Fiscal Year 1994 at 120-121.

[^447]: 13 C.F.R. § 121.201, Standard Industrial Code (SIC) 3663.

[^448]: U.S. Dept. of Commerce, *1992 Census of Transportation,
    Communications and Utilities* (issued May 1995), SIC 3663.

[^449]: *See* 5 U.S.C. § 603(c).

[^450]: *See* 5 U.S.C. § 801(a)(1)(A).

[^451]: *See* 5 U.S.C. §604(b).

[^452]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq*.,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^453]: *See* 5 U.S.C. § 603(a).

[^454]: *See* *id.*

[^455]: 47 U.S.C. §§ 154(i), 303(r), 332(a)(2).

[^456]: *See* 5 U.S.C. § 603(b)(3).

[^457]: *See* 5 U.S.C. § 601(6).

[^458]: *Compare* 5 U.S.C. § 601(3) (RFA) *with* 15 U.S.C. § 632 (SBA).

[^459]: Small Business Act, 5 U.S.C. § 632 (1996).

[^460]: 5 U.S.C. § 601(4).

[^461]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to the Office of Advocacy
    of the Small Business Administration).

[^462]: ^?^ With the exception of the special emergency service, these
    services are governed by Subpart B of Part 90 of the Commission\'s
    rules. 47 C.F.R. §§ 90.15 through 90.27. The police service includes
    26,608 licensees that serve state, county and municipal enforcement
    through telephony (voice), telegraphy (code) and teletype and
    facsimile (printed material). The fire radio service includes 22,677
    licensees comprised of private volunteer or professional fire
    companies as well as units under governmental control. The local
    government service that is presently comprised of 40,512 licensees
    that are state, county or municipal entities that use the radio for
    official purposes not covered by other public safety services. There
    are 7,325 licensees within the forestry service which is comprised
    of licensees from state departments of conservation and private
    forest organizations who set up communications networks among fire
    lookout towers and ground crews. The 9,480 state and local
    governments are licensed to highway maintenance service provide
    emergency and routine communications to aid other public safety
    services to keep main roads safe for vehicular traffic. The 1,460
    licensees in the Emergency Medical Radio Service (EMRS) use the 39
    channels allocated to this service for emergency medical service
    communications related to the actual delivery of emergency medical
    treatment. 47 C.F.R. §§ 90.15 through 90.27. The 19,478 licensees in
    the special emergency service include medical services, rescue
    organizations, veterinarians, handicapped persons, disaster relief
    organizations, school buses, beach patrols, establishments in
    isolated areas, communications standby facilities and emergency
    repair of public communication facilities. 47 C.F.R. §§ 90.33
    through 90.55.

[^463]: *See* 13 C.F.R. § 121.201 (SIC Code 4812).

[^464]: *See* 5 U.S.C. § 601(5) (including cities, counties, towns,
    townships, villages, school districts, or special districts).

[^465]: 5 U.S.C. § 601(5).

[^466]: U.S. Dept. of Commerce, Bureau of the Census, \"1992 Census of
    Governments.\"

[^467]: *Id.*

[^468]: *See* 13 C.F.R. § 121.201 (SIC Code 4812).

[^469]: *Id.*

[^470]: *Id.* (SIC Code 4822).

[^471]: *See* Federal Communications Commission, 60th Annual Report,
    Fiscal Year 1994 at 120-121.

[^472]: 13 C.F.R. § 121.201, Standard Industrial Code (SIC) 3663.

[^473]: U.S. Dept. of Commerce, *1992 Census of Transportation,
    Communications and Utilities* (issued May 1995), SIC 3663.

[^474]: *See* 5 U.S.C. §603(c).

[^475]: *See supra* ¶¶ 113-16.