**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | ) | WT Docket No. 02-353         |
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| Service Rules for Advanced       | ) |                              |
| Wireless Services                |   |                              |
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| In the 1.7 GHz and 2.1 GHz Bands |   |                              |
|                                  | ) |                              |
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|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
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|                                  | ) |                              |
+----------------------------------+---+------------------------------+

**ORDER ON RECONSIDERATION**

**Adopted:** August 5, 2005 **Released:** August 15, 2005

By the Commission: Chairman Martin and Commissioners Copps and Adelstein
issuing separate statements.

Table of Contents

Heading Paragraph \#

I. introduction 1

II\. background 2

III\. ISSUES ON RECONSIDERATION 4

A. Band Plan 5

B. Provisions for Designated Entities 22

C. Technical Rules 42

IV\. PROCEDURAL MATTERS 45

A. Supplemental Final Regulatory Flexibility Analysis 45

B. Paperwork Reduction Act of 1995 Analysis 46

C. Authority 47

D. Further Information 48

V. ORDERING CLAUSES 49

Appendix A: List of Commenters

Appendix B: Final Rules

Appendix C: Supplemental Final Regulatory Flexibility Analysis

#  introduction

1.  This order resolves five petitions for reconsideration of the
    *Report and Order* adopting service rules for Advanced Wireless
    Services (AWS) in the 1710-1755 and 2110-2155 MHz bands.[^1] In this
    Order, we modify the band plan and make minor revisions to the
    service rules to provide additional opportunities for smaller and
    rural wireless carriers and to enhance flexibility for potential
    licensees. In all other respects, we deny or dismiss the petitions
    for reconsideration.[^2]

# background

2.  Growth in demand for mobile wireless services, coupled with the rise
    of the Internet and greater broadband availability, have increased
    the need for additional spectrum and advanced technologies capable
    of providing Advanced Wireless Services, including wireless Internet
    access and other high-speed information and entertainment services.
    Enhancements to current wireless network technologies, as well as
    the development of new technologies, are continuing to improve and
    expand the deployment of wireless broadband.[^3] These new
    technologies are more advanced than analog cellular (first
    generation, or 1G) and digital cellular (second generation or 2G),
    and are often labeled 2.5G, 3G, 4G, and so on.[^4] In the past two
    years, mobile telephone carriers have begun to deploy significantly
    faster broadband technologies on their mobile cellular networks, and
    many have announced plans to launch or expand these technologies
    further in the future.

3.  In order to facilitate the rapid deployment of broadband
    technologies, the Commission has allocated spectrum to meet the
    demand for advanced wireless services. In November 2002, as part of
    the AWS Allocation Second Report and Order, the Commission
    identified and allocated the two 45-megahertz blocks of spectrum at
    1710-1755 MHz and 2110-2155 MHz to the fixed and mobile services for
    AWS (AWS-1).[^5] In the AWS-1 Service Rules Order adopted in
    November 2003, the Commission set forth a band plan and licensing
    procedures for the AWS-1 bands using regional and localized
    licensing areas.[^6] The Order also established rules governing
    competitive bidding for the licenses,[^7] as well as operational and
    technical rules.[^8]

# ISSUES ON RECONSIDERATION 

4.  In this section, we address petitions for reconsideration of the
    AWS-1 Service Rules Order filed by Rural Communications Association
    (RCA), T-Mobile USA, Inc. (T-Mobile), Council Tree Communications,
    Inc. (Council Tree), and Powerwave Technologies, Inc. (Powerwave).
    Generally, RCA and T-Mobile seek reconsideration of the AWS-1 band
    plan to increase the amount of spectrum and number of spectrum
    blocks within the band that are licensed using smaller geographic
    areas.[^9] Council Tree seeks to have a portion of the 1710-1755 MHz
    and 2110-2155 MHz bands set aside exclusively for designated
    entities or, in the alternative, seeks the addition of a third tier
    of small business bidding credits to the two-tiered bidding credit
    adopted in the AWS-1 Service Rules Order.[^10] Finally, Powerwave
    seeks harmonization of the transmitter output power of AWS stations
    and PCS stations.[^11]

## Band Plan

5.  *Background*. In the AWS-1 Service Rules Order, the Commission
    adopted a band plan for the 1710-1755 and 2110-2155 MHz bands using
    a range of geographic licensing areas.[^12] In order to foster
    service to rural areas and tribal lands, and to promote investment
    in and rapid deployment of new technologies and services, the
    Commission included a combination of large regional licensing areas,
    smaller regional licensing areas, and local licensing areas. [^13]
    By including a variety of geographic licensing area sizes in the
    band plan for this spectrum, the Commission sought to promote the
    policy goal of disseminating licenses among a wide variety of
    applicants.[^14] Further, the Commission stated that there is enough
    spectrum available in these two bands to accommodate the competing
    need for both large and small geographic licensing areas and that
    including these different licensing area sizes in the band plan for
    this spectrum would provide carriers with the flexibility to tailor
    their licensing areas to meet their individual business needs and
    goals.[^15] The band plan as adopted in the AWS-1 Service Rules
    Order is as follows:

> [Blocks]{.underline} [Pairings]{.underline} [Amount]{.underline}
> [Area]{.underline} [Licenses]{.underline}
>
> A 1710-1720 and 2110-2120 2x10 EA 176
>
> B 1720-1730 and 2120-2130 2x10 REAG[^16] 12
>
> C 1730-1735 and 2130-2135 2x5 REAG 12
>
> D 1735-1740 and 2135-2140 2x5 RSA/MSA[^17] 734
>
> E 1740-1755 and 2140-2155 2x15 REAG 12

6.  Rural Cellular Association (RCA) filed a petition for
    reconsideration of the *AWS-1 Service Rules Order*, stating that a
    single 10 MHz spectrum block, licensed on a Rural Service
    Area/Metropolitan Statistical Area (RSA/MSA) basis, is insufficient
    to meet rural needs.[^18] RCA restated its concern from the *AWS-1
    Service Rules* proceeding that small rural carriers have
    insufficient bargaining power when negotiating partitioning and
    disaggregation agreements, and proposed that the Commission
    reapportion the spectrum to be sure that at least two 20 megahertz
    licenses are available on a RSA/MSA basis.[^19] RCA later revised
    its position, seeking to make one 20 megahertz block available to be
    auctioned on a RSA/MSA basis.[^20] RCA also requests that the
    Commission retain a 20 megahertz license with Economic Area (EA)
    boundaries.[^21] CTIA initially opposed RCA's request to convert
    multiple spectrum blocks to an RSA/MSA configuration,[^22] but later
    agreed that RCA's revised position would be an appropriate means of
    encouraging effective small and rural carrier participation in the
    AWS auction.[^23] Thus, the final RCA proposal, supported by CTIA,
    is as follows:

> [Blocks]{.underline} [Pairings]{.underline} [Amount]{.underline}
> [Area]{.underline} [Licenses]{.underline}
>
> A 1710-1720 and 2110-2120 2x10 EA 176
>
> B 1720-1730 and 2120-2130 2x10 REAG 12
>
> C 1730-1735 and 2130-2135 2x5 REAG 12
>
> D 1735-1745 and 2135-2145 2x10 REAG 12

E 1745-1755 and 2145-2155 2x10 RSA/MSA 734[^24]

7.  T-Mobile also filed a petition for reconsideration seeking to split
    the 30 megahertz E-block into a 20 megahertz block and a 10
    megahertz block. T-Mobile argued that it would be better to offer
    spectrum in smaller blocks that could be aggregated in auction,
    rather than force applicants to bid on more spectrum than they need
    (at greater cost) and subsequently contend with excess spectrum
    through secondary markets mechanisms.[^25] Later, T-Mobile revised
    its position in a joint filing with Rural Telecommunications Group
    (RTG), in which the parties argue in favor of splitting the E-block
    and creating a sixth licensing block. T-Mobile and RTG seek to
    increase the amount of spectrum licensed on an RSA/MSA basis and on
    an EA basis, to be accomplished by shifting the spectrum from the
    REAG blocks.[^26] T-Mobile states that its band plan proposal was
    developed to also incorporate the concerns of RCA regarding MDS
    Channels 1 and 2.[^27] The T-Mobile/RTG proposed band plan is as
    follows:

> [Blocks]{.underline} [Pairings]{.underline} [Amount]{.underline}
> [Area]{.underline} [Licenses]{.underline}
>
> A 1710-1720 and 2110-2120 2x10 EA 176
>
> B 1720-1730 and 2120-2130 2x10 REAG 12
>
> C 1730-1735 and 2130-2135 2x5 REAG 12
>
> D 1735-1745 and 2135-2145 2x10 RSA/MSA 734
>
> E 1745-1750 and 2145-2150 2x5 EA 176
>
> F 1750-1755 and 2150-2155 2x5 REAG 12

8.  A number of commenters expressed support for the T-Mobile/RTG plan.
    Ericsson, Inc. (Ericsson) submitted a letter in support of the
    T-Mobile/RTG joint plan, stating that changing market conditions
    subsequent to the company's initial filing in the *AWS-1 Service
    Rules* docket have caused it to change its band plan recommendation.
    Specifically, Ericsson revised its recommendation from a band plan
    with three 15 megahertz paired blocks to a plan with smaller
    spectrum block sizes combined with the ability to aggregate and
    disaggregate spectrum blocks and service areas.[^28] United States
    Cellular Corp. (US Cellular) also offers its support to the T-Mobile
    and RTG proposal, asserting that increased use of RSA/MSA and EA
    licensing areas offers realistic opportunities for local, largely
    rural carriers to afford adequate spectrum for voice and advanced
    data services in markets of manageable size suited to their existing
    operations.[^29] In addition, PCIA supports the T-Mobile/RTG
    proposal, noting that by allowing up to six market entrants, the FCC
    can promote competition in the wireless marketplace.[^30] Cingular
    states that it could support the conversion of the D block into a 20
    MHz license by taking 10 megahertz of spectrum from the E block and
    retaining the RSA/MSA designation as proposed by T-Mobile and RTG,
    but does not support creating additional 10 megahertz blocks in the
    manner proposed by T-Mobile and RTG.[^31] MetroPCS Communications,
    Inc. (MetroPCS), in a late *ex parte* filing, also offered a band
    plan emphasizing the use of EAs and smaller licensing blocks, as
    opposed to large REAG blocks, but also supporting use of Major
    Economic Areas (MEAs)[^32] while encouraging the Commission to move
    away from the use of RSA/MSA-based allocations.[^33] 

9.  Verizon Wireless also submitted a proposed band plan that it states
    incorporates a variety of geographic and frequency blocks to allow
    for efficient aggregation of spectrum.[^34] Verizon Wireless' plan
    increases the number of blocks to six, shifts the location of the
    RSA/MSA license, and does not include a 30 megahertz license. While
    addressing several parties' concerns and proposing an increase in
    spectrum licensed on an RSA/MSA basis, Verizon Wireless also
    proposes that the RSA/MSA license be moved from the middle to the
    edge of the band plan to enable efficient aggregation of the REAG
    and EA "building block" spectrum licensing areas.[^35] The Verizon
    Wireless proposed band plan is as follows:

[Blocks]{.underline} [Pairings]{.underline} [Amount]{.underline}
[Area]{.underline} [Licenses]{.underline}

A 1710-1720 and 2110-2120 2x10 RSA/MSA 734

B 1720-1725 and 2120-2125 2x5 EA 176

C 1725-1735 and 2125-2135 2x10 REAG 12

D 1735-1740 and 2135-2140 2x5 REAG 12

E 1740-1750 and 2140-2150 2x10 REAG 12

F 1750-1755 and 2150-2155 2x5 EA 176

10. *Discussion.* In the *AWS-1 Service Rules Order,* the Commission
    concluded that, by offering three geographic license sizes, the band
    plan would meet the various needs expressed by potential entrants,
    as well as the needs of incumbents seeking additional spectrum.[^36]
    While we continue to believe that a variety of license area sizes
    offers the best means of providing spectrum to a wide variety of
    applicants, the record on reconsideration supports some
    modifications to the AWS-1 licensing areas. Specifically, we find
    that more spectrum should be licensed on an RSA/MSA basis to meet
    the needs of rural carriers, that a 30 megahertz REAG block is too
    large for most bidders and should be broken into smaller components
    that could be aggregated, and that offering an additional block
    licensed on an EA basis would help enhance the mixture of large and
    small geographic area licenses available to applicants. These
    determinations are discussed in further detail below.

11. First we address the needs of rural carriers. As we stated in the
    *AWS-1 Service Rules Order,* the adopted band plan meets the needs
    of entities interested in localized service areas by including
    licensing areas based on RSAs and MSAs.[^37] The Commission stated
    that, these types of smaller geographic service areas provide entry
    opportunities for smaller carriers, new entrants, and rural
    telephone companies. However, RCA asserts that small and rural
    markets are largely underserved by larger wireless carriers, and
    argues that more spectrum must therefore be made available in RSAs
    and MSAs in order to adequately serve small markets and rural areas
    and to achieve a diversity of licensees.[^38] RCA re-emphasizes
    concerns it raised earlier in this proceeding that it expects small
    rural carriers to have insufficient bargaining power when
    negotiating partitioning and disaggregation agreements to acquire
    more than 10 megahertz of AWS spectrum.[^39] CTIA agrees with RCA
    that making one 20 megahertz block available on a RSA/MSA basis will
    increase the practical ability of smaller carriers to participate in
    the offering of CMRS service in the AWS-1 bands, while at the same
    time appropriately balancing allocation of AWS spectrum between
    regional and small market areas.[^40] CTIA states that such a block
    would be most efficient if situated on one end or the other of the
    allocation, rather than in the middle of the spectrum blocks, to
    maximize efficiency for those bidders who might be interested in
    aggregating spectrum blocks.[^41]

12. In the *AWS-1 Service Rules Order*, the record reflected that a
    bandwidth of at least five megahertz is required to accommodate the
    fullest range of advanced wireless services, including all of the 3G
    radio interfaces.[^42] Five megahertz blocks can be used for new
    technologies and can be used for some data services, including
    broadband Internet access.[^43] For example, paired five megahertz
    blocks enable a single wideband CDMA channel. The Commission also
    found that five megahertz blocks would provide entry opportunities
    for small and rural service providers.[^44] RCA, in its petition for
    reconsideration, argues that the Commission's band plan relegates
    small carriers to a position of competing for a single license in
    each area that is capable of providing a single wideband CDMA
    channel, while precluding them from offering Internet access at
    faster speeds, higher data rates, additional capacity, and greater
    flexibility, which will instead, RCA argues, become the exclusive
    province of large carriers that can compete for large geographic
    license areas.[^45]

13. RCA states that only spectrum blocks larger than 10 megahertz will
    provide sufficient bandwidth for the desired additional capacity and
    flexibility necessary for AWS.[^46] According to RCA, its members
    \-- for the most part \-- hold 800 MHz cellular licenses for RSAs,
    consisting of 25 megahertz. That spectrum, states RCA, is utilized
    effectively to provide voice services, but it is not sufficient or
    useful in combination with AWS spectrum in the 1.7 GHz and 2.1 GHz
    bands (using mass produced and competitively priced equipment) for
    deploying anticipated forms of advanced wireless services.[^47] RCA
    members would like to offer the same quality wireless service as
    larger carriers, but they assert that they will be unable to do so
    with only 10 megahertz of AWS spectrum. A carrier with 20 or 30
    megahertz of spectrum in the 1.7 GHz and 2.1 GHz bands would be able
    to provide superior service, according to RCA.[^48]

14. We find that including additional spectrum licensed on an RSA/MSA
    basis will be beneficial to carriers of various sizes, including
    carriers holding 800 MHz cellular spectrum licensed on an RSA/MSA
    basis. We believe that the inclusion of 20 megahertz licensed on an
    RSA/MSA basis in our band plan will foster service to rural areas
    and tribal lands and thereby bring the benefits of advanced services
    to these areas. As stated by CTIA, allocating one 20 megahertz block
    on an RSA/MSA basis will effectively encourage small and rural
    carrier participation in the AWS auction.[^49] As the Commission has
    acknowledged, and RCA reiterates, RSAs and MSAs allow entities to
    mix and match rural and urban areas according to their business
    plans and that, by being smaller, these types of geographic service
    areas provide entry opportunities for smaller carriers, new
    entrants, and rural telephone companies.[^50] Additionally, with
    respect to larger carriers, the Commission has said that aggregation
    at auction of smaller spectrum licenses and blocks may provide
    bidders with greater flexibility to implement their business plans
    as compared with a more traditional approach of defining an optimal
    size.[^51]

15. The record also supports reducing the size of the 30 megahertz REAG
    block and, instead, creating smaller components that could be
    aggregated. In the *AWS-1 Service Rules Order*, the Commission
    stated that the larger 20 and 30 megahertz blocks should enable a
    broader range of broadband services, including Internet access at
    faster speeds. These larger blocks should also accommodate future,
    higher data rates and provide operators with additional capacity,
    and, importantly, with greater flexibility. The Commission also
    stated that larger blocks should also be of interest to those
    service providers contemplating a large regional or nationwide
    service.[^52] T-Mobile and RTG argue, however, that industry
    consolidation and increases in the spectrum holdings of the largest
    wireless carriers have increased the importance to other national,
    regional and rural carriers of gaining the ability to access
    affordable, appropriately-sized blocks of spectrum. Without this
    access, assert T-Mobile and RTG, smaller carriers cannot augment
    their existing voice and data services or deploy innovative product
    offerings as demanded by their customers.[^53] Verizon Wireless
    states that while it initially supported the adoption of a 30
    megahertz license, it believes that the Commission can still achieve
    the objective of permitting carriers to acquire enough contiguous
    spectrum to provide the capacity for more advanced service by
    increasing the number of blocks to six, but also organizing the
    blocks to permit multiple ways of aggregating 30 megahertz of
    spectrum.[^54] Ericsson and other commenters, also citing to market
    developments, requests that the Commission adopt smaller spectrum
    block sizes that licensees can adjust based on existing spectrum
    holdings to meet their individual business plans.[^55] We agree
    that, as stated by Ericsson, smaller spectrum block sizes, combined
    with the ability to aggregate and disaggregate spectrum blocks and
    service areas, will allow carriers to devise spectrum configurations
    most appropriate for different markets.[^56] Therefore, we decide to
    reduce the size of the 30 megahertz REAG block.

16. T-Mobile asserts that licensing AWS spectrum blocks in excess of
    some carriers' needs would result in unnecessary transaction costs
    and potential delay in the availability of spectrum to those who
    value it most.[^57] T-Mobile asserts that the Commission intended to
    offer bandwidth in amounts that would provide various efficient uses
    of the spectrum without requiring carriers to adjust their licenses
    after the fact through multiple secondary market transactions such
    as partitioning and disaggregation, which tend to be more costly and
    time consuming than aggregation of licenses during an auction.[^58]
    As further justification for breaking large blocks into smaller
    paired blocks, T-Mobile cites to Commission proceedings involving
    re-packaging of PCS C block, and licensing spectrum in the 700 MHz
    band.[^59]

17. We agree that, in order to facilitate access for smaller carriers,
    the two 15-megahertz blocks comprising block E should be broken down
    into smaller blocks. The record supports this approach as a way to
    enable a wide variety of carriers \-- including not only incumbent
    PCS and cellular providers but also new entrants and smaller, rural
    wireless providers \-- to acquire smaller spectrum blocks to deploy
    advanced services effectively, increase their footprint, and improve
    service quality.[^60] As T-Mobile stated, any bidders wanting blocks
    larger than 20 megahertz to suit individual business plans would be
    able to aggregate two or more smaller blocks at auction or in the
    secondary market.[^61] For these reasons, we conclude that
    decreasing the size of the paired E blocks from 15 to 10 megahertz
    will help meet these objectives.

18. We also find that the record on reconsideration supports modifying
    the AWS-1 band plan to offer an additional block licensed on an EA
    basis to enhance the mixture of large and small geographic area
    licenses available to applicants for this spectrum. As T-Mobile,
    RTG, and Ericsson have suggested, increasing the amount of spectrum
    licensed on an EA basis will offer applicants the option of
    combining spectrum blocks and service areas to suit their business
    plans.[^62] Further, by placing spectrum blocks with the same type
    of geographic area licenses adjacent to one another, we
    enable licensees to employ a variety of aggregation
    possibilities.[^63]

19. In the *AWS-1 Service Rules Order*, the Commission stated that by
    placing the larger 20 and 30 megahertz blocks at either end of the
    two bands, licensees in these segments will have sufficient
    bandwidth and maximum flexibility to resolve adjacent band
    interference concerns.[^64] That rationale stands. Licensees of the
    larger blocks should be better able to internalize interference
    management measures than would licensees of smaller blocks. In
    addition, there is support in the record for situating the 20 MHz
    block licensed on an RSA/MSA basis on one end of the allocation to
    maximize efficiency for bidders interested in aggregating spectrum
    blocks.[^65] For these reasons, we will take the same approach the
    Commission took in the *AWS-1 Service Rules Order* and we will
    license 20 megahertz blocks at the band edges.

20. For the reasons discussed above, we modify the AWS-1 band plan. We
    will license 20 megahertz at 1710-1720, paired with 2110-2120 on an
    RSA/MSA basis. Further, consistent with requests on the record, we
    will license 30 megahertz in this band on an EA basis: 20 megahertz
    at 1720-1730 paired with 2120-2130, and 10 megahertz at 1730-1735
    paired with 2130-2135. We will license 40 megahertz on an REAG basis
    and we will make these blocks contiguous in a manner that is
    convenient for aggregation. We have broken up the 2x15 MHz REAG
    block into a 2x5 MHz E block located at 1740-1745 and 2140-2145 MHz
    and a new 20 megahertz F block located at 1745-1755 MHz paired with
    2145-2155 MHz. Our revised band plan is as follows:

> [Blocks]{.underline} [Pairings]{.underline} [Amount]{.underline}
> [Area]{.underline} [Licenses]{.underline}
>
> A 1710-1720 and 2110-2120 2x10 RSA/MSA 734
>
> B 1720-1730 and 2120-2130 2x10 EA 176
>
> C 1730-1735 and 2130-2135 2x5 EA 176
>
> D 1735-1740 and 2135-2140 2x5 REAG 12
>
> E 1740-1745 and 2140-2145 2x5 REAG 12
>
> F 1745-1755 and 2145-2155 2x10 REAG 12

21. We believe that this alteration of the band plan reflects a
    reasonable balance of the predicted spectrum needs reflected the
    record. The A, B, and C blocks address the need for additional
    spectrum licensed on a smaller geographic basis. Reducing the size
    of the former E-block, while aligning the EA and REAG spectrum in a
    configuration suitable for aggregation also addresses opportunities
    for obtaining spectrum suitable to a range of business plans.

## Provisions for Designated Entities 

22. *Background.* In the *AWS-1 Service Rules NPRM*, the Commission
    sought comment on whether it should set aside spectrum for new
    entrants or other types of applicants in the 1710-1755 MHz and
    2110-2155 MHz bands.[^66] In the *AWS-1 Service Rules Order*, the
    Commission decided not to set aside any AWS spectrum for designated
    entities or other categories of bidders.[^67] The Commission
    reasoned that by adopting smaller geographic licensing areas such as
    MSAs and RSAs, as well as smaller spectrum block sizes, it would
    encourage participation by smaller and rural entities, without the
    necessity of adopting set-asides or eligibility restrictions.[^68]
    The Commission also noted that "opening the 1710-1755 MHz and
    2110-2155 MHz bands to as wide a range of applicants as possible
    would encourage entrepreneurial efforts to develop new technologies
    and services, while helping to ensure efficient use of the
    spectrum."[^69]

23. In the *AWS-1 Service Rules Order*, the Commission adopted a
    two-tiered bidding credit for small businesses.[^70] The Commission
    defined a "small business" as an entity with average annual gross
    revenues for the preceding three years not exceeding \$40 million,
    and a "very small business" as an entity with average annual gross
    revenues for the preceding three years not exceeding \$15 million.
    It provided small businesses with a bidding credit of 15 percent and
    very small businesses with a bidding credit of 25 percent. The small
    business size standards and associated bidding credits for licenses
    in the 1710-1755 MHz and 2110-2155 MHz bands are the same as those
    the Commission adopted for broadband PCS.[^71] The Commission
    concluded that the small business size standards and bidding credit
    levels that matched those offered in auctions of broadband PCS
    licenses were appropriate because broadband PCS presented service
    opportunities, capital requirements, and entry issues comparable to
    those presented by AWS.[^72]

24. Council Tree filed a petition for reconsideration of the *AWS-1
    Service Rules Order*, urging the Commission to reconsider its
    position with respect to set-asides for designated entities or, in
    the alternative, to offer a third level of bidding credit.[^73]
    Specifically, Council Tree urges the Commission to limit eligibility
    to bid for the MSA/RSA licenses composing the D block under our
    original band plan.[^74] Council Tree notes that for broadband PCS,
    the Commission chose to supplement bidding credits and other special
    provisions with a limitation on the size of the parties that
    designated entities will bid against.[^75] It further argues that
    without the insulation of a set-aside block, bidding credits may
    prove ineffective for AWS.[^76] Alternatively, Council Tree urges
    the Commission to offer a 35 percent bidding credit to those AWS
    auction applicants whose average gross revenues for the preceding
    three years do not exceed \$3 million.[^77]

25. In support of its request for a set-aside, Council Tree asserts that
    the Commission's partitioning and disaggregation policies do not
    necessarily help to achieve the goal of increasing designated entity
    participation. In addition, it argues that leasing the use of
    certain spectrum bands from existing wealthy licensees will not
    afford opportunities to designated entities because of the
    transaction costs that spectrum leasing introduces.[^78] CTIA
    opposes Council Tree's Petition, arguing that the licensing plan
    adopted in the *AWS-1 Service Rules Order* provides a balance
    between regional and small market areas that will result in the
    dissemination of licenses to a diverse range of entrants.[^79] CTIA
    asserts, among other things, that set-asides are unnecessary due to
    the participation opportunities created by bidding credits, as well
    as partitioning and disaggregation.[^80] It states that in the PCS
    bands, a broad use of partitioning and disaggregation has enabled
    small and rural carriers to obtain portions of larger Major Trading
    Area (MTA) authorizations from national carriers for localized
    services.[^81] It further states that the Commission's secondary
    market policies enable entrants to obtain short- or long-term leases
    of AWS spectrum, aiding those entrants seeking to provide localized
    services.[^82] In its Reply to CTIA's Opposition, Council Tree
    states that "though the Commission's secondary markets and
    partitioning/disaggregation policies create the potential for
    post-auction transactions with licensees, unlike the Commission,
    licensees have no obligation to disseminate licenses widely or make
    opportunities available to new entrants."[^83] Consequently, it
    argues that under Section 309(j) of the Communications Act, it is
    the Commission's duty to insure that a wide variety of applicants
    obtain licenses, and that small businesses have the opportunity to
    provide spectrum-based services.

26. On June 13, 2005, over a year after the AWS-1 reconsideration period
    had closed, Council Tree submitted an *ex parte* filing to
    supplement its petition for reconsideration.[^84] In its *ex parte*,
    Council Tree urges the Commission to add a third small business size
    standard and offer such entities a 35 percent bidding credit,
    effectively reiterating the alternative proposal contained in its
    petition for reconsideration.[^85] Council Tree's *ex parte* makes
    three additional proposals not made in its original petition for
    reconsideration. It proposes that large incumbent wireless carriers
    should not be allowed to have any material investment, financial, or
    operating relationship with a designated entity if they have
    licenses with material geographic overlap. [^86] Further, Council
    Tree proposes that individuals with a net worth exceeding \$3
    million (excluding the value of their primary residence) should not
    be permitted to have an actual controlling interest in a designated
    entity.[^87] Finally, Council Tree proposes that the Commission
    should provide an additional 10 percent bidding credit (increasing
    the maximum 35 percent credit to 45 percent) for those designated
    entities that provide service to underserved segments of the
    population, namely lower income customers and members of minority
    groups.[^88]

27. A number of entities filed letters advancing the same proposals
    raised in Council Tree's *ex parte* and asserting that changes to
    the designated entity program would help promote competition and
    ensure diversity of ownership in the wireless industry.[^89]
    T-Mobile opposes Council Tree's *ex parte* filing, asserting, among
    other things, that altering the current eligibility rules may
    adversely affect the new statutory requirement that total cash
    proceeds equal at least 110 percent of estimated costs of relocating
    eligible federal incumbents.[^90] CTIA also opposes Council Tree's
    *ex parte* filing, asserting, among other things, that Council
    Tree's proposed changes to designated entity qualifications are
    beyond the scope of the pending petitions for reconsideration. It
    further states that Council Tree's proposed constraint on designated
    entities' affiliation with large wireless carriers is contrary to
    the Commission's goal of providing legitimate small businesses
    maximum flexibility in attracting passive financing.[^91] It also
    asserts that additional bidding credits for providing service to
    underserved segments of the population should not be adopted through
    auction policy and that even if, as a policy matter, such bidding
    credits were deemed appropriate for this purpose, the bidding
    credits should be available to all bidders and not just to
    designated entities.[^92] Cook Inlet Region, Inc. also opposed
    Council Tree's *ex parte* filing asserting, among other things, that
    Council Tree's new suggestions "at the eleventh hour in this
    proceeding" would result in delay in conducting the auctions and in
    permitting highly demanded new service to be provided to the
    public.[^93]

28. *Discussion.* We deny Council Tree's request to set aside spectrum
    in the 1710-1755 MHz and 2110-2155 MHz bands for designated entities
    or other categories of bidders. We also deny Council Tree's
    alternative request, reiterated in its *ex parte*, to establish a
    third small business size standard and offer a 35 percent bidding
    credit to those AWS auction applicants whose average gross revenues
    for the preceding three years do not exceed \$3 million. With
    respect to Council Tree's *ex parte*, as discussed below, we reject
    its proposal that individuals with a net worth exceeding \$3 million
    (excluding the value of their primary residence) should not be
    permitted to have an actual controlling interest in a designated
    entity. We also reject Council Tree's proposal that the Commission
    provide an additional 10 percent bidding credit for those designated
    entities that provide service to underserved segments of the
    population, namely lower income customers and members of minority
    groups. Finally, we reject Council Tree's proposal that large
    incumbent wireless carriers should not be allowed to have any
    material investment, financial, or operating relationship with a
    designated entity if they have licenses with material geographic
    overlap.[^94] Although we reject this proposal based on the record
    in this proceeding, we believe it warrants further study by the
    Commission. The Commission therefore plans to examine this proposal
    in a separate action.

29. *Set Aside.* In the *AWS-1 Service Rules Order*, the Commission
    stated that its objectives of ensuring both efficient use of
    spectrum and diversity of licensees can best be achieved by adopting
    a variety of license areas and spectrum block sizes, and ensuring
    the ability of licensees to partition and disaggregate their
    licenses and fully participate in the secondary spectrum
    markets.[^95] The Commission also noted that the adoption of
    spectrum leasing policies applicable to AWS spectrum should
    facilitate the ability of wireless licensees to lease spectrum usage
    rights to third parties.[^96]

30. We do not believe that Council Tree has presented any grounds to
    warrant reconsideration of the Commission's decision not to
    establish a spectrum set-aside in the 1710-1755 MHz and 2110-2155
    MHz bands*.*[^97] As Council Tree recognizes, the Commission has
    generally used bidding credits rather than eligibility restrictions
    to encourage the participation of designated entities in competitive
    bidding.[^98] Indeed, in other services, the Commission has
    refrained from establishing small business set-asides like those
    adopted in PCS. In rejecting small business set-asides, the
    Commission generally has cited the "large number of licenses
    available" and the effectiveness of bidding credits and other
    special provisions that allow for extensive participation of small
    businesses without the use of spectrum set-asides.[^99] As CTIA
    points out, in recent auctions of spectrum in the Multichannel Video
    Distribution and Data Service (MVDDS)[^100] and the Lower 700 MHz
    band,[^101] even in the absence of a spectrum set-aside, designated
    entities won a majority of licenses sold at auction.[^102] Moreover,
    in examining all auctions of non-broadcast licenses where no
    spectrum was set aside for designated entities, we have determined
    that designated entities won approximately 53 percent of all of the
    licenses won in these auctions.[^103] Based on the record of success
    of designated entities in auctions without set-asides, we find that
    it is unnecessary to establish a set-aside of AWS-1 spectrum.

31. We find that Council Tree has not provided sufficient reason for us
    to create a set-aside in AWS. Other than Council Tree, no other
    party supports a set-aside and we see no need to supplement the
    incentives for small business participation that the Commission has
    already adopted by foreclosing any of the licenses to other bidders.
    We also continue to believe that the Commission's adoption of
    spectrum leasing policies applicable to AWS spectrum and the ability
    of licensees to partition and disaggregate their licenses and fully
    participate in the secondary spectrum markets should facilitate the
    ability of wireless licensees to transfer or lease spectrum usage
    rights to third parties. We therefore affirm the Commission's
    conclusion in the *AWS-1 Service Rules Order* that adoption of a
    variety of license areas and spectrum block sizes obviates the need
    for any type of set-aside for designated entities. We find that our
    revised band plan creating additional licensing opportunities for
    DEs makes such a spectrum set-aside even less necessary.

32. *Additional Bidding Credit.* Council Tree requests, in the
    alternative, that if we do not adopt a set-aside for the AWS D
    Block, we offer a 35 percent bidding credit to those AWS auction
    applicants whose average gross revenues are \$3 million or less
    consistent with Section 1.2110(f)(2)(i) of the Commission's
    rules.[^104] Council Tree states that this larger bidding credit
    will provide smaller businesses with a measure of needed assistance
    in becoming Commission licensees.[^105] CTIA opposes Council Tree's
    proposal to add a third tier of bidding credit, asserting that the
    bidding credits that the Commission adopted in the *AWS-1 Service
    Rules Order* were set at an appropriate level and that the
    Commission's secondary markets policies permit entrants seeking to
    implement more localized services to obtain either short term or
    long term leases of AWS spectrum.[^106] In its Reply to CTIA's
    Opposition, Council Tree asserts that the Commission developed the
    35 percent bidding credit in its Part 1 standardized schedule to
    help achieve the objectives set forth in Section 309(j) of the
    Communications Act when other measures to promote the participation
    of designated entities in competitive bidding are not offered.[^107]

33. We do not find that Council Tree has presented any grounds to
    warrant reconsideration of the Commission's decision to establish
    two tiers of bidding credits in the 1710-1755 MHz and 2110-2155 MHz
    bands. In the *AWS-1 Service Rules Order*, the Commission adopted
    the same two tiers of bidding credits for licenses in the 1710-1755
    MHz and 2110-2155 MHz bands that it adopted for broadband PCS.[^108]
    In reviewing the record before it, the Commission concluded that
    licensees in these bands will be presented with issues and costs
    similar to those presented to broadband PCS licensees, including
    those involved in relocating incumbents, and developing markets,
    technologies, and services.[^109] Accordingly, consistent with its
    practice of establishing service-specific small business size
    standards the Commission defined a "small business" as an entity
    with average annual gross revenues for the preceding three years not
    exceeding \$40 million, and a "very small business" as an entity
    with average annual gross revenues for the preceding three years not
    exceeding \$15 million. Consistent with the standardized schedule of
    bidding credits at 47 C.F.R. § 1.2110(f)(2), the Commission provided
    "small businesses" with a bidding credit of 15 percent and "very
    small businesses" with a bidding credit of 25 percent. It is notable
    that in response to the Commission's *AWS-1 Service Rules NPRM,*
    commenters did not oppose the Commission's proposal for two tiers of
    bidding credits and did not suggest an alternative bidding credit
    regime. Upon reconsideration, we do not find that Council Tree has
    provided any basis for revisiting the Commission's determination in
    the *AWS-1 Service Rules Order* .[^110]

34. Pursuant to its service specific approach to establishing small
    business size standards and associated bidding credits, in
    establishing designated entity provisions for AWS-1, the Commission
    considered the distinctive characteristics of this service,
    including the capital requirements for the variety of licenses to be
    available in the band plan. In adopting the AWS-1 band plan, the
    Commission noted that in order to meet competing needs and to
    provide maximum flexibility, it would license the 1710-1755 MHz and
    2110-2155 MHz bands using a range of geographic licensing areas,
    including large regional licensing areas, smaller licensing areas,
    and local licensing areas, across multiple spectrum blocks.[^111]
    The Commission stated that by adopting such varied geographic
    licensing areas, it would promote the policy goal of disseminating
    licenses among a wide variety of applicants.[^112] The revised band
    plan that we adopt in this *Order on Reconsideration* increases the
    variety of licenses to meet the needs of potential new entrants as
    well as the needs of incumbents seeking additional spectrum. We
    believe that such a band plan creates a playing field in which the
    range of available licenses should encourage competition in each
    block among similarly sized applicants. We do not believe that the
    adoption of a third small business size standard and bidding credit
    tier is necessary in this proceeding, where our licensing scheme
    provides a broad spectrum of regional and small market areas across
    multiple spectrum blocks which should result in the dissemination of
    licenses to a diverse range of entrants.

35. In looking at all of the characteristics and the capital
    requirements of the AWS service as well as the variety and number of
    licenses that will become available for this spectrum, we find that
    the two small business size standards and corresponding tiers of
    bidding credits adopted in the *AWS-1 Service Rules Order* are
    appropriate and offer sufficient incentives for smaller businesses
    to compete effectively. We further find that the distinctive
    characteristics of the AWS-1 service make inapposite the cases cited
    by Council Tree in support of its request for a third bidding credit
    tier. As noted above, unlike a number of those cases, the AWS-1 band
    plan provides a broad spectrum of regional and small market areas
    across multiple spectrum blocks. [^113] Moreover, in none of the
    cases cited did the Commission face circumstances or characteristics
    substantially similar to those in AWS-1.[^114]

36. We also believe that the adoption of two tiers of bidding credits is
    appropriate in light of the Commission's establishment of secondary
    markets policies which, among other things, clarifies policies that
    facilitate the entry of entities seeking to implement more localized
    services.[^115] The adoption of spectrum leasing policies applicable
    to AWS spectrum and the ability of licensees to partition and
    disaggregate their licenses and fully participate in the secondary
    spectrum markets should facilitate the ability of wireless licensees
    to transfer or lease spectrum usage rights to third parties. In
    looking at all of these factors as well as our revised band plan
    which creates additional smaller licenses, we find that it is
    appropriate to affirm the Commission's conclusion in the *AWS-1
    Service Rules Order* and maintain two tiers of bidding credits for
    the 1710-1755 MHz and 2110-2155 MHz bands.

37. *Three-Million Dollar Net Worth Limit*. We find that Council Tree
    has not presented any persuasive arguments to support the adoption
    of its proposal to impose a \$3 million net worth limit on
    individual controlling interests of a designated entity.[^116] The
    Commission has generally excluded personal net worth, including
    personal income and assets, from attribution for purposes of
    eligibility for designated entity provisions. The Commission has
    considered and rejected personal net worth limitations several times
    in the past for a number of reasons.[^117] In making this
    determination, the Commission observed that personal net worth
    limits are difficult to apply and enforce and may be easily
    manipulated.[^118] The Commission explained it did not believe that
    eliminating the personal net worth limits would facilitate
    significant encroachment by \"deep pockets\" that can be accessed by
    wealthy individuals through affiliated entities because, in those
    instances where access to such resources would create an unfair
    advantage, the affiliation rules will continue to apply and require
    that such an entity\'s assets and revenues be included in
    determining an applicant\'s size. The Commission emphasized that it
    believed the affiliation rules make the personal net worth rules
    largely unnecessary because most wealthy individuals are likely to
    have their wealth closely tied to ownership of another
    business.[^119]

38. We find that the factual predicate that underpins our prior
    decisions to reject net worth limitations is fully applicable today.
    Council Tree's proposal to add a personal net worth test for DE
    eligibility at this time does not appear to add sufficient value to
    justify imposition of an additional regulatory burden and
    administrative cost. We believe that imposing such a limitation
    could limit the ability of small businesses to raise capital without
    an overriding public interest benefit and thereby undermine the
    purpose of our designated entity provisions to promote small
    business participation in the highly competitive telecommunications
    marketplace. Moreover, our attribution and affiliation rules will
    continue to apply, and already serve to address Council Tree's
    concerns.[^120] As the Commission has stated previously, we do not
    believe that the lack of a personal net worth limitation will
    facilitate encroachment by "deep pockets" that can be accessed by
    wealthy individuals through affiliated entities because, in those
    instances where access to such resources would create an unfair
    advantage, the Commission's affiliation rules will require that such
    an entity's assets and revenues be included in determining an
    applicant's size. In light of Commission precedent disfavoring
    individual net worth limitations, coupled with the dearth of any new
    information or justification in the record that brings this
    precedent into question, we find Council Tree's argument that its
    proposal will limit designated entity benefits to only those
    entities that merit assistance neither relevant nor persuasive. As
    such, we reject Council Tree's individual net worth proposal.

39. *Additional 10 Percent Bidding Credit*. Similarly, we find that the
    record contains virtually no evidence to justify adoption of Council
    Tree's proposal that the Commission provide an additional 10 percent
    bidding credit to designated entities that provide service to
    underserved segments of the population[^121] In describing its
    proposal, Council Tree suggests that to qualify for such a bidding
    credit, an applicant be required to submit as part of its long-form
    application (FCC Form 601), a business plan showing its intent to
    target lower income and minority group customers for the provision
    of services with its licensed spectrum. Council Tree further
    proposes that the designated entity be required to submit to the
    Commission "a demonstration, through statistically-valid sampling,
    that it had met the presumption of targeting on the third
    anniversary of the date of the corresponding AWS license
    grant."[^122]

40. First, we note that Council Tree's proposal would duplicate in large
    part the Commission's tribal land bidding credit program, which
    targets a very substantial part of the nation's underserved
    population, and has the advantage of being available to any winning
    bidder that provides service to a tribal land, regardless of whether
    it is a designated entity. Council Tree has provided no evidence to
    support a finding that an additional 10 percent bidding credit would
    result in the provision of service to underserved populations
    outside of tribal lands. In addition, because Council Tree's
    proposed bidding credit is intended to promote service to
    underserved populations and is not based on the characteristics of
    the licensee, there is inadequate justification to adopt such a
    bidding credit that is limited to designated entities. Moreover, we
    find that the conditions imposed on the recipient of the proposed
    bidding credit enhancement could be administratively burdensome and
    very difficult to enforce, requiring the Commission to, among other
    things, review the winning bidder's business plan as well as monitor
    and verify the licensee's subsequent activities. Given the current
    availability of a bidding credit to winning bidders that will
    provide service to tribal lands, and the lack of sufficient data to
    support Council Tree's proposal, we decline to adopt it.

41. *Investment Restriction*. As noted above, Council Tree proposes that
    the Commission restrict large incumbent wireless service providers
    from having any material investment, financial, or operating
    relationship with a designated entity if they have licenses with
    material geographic overlap.[^123] Among other things, Council Tree
    proposes that the Commission define a large, incumbent wireless
    service provider as an entity (including all parties under common
    control) that (a) is, or has an attributable interest in, a CMRS or
    AWS licensee whose licensed service area has significant overlap in
    the geographic area to be licensed to the new entrant applicant
    and (b) has average gross wireless revenues for the preceding three
    years exceeding \$5 billion. We believe that Council Tree's proposal
    warrants further study by the Commission. However, because Council
    Tree did not raise this issue in its reconsideration petition and
    instead filed this proposal in an *ex parte* extremely late in this
    proceeding, the record on this issue is undeveloped. We therefore
    reject Council Tree's proposal. Nevertheless, we plan to examine
    this proposal in a separate proceeding.

## Technical Rules

42. In the *AWS-1 Service Rules Order*, the Commission stated that an
    important goal in the AWS proceeding is to try, to the extent
    possible, to provide the same technical criteria for AWS equipment
    as currently exist for broadband PCS.[^124] The Commission found
    that it would be best to establish the same method for limiting
    transmitter output power in the AWS bands that is currently used for
    measuring transmitter output power in the broadband PCS bands.[^125]
    The Commission adopted a peak transmitter output power of 100 watts
    for fixed and base stations transmitting in the 2110-2155 MHz
    band.[^126]

43. Powerwave asserts in its petition that the Commission intended to
    adopt the same transmitter output power limitations for AWS that
    apply to broadband PCS systems in Section 24.232, but that the
    language in Section 27.50(d)(1) sets a transmitter output power
    limit that is more restrictive than the limit applicable to
    broadband PCS.[^127] Powerwave therefore asks that we reconsider
    Section 27.50(d)(1) governing the transmitter output power of AWS
    stations operating in the 2110-2155 MHz band, and change the rule so
    that it is the same as the rule governing PCS stations.

44. In the recently released *Biennial Regulatory Review Report and
    Order*, we amended Sections 24.232(a)-(b) to completely eliminate
    the base station transmitter power output limits for PCS
    stations.[^128] Consistent with the Commission's goal of trying to
    provide the same technical criteria for AWS equipment as currently
    exist for broadband PCS, we revise Section 27.50(d)(1) to similarly
    eliminate the transmitter output power limits for AWS base and fixed
    stations.[^129]

# PROCEDURAL MATTERS

## Supplemental Final Regulatory Flexibility Analysis

45. Consistent with the Regulatory Flexibility Act, *see* [5 U.S.C. §
    604](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=5USCAS604&FindType=L&AP=&mt=Communications&fn=_top&sv=Full&vr=2.0&rs=WLW5.04),
    the Commission has prepared a Supplemental Final Regulatory
    Flexibility Analysis (Supplemental FRFA) of the possible significant
    economic impact on small entities of the rules amended in this
    document. The Supplemental FRFA is set forth in Appendix C. The
    Commission will send a copy of this Order on Reconsideration,
    including a copy of the Supplemental FRFA, in a report to Congress
    and the Government Accountability Office pursuant to the
    Congressional Review Act.[^130] In addition, the Order on
    Reconsideration and the Supplemental FRFA will be sent to the Chief
    Counsel for Advocacy of the SBA, and will be published (in full or
    in summary form) in the Federal Register.[^131]

## Paperwork Reduction Act of 1995 Analysis

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

## Authority

47. This action is taken pursuant to Sections 1, 2, 4(i), 201, 214, 301,
    302, 303, 307, 308, 309, 310, 319, 324, 332, and 333 of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 152,
    154(i), 301, 302, 303, 307, 308, 309, 310, 319, 324, 332, and 333.

## Further Information

48. For further information, contact Peter Corea of the Broadband
    Division, Wireless Telecommunications Bureau, at 202-418-BITS (2487)
    (voice) or 202-418-1169 (TTY).

#  ORDERING CLAUSES

49. Accordingly, IT IS ORDERED that the Petition for Reconsideration
    filed by Rural Communications Association IS GRANTED TO THE EXTENT
    INDICATED HEREIN, and IS OTHERWISE DENIED.

50. IT IS FURTHER ORDERED that the Petition for Reconsideration filed by
    T-Mobile, USA, Inc. IS GRANTED TO THE EXTENT INDICATED HEREIN, and
    IS OTHERWISE DENIED.

51. IT IS FURTHER ORDERED that the Petition for Reconsideration filed by
    Council Tree Communications, Inc. IS DENIED.

52. IT IS FURTHER ORDERED that the Petition for Reconsideration filed by
    Powerwave Technologies, Inc. IS GRANTED TO THE EXTENT INDICATED
    HEREIN.

53. IT IS FURTHER ORDERED that Part 27 of the Commission's Rules is
    amended as set forth in Appendix B.

54. IT IS FURTHER ORDERED that the Petition for Reconsideration filed by
    American Petroleum Institute and United Telecom Council IS DENIED TO
    THE EXTENT INDICATED HEREIN.

55. IT IS FURTHER ORDERED that the rule amendments made by this Order
    and specified in Appendix B SHALL BECOME EFFECTIVE 30 days after the
    date of their publication in the Federal Register.

56. IT IS FURTHER ORDERED that the Commission's Consumer and
    Governmental Affairs Bureau, Reference Information Center, SHALL
    SEND a copy of this Order, including the Supplemental Final
    Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
    of the Small Business Administration.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch,

    Secretary

    **APPENDIX A: LIST OF COMMENTERS**

    [Petitions for Reconsideration]{.underline}

    American Petroleum Institute and United Telecom Council (API/UTC)

    Council Tree Communications, Inc.

    Powerwave Technologies, Inc.

    Rural Communications Association (RCA)

    T-Mobile USA, Inc.

    Wireless Communications Association International (WCAI)

    [Oppositions/Replies]{.underline}

    Council Tree Communications, Inc.

    CTIA- The Wireless Association

    Motorola, Inc.

    Rural Communications Association

    Wireless Communications Association International

    [*Ex Parte* Communications]{.underline}

    Alcatel

    American Women in Radio and Television

    Bethel Native Corporation

    Catalyst Investors, LLC

    Centennial Communications Corp.

    Chugach Alaska Corporation

    Cingular Wireless

    Cook Inlet Region, Inc.

    Coral Wireless, LLC

    CSM Wireless, LLC

    CTIA- The Wireless Association

    Doyon, Limited

    Ericsson, Inc.

    Leap Wireless International, Inc.

    MetroPCS Communications, Inc.

    National Telecommunications Cooperative Association (NTCA)

    Nokia, Inc.

    Nortel

    Organization for the Promotion and Advancement of Small
    Telecommunications Companies (OPASTCO)

    PCIA---the Wireless Infrastructure Association (PCIA)

    PC Management, Inc.

    Qualcomm, Inc.

    Royal Street Communications, LLC

    Rural Communications Association

    Rural Telecommunications Group (RTG)

    SR Capital Advisors

    SunCom Wireless Operating Company, LLC

    T-Mobile USA, Inc.

    United States Cellular Corp.

    Verizon Wireless

    **APPENDIX B: FINAL RULES**

**PART 27 -- MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES**

1.  The authority citation for Part 27 continues to read as follows:

AUTHORITY: 47 U.S.C. 154, 301, 302, 303, 307, 309, 332, 336, and 337
unless otherwise noted.

#####  {#section .unnumbered}

2.  Section 27.5 is revised to amend section (h) to read as follows:

**§ 27.5   Frequencies.**

\* \* \* \* \*

\(h\) *1710--1755 MHz and 2110--2155 MHz bands.* The following
frequencies are available for licensing pursuant to this part in the
1710--1755 MHz and 2110--2155 MHz bands:

\(1\) Three paired channel blocks of 10 megahertz each are available for
assignment as follows:

Block A: 1710--1720 MHz and 2110--2120 MHz;

Block B: 1720--1730 MHz and 2120--2130 MHz; and

Block F: 1745--1755 MHz and 2145--2155 MHz.

\(2\) Three paired channel blocks of 5 megahertz each are available for
assignment as follows:

Block C: 1730--1735 MHz and 2130--2135 MHz;

Block D: 1735--1740 MHz and 2135--2140 MHz; and

Block E: 1740--1745 MHz and 2140--2145 MHz.

3\. Section 27.6 is revised to amend section (h) to read as follows:

**§ 27.6   Service areas.**

\* \* \* \* \*

\(h\) *1710--1755 and 2110--2155 MHz bands.* AWS service areas for the
1710--1755 MHz and 2110--2155 MHz bands are as follows:

\(1\) Service areas for Block A (1710--1720 MHz and 2110--2120 MHz) are
based on cellular markets comprising Metropolitan Statistical Areas
(MSAs) and Rural Service Areas (RSAs) as defined by Public Notice Report
No. CL--92--40 "Common Carrier Public Mobile Services Information,
Cellular MSA/RSA Markets and Counties," dated January 24, 1992, DA
92--109, 7 FCC Rcd 742 (1992), with the following modifications:

\(i\) The service areas of cellular markets that border the U.S.
coastline of the Gulf of Mexico extend 12 nautical miles from the U.S.
Gulf coastline.

\(ii\) The service area of cellular market 306 that comprises the water
area of the Gulf of Mexico extends from 12 nautical miles off the U.S.
Gulf coast outward into the Gulf.

\(2\) Service areas for Blocks B (1720--1730 MHz and 2120--2130 MHz) and
C (1730--1735 MHz and 2130--2135 MHz) are based on Economic Areas (EAs)
as defined in paragraph (a) of this section.

\(3\) Service areas for blocks D (1735--1740 MHz and 2135--2140 MHz), E
(1740--1745 MHz and 2140--2145 MHz) and F (1745--1755 MHz and 2145--2155
MHz) are based on Regional Economic Area Groupings (REAGs) as defined by
paragraph (a) of this section.

4\. Section 27.11 is revised to amend section (i) to read as follows:

**§ 27.11   Initial authorization.**

\* \* \* \* \*

\(i\) *1710--1755 MHz and 2110--2155 MHz bands.* Initial authorizations
for the 1710--1755 MHz and 2110--2155 MHz bands shall be for 5 or 10
megahertz of spectrum in each band in accordance with §27.5(h) of this
part.

\(1\) Authorizations for Block A, consisting of two paired channels of
10 megahertz each, will be based on those geographic areas specified in
§27.6(h)(1).

\(2\) Authorizations for Block B, consisting of two paired channels of
10 megahertz each, will be based on those geographic areas specified in
§27.6(h)(2).

\(3\) Authorizations for Block C, consisting of two paired channels of 5
megahertz each, will be based on those geographic areas specified in
§27.6(h)(2).

\(4\) Authorizations for Blocks D, consisting of two paired channels of
5 megahertz each, will be based on those geographic areas specified in
§27.6(h)(3).

\(5\) Authorizations for Blocks E, consisting of two paired channels of
5 megahertz each, will be based on those geographic areas specified in
§27.6(h)(3).

\(6\) Authorizations for Block F, consisting of two paired channels of
10 megahertz each, will be based on those geographic areas specified in
§27.6(h)(3).

5\. Section 27.50 is revised to amend section (d) to read as follows:

#####  {#section-1 .unnumbered}

##### Subpart C---Technical Standards {#subpart-ctechnical-standards .unnumbered}

 27.50   Power and antenna height limits.

\* \* \* \* \*

\(d\) The following power and antenna height requirements apply to
stations transmitting in the 1710--1755 MHz and 2110--2155 MHz bands:

\(1\) The power of each fixed or base station transmitting in the
2110--2155 MHz band and located in any county with population density of
100 or fewer persons per square mile, based upon the most recently
available population statistics from the Bureau of the Census, is
limited to a peak equivalent isotropically radiated power (EIRP) of 3280
watts. The power of each fixed or base station transmitting in the
2110--2155 MHz band from any other location is limited to a peak EIRP of
1640 watts. A licensee operating a base or fixed station utilizing a
power of more than 1640 watts EIRP must coordinate such operations in
advance with all Government and non-Government satellite entities in the
2025--2110 MHz band. Operations above 1640 watts EIRP must also be
coordinated in advance with the following licensees within 120
kilometers (75 miles) of the base or fixed station: all Multipoint
Distribution Service (MDS) licensees authorized under Part 21 in the
2155--2160 MHz band and all AWS licensees in the 2110--2155 MHz band.

**APPENDIX C**

**SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act of 1980, as amended
(RFA),[^132] an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the *Notice of Proposed Rulemaking* in WT Docket No.
02-353 (*NPRM*).[^133] The Commission sought written public comment on
the proposals in the *NPRM*, including comment on the IRFA. In addition,
a Final Regulatory Flexibility Analysis (FRFA) was incorporated in the
*Report and Order* in WT Docket No. 02-353 (*Report and Order).*[^134]
This present Supplemental Final Regulatory Flexibility Analysis
(Supplemental FRFA) for the Order on Reconsideration conforms to the
RFA.[^135]

##  Need for, and Objectives of, the Amended Rules

The Order on Reconsideration responds to petitions for reconsideration
of the *Report and Order* adopting service rules for Advanced Wireless
Services in the 1710-1755 and 2110-2155 MHz bands (AWS-1).[^136] The
need for and objectives of the rules adopted in this Order on
Reconsideration are the same as those discussed in the FRFA for the
*Report and Order*. In the *Report and Order,* the Commission adopted
provisions for application, licensing, operating and technical rules,
and for competitive bidding for AWS-1. As adopted, the rules provide
flexibility to licensees to provide any fixed or mobile service that is
consistent with the allocations for this spectrum and, in order to
accommodate differing needs, the band plan includes both localized and
regional geographic service areas and symmetrically paired spectrum
blocks with pairings composed of different bandwidths. The
market-oriented licensing framework for these bands will ensure that
this spectrum is efficiently utilized and will foster the development of
new and innovative technologies and services, as well as encourage the
growth and development of broadband services, ultimately leading to
greater benefits to consumers.

On reconsideration, we take the following actions: (1) modify the band
plan to increase the amount of spectrum available to smaller and rural
wireless carriers; (2) break a 30 MHz block into smaller components that
can be aggregated; (3) offer an additional block licensed on an Economic
Area (EA) basis to help enhance the mixture of large and small
geographic area licenses available to applicants; and (4) eliminate the
transmitter output power limits for AWS base and fixed stations to make
the rule consistent with the rule governing PCS stations.[^137] The
Commission affirmed its decision in the *AWS-1 Service Rules Order* not
to set aside spectrum for designated entities in the 1710-1755 and
2110-2155 MHz bands and also affirmed its decision to maintain two
levels of bidding credits.

## Summary of Significant Issues Raised by Public 

We received no comments directly in response to the IRFA or FRFA in this
proceeding. We did, however, consider the potential impact of our rules
on smaller entities. For example, in the present Order, we have adopted
certain changes in the band plan requested by the Rural Cellular
Association (RCA) and the Rural Telecommunications Group (RTG), in
conjunction with other commenting parties, which increase the amount of
spectrum and number of spectrum blocks licensed on a smaller geographic
basis. These changes are expected to increase opportunities for local,
largely rural carriers, to be able to afford adequate spectrum and to
utilize a building block approach to suit their particular needs.

We also note that in the *Report and Order,* the Commission decided to
encourage participation by smaller and rural entities by adopting
smaller geographic licensing areas such as MSAs and RSAs, as well as
smaller spectrum block sizes, rather than adopting set-asides or
eligibility restrictions.[^138] The Commission reasoned that opening the
bands to as wide a range of applicants as possible would encourage
entrepreneurial efforts to develop new technologies and services, while
helping ensure the spectrum is used efficiently.[^139]

In a petition for reconsideration, Council Tree urged the Commission to
reconsider its decision not to adopt a set aside for designated entities
in the 1710-1755 and 2110-2155 MHz bands or, in the alternative, to
adopt a third tier of bidding credit.  In a separate ex parte filing,
Council Tree also made certain proposals relating to designated entity
status and benefits. As noted above, while we affirm the
Commission\'s decision in the *AWS-1 Service Rules Order* and decline to
amend the designated entity rules in this proceeding, we will examine,
in a separate action, Council Tree\'s proposal to restrict large
incumbent wireless service providers from having any material
investment, financial, or operating relationship with a designated
entity.

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

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.[^140] The RFA generally
defines the term "small entity" as having the same meaning as the terms
"small business," "small organization," and "small government
jurisdiction."[^141] In addition, the term "small business" has the same
meaning as the term "small business concern" under the Small Business
Act.[^142] A small business 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.[^143]
Nationwide, there are approximately 22.4 million small businesses,
total, according to the SBA data.[^144]

A small organization is generally "any not-for-profit enterprise which
is independently owned and operated and is not dominant in its
field."[^145] Nationwide, as of 2002, there were approximately 1.6
million small organizations.[^146] Last, the definition of "small
governmental jurisdiction" is one with populations of fewer than
50,000.[^147] The term "small governmental jurisdiction" is defined as
"governments of cities, towns, townships, villages, school districts, or
special districts, with a population of less than fifty thousand."[^148]
As of 1997, there were about 87,453 governmental jurisdictions in the
United States.[^149] This number includes 39,044 county governments,
municipalities, and townships, of which 37,546 (approximately 96.2%)
have populations of fewer than 50,000, and of which 1,498 have
populations of 50,000 or more. Thus we estimate the number of small
governmental jurisdictions overall to be 84,098 or fewer.

The rules amended in the Order on Reconsideration affect applicants who
wish to provide service in the 1710-1755 MHz and 2110-2155 MHz bands. As
discussed in the *Report and Order,* we do not know precisely the type
of service that a licensee in these bands might seek to provide.[^150]
Nonetheless, we anticipate that the services that will be deployed in
these bands may have capital requirements comparable to those in the
broadband Personal Communications Service (PCS), and that the licensees
in these bands will be presented with issues and costs similar to those
presented to broadband PCS licensees. Further, at the time the broadband
PCS service was established, it was similarly anticipated that it would
facilitate the introduction of a new generation of service. Therefore,
the *Report and Order* adopted the same small business size standards
here that the Commission adopted for the broadband PCS service. In
particular, the *Report and Order* defined a "small business" as an
entity with average annual gross revenues for the preceding three years
not exceeding \$40 million, and a "very small business" as an entity
with average annual gross revenues for the preceding three years not
exceeding \$15 million. The *Report and Order* also provided small
businesses with a bidding credit of 15 percent and very small businesses
with a bidding credit of 25 percent.

We do not yet know how many applicants or licensees in these bands will
be small entities. Thus, the Commission assumes, for purposes of this
Supplemental FRFA, that all prospective licensees are small entities as
that term is defined by the SBA or by our three special small business
size standards for these bands. Although we do not know for certain
which entities are likely to apply for these frequencies, we note that
the 1710-1755 MHz and 2110-2155 MHz bands are comparable to those used
for cellular service and personal communications service.

**Wireless Telephony Including Cellular, Personal Communications Service
(PCS) and SMR Telephony Carriers.** The SBA has developed a small
business size standard for wireless small businesses within the two
separate categories of **Paging**[^151] and **Cellular and Other
Wireless Telecommunications**. [^152] Under both SBA categories, a
wireless business is small if it has 1,500 or fewer employees. We can
assess small business prevalence by using data provided annually to the
Commission by Telecommunications Relay Service (TRS) carriers. The TRS
data compilation, published in the Commission's *Trends in Telephone
Service*, groups together cellular, personal communications services,
and specialized mobile radio telephony carriers into a single category
called "Wireless Telephony." As noted above, under the pertinent SBA
small business size standard, a wireless business is small if it has
1,500 or fewer employees.[^153] According to *Trends in Telephone
Service* data, 447 carriers have reported that they provide Wireless
Telephony.[^154] Of that total, an estimated 245 are small providers,
under the SBA size standard. Thus, we can estimate that the majority of
such businesses are small. In addition, the TRS data include a larger
reporting category, "Wireless Service Providers," that includes the
above entities plus paging, data, and other mobile providers. According
to the *Trends in Telephone Service* data, 975 carriers have reported
that they are Wireless Service Providers.[^155] Of that total, an
estimated 767 are small providers, under the SBA size standard. Thus, we
can again estimate that the majority of such businesses are small.
Consequently, the Commission estimates that most wireless service
providers, as defined herein, are small.

## Description of Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities

Applicants for AWS licenses in the 1710-1755 MHz and the 2110-2155 MHz
bands will be required to submit short-form auction applications using
FCC Form 175.[^156] In addition, winning bidders must submit long-form
license applications through the Universal Licensing System using Form
601,[^157] FCC Ownership Disclosure Information for the Wireless
Telecommunications Services using FCC Form 602, and other appropriate
forms.[^158] These requirements were established in the *Report and
Order* and are not modified by the Order on Reconsideration.

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

The RFA requires an agency to describe any significant alternatives that
it has considered in reaching its adopted 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.[^159]

We have taken significant steps to reduce burdens on small entities
wherever possible, and considered various alternatives in this regard.
To provide opportunities for small entities to participate in any
auction that is held, we provide bidding credits for small businesses
and very small businesses. The bidding credits adopted are 15 percent
for small businesses and 25 percent for very small businesses. Although
petitioner Council Tree requested set asides for designated entities in
the 1710-1755 MHz and 2110-2155 MHz bands, we have found that the use of
tiered or graduated small business size standards and bidding credits is
useful in furthering our mandate under Section 309(j) of the
Communications Act to promote opportunities for, and disseminate
licenses to, a wide variety of applicants. As discussed above in the
Summary of Significant Issues Raised by Public, we decline to supplement
the incentives for small business participation that the Commission has
already adopted by foreclosing any of the licenses to other bidders.

Regarding our decisions to modify slightly the licensing approach to
provide additional spectrum licensed on an RSA/MSA basis and to add an
additional block offered on an EA basis, we anticipate that on balance
small entities will benefit from this licensing approach. Geographic
licensing in these bands supports the Commission's overall spectrum
management goals in that it allows licensees to quickly respond to
market demand. Small entities that acquire spectrum that is licensed on
a geographic area basis will benefit from such flexibility. Moreover, we
have attempted to strike a balance by using varying sizes of geographic
areas. For example, small entities may be more interested in spectrum
licensed using smaller geographic areas rather than in spectrum licensed
on a nationwide or large regional basis. Consequently, we have decided
to include licensing areas based on MSAs and RSAs, which permit entities
who are only interested in serving rural areas to acquire spectrum
licenses for these areas alone, and avoid acquiring spectrum licenses
with high population densities that make purchase of license rights too
expensive for these types of entities. MSAs and RSAs allow entities to
mix and match rural and urban areas according to their business plans.
These types of smaller geographic service areas provide entry
opportunities for smaller carriers, new entrants, and rural telephone
companies. Their inclusion in our band plan will foster service to rural
areas and tribal lands and thereby bring the benefits of advanced
services to these areas.[^160] Smaller service providers could acquire
an RSA and create a new service area or they could expand an existing
service territory or supplement the spectrum they are licensed to
operate in by adding an RSA. They could also combine a few MSAs and RSAs
to create a larger but localized service territory. An alternative to
our decision to use geographic areas for licensing would have been to
employ a site-by-site licensing approach. Site-by-site licensing,
however, would be an inefficient licensing method due to a greater
strain on Commission resources and less flexibility afforded to
licensees.

We have also made adjustments to the band plan to license the spectrum
in different bandwidths. We do not believe this will disadvantage small
entities. In fact, we have decided that the RSA/MSA license areas will
be licensed as paired spectrum at 1710-1720 and 2110-2120 for a total of
734 licenses, and we have decided that the B and C blocks will be
licensed as paired 10- and 5-MHz blocks, respectively, on an EA basis.
These block sizes should provide flexibility to licensees in
constructing their systems. Our approach provides maximum flexibility
for both small and large entities to offer a wide range of
communications services.

## Report to Congress

The Commission will send a copy of the Order, including this
Supplemental FRFA, in a report to be sent to Congress and the Government
Accountability Office pursuant to the Congressional Review Act.[^161] In
addition, the Commission will send a copy of the Order, including the
Supplemental FRFA, to the Chief Counsel for Advocacy of the Small
Business Administration. A copy of the Order and Supplemental FRFA (or
summaries thereof) will also be published in the Federal Register.[^162]

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

Re: *Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1
GHz Bands*, Order on Reconsideration (WT Docket No. 02-353)

By our actions in this order, the Commission takes another step forward
in our continuing efforts to make spectrum available for wireless
broadband services.

Adoption of this order will allow the Commission to move forward
expeditiously to auction 90 MHz of wireless spectrum. Making this large
swath of spectrum available will enable carriers to provide a wide range
of new and better services, including in rural areas. The revised band
plan also incorporates a recommendation of the Commission's Advisory
Committee on Diversity to identify spectrum covering small geographic
areas, which promotes participation by minorities in emerging technology
sectors.

Perhaps most importantly, I expect much of this spectrum to be used for
new wireless broadband services. Adoption of this item thus brings us
closer to achieving our goal of universal, affordable broadband access.

STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

*RE: Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1
GHz Bands*, Order on Reconsideration (WT Docket No. 02-353)

            I am committed to sticking to our schedule and conducting
the AWS auction as soon as possible.  The changes that we make today to
the band plan will make this a better auction.  The band plan balances
the needs of different types of wireless companies by offering both
geographically large and small auction areas.  I think we came up with a
solution that gives everyone a chance to participate meaningfully in the
auction, a result that will serve both rural and urban consumers.  We
all want to make this spectrum available as quickly as possible, and we
take a big step toward that goal today.

 

            The Order also announces that the Commission will initiate a
NPRM on the question of whether we should close a potentially troubling
loophole in the designated entity program.  The DE program is designed
to create opportunities for smaller carriers to obtain the spectrum
resources needed to bring new services to consumers.  The program is
often particularly useful in rural areas.  In this auction, carriers
that qualify under the DE program as small companies will receive a 25
percent auction discount.  That discount can add up to millions of
dollars. 

 

            I strongly support the DE program and consider it a powerful
tool that can create new competition and entry by small businesses.  But
I also believe that we must be vigilant and guard against misuse of the
program.  Some entities cast themselves as small companies to qualify
for auction discounts, having already entered into agreements to lease
the spectrum rights they win to industry giants that themselves do not
qualify for the discount.  I am glad that we are exploring whether we
should limit the ability of companies with billions of dollars in
revenues to effectively receive discounts intended for small companies
by entering into such arrangements.  The DE program was initiated to
create new competition and to give small entrepreneurs a chance to bring
innovations to consumers.  If there is a loophole that could result in
millions of dollars less in auction revenues without these goals being
served, we should act expeditiously to protect the DE program.

 

            Our largest auction in many years is going to be held in
June.  We need to put this NPRM out immediately, compile the record, and
develop whatever action plan may be necessary if it is determined that
new protections are needed for the DE program---well before the auction
is held.  We need not delay this auction, but at the same time we must
protect taxpayer money.  I see no reason -- if we move quickly -- why we
can't achieve both of these goals.

**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

*Re: Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1
GHz Bands*, Order on Reconsideration (WT Docket No. 02-353)

I have repeatedly said the FCC needs to improve access to spectrum by
those providers who want to offer service to traditionally under-served
areas. That is why I pressed for the inclusion of both Economic Area
(EA) as well as Cellular Market Area (CMA) licenses in the Advanced
Wireless Services (AWS) Report and Order adopted last year.

I am very pleased that my initial push for EA licenses has been so well
received by a number of carriers and manufacturers. Since our original
decision, diverse interests have come together to actively support an
even better balance between smaller and larger license areas through a
variety of changes to the AWS band plan, many of which we adopt today.

All of this interest has resulted in a full and complete record that
eminently supports our decision-making process. As a result, we have
unanimous agreement at the Commission to make changes to our band plan
that specifically respond to suggestions made by a number of different
groups within the wireless industry. In particular, we are making
additional spectrum available on both an EA and CMA basis.

I certainly recognize that there is value in offering larger service
areas for economies of scale and to facilitate larger scale deployments,
and our Order accommodates this need. But the public interest demands
that we find a balance in developing a band plan, and we have done so
today, particularly in light of recent consolidation among some of the
largest wireless carriers since we first considered the issue. Also, in
modifying our band plan, we move another step closer to seeing a more
diverse group of providers offer a new generation of wireless services
in this country.

I also am very pleased that in this item we commit to launching a
separate proceeding to explore the narrow issue of limiting the ability
of designated entities (DEs) who have a relationship with the largest
wireless carriers from having access to bidding credits in this and
future auctions. The stakes are simply too high to not allow a further
question on whether or not we should allow this potential loophole to
apply in the upcoming AWS auction. Considering this issue is
particularly important given the dramatic scope of consolidation in the
wireless industry in just the last 12 months and the ever-increasing
market share of the largest carriers (up to 90% by some estimates).

Of course, we do not want to see the AWS auction unnecessarily delayed.
But there is at least ten months until then, and if we all agree to move
fast, we surely can resolve this matter in time. Indeed, there are a
number of variables, both within and outside the Commission's control
that may independently affect the timing of the auction, such as the
submission of NTIA relocation costs. There also are MDS relocation
issues that have not yet been resolved. So we have an open window, but
we have to act quickly. And I thank the Chairman for agreeing to move
forward on this important issue. Immediate action truly is important to
ensure that there is as little uncertainty as possible as interested
parties prepare for this landmark auction.

I look forward to seeing the record in this proceeding because, at this
time, it is unclear to me why the Commission allows large wireless
companies to partner with DEs. This is even more important in the AWS
auction where auction proceeds must be sufficient to cover government
relocation costs. Also, the AWS auction should raise \$15 billion
dollars by some estimates for the federal Government at a time our
budget is under ever increasing pressure. Do we want the nation's
largest wireless carriers partnering with DEs to get a 25% discount so
that auction revenues to the U.S. treasury could potentially be reduced
by well over a billion dollars? How is the public interest served in
that outcome?

At a time of wholesale consolidation in the industry, it seems unwise to
allow wireless giants to access a discount by being allowed to partner
with a supposedly small business. Allowing access to discounts by the
country's largest wireless businesses, at the expense of taxpayers,
seems completely at odds with a program whose purpose is to help small
telecommunications businesses get a foothold so that they can compete on
a more level playing field with more established companies.

I look forward to working with my colleagues and the Bureau to making
sure this auction is as successful as it can possibly be.

[^1]: Service Rules for Advanced Wireless Services in the 1.7 GHz and
    2.1 GHz Bands, WT Docket No. 02-353, 18 FCC Rcd 25162 (2003) (*AWS-1
    Service Rules Order*). We discuss the petitions for reconsideration
    of the *AWS-1 Service Rules Order* filed by Rural Communications
    Association (RCA), T-Mobile USA, Inc. (T-Mobile), Council Tree
    Communications, Inc. (Council Tree), and Powerwave Technologies,
    Inc. (Powerwave) in section III below. With respect to the fifth
    petition, American Petroleum Institute and United Telecom Council
    (API/UTC) filed a joint petition in ET Dockets 95-18 and 00-258, as
    well as WT Docket 02-353, seeking clarification and reconsideration
    of the Fixed Microwave Service (FMS) relocation procedures adopted
    for the 2110-2150 MHz band. The Commission addressed API/UTC's
    petition in the *MSS Fifth Memorandum Opinion and Order*, granting
    the petition in part and denying the petition otherwise. *See*
    Amendment of Part 2 of the Commission\'s Rules to Allocate Spectrum
    Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, Petition for Rule Making of the
    Wireless Information Networks Forum Concerning the Unlicensed
    Personal Communications Service, Petition for Rule Making of
    UTStarcom, Inc., Concerning the Unlicensed Personal Communications
    Service, Amendment of Section 2.106 of the Commission\'s Rules to
    Allocate Spectrum at 2 GHz for use by the Mobile-Satellite Service,
    ET Docket No. 00-258, RM-9498, RM-10024, ET Docket No. 95-18,
    *Sixth* *Report and Order, Third Memorandum Opinion and Order, and
    Fifth Memorandum Opinion and Order*, 19 FCC Rcd 20720, 20763-20764,
    ¶¶ 101-105 (2004) (*MSS Fifth MO&O*). Because the Commission
    addressed the petition in a prior proceeding, we deny the petition
    relative to the above-captioned proceeding.

[^2]: Wireless Communications Association International (WCAI) filed a
    petition for reconsideration seeking reconsideration of the criteria
    for AWS licensees to protect incumbent Broadband Radio Service (BRS)
    operations in the 2150-2160 MHz band. The petition raises issues
    relating to BRS Channels 1 and 2 that are the subject of ongoing
    proceedings at the Commission, and will be addressed in subsequent
    order(s).

[^3]: *See* Report, Wireless Broadband Access Task Force, GN Docket No.
    04-163 (Feb. 2005).

[^4]: The term "2.5G" is often used to describe the interim technologies
    that carriers have used to migrate from their 2G technologies of
    CDMA, TDMA, GSM, and iDEN to 3G technologies.  *See* Implementation
    of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993,
    Annual Report and Analysis of Competitive Market Conditions with
    Respect to Commercial Mobile Services, *Sixth Report*, 16 FCC Rcd
    13350 (2001). The International Telecommunication Union (ITU) has
    defined 3G network technologies as those that can offer maximum data
    transfer speeds of 2 megabits per second (Mbps) from a fixed
    location, 384 kbps at pedestrian speeds, and 144 kbps at traveling
    speeds of 100 kilometers per hour. *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, *Ninth Report*, 19 FCC Rcd 20597 (2004) (*Ninth
    CMRS Competition Report*) at 20650 n. 314.

[^5]: *See* Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, Including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Second Report
    and Order*, 17 FCC Rcd 23193 (2002) (*AWS Allocation* *Second Report
    and Order*). In addition to the spectrum located in the 1710-1755
    and 2110-2155 MHz bands, the Commission has proposed services rules
    for spectrum in the 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and
    2175-2180 MHz bands (AWS-2) and has identified an additional 20 MHz
    of spectrum (at 2155-2175 MHz) suitable for AWS uses adjacent to the
    upper 45 megahertz of AWS-1. *See generally* ET Docket No. 00-258
    and ET Docket No. 95-18.

[^6]: *See generally AWS-1 Service Rules Order,* 18 FCC Rcd 25162.

[^7]: *Id.* at 25215-25220 ¶¶ 138-149.

[^8]: *Id.* at 25186-25214 ¶¶58-135.

[^9]: RCA Petition for Reconsideration (filed Mar. 8, 2004) (RCA
    Petition) at 8-9; T-Mobile Petition for Reconsideration (filed Mar.
    8, 2004) (T-Mobile Petition) at 10-11.

[^10]: Council Tree Petition for Reconsideration (filed Mar. 8, 2004)
    (Council Tree Petition) at 4.

[^11]: Powerwave Petition for Reconsideration (filed Mar. 8, 2004)
    (Powerwave Petition) at 1.

[^12]: *AWS-1 Service Rules Order*, 18 FCC Rcd at 25173-25179 ¶¶
    27-46*.*

[^13]: *Id.* at 25175,¶ 35.

[^14]: *Id*.

[^15]: *Id.*

[^16]: Of the 12 Regional Economic Area Groupings (REAG), the first six
    cover the continental United States and the other six cover smaller
    areas (*i.e*., Alaska, Hawaii, the islands, and the Gulf of Mexico).
    47 C.F.R. § 27.6(a)(1). EAs and REAGs are related to each other and
    EAs can be aggregated to form REAGs. *See* 47 C.F.R. § 27.6.

[^17]: MSAs and RSAs are collectively referred to as Cellular Market
    Areas (CMAs). MSAs and RSAs were originally used to license cellular
    service. 47 C.F.R. § 22.909. The Commission refined and used these
    areas for licensing the lower 700 MHz band. 47 C.F.R. § 27.6(c)(2).
    For purposes of the 1710-1755 and 2110-2155 MHz bands, we stated
    that we will use the same MSAs and RSAs used for licensing the lower
    700 MHz band. MSAs and RSAs cannot be combined to form EAs because
    several MSAs/RSAs cross EA borders.

[^18]: RCA Petition at 8-9.

[^19]: RCA Petition at iii.

[^20]: Letter from David Nace, RCA, to Marlene H. Dortch, FCC, WT Docket
    No. 02-353, (Feb. 17, 2005) (RCA Feb. 17 Letter).

[^21]: Letter from David Nace, RCA, to Marlene H. Dortch, FCC, WT Docket
    No. 02-353, (Aug. 6, 2004) and Erratum (filed Aug. 9, 2004) (RCA
    Aug. Letter and Erratum).

[^22]: *See* CTIA Opposition to Petition for Reconsideration (filed Apr.
    27, 2004) (CTIA Opposition).

[^23]: Letter from Diane Cornell, CTIA, to Marlene H. Dortch, FCC, WT
    Docket No. 02-353, (August 2, 2004) (CTIA Aug. 2 Letter).

[^24]: RCA submitted a request subsequent to its proposed band plan
    seeking 20 megahertz licensed on an RSA/MSA basis in a part of the
    band not "encumbered" by BRS Channels 1 & 2. *See* RCA Feb. 17
    Letter. CTIA has stated its preference that RSA/MSA licenses be
    situated on an edge of the band to facilitate aggregation of REAG
    and EA licensing blocks. CTIA Aug. 2 Letter.

[^25]: T-Mobile Petition at 10-11.

[^26]: Letter from Tom Sugrue, T-Mobile, to Marlene H. Dortch, FCC, WT
    Docket No. 02-353 (March 11, 2005) (Joint T-Mobile-RTG Letter);
    T-Mobile *Ex Parte* Presentation, WT Dockets No. 02-353 and 04-356
    (Apr. 4, 2005) (T-Mobile Apr. 4 *Ex Parte*).

[^27]: T-Mobile Apr. 4 *Ex Parte*; *see also* footnote Error: Reference
    source not found, *supra* (discussing RCA's request).

[^28]: Letter from Mark Racek, Ericsson, to Marlene H. Dortch, FCC, WT
    Docket No. 02-353 (Mar. 30, 2005) (Ericsson Mar. 30 Letter).

[^29]: Letter from George Wheeler, US Cellular, to Marlene H. Dortch,
    FCC, WT Docket No. 02-353 (Apr. 29, 2005) (US Cellular Apr. 29
    Letter) at 4. In a subsequent *ex parte* presentation, US Cellular
    also emphasized the importance of providing opportunities for
    carriers to aggregate adjacent EA and MSA/RSA spectrum blocks or
    multiple adjacent EA spectrum blocks. Letter from George Wheeler, US
    Cellular, to Marlene H. Dortch, FCC, WT Docket No. 02-353 (June 17,
    2005) (US Cellular June 17 Letter) at 1-2.

[^30]: Letter from Michael T.N. Fitch, PCIA, to Marlene H. Dortch, FCC,
    WT Docket No. 02-353 (June 8, 2005) at 2.

[^31]: Letter from David Wye, Cingular, to Marlene H. Dortch, FCC, WT
    Docket No. 02-353 (May 11, 2005) (Cingular May 11 Letter); Letter
    from David Wye, Cingular, to Marlene H. Dortch, FCC, WT Docket No.
    02-353 (May 19, 2005) (Cingular May 19 Letter) (discussing 3G band
    plans in certain European countries).

[^32]: There are 52 MEAs in the U.S., as compared with 176 EAs, and 12
    REAGs. The borders of these licensing areas are harmonized, such
    that EAs "nest" within MEAs, and MEAs within REAGs.

[^33]: Letter from Carl Northrup, MetroPCS, to Marlene H. Dortch, FCC,
    June 29, 2005. Supporters of this plan include CSM Wireless, LLC
    (July 1, 2005 *ex parte*), Royal Street Communications, LLC (July 7,
    2005 *ex parte*), Leap Wireless International, Inc. (July 25, 2005
    *ex parte*), Centennial Communications Corp. (July 26, 2005 *ex
    parte*), and Coral Wireless, LLC (July 27, 2005 *ex parte*).

[^34]: Letter from Charla Rath, Verizon Wireless, to Marlene H. Dortch,
    FCC, WT Docket No 02-353 (May 27, 2005) (Verizon Wireless May 27
    Letter).

[^35]: *Id.* at 2.

[^36]: *AWS-1 Service Rules Order*, 18 FCC Rcd at 25176 ¶ 36.

[^37]: *Id.* at 25177 ¶ 39.

[^38]: RCA Petition at 5-6, 7.

[^39]: RCA Petition at 8.

[^40]: *See* CTIA Aug. 2 Letter.

[^41]: *Id.*

[^42]: 18 FCC Rcd at 25178 ¶ 44 (noting that worldwide spectrum for
    advanced wireless services have not been licensed using anything
    less than five megahertz blocks.)

[^43]: *See* Letter From Michelle Farquhar, SunCom Wireless Operating
    Company, to Marlene H. Dortch, FCC, WT Docket No. 02-353 (May 20,
    2005) (SunCom May 20 Letter) at 3.

[^44]: *AWS-1 Service Rules Order*, 18 FCC Rcd at 25178 ¶ 44.

[^45]: RCA Petition at 10.

[^46]: RCA Reply to Oppositions (filed May 10, 2004) at 2. *See also*
    Cingular May 11 Letter (discussing Cingular's view that paired 2 x
    10 megahertz licenses are the minimum needed to effectively support
    today's technologies while avoiding interference from adjacent
    bands).

[^47]: RCA Reply to Oppositions at 5.

[^48]: RCA Reply to Oppositions at 6.

[^49]: *See* CTIA *Ex Parte* Presentation, (Feb. 8, 2005) (CTIA Feb. 8
    *Ex Parte*) at 4.

[^50]: RCA Petition at 5 (citing *AWS-1 Service Rules Order*, 18 FCC Rcd
    at 21577 ¶ 39). We also note that the FCC Federal Advisory Committee
    on Diversity for Communications in the Digital Age adopted a
    recommendation that as a means to promote participation by
    minorities in emerging technology sectors of the communications
    industry, the Commission identify spectrum auctions whereby the
    licenses assigned cover small geographic areas such as MSAs and
    RSAs. New Technologies Subcommittee Recommendations to the Federal
    Communications Commission's Advisory Committee on Diversity for
    Communications in the Digital Age, *Recommendations on Spectrum and
    Access to Capital* (released June 14, 2004).

[^51]: T-Mobile Petition at 5 (citing Amendment of the Commission's
    Rules Regarding Installment Payment Financing for Personal
    Communications Services Licenses, *Sixth Report and Order on
    Reconsideration*, 15 FCC Rcd 16266 (2000)).

[^52]: *AWS-1 Service Rules Order*, 18 FCC Rcd at 25178 ¶ 44.

[^53]: Joint T-Mobile-RTG Letter.

[^54]: Verizon Wireless May 27 Letter at 2.

[^55]: *See* Ericsson March 30 Letter. *See also* SunCom May 20 Letter
    at 2.

[^56]: *See* Ericsson March 30 Letter at 2.

[^57]: T-Mobile Petition at 2-3.

[^58]: *Id.* at 4 (citing *AWS-1 Service Rules Order*, 18 FCC Rcd at
    25178).

[^59]: *Id.* at 5-6 (citing Amendment of the Commission's Rules
    Regarding Installment Payment Financing for Personal Communications
    Services Licenses, Sixth Report and Order on Reconsideration, 15 FCC
    Rcd 16266 (2000) (*Sixth Report and Order*); *Service Rules for
    746-764 MHz and 776-794 MHz Bands, and Revisions to Part 27 of the
    Commission's Rules*, First Report and Order, 15 FCC Rcd 476 (2000)
    (7*00 MHz First Report and Order*)).

[^60]: *See* Ericsson March 30 Letter; T-Mobile Petition at 5; Joint
    T-Mobile-RTG Letter at 3-4; US Cellular *Ex Parte* Presentation
    (Apr. 29, 2005) (US Cellular *Ex Parte*) at 4; Letter from John
    Shelnut, Alcatel, to Marlene H. Dortch, FCC, WT Docket No. 02-353
    (May 23, 2005); Letter from Jill Canfield, National
    Telecommunications Cooperative Association, to Marlene H. Dortch,
    FCC, WT Docket No. 02-353 (May 25, 2005); Letter from Stuart
    Polikoff, OPASTCO, to Marlene H. Dortch, FCC, WT Docket No. 02-353
    (June 2, 2005); Letter from Raymond Strassburger, Nortel, to Marlene
    H. Dortch, FCC, WT Docket No. 02-353 (June 24, 2005).

[^61]: *See* T-Mobile Petition at 3.

[^62]: Joint T-Mobile-RTG Letter at 2; T-Mobile April 4 *Ex Parte* at
    6-8; Ericsson March 30 Letter. Specifically, the addition of an EA
    licensing area, which is a subset of REAG, as well as the alignment
    of EAs and REAGs in adjacent blocks, facilitates the ability of
    licensees to aggregate spectrum where needed to suit individual
    business plans. *See also* Cingular May 11 and Letter from Charla M.
    Rath, Verizon Wireless, to Marlene H. Dortch, FCC, WT Docket no.
    02-353 (June 14, 2005) (Verizon Wireless June 14 letter) (supporting
    contiguous EA and REAG spectrum to facilitate aggregation).

[^63]: The commenting parties also note that EAs cannot only be
    aggregated together to form larger blocks, EAs also present the
    opportunity to aggregate with either larger (REAGs) or smaller
    spectrum blocks (RSA/MSAs). Letter from Michele C. Farquhar, SunCom
    to Marlene H. Dortch, FCC, WT Docket no. 02-353 (June 17, 2005) at
    2; US Cellular June 17 letter at 1-2; Verizon Wireless June 14
    letter at 1. Although Cingular stated that it does not support the
    paired 5 megahertz E and F blocks as proposed by T-Mobile and RTG
    due to the inability to aggregate these blocks with adjacent
    spectrum and due to spectrum efficiency and interference
    concerns, our modified band plan allows carriers to accommodate
    increased bandwidth requirements of advanced technologies
    through aggregation at auction or through secondary markets
    mechanisms.  *See* Cingular May 11 Letter*.*

[^64]: *AWS-1 Service Rules Order,* 18 FCC Rcd at 25178 ¶ 43.

[^65]: *See* CTIA Feb. 8 *Ex Parte*.

[^66]: *AWS-1 Service Rules NPRM,* 17 FCC Rcd at 24153 ¶ 42.

[^67]: *AWS-1 Service Rules Order,* 18 FCC Rcd at 25189 ¶ 68.

[^68]: *Id.*

[^69]: *Id.* (*citing* *AWS-1 Service Rules NPRM*, 17 FCC Rcd at 24153 ¶
    42).

[^70]: *AWS-1 Service Rules Order,* 18 FCC Rcd at 25220 ¶ 149.

[^71]: *Id.*

[^72]: *Id*.

[^73]: Council Tree Petition at 4.

[^74]: *Id*. In the *AWS-1 Service Rules Order,* the Commission adopted
    a geographic area licensing scheme that created an AWS D block
    comprising 734 RSA/MSA licenses. Under our revised band plan, the
    spectrum to be licensed on an MSA/RSA basis will be in the A block.

[^75]: Council Tree Petition at 8 (*citing* Implementation of Section
    309(j) of the Communications Act -- Competitive Bidding, *Fifth*
    *Memorandum Opinion and Order*, 10 FCC Rcd 403, 414-415 ¶ 16 (1994)
    (broadband PCS entrepreneur block set aside)).

[^76]: *Id.* at 8.

[^77]: *Id.* at 4, 13. 47 C.F.R. § 1.2110(f)(2)(i).

[^78]: Council Tree Petition at 9.

[^79]: Opposition of Cellular Telecommunications & Internet Association
    dated April 27, 2004 (CTIA Opposition) at 2.

[^80]: CTIA Opposition at 4.

[^81]: *Id.*

[^82]: *Id*.

[^83]: Reply of Council Tree Communications, Inc. to Opposition to
    Petition for Reconsideration dated May 7, 2004 (Council Tree Reply)
    at 8.

[^84]: Letter from Messrs. Steve C. Hillard, President and George T.
    Laub, Council Tree Communications, Inc. to Marlene H. Dortch,
    Secretary, Federal Communications Commission, WT Docket Nos. 02-353,
    04-356, RM-10956 (June 13, 2005) (Council Tree *ex parte*). Through
    this *ex parte* filing, Council Tree also seeks to supplement its
    February 8, 2005 reply comments in WT Docket No. 04-356 as well as
    its March 8, 2004 petition for rulemaking (RM-10956).

[^85]: Council Tree *ex parte* at 2, 12.

[^86]: Council Tree defines large incumbent wireless carriers as those
    carriers with wireless revenues of \$5 billion or more. Council Tree
    *ex parte* at 2, 11.

[^87]: *Id.* at 2, 6, 10-13.

[^88]: *Id.* at 3, 16-17.

[^89]: Letter from Marc D. Stemp, President, Bethel Native Corporation
    to Marlene H. Dortch, Secretary, Federal Communications Commission,
    WT Docket No. 02-353, WT Docket 04-356, RM-10956 (June 29, 2005);
    Letter from Maria Brennan, Executive Director, American Women in
    Radio and Television to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WT Docket No. 02-353, WT Docket 04-356,
    RM-10956 (June 28, 2005); Letter from Brian Rich, President,
    Catalyst Investors, LLC, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WT Docket No. 02-353, WT Docket 04-356,
    RM-10956 (June 28, 2005); Letter from Barney Uhart, President,
    Chugach Alaska Corporation to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WT Docket No. 02-353, WT Docket 04-356,
    RM-10956 (June 27, 2005); Letter from Daniel S. (Toby) Osborn, Chief
    Financial Officer, Doyon, Limited to Marlene H. Dortch, Secretary,
    Federal Communications Commission, WT Docket No. 02-353, WT Docket
    04-356, RM-10956 (June 24, 2005); Letter from Steven Roberts,
    Managing Director, SR Capital Advisors to Marlene H. Dortch,
    Secretary, Federal Communications Commission, WT Docket No. 02-353,
    WT Docket 04-356, RM-10956 (June 24, 2005); Letter from Robert C.
    Martin, President, PC Management, Inc. to FCC Chairman Kevin Martin
    and FCC Commissioners Abernathy, Copps and Adelstein, WT Docket No.
    02-353, WT Docket 04-356, RM-10956 (June 23, 2005); Letter from Ed
    Kurzenski, Chief Technical Officer, Coral Wireless, LLC to FCC
    Chairman Kevin Martin and FCC Commissioners Abernathy, Copps and
    Adelstein, WT Docket No. 02-353, WT Docket 04-356, RM-10956 (June
    20, 2005); Letter from James H. Barker, Counsel for Leap Wireless
    International, Inc. to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WT Docket No. 02-353, WT Docket 04-356,
    RM-10956 (June 20, 2005) (supporting all of Council Tree's proposals
    except for the limitation on high net worth individuals).

[^90]: Letter from Robert A. Calaff, Director, Federal Policy, T-Mobile
    USA, Inc. to Marlene H. Dortch, Secretary, Federal Communications
    Commission, WT Docket No. 02-353 (June 22, 2005). Section 203 of the
    Commercial Spectrum Enhancement Act, Pub. L. No. 108-494, 118 Stat.
    3986, (2004) imposes such a requirement for auctions of "eligible
    frequencies," including the 1710-1755 MHz band, which is designated
    for AWS-1.

[^91]: Letter from Diane Cornell, Vice President, Regulatory Policy,
    Cellular Telecommunications & Internet Association to Marlene H.
    Dortch, Secretary, Federal Communications Commission, WT Docket No.
    02-353 (June 30, 2005).

[^92]: *Id*.

[^93]: Letter from Kurt Wimmer, Counsel for Cook Inlet Region, Inc. to
    Marlene H. Dortch, Secretary, Federal Communications Commission, WT
    Docket No. 02-353, (July 28, 2005).

[^94]: Council Tree defines large incumbent wireless carriers as those
    carriers with wireless revenues of \$5 billion or more. Council Tree
    *ex parte* at 2, 11.

[^95]: *AWS 1 Service Rules Order,* 18 FCC Rcd at 25189 ¶ 68 (2003).

[^96]: *Id.*

[^97]: Council Tree proposes that we set aside the AWS D block spectrum
    for a substantially narrower class of bidders than is eligible to
    bid on spectrum offered to entrepreneurs in broadband PCS through
    closed bidding. It proposes that we adopt a set aside that would be
    limited to those that qualify as "small businesses" (entities with
    average annual gross revenues for the preceding three years not
    exceeding \$40 million) and "very small businesses" (entities with
    average annual gross revenues for the preceding three years not
    exceeding \$15 million). In contrast, to be eligible to bid on
    broadband PCS C and F block licenses available in closed bidding,
    applicants must have gross revenues of less than \$125 million in
    each of the last two years and total assets of less than \$500
    million. 47 C.F.R. § 24.709.

[^98]: Council Tree Petition at 11.

[^99]: *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, *First Report and Order*, 15 FCC Rcd 476, 506, 530 ¶¶ 74,
    134 (2000); Amendment of Part 90 of the Commission\'s Rules to
    Provide for the Use of the 220-222 MHz Band by the Private Land
    Mobile Radio Service, Third Report and Order, Fifth Notice of
    Proposed Rulemaking, 12 FCC Rcd 10942, 11077 ¶319 (1997); Revision
    of Part 22 and Part 90 of the Commission\'s Rules To Facilitate
    Future Development Of Paging Systems; and Implementation of Section
    309(j) of the Communications Act - Competitive Bidding, Second
    Report and Order and Further Notice of Proposed Rulemaking, WT
    Docket No. 96-18, PP Docket No. 930253, 12 FCC Rcd 2732, 2820 ¶201
    (1997); Amendment of the Commission\'s Rules Regarding the 37.0-38.6
    GHz and 38.6-40.0 GHz Bands; Implementation of
    [Section](refptr://604d348/) 309(j) of the Communications Act -
    Competitive Bidding, Notice of Proposed Rule Making and Order, ET
    Docket No. 95-183, PP [Docket](refptr://607fb60/) No. 93-253, 11 FCC
    Rcd 4930, 4975 ¶94 (1995); Amendment of the Commission\'s Rules to
    Establish Part 27, the Wireless Communications Service (WCS), Report
    and Order, GN Docket No. 96-228, 12 FCC Rcd 10785, 10882 ¶200
    (1997).

[^100]: See rounds results for Auction No. 53 at
    [http://wireless.fcc.gov/auctions/53/](http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=53)

[^101]: See rounds results for Auction No. 49 at
    [http://wireless.fcc.gov/auctions/49/](http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=49)

[^102]: CTIA Opposition at 5.

[^103]: Rounds results for all of the Commission's auctions may be found
    on the Commission's website at
    <http://wireless.fcc.gov/auctions/default.htm?job=round_results_all>

[^104]: Council Tree Petition at 11-13. Council Tree proposed a similar
    bidding credit increase in its *ex parte* filing. Council Tree *ex
    parte* at 2, 12. Section 1.2110(f)(2)(i) of the Commission's rules
    provides that businesses that qualify as a small business with
    average gross revenues for the preceding three years of \$3 million
    or less are eligible for bidding credits of 35 percent. 47 C.F.R. §
    1.2110(f)(2)(i). Section 1.2110(f)(1) provides that service specific
    competitive bidding rules will identify the size standards for
    bidding credit eligibility.

[^105]: Council Tree Petition at 11.

[^106]: CTIA Opposition at 3.

[^107]: Council Tree Reply at 7, 8.

[^108]: *AWS-1 Service Rules Order,* 18 FCC Rcd at 25220 ¶ 149.

[^109]: *Id.*

[^110]: In the *AWS-1 Service Rules NPRM*, the Commission emphasized
    that to the extent commenters support a different bidding credit
    regime, they should support their proposals with relevant
    information on the types of system architecture that are likely to
    be deployed in these bands, the availability of equipment, market
    conditions, and other factors that may affect the capital
    requirements of the types of services that may be provided. *AWS-1
    Service Rules NPRM,* 17 FCC Rcd at 24153 ¶ 78. Council Tree does not
    offer any such support.

[^111]: *AWS-1 Service Rules Order* at 25175-76 ¶ 35.

[^112]: *Id.*

[^113]: *See* Reallocation and Service Rules for the 698-746 MHz
    Spectrum Band (Television Channels 52-59), *Report and Order*, 17
    FCC Rcd 1022 (2002) (Commission adopted a third tier of bidding
    credit for a block of MSA/RSA licenses, where all of the other
    licenses in that service were based on large, regional geographic
    areas); Amendment of Parts 2 and 25 of the Commission\'s Rules to
    Permit Operation of NGSO FSS Systems Co-Frequency with GSO and
    Terrestrial Systems in the Ku-Band Frequency Range; Amendment of the
    Commission\'s Rules to Authorize Subsidiary Terrestrial Use of the
    12.2-12.7 GHz Band by Direct Broadcast Satellite Licensees and Their
    Affiliates; and Applications of Broadwave USA, PDC Broadband
    Corporation, and Satellite Receivers, Ltd. to Provide A Fixed
    Service in the 12.2-12.7 GHz Band, ET Docket No. 98-206, *Memorandum
    Opinion and Order and Second Report and Order*, 17 FCC Rcd 9614
    (2002) *aff'd* Northpoint Technology, Ltd. V. FCC, Case No. 02-1194
    (D.C. Cir. July 15, 2005) (Commission adopted three small business
    size standards where it established only one block of geographic
    area licenses); Implementation of Competitive Bidding Rules to
    License Certain Rural Service Areas, *Report and Order*, 17 FCC Rcd
    1960 (2002) (Commission justified the adoption of a third tier of
    bidding credit where only four licenses for relatively small rural
    markets were available).

[^114]: As Council Tree acknowledges, in many of the cases it cites, the
    Commission adopted a bidding credit of 35 percent (or more, in one
    case) because it had suspended its previously available installment
    financing program. *See* Amendment of the Commission's Rules to
    Establish Part 27, the Wireless Communications Service, *Report and
    Order*, 12 FCC Rcd 10785 (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 (1997); Rulemaking to Amend Parts
    1, 2, 21 and 25 of the Commission's Rules to Redesignate the
    27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz
    Frequency band, to Establish Rules and Policies for Local Multipoint
    Distribution Service and for Fixed Satellite Services, *Second Order
    on Reconsideration*, 12 FCC Rcd 15082 (1997); Revision of Part 22
    and Part 90 of the Commission's Rules to Facilitate Future
    Development of Paging Systems, *Memorandum Opinion and Order on
    Reconsideration and Third Report and Order*, 14 FCC Rcd 10030
    (1999). However, the Commission's inclusion of a 35 percent bidding
    credit in the Part 1 standardized schedule adopted in 1997, does not
    mean that the Commission intended that all three tiers of small
    business size standards would be applicable to every service. The
    Commission intended this schedule to provide small businesses with a
    certain level of predictability regarding the potential bidding
    credits that would be available to businesses of certain sizes,
    depending on the particular circumstances involved in any particular
    service. *See* Amendment of Part 1 of the Commission's
    Rules---Competitive Bidding Procedures, *Third Report and Order and
    Second Further Notice of Proposed Rule Making,* 13 FCC Rcd 374, 386,
    388 ¶¶ 14, 18 (1997).

[^115]: Promoting Efficient Use of Spectrum Through Elimination of
    Barriers to the Development of Secondary Markets, *Report and Order
    and Further Notice of Proposed Rulemaking*, 18 FCC Rcd 20604 (2003).

[^116]: Council Tree *ex parte* at 2, 6, 10-13. This proposal is similar
    to, but expands substantially upon a proposal contained in a
    Petition for Rulemaking that Council Tree filed on March 8, 2004.
    That petition sought to have the Commission adopt a personal net
    worth limit of \$750,000 on individuals with a controlling interest
    in a designated entity. The Commission did not receive any comments
    on this petition for rulemaking.

[^117]: ^?^ Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding, *Fifth* *Memorandum Opinion and Order*, 10
    FCC Rcd 403 (1994).

[^118]: *Id.* at 421 ¶30.

[^119]: *Id.*

[^120]: *See*, *e.g.*, 47 C.F.R. § 1.2110; Amendment of Part 1 of the
    Commission's Rules --- Competitive Bidding Procedures, *Second
    Report and Order,* 9 FCC Rcd 2348 (1994); Amendment of Part 1 of the
    Commission's Rules --- Competitive Bidding Procedures, *Order on
    Reconsideration of the Third Report and Order*, *Fifth Report and
    Order*, *and Fourth Further Notice of Proposed Rule Making*, 15 FCC
    Rcd 15293 (2000) (modified by Erratum, DA 00-2475 (rel. Nov. 3,
    2000)) ("*Part 1 Fifth Report and Order*"); Amendment of Part 1 of
    the Commission's Rules --- Competitive Bidding Procedures, *Eighth
    Report and Order*, 17 FCC Rcd 2962 (2002). 

[^121]: Council Tree *ex parte* at 3, 16-17.

[^122]: *Id.* at 17.

[^123]: Council Tree defines large incumbent wireless carriers as those
    carriers with wireless revenues of \$5 billion or more. *Id.* at 2,
    11.

[^124]: *AWS-1 Service Rules Order,* 18 FCC Rcd at 25200 ¶ 97.

[^125]: *See* 47 C.F.R. § 24.232.

[^126]: 47 C.F.R. § 27.50(d)(1). Subsequently, the *Rural Report and
    Order* amended the power limit rules for broadband PCS and AWS,
    sections 24.232(b) and 27.50(d)(1) respectively, to allow twice as
    much radiated power (3280 watts EIRP) and twice as much transmitter
    output power (200 watts) in rural areas. Facilitating the Provision
    of Spectrum-Based Services to Rural Areas and Promoting
    Opportunities for Rural Telephone Companies to Provide
    Spectrum-Based Services, WT Docket No. 02-381, 2000 Biennial
    Regulatory Review Spectrum Aggregation Limits for Commercial Mobile
    Radio Services, WT Docket No. 01-14, Increasing Flexibility to
    Promote Access to and the Efficient and Intensive Use of Spectrum
    and the Widespread Deployment of Wireless Services, and to
    Facilitate Capital Formation, WT Docket No. 03-202, *Report and
    Order and Further Notice of Proposed Rulemaking*, 19 FCC Rcd. 19078
    (2004) (*Rural Report and Order*).

[^127]: Powerwave Petition at 1. Powerwave explains the difference: §
    24.232(a) states, "In no case may the peak output power of a base
    station transmitter exceed 100 watts" while § 27.50(d)(1) also
    creates a 100 watt peak output power limit, but applies it not to a
    "base station transmitter" but to the entire base station. Powerwave
    at 3.

[^128]: We made this decision in an effort to afford more flexibility to
    wireless services. *Biennial Regulatory Review* -- *Amendment of
    Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various
    Rules Affecting Wireless Radio Services* WT Docket No. 03-264, FCC
    05-144, (rel. Aug. 9, 2005) (*Biennial Review*), ¶ 19. We also
    indicated in the Order that requests on the *Biennial Regulatory
    Review* record that any changes made to section 24.232(a) of our
    rules be uniformly applied to our Part 27 rules involving
    transmitter output power for AWS systems, specifically section 27.50
    (d)(1), would be better addressed in the instant proceeding.
    *Biennial Review,* note 64.

[^129]: We note that requests by Motorola, Inc. (Motorola) and Qualcomm,
    Inc. (Qualcomm) to modify our EIRP rules for AWS stations will not
    be addressed in this proceeding. S*ee* Motorola Reply at 3-4;
    Qualcomm Comments at 2. We are considering possible revisions to the
    current EIRP limits for both PCS and AWS systems in the *Biennial
    Review FNPRM.*

[^130]: *See* 5 U.S.C. § 801(a)(1)(A).

[^131]: *See* 5 U.S.C. § 604.

[^132]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^133]: *See* Service Rules for Advanced Wireless Services in the 1.7
    GHz and 2.1 GHz Bands, *Notice of Proposed Rule Making,* WT Docket
    No. 02-353, 17 FCC Rcd 24135, 24167 (2002) (*Notice*).

[^134]: *See* *AWS-1 Service Rules Order,* 18 FCC Rcd 25162, 25221 and
    Appendix B.

[^135]: *See* 5 U.S.C. § 604.

[^136]: *See AWS-1 Service Rules Order.*

[^137]: *Biennial Regulatory Review* -- *Amendment of Parts 1, 22, 24,
    27, and 90 to Streamline and Harmonize Various Rules Affecting
    Wireless Radio Services**,*** WT Docket No. 03-264, FCC 05-144 (rel.
    Aug. 9, 2005).

[^138]: *See AWS-1 Service Rules Order,* 18 FCC Rcd at 25189.

[^139]: *Id.*

[^140]: 5 U.S.C. § 603(b)(3).

[^141]: 5 U.S.C. § 601(6).

[^142]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C.§ 632). Pursuant to the RFA,
    the statutory definition of a small business applies "unless an
    agency, after consultation with the Office of Advocacy of the Small
    Business Administration and after opportunity for public comment,
    establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register." 5 U.S.C. § 601(3).

[^143]: Small Business Act, 15 U.S.C. § 632 (1996).

[^144]: See SBA, *Programs and Services*, SBA Pamphlet no. CO-0028, at
    page 40 (July 2002).

[^145]: 5 U.S.C. § 601(4).

[^146]: Independent Sector, The New Nonprofit Almanac & Desk Reference
    (2002).

[^147]: 5 U.S.C. § 601(5).

[^148]: 5 U.S.C. 601(5).

[^149]: U.S. Census Bureau, Statistical Abstract of the United States:
    2000, Section 9, pages 299-300, Tables 490 and 492.

[^150]: *See AWS-1 Service Rules Order*, 18 FCC Rcd at 25218.

[^151]: 13 C.F.R. § 121.201, NAICS code 517211.

[^152]: 13 C.F.R. § 121.201, NAICS code 517212.

[^153]: 13 C.F.R. § 121.201, NAICS code 517212.

[^154]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (May 2004). This source uses data that are current as of
    October 22, 2003.

[^155]: *Id.*

[^156]: *See generally,* 47 C.F.R. § 1.2105.

[^157]: 47 C.F.R. § 1.913(a)(1).

[^158]: 47 C.F.R. § 1.2107.

[^159]: *See* 5 U.S.C. § 603(c)(1)-(4).

[^160]: While we did not receive any comments from Tribal governments,
    we remain interested in ensuring that the communication needs of
    these communities are met. *See* *AWS Service Rules NPRM*, 17 FCC
    Rcd at 24146-47 ¶ 25; *see also* Statement of Policy on Establishing
    a Government-to-Government Relationship with Indian Tribes, *Policy
    Statement*, 16 FCC Rcd 4078 (2000).

[^161]: *See* 5 U.S.C. § 801(a)(1)(A).

[^162]: *See* 5 U.S.C. § 604(b).