Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | WT Docket No. 01-108         |
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| Year 2000 Biennial Regulatory    | ) |                              |
| Review -- Amendment of Part 22   | * |                              |
| of the Commission's Rules to     | * |                              |
| Modify or Eliminate Outdated     |   |                              |
| Rules Affecting the Cellular     | * |                              |
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| Commercial Mobile Radio Services | ) |                              |
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**SECOND REPORT AND ORDER**

**Adopted:** September 10, 2002 **Released:** September 24, 2002

**By the Commission: Commissioner Copps approving in part, dissenting in
part, and issuing a separate statement; Commissioner Martin approving in
part, concurring in part, and issuing a separate statement**

I.  **INTRODUCTION**

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1.  In this *Second Report and Order*, we complete our examination of
    Part 22 of our rules as part of our year 2000 Biennial Review of
    regulations, pursuant to section 11 of the Communications Act of
    1934, as amended (Act). [^1] Section 11 of the Act mandates that we
    review all of our regulations relating to providers of
    telecommunications service and "determine whether any such
    regulation is no longer necessary in the public interest as the
    result of meaningful economic competition between providers of such
    service." In the event that we determine that a rule is "no longer
    necessary in the public interest" as the result of meaningful
    economic competition, section 11 provides that we "shall repeal or
    modify" the subject regulation. Accordingly, in this *Second Report
    and Order*, we amend section 22.901 of our rules to eliminate or
    modify certain provisions that have become outdated or unnecessary
    due to technological change or increased competition in the
    Commercial Mobile Radio Services (CMRS).

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II. **BACKGROUND**

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2.  In January 2001, pursuant to the statutory mandate under section 11
    of the Act requiring us to review our rules, Commission staff
    completed an evaluation of regulations affecting telecommunications
    service providers, and issued a report regarding recommendations
    made as a result of that review.[^2] In its review, the staff
    recommended that we reexamine the cellular rules and determine
    whether any of the rules are no longer necessary as a result of the
    technological advances and growth in competition that have occurred
    in mobile telephony since the rules were first promulgated. In the
    *Biennial Review Report*, we accepted the staff's recommendation to
    initiate a rulemaking to review the Part 22 cellular rules[^3] to
    consider which rules are obsolete because of competitive or
    technological developments. We also followed the recommendation to
    review rules regulating other Part 22 services on the same
    basis.[^4] Accordingly, in May 2001, we issued a *Notice of Proposed
    Rulemaking* (*NPRM*) seeking to identify and address outdated rule
    sections of Part 22.[^5] In the *NPRM*, we noted that our rules
    governing the cellular service have changed little since we first
    initiated the service in the early 1980s.[^6] Among other
    provisions, we proposed the elimination or modification of certain
    provisions of section 22.901, entitled "Service requirements and
    limitations," in order to more accurately reflect the current state
    of technology and to remove any unnecessary requirements. [^7]

3.  In the *NPRM*, we proposed to modify various general cellular
    service requirements set out in section 22.901 of the Commission's
    rules. First, we proposed deleting current section 22.901(d), which
    addresses alternative cellular technologies.[^8] Because the rule is
    drafted as though the principal cellular technology is analog
    technology,[^9] we therefore proposed deleting current section
    22.901(d) and adding the following language to the introductory
    paragraph of the rule: "In providing cellular services, each
    cellular system may incorporate any technology that meets all
    applicable technical requirements in this part."[^10]

4.  We also proposed deleting sections 22.901(a) and 22.901(b) of our
    rules.[^11] Section 22.901(a) requires that cellular licensees
    provide subscribers with information regarding the service area of
    the cellular provider.[^12] We sought comment on whether there is
    any material difference between the service-area-related information
    provided by cellular providers in comparison with other providers of
    CMRS services.[^13] The *NPRM* also requested comment on whether, in
    light of the current level of competition in the provision of CMRS
    services, such a requirement is still necessary to ensure that
    consumers have access to service-area-related information.[^14]
    Section 22.901(b) requires the cellular licensee to notify the
    Commission in the event that a subscriber's request for service is
    denied due to lack of cellular system capacity.[^15] We proposed
    removing this requirement, noting that the rule does not provide any
    mechanism for ameliorating any instance of a lack of system
    capacity.[^16] We also explained that, given the current level of
    competition, consumers who are denied service by a particular
    provider due to lack of capacity will be very likely to have other
    service options.[^17]

5.  Further, we also proposed deleting certain sentences in the
    introductory paragraph to section 22.901.[^18] Specifically, we
    proposed deleting the first sentence of the introductory paragraph,
    which provides that "Cellular system licensees must provide cellular
    mobile radiotelephone service upon request to all cellular
    subscribers in *good standing* . . . ."[^19] We noted that no
    comparable requirements are placed on other CMRS services.[^20] We
    also proposed removing the specific reference in the introductory
    paragraph to section 22.901 that provides that a cellular system may
    terminate service when a subscriber "operates a cellular telephone
    in an airborne aircraft."[^21] We explained that this provision
    appears to be both unnecessary and potentially confusing, to the
    extent that it could be read to imply that a cellular provider would
    not have the right to terminate service unless our rules provided
    such right explicitly and also because, by addressing only one
    ground for service termination, it could imply that a cellular
    provider would not be able to terminate service for other violations
    of Commission rules.[^22]

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III. **DISCUSSION**

     **A. Standard for Decision (Section 11 of the Act).**

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6.  In 1996, Congress anticipated that the development of competition
    would lead market forces to reduce the need for regulation and
    amended the Communications Act of 1934 to permit and encourage
    competition in various communications markets.[^23] Section 11 of
    the 1996 Act requires us to review biennially all of our regulations
    "that apply to the operations or activities of any provider of
    telecommunications service" and to "determine whether any such
    regulation is no longer necessary in the public interest as a result
    of meaningful economic competition between providers of such
    service."[^24] In the past, we have looked to the plain meaning of
    the text for guidance in exercising our obligation pursuant to
    section 11.[^25] We have stated that "the language places an
    obligation on the Commission to 'determine' if the regulation in
    question 'is no longer necessary in the public interest as the
    result of meaningful economic competition.'"[^26] Further, section
    11 explicitly provides that "the Commission shall repeal or modify"
    any regulation that it determines is no longer necessary in the
    public interest as a result of meaningful economic competition.[^27]
    We note that section 11 places the burden on the Commission to make
    the requisite determinations; no particular burden is placed on the
    opponents or proponents of a given rule.[^28] We have previously
    interpreted the language of section 11 as directing us to examine
    why a rule originally was "necessary" and whether it continues to be
    necessary.[^29] We have found that in making the determination
    whether a rule remains "necessary" in the public interest once
    meaningful economic competition exists, the Commission must consider
    whether the concerns that led to the rule or the rule's original
    purposes may be achieved without the rule or with a modified
    rule.[^30]

    **B. Section 22.901.**

7.  First, we conclude that the competitive state of the mobile
    telephony market renders unnecessary both section 22.901(d) to the
    extent it characterizes certain technologies as "primary" or
    "alternative" as well as the first sentence in the introductory
    paragraph of section 22.901 to the extent it requires licensees to
    "provide cellular mobile radiotelephone service upon request to all
    cellular subscribers in good standing." No commenters opposed these
    proposed changes. We delete the existing text of section 22.201(d)
    (which implies that analog is the principal technology in use). We
    add a technologically-neutral statement to section 22.901: "In
    providing cellular services, each cellular system may incorporate
    any technology that meets all applicable technical requirements of
    this part." Further, we find that the statement in the introductory
    paragraph about provision of service to "cellular subscribers in
    good standing" is unnecessary because, even in the absence of this
    rule, cellular service providers, like all common carriers, are
    required to comply with sections 201 and 202 of Title II of the Act.
    Those sections require cellular carriers to provide service upon
    reasonable request, to have charges, practices, classifications, and
    regulations that are just and reasonable, and to avoid unjust or
    unreasonable discrimination in their charges, practices,
    classifications, regulations, facilities, or services. Further, we
    note that there are no other comparable rule requirements placed on
    other CMRS licensees.

8.  Second, we find that it is no longer necessary to require cellular
    carriers to provide subscribers with information regarding the
    service area of the provider and therefore delete section 22.901(a).
    Some commenters agree with this conclusion, stating that licensees
    already provide service area information in response to consumer
    demand.[^31] Other commenters warn that a rule is necessary in order
    to guarantee that customers have sufficient information to make
    informed decisions about purchasing wireless products and
    services.[^32] While we agree that consumers should have access to
    information about carriers' service areas prior to purchasing
    wireless services, as well as while using the services, we find that
    cellular carriers, as well as PCS and digital SMR carriers are
    already making this information available at retail outlets, as well
    as via the internet. We note that PCS and digital SMR providers are
    doing so without any comparable regulatory requirement, presumably
    because consumers demand this information. Notably, we believe the
    rule is no longer necessary because, even in the absence of the
    rule, cellular carriers will continue to make this information
    available while marketing their services in today's competitive
    marketplace.

9.  Third, we find that the current level of competition renders
    unnecessary the provision in section 22.901(b) that carriers must
    notify the Commission in the event that a subscriber's request for
    service is denied due to lack of capacity. Some commenters note that
    this provision is unnecessary because consumers have the choice of
    obtaining service from another carrier.[^33] They also point out
    that there is no similar requirement for PCS or SMR licensees. Other
    commenters argue that eliminating the rule may lead to cellular
    licensees providing insufficient analog capacity.[^34] As a
    threshold matter, we are unaware of any cellular licensee having
    filed such a notification with the Commission. We agree that
    carriers must provide sufficient capacity for analog service in
    instances where it is required. In fact, revised section
    22.901(b)(2) states in part that "\[c\]ellular licensees must allot
    sufficient system resources such that the quality of AMPS provided,
    in terms of geographic coverage and traffic capacity, is fully
    adequate to satisfy the concurrent need for AMPS availability." We
    believe that this rule provision, combined with the choices of
    wireless services available to consumers today, will ensure that
    consumers of analog services will continue to receive adequate
    service even in the absence of the notification requirement.

10. Finally, we conclude that it is unnecessary to retain the provision
    in the introductory paragraph to section 22.901 stating that a
    carrier may terminate service to a customer who operates a cellular
    telephone while on board an airborne aircraft. Commenters addressing
    this issue agree that the rule is no longer necessary.[^35] Some
    carriers note that, in the event we retain the rule, it should be
    broadened to include other rule violations and apply to all CMRS
    providers.[^36] We find, however, that there is no basis to retain
    this provision because our rules already explicitly prohibit
    operation of cellular telephones on board airborne aircraft, and a
    cellular licensee would be within its obligations under sections 201
    and 202 of the Act in terminating the service of customers who
    violate the Commission's rules. Further, such a rule could be
    misinterpreted to limit a cellular or other CMRS licensee's ability
    to terminate service to customers in the case of other types of rule
    violations. The Commission has previously stated that a Part 22
    licensee may refuse or terminate service in the event that a
    subscriber operates a telephone in violation of the Commission's
    rules.[^37] Therefore, we find that an express condition regarding
    airborne operation is unnecessary and potentially confusing to
    licensees.

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IV. **ADMINISTRATIVE MATTERS**

    A.  **Final Regulatory Flexibility Act Analysis**.

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11. The Final Regulatory Flexibility Analysis for this *Second Report
    and Order,* as required by section 604, of the Regulatory
    Flexibility Act of 1980, 5 U.S.C. § 604, is set forth in Appendix B.

    A.  **Paperwork Reduction Act Analysis.**

12. The actions taken in this *Second Report and Order* have been
    analyzed with respect to the Paperwork Reduction Act of 1995,
    Pub. L. No. 104-13, and found to impose no new or modified
    recordkeeping requirements or burdens on the public.

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V.  **ORDERING CLAUSES.**

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13. IT IS ORDERED that, pursuant to the authority of sections 4(i), 7,
    303(c), 303(f), 303(g), 303(r), and 332 of the Communications Act of
    1934, as amended, 47 U.S.C. §§ 154(i), 303(c), 303(f), 303(g),
    303(r), and 332, the rule changes specified in Appendix A are
    adopted.

14. IT IS FURTHER ORDERED that the rule changes set forth in Appendix A
    WILL BECOME EFFECTIVE 60 days after publication in the *Federal
    Register*.

15. IT IS FURTHER ORDERED that a copy of this *Second Report and Order*,
    including the Final Regulatory Flexibility Analysis set forth in
    attached Appendix B, will be sent to the Chief Counsel

16. for Advocacy of the Small Business Administration in accordance with
    paragraph 603(a) of the Regulatory Flexibility Act, Pub. L. No.
    96-354, 94 Stat. 1164, 5 U.S.C. §§ 601 et seq. (1981).

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

Secretary

**APPENDIX A**

**[RULE CHANGES]{.underline}**

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

The authority citation for part 22 continues to read as follows:

[Authority]{.smallcaps}: 47 U.S.C. 154, 222, 303, 309 and 332.

Section 22.901 is revised to read as follows:

**22.901 Cellular service requirements and limitations.**

The licensee of each cellular system is responsible for ensuring that
its cellular system operates in compliance with this section.

(a)  Each cellular system must provide either mobile service, fixed
service, or a combination of mobile and fixed service, *subject to* the
requirements, limitations and exceptions in this section. Mobile service
provided may be of any type, including two‑way radiotelephone, dispatch,
one‑way or two‑way paging, and personal communications services (as
defined in Part 24 of this chapter). Fixed service is considered to be
primary service, as is mobile service. When both mobile and fixed
service are provided, they are considered to be co‑primary services. In
providing cellular services, each cellular system may incorporate any
technology that meets all applicable technical requirements in this
part.

(b) Until \[FIVE YEARS FROM THE EFFECTIVE DATE OF ORDER\], each cellular
system that provides two-way cellular mobile radiotelephone service must
--

\(1\) Maintain the capability to provide compatible analog service
("AMPS") to cellular telephones designed in conformance with the
specifications contained in §§ 1 and 2 of the standard document ANSI
TIA/EIA-553-A-1999 Mobile Station -- Base Station Compatibility Standard
(approved October 14, 1999); or, the corresponding portions, applicable
to mobile stations, of whichever of the predecessor standard documents
was in effect at the time of the manufacture of the telephone. This
incorporation by reference was approved by the Director of the Federal
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of
the standard may be purchased from Global Engineering Documents, 15
Inverness East, Englewood, CO 80112-5704 (or via the internet at
http://global.ihs.com). Copies are available for inspection at the
Federal Communications Commission, 445 12th Street, SW, Washington, DC
20554, or the Office of the Federal Register, 800 North Capitol Street,
NW, Suite 700, Washington, DC.

(2) Provide AMPS, upon request, to subscribers and roamers using such
cellular telephones while such subscribers are located in any portion of
the cellular system's CGSA where facilities have been constructed and
service to subscribers has commenced. *See also* § 20.12 of this
chapter. Cellular licensees must allot sufficient system resources such
that the quality of AMPS provided, in terms of geographic coverage and
traffic capacity, is fully adequate to satisfy the concurrent need for
AMPS availability.

**APPENDIX B**

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act (RFA),[^38] an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of
Proposed Rulemaking in WT Docket No. 01-108, released May 17, 2001
(*NPRM*).[^39] The Commission sought written public comment on the
proposals in the Second Further Notice, including comment on the IRFA.
The comments received are discussed below. This Final Regulatory
Flexibility Analysis (FRFA) conforms to the RFA.[^40]

**A. Need for, and Objectives of, the Order.**

In the Telecommunications Act of 1996, Congress added sections 11 and
202(h) to the Communications Act of 1934, as amended, requiring the
Commission to 1) review biennially its regulations that pertain to the
operations or activities of telecommunications service providers, and 2)
determine whether those regulations are no longer necessary in the
public interest as a result of meaningful economic competition.
Following such review, the Commission is required to modify or repeal
any such regulations that are no longer in the public interest.[^41]
Accordingly, as part of the Commission's year 2000 Biennial Review of
regulations, the *Second Report and Order* amends Part 22 of the
Commission's rules by modifying or eliminating provisions of section
22.901, which has become outdated due to technological change and
increased competition in the Commercial Mobile Radio Services (CMRS).

**B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA.**

Although we have received numerous comments in response to the *NPRM,*
we received no comments in response to the IRFA. However, as described
in section E. below, we have nonetheless considered potential
significant economic impacts of the rules on small entities.

**General Cellular Service Requirements and Limitations**. A number of
commenters agree that certain portions of section 22.901 should be
removed as outdated, duplicative, and unnecessary.[^42] Our action
eliminates burdens on our licensees. WCA, AG Bell, and NECC, however,
argued that the Commission should retain the requirement in section
22.901(a) requiring cellular licensees to provide service area a
information to potential customers.[^43] They argue that consumers
require access to this information in order to make sound choices when
purchasing wireless services. Likewise, AG Bell and Sprint urge the
Commission to retain the requirement in section 22.901(b) requiring
cellular licensees to notify the Commission in the event a consumer's
request for service is denied due to lack of capacity.[^44] They argue
that eliminating the rule may lead to cellular carriers not providing
sufficient capacity for analog services going forward.

**C. 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.[^45] The RFA generally
defines the term "small entity" as having the same meaning as the terms
"small business," "small organization," and "small governmental
jurisdiction."[^46] In addition, the term "small business" has the same
meaning as the term "small business concern" under the Small Business
Act.[^47] A "small business concern" is one which: (1) is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the Small Business
Administration (SBA).[^48]

This *Second Report and Order* results in rule changes that could affect
small businesses that currently are or may become Cellular
Radiotelephone Service providers that are regulated under Subpart H of
Part 22 of the Commission's rules. The SBA has developed a small
business size standard for small businesses in the category "Cellular
and Other Wireless Telecommunications."[^49] Under that SBA category, a
business is small if it has 1,500 or fewer employees.[^50] According to
the Bureau of the Census, only twelve firms from a total of 1238
cellular and other wireless telecommunications firms operating during
1997 had 1,000 or more employees.[^51] Therefore, even if all twelve of
these firms were cellular telephone companies, nearly all cellular
carriers were small businesses under the SBA's definition. In addition,
we note that there are 1807 cellular licenses; however, a cellular
licensee may own several licenses. According to the most recent *Trends
in Telephone Service* data, 806 carriers reported that they were engaged
in the provision of either cellular service, Personal Communications
Service (PCS), or Specialized Mobile Radio telephony services, which are
placed together in that data.[^52] We have estimated that 323 of these
are small under the SBA small business size standard.[^53] Accordingly,
based on this data, we estimate that not more than 323 cellular service
providers will be affected by these revised rules.

**D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements**

None.

**E. 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 proposed approach, which may include
the following four alternatives (among others): (1) the establishment of
differing compliance or reporting requirements or timetables that take
into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of
performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.[^54]

As stated earlier, the *Second Report and Order* concluded that certain
provisions of section 22.901 are unnecessary in light of meaningful
economic competition or technological advances. Therefore, modifying or
eliminating these provisions should decrease the costs associated with
regulatory compliance for cellular service providers, provide additional
flexibility in manufacturing cellular equipment, and also enhance the
market demand for some products.

F.  **Federal Rules that May Duplicate, Overlap or Conflict with the
    Proposed Rules**

None.

**[Report to Congress]{.underline}**: The Commission will send a copy of
the *Report and Order*, including this FRFA, in a report to be sent to
Congress pursuant to the Small Business Regulatory Enforcement Fairness
Act of 1996, see 5 U.S.C. § 801(a)(1)(A). In addition, the Commission
will send a copy of the *Report and Order*, including this FRFA, to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the *Report and Order* and FRFA (or summaries thereof) will also be
published in the Federal Register. *See* 5 U.S.C. § 604(b).

**APPENDIX C**

**List of Commenters**

**[Comments]{.underline}**

Alexander Graham Bell Association for the Deaf and Hard of Hearing (AG
Bell)

AT&T Wireless Services, Inc. (AT&T Wireless)

ATX Technologies, Inc.

Bristol Bay Cellular Partnership

CaseNewHolland Inc. (CNH)

Cellular Telecommunications & Internet Assn. (CTIA)

CenturyTel Wireless, Inc.

Cingular Wireless, LLC

Council of Organizational Representatives (COR)

Deere & Co. (Deere)

Deltec Telesystems, Inc.

Dixon, Alan

Dobson Communications Corp.

Ericsson, Inc.

Hiscock, David

Independent Cellular Services Association and MT Communications (ICSA/MT
Communications)

Kosterich, Eileen

League For the Hard of Hearing

McElvogue, Ronnald E.

Missouri RSA No. 7 L.P. dba Mid-Missouri Cellular, Northwest Missouri
Cellular L.P. dba Northwest Missouri Cellular, RSA 1 L.P. dba Cellular
29 Plus (Mid-Missouri Cellular et al.)

National Association of the Deaf (NAD)

OnStar Corp.

Qualcomm, Inc.

Qwest Wireless, L.L.C.

Rural Cellular Association (RCA)

Rural Telecommunications Group (RTG)

Secure Alert

Self Help For Hard of Hearing People (SHHH)

Sprint Spectrum L.P., dba Sprint PCS

Telecommunications for the Deaf, Inc.

Telecommunications Industry Association (TIA)

U.S. Cellular Corporation

Verizon Wireless, LLC (Verizon)

Vickery, Ronald H.

Western Wireless, Inc.

Wireless Consumers Alliance, Inc. (WCA)

**[Reply Comments]{.underline}**

AT&T Wireless Services, Inc. (AT&T Wireless)

ATX Technologies, Inc.

CaseNewHolland Inc. (CNH)

Cingular Wireless, LLC

Council of Organizational Representatives (COR)

Deere & Co. (Deere)

Dobson Communications Corp.

EDS Corp.

Independent Cellular Services Association and MT Communications (ICSA/MT
Communications)

Kosterich, Eileen

Leap Wireless International, Inc.

Mercedes-Benz USA, LLC. (MBUSA)

Missouri RSA No. 7 L.P. dba Mid-Missouri Cellular, Northwest Missouri
Cellular L.P. dba Northwest Missouri Cellular, RSA 1 L.P. dba Cellular
29 Plus (Mid-Missouri Cellular et al.)

N.E. Colorado Cellular, Inc.

National Association of the Deaf (NAD)

Rural Cellular Association (RCA)

Rural Telecommunications Group (RTG)

Self Help For Hard of Hearing People (SHHH)

Sprint Spectrum L.P., dba Sprint PCS

Telecommunications For the Deaf, Inc.

Verizon Wireless, LLC (Verizon)

**[*Ex Partes* or Late Filed Comments]{.underline}**

A2Q, Inc.

AARP

ATX Technologies, Inc., et al.

Allen, George (The Hon.)

American Honda Motor Company (Honda)

Audi of America

Breaux, John D. (The Hon.)

Brownback, Sam (The Hon.)

Carnahan, Jean (The Hon.)

Cellular Telecommunications & Internet Assn. (CTIA)

Cingular Wireless, LLC

Cleland, Max (The Hon.)

Dorgan, Byron L. (The Hon.)

Edwards, John (The Hon.)

Hollings, Ernest F. (The Hon.)

Los Angeles County Service Authority for Freeway Emergencies

Mercedes-Benz USA, LLC

National Association of EMS Physicians (NAEMSP)

National Telecommunications and Information Administration (NTIA)

Nelson, Bill (The Hon.)

National Organization on Disability

OnStar Corporation

Rehabilitation Engineering Research Center on Telecommunications Access
(RERC-TA)

Rural Cellular Association (RCA)

Rural Telecommunications Group (RTG)

San Bernardino County -- Service Authority for Freeways and Expressways

Smith, Gordon (The Hon.)

Sprint Spectrum L.P., dba Sprint PCS

Toyota Motor North America, Inc.

Transportation Agency for Monterey County

Wyden, Ron (The Hon.)

Zarick, Michael (late filed)

**[Comments re: Request for Waiver of the Vertical Wave Polarization
Requirement filed by Cingular Wireless, LLC]{.underline}**

AirCell, Inc.

Allgon Telecom

Andrew Corp.

AT&T Wireless Services, Inc.

CSA Wireless

Cingular Wireless, LLC

Dobson Communications Corp.

Meyers, Lou

**STATEMENT OF COMMISSIONER MICHAEL J. COPPS**

**APPROVING IN PART, DISSENTING IN PART**

*RE: Year 2000 Biennial Review -- Amendment of Part 22 of the
Commission's Rules to Modify or Eliminate Outdated Rules Affecting the
Cellular Radiotelephone Service and Other Commercial Mobile Radio
Services*, Second Report and Order, WT Docket No. 108

Today's Order eliminates the rule that cellular licensees must inform
potential customers of their service areas. The rule being repealed
guarantees that when a consumer walks into a cellular store, he or she
will see a network coverage map. I believe that understanding a
carrier's service area is critical information for consumers. I also
disagree with the majority's apparent belief that competition alone can
obviate the need for consumer protection laws. I therefore must dissent
from that portion of the Order.

Markets depend on information. Consumers with good information about
products and services can "comparison shop" and determine what products
and service are worth. Informed consumers will choose the best
combination of quality and price. These discriminating consumers force
sellers to compete with one another. This competition drives down costs
and pushes up quality, because the seller with the best product or
service will win the informed consumer.

Without information, however, consumers are in the dark. They cannot
comparison shop because they don't know how products and services
differ. They cannot determine how much a product or service is worth,
because they do not know the quality of what they are considering
purchasing. This lack of information means that sellers are not forced
to compete as vigorously. Costs can stay higher and quality can stay
lower.

For cellular customers, the service area of a given cellular plan is
critical information. It allows them to determine where they can use
their phone and where they cannot. It allows then to determine the size
of their monthly bill. In rural areas, it allows them to determine where
911 calls will go through and where their signal will never be heard.
Armed with information on service areas, consumers will seek out
carriers with the largest, most complete service areas, while also
seeking better technology, and better prices.

Carriers provide service area information now. Cellular carriers were,
until today, required to do so. PCS carriers, who came into a market
where such provision was required of their competitors, naturally
followed suit. But when the cellular rule disappears, we face the risk
that carriers with the worst service areas will try to conceal their
inferiority by not making service maps available. Unsophisticated
consumers may assume to their detriment that since the carrier provides
them with no coverage map that coverage exists everywhere. Competition
and consumers will suffer.

Some argue that we do not need a requirement because market forces will
protect consumers -- that we do not need consumer protection rules
because the unfettered market will do just as well. I believe that
consumer protection is important even where competition exists. This is
especially true for rules that put the power of information in the hands
of consumers. Consumers cannot possibly determine a carrier's service
area unless the carrier provides it. This information is, practically,
under the sole control of the carrier. Where such information access
asymmetries exist, rules that make information more widely available can
address market failures that could otherwise undermine a market and lead
to inefficiencies. Additionally, many believe that the wireless industry
will soon experience significant consolidation. Even if one believes
that competition without consumer protection will cause carriers to
disclose service areas today, with less competition tomorrow this will
be less likely to occur.

To sum up, the majority seems to believe that we can safely assume that
competitive forces will result in all carriers continuing to provide
customers with coverage maps -- and that while these maps are
undoubtedly important to consumers, that the rule is not needed to
maintain their availability. I believe that this assumption is wrong,
and that we are opening the door to a market where such maps are no
longer universally available.

I could be wrong. But even if I was wrong and the rule was retained, and
maps stayed available through a rule that was not necessary, consumers
would remain protected *[at no additional cost to
industry]{.underline}*. After all, even if the rule were eliminated, the
majority assumes competition would force carriers to provide the very
same maps. But if the majority is wrong, and competitive forces do not
force carriers to provide accurate coverage area information once the
rule is gone, coverage maps will no longer be a ubiquitous consumer
protection. Thus, for the mere sake of eliminating a costless rule, the
majority is willing to take this substantial risk. I am not.

**CONSOLIDATED SEPARATE STATEMENT OF**

**COMMISSIONER KEVIN J . MARTIN,**

**APPROVING IN PART AND CONCURRING IN PART**

*Re: Year 2000 Biennial Regulatory Review -- Amendment of Part 22 of the
Commission's Rules To Modify or Eliminate Outdated Rules Affecting the
Cellular Radiotelephone Service and other Commercial Mobile Radio
Services*, WT Docket No. 01-108, Report and Order (FCC 02-229) and
Second Report and Order (FCC 02-247)

I support these Orders, which modify or eliminate a number of our Part
22 rules pursuant to the biennial review mandated by section 11 of the
Communications Act. I concur, however, with respect to the Orders'
discussion of the legal standard for Section 11's biennial review. I
also write separately to emphasize my support for ensuring that people
with hearing disabilities have sufficient access to wireless services.

Section 11 requires the Commission to review its regulations for
providers of telecommunications service every two years and to
"determine whether any such regulation is no longer necessary in the
public interest as the result of meaningful economic competition between
providers of such service." 47 U.S.C. § 161(a). The provision then
mandates that "The Commission shall repeal or modify any regulation it
determines to be no longer necessary in the public interest." *Id.* §
161(b).

While I agree with much of the Orders' discussion of Section 11's legal
standard (*see* First Report and Order ¶ 4; Second Report and Order ¶ 6)
-- as well as the Orders' application of the standard to the regulations
at issue -- I am concerned by the Orders' failure to discuss the meaning
of the term "necessary" in Section 11. In a similar context, the
Commission has argued that the term "necessary" means only "useful" or
"appropriate." *See* FCC's Petition for Rehearing or Rehearing *En
Banc*, *Fox Television Stations, Inc. v. FCC*, Nos. 00-1222, *et al.*,
2002 WL 1343461, at 5 (D.C. Cir. Jun 21, 2002) ("Terms such as
'necessary' and 'required' must be read in their statutory context and,
so read, can reasonably be interpreted as meaning 'useful' or
'appropriate' rather than 'indispensable' or 'essential.'"). As I have
argued elsewhere, I believe the term "necessary" should be read in
accordance with its plain meaning, to mean something closer to
"essential."[^55] But at the very least, I think the Commission should
clarify that the term means something more than merely "useful" or
"appropriate." Accordingly, I concur in the Orders' discussion of
Section 11's legal standard.

I also wish to note my support for ensuring that people with hearing
disabilities have sufficient access to wireless services. Currently,
hearing disabled people must generally rely on analog wireless service,
because most digital phones cause interference to most hearing aids and
cochlear implants. For this reason, among others, the First Report and
Order leaves in place the requirement that cellular carriers provide
analog service for another five years. More importantly, that Order
makes clear that -- even after the five-year period -- the Commission
will not eliminate the analog requirement if hearing-aid compatible
digital devices are still not available. This latter point was
fundamental to my support of the item.

Ultimately, however, the Commission must ensure the availability of
digital phones that are compatible with hearing aids and cochlear
implants. Fixing the digital compatibility problem, rather than
relegating the hearing disabled community to analog phones, is the real
solution. I thus look forward to tackling that issue and completing our
proceeding under the Hearing Aid Compatibility Act of 1988. Completing
that proceeding should be, and is, a priority for the Commission.

[^1]: 47 U.S.C. § 161. *See* Year 2000 Biennial Regulatory Review --
    Amendment of Part 22 of the Commission's Rules to Modify or
    Eliminate Outdated Rules Affecting the Cellular Radiotelephone
    Service and other Commercial Mobile Radio Services, *Report and
    Order*, FCC 02-229 (rel. September xx, 2002).

[^2]: *See* Biennial Regulatory Review, CC Docket No. 00-175, *Report*,
    16 FCC Rcd 1207 (2001) (*Biennial Review Report*); Biennial
    Regulatory Review 2000 Updated Staff Report, rel. January 17, 2001
    (*Biennial Review Staff Report*).

[^3]: 47 C.F.R. §§ 22.900 *et seq.*

[^4]: *See Biennial Review Staff Report* at para. 104.

[^5]: Year 2000 Biennial Regulatory Review -- Amendment of Part 22 of
    the Commission's Rules to Modify or Eliminate Outdated Rules
    Affecting the Cellular Radiotelephone Service and other Commercial
    Mobile Radio Services, *Notice of Proposed Rulemaking*, 16 FCC Rcd
    11169 (2001) (*NPRM*).

[^6]: *NPRM* at para. 7.

[^7]: *Id.* at paras. 13-17.

[^8]: *Id*. at para. 13.

[^9]: *Id*.

[^10]: *Id*.

[^11]: *Id.* at paras. 14-15.

[^12]: Section 22.901(a) provides as follows: "*Service area
    information*. Licensees must inform prospective subscribers of the
    area in which reliable service can be expected." 47 C.F.R. §
    22.901(a).

[^13]: *NPRM* at para. 14.

[^14]: *Id*.

[^15]: Section 22.901(b) provides as follows: "Lack of capacity. If a
    licensee refuses a request for cellular service because of a lack of
    system capacity, it must report that fact to the FCC in writing,
    explaining how it plans to increase capacity." 47 C.F.R. §
    22.901(b).

[^16]: *NPRM* at para. 15.

[^17]: *Id*.

[^18]: *Id*. at paras. 16-17.

[^19]: 47 C.F.R. § 22.901. *NPRM* at para. 16.

[^20]: *NPRM* at para. 16.

[^21]: 47 C.F.R. § 22.901; *NPRM* at para. 17.

[^22]: *NPRM* at para. 17.

[^23]: *See* Telecommunications Act of 1996, Pub. Law No. 104-104, 110
    Stat. 56 (1996) ("1996 Act"), introductory statement (the 1996 Act
    was intended "\[t\]o promote competition and reduce regulation in
    order to secure lower prices and higher quality services for
    American telecommunications consumers and encourage the rapid
    deployment of new telecommunications technologies."); Joint
    Managers' Statement, S. Conf. Rep. No. 104-230, 104th Cong., 2d
    Sess. 113 (1996) at 1 (stating that the 1996 Act would establish a
    "pro-competitive, deregulatory national policy framework").

[^24]: *See* 47 U.S.C. § 161. Section 11 states:

    BIENNIAL REVIEW OF REGULATIONS. -- In every even-numbered year
    (beginning with 1998), the Commission \-- (1) shall review all
    regulations issued under this Act in effect at the time of the
    review that apply to the operations or activities of any provider of
    telecommunications service; and (2) shall determine whether any such
    regulation is no longer necessary in the public interest as the
    result of meaningful economic competition between providers of such
    service.

    \(b\) EFFECT OF DETERMINATION. -- The Commission shall repeal or
    modify any regulation it determines to be no longer necessary in the
    public interest.

[^25]: *See* In the Matter Of 2000 Biennial Regulatory Review Spectrum
    Aggregation Limits for Commercial Mobile Radio Services, WT Docket
    No. 01-14, *Report and Order*, 16 FCC Rcd 22628, para. 25 (2001)
    (*Spectrum Cap Order*).

[^26]: *Id.* (quoting 47 U.S.C. § 161(a)(2)).

[^27]: 47 U.S.C. § 161(b).

[^28]: *See Spectrum Cap Order* at 22678-79, para. 25.

[^29]: *Id.* at 22679, para. 25.

[^30]: *Id.* We note that, in the context of section 202(h) of the
    Communications Act, the U.S. Court of Appeals for the D.C. Circuit
    found that we are not limited to the original purpose of a rule when
    determining whether or not it remains necessary. *See Fox Television
    Stations, Inc. v. FCC et al.*, 280 F.3d 1027 (D.C. Cir. 2002)
    ("Nothing in § 202(h) suggests the grounds upon which the Commission
    may conclude that a rule is necessary in the public interest are
    limited to the grounds upon which it adopted the rule in the first
    place.").

[^31]: Verizon Comments at 15; Cingular Comments at 15.

[^32]: WCA Comments at 6; AG Bell Comments at 5; NECC Reply Comments at
    7.

[^33]: Verizon Comments at 16; Cingular Comments at 16.

[^34]: AG Bell Comments at 6; Sprint Reply Comments at 11.

[^35]: Cingular Comments at 16.

[^36]: Verizon Comments at 16-17.

[^37]: *See* Amendment of Sections of Part 21 (now Part 22) of the
    Commission's Rules to Modify Individual Licensing Procedures in the
    Domestic Public Radio Services (now Public Mobile Radio Services),
    CC Docket No. 79-259, *Report and Order*, 77 FCC 2d 84, 86, para. 8
    (1980) ("If a subscriber fails to meet any of the responsibilities
    discussed above \[including compliance with the Commission's
    rules\], the carrier may refuse or suspend service until the
    subscriber has corrected the deficiency in question.").

[^38]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq*.,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^39]: Year 2000 Biennial Regulatory Review -- Amendment of Part 22 of
    the Commission's Rules to Modify or Eliminate Outdated Rules
    Affecting the Cellular Radiotelephone Service and other Commercial
    Mobile Radio Services, *Notice of Proposed Rulemaking*, 16 FCC Rcd
    11169 (2001) (*NPRM*).

[^40]: *See* 5 U.S.C. § 604.

[^41]: 47 U.S.C. § 11(b); the Telecommunications Act of 1996 § 202(h).

[^42]: *See e.g.* Verizon Comments at 15; Cingular Comments at 15.

[^43]: WCA Comments at 6; AG Bell Comments at 5; NECC Reply Comments at
    7.

[^44]: AG Bell Comments at 6; Sprint Reply Comments at 11.

[^45]: 5 U.S.C. § 603(b)(3).

[^46]: 5 U.S.C. § 601(6).

[^47]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in the Small Business Act, 15 U.S.C. §
    632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a
    small business applies "unless an agency, after consultation with
    the Office of Advocacy of the Small Business Administration and
    after opportunity for public comment, establishes one or more
    definitions of such term which are appropriate to the activities of
    the agency and publishes such definition(s) in the Federal
    Register."

[^48]: 15 U.S.C. § 632.

[^49]: 13 C.F.R. § 121.201, North American Industry Classification
    System (NAICS) code 513322.

[^50]: *Id*.

[^51]: U.S. Department of Commerce, U.S. Census Bureau, 1997 Economic
    Census, Information - Subject Series, Establishment and Firm Size,
    Table 5 -- Employment Size of Firms Subject to Federal Income Tax at
    64, NAICS code 513322 (October 2000).

[^52]: *See Trends in Telephone Service*, Industry Analysis Division,
    Common Carrier Bureau , Table 5.3 - Number of Telecommunications
    Service Providers that are Small Businesses (August 2001).

[^53]: *Id.* Data found in *Trends in Telephone Service* is based on
    information filed by service providers on FCC Form 499-A worksheets,
    in combination with employment information obtained from ARMIS and
    Securities and Exchange Commission filings as well as industry
    employment estimates published by the Bureau of Labor Statistics.

[^54]: *See* 5 U.S.C. § 603.

[^55]: *See* Separate Statement of Commissioner Kevin J. Martin,
    *Verizon Wireless's Petition for Partial Forbearance from the
    Commercial Mobile Radio Services Number Portability Obligation*,
    Memorandum Opinion and Order, WT Docket No. 01-184, CC Docket No.
    95-116 (adopted July 16, 2002); Separate statement of Commissioner
    Kevin J. Martin, *Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992; Development of Competition
    and Diversity in Video Programming Distribution: Section 628(c)(5)
    of the Communications Act; Sunset of Exclusive Contract
    Prohibition*, Report and Order, CS Docket No. 01-290 (adopted June
    13, 2002).