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 Federal  Communications  Commission  FCC  01-  153 
 1 
 Before  the 
 Federal  Communications  Commission  Washington,  D.  C.  20554 

 In  the  Matter  of 
 Year  2000  Biennial  Regulatory  Review 
   Amendment  of  Part  22  of  the 
 Commissions  Rules  to  Modify  or 
 Eliminate  Outdated  Rules  Affecting 
 the  Cellular  Radiotelephone  Service 
 and  other  Commercial  Mobile  Radio 
 Services 

 ) 
 ) 
 ) 
 ) 
 )  WT  Docket  No.  01-  108 
 ) 
 ) 
 ) 
 ) 

 NOTICE  OF  PROPOSED  RULEMAKING 
 Adopted:  May  3,  2001  Released:  May  17,  2001 
 Comment  Date:  July  2,  2001  Reply  Comment  Date:  August  1,  2001 

 By  the  Commission:  Commissioner  Tristani  issuing  a  separate  statement. 
 TABLE  OF  CONTENTS  Paragraph 

 I.  INTRODUCTION......................................................................................................  1 
 II.  BACKGROUND.......................................................................................................  7 
 III.  DISCUSSION........................................................................................................  10 
 A.  General  Cellular  Rules:  Cellular  Service  Requirements  and  Limitations....  13  B.  Cellular  Technical  Rules..................................................................................  18 

 1.  Analog  Cellular  Compatibility  Standard  .....................................................  18 
 2.  Electronic  Serial  Number  Rule....................................................................  32 
 3.  Channelization  Requirements......................................................................  37 
 4.  Modulation  Requirements  and  In-  band  Emissions  Limitations  ....................  39 
 5.  Wave  Polarization  Requirement  ..................................................................  43 
 6.  Assignment  of  System  Identification  Numbers  .............................................  48 
 7.  Determination  of  Cellular  Geographic  Service  Area  ...................................  52 
 8.  Service  Commencement  and  Construction  Periods......................................  55 
 C.  Incidental  Services  Rule...................................................................................  56 
 D.  Cellular  Anti-  Trafficking  Rules  ......................................................................  63 
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 IV.  ADMINISTRATIVE  MATTERS.........................................................................  71 
 A.  Initial  Regulatory  Flexibility  Act.....................................................................  71  B.  Paperwork  Reduction  Act  ...............................................................................  72 

 C.  Ex  Parte  Rules  ..................................................................................................  73 
 D.  Filing  of  Comments  and  Reply  Comments  .....................................................  74 

 V.  ORDERING  CLAUSES  .........................................................................................  77 
 APPENDIX  A:  Proposed  Rule  Changes 
 APPENDIX  B:  Initial  Regulatory  Flexibility  Analysis 

 I.  INTRODUCTION 
 1.  In  this  Notice  of  Proposed  Rulemaking  (Notice),  we  propose  to  amend  Part  22 
 of  our  rules  to  modify  or  eliminate  regulations  that  have  become  outdated  as  a  result  of 
 technological  change,  increased  competition  in  the  Commercial  Mobile  Radio  Services 
 (CMRS),  supervening  changes  to  related  Commission  rules,  or  a  combination  of  these 
 factors.  We  focus  particularly  on  the  rules  in  Part  22,  Subpart  I  that  govern  the  Cellular 
 Radiotelephone  Service  (cellular),  but  we  also  consider  modification  or  elimination  of 
 certain  other  rules  that  affect  all  Part  22  Public  Mobile  Services. 

 2.  We  initiate  this  proceeding  as  a  part  of  our  year  2000  Biennial  Review  of 
 regulations  pursuant  to  Section  11  of  the  Communications  Act  of  1934,  as  amended 
 (Communications  Act).  1  Section  11  requires  us  to  review  all  of  our  regulations  applicable 
 to  providers  of  telecommunications  service,  and  to  determine  whether  any  rule  is  no 
 longer  in  the  public  interest  as  a  result  of  meaningful  economic  competition  between 
 providers  of  telecommunications  service  and  whether  such  regulations  should  be  deleted 
 or  modified. 

 3.  Pursuant  to  that  statutory  standard,  the  Commission  staff  has  recently 
 completed  a  report  on  its  comprehensive  review  of  regulations  that  affect 
 telecommunications  service  providers,  and  the  Commission  has  issued  a  report  endorsing 
 recommendations  made  by  staff  as  a  result  of  that  review.  2  In  the  staff  report,  the  staff 
 notes  that  many  of  the  Part  22  rules  regulating  cellular  telephone  service  date  back  to  the 
 inception  of  the  service  in  the  early  1980s,  when  the  two  cellular  carriers  in  each  market 
 were  the  only  providers  of  mobile  telephony,  thus  creating  a  duopoly  market  for  this 
 service.  The  staff  report  recommends  initiating  a  rulemaking  to  review  the  cellular  rules 
 and  consider  which  of  these  rules  are  obsolete  as  a  result  of  the  technological  advances 
 and  growth  of  competition  that  have  occurred  in  mobile  telephony  since  the  rules  were 

 1  See  Section  11  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    161. 
 2  See  Biennial  Regulatory  Review,  CC  Docket  No.  00-  175,  Report,  FCC  00-  456  (adopted  December  29, 
 2000;  released  January  17,  2001)  (Biennial  Review  Report);  Biennial  Regulatory  Review  2000  Updated 
 Staff  Report,  released  January  17,  2001  (Biennial  Review  Staff  Report). 
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 adopted.  The  report  also  recommends  review  of  certain  other  Part  22  rules  on  the  same 
 basis.  3 
 4.  In  the  Biennial  Review  Report,  we  agreed  with  the  staffs  recommendation 
 that  pursuant  to  Section  11,  we  should  initiate  a  rulemaking  proceeding  to  identify  and 
 address  potentially  outdated  technical  rules  governing  cellular  service.  4  Therefore,  in  this 
 Notice,  we  seek  comment  on  whether  to  modify  or  eliminate  the  following  rules: 

 x  General  cellular  service  requirements  and  limitations  (Section  22.  901). 

 x  The  Advanced  Mobile  Phone  Service  (AMPS)  analog  cellular  compatibility 
 standard  (Sections  22.901  and  22.933). 

 x  Manufacturing  design  requirements  governing  the  security  of  electronic  serial 
 numbers  (ESNs)  in  cellular  telephones  (Section  22.919). 

 x  Cellular  channelization  rules  (Section  22.905). 

 x  Cellular  analog  modulation  requirements  and  out-  of-  band  emission  limitations 
 (Sections  22.915  and  22.917).  We  also  propose  greater  flexibility  in  our  out-  of-band  emission  rules  for  broadband  Personal  Communications  Services  (PCS). 

 x  Cellular  wave  polarization  requirement  (Section  22.367(  a)(  4)). 
 x  Rule  governing  cellular  System  Identification  Numbers  (SIDs)  (Section  22.  941) 
 x  Alternative  methods  for  determining  a  Cellular  Geographic  Service  Area  (CGSA) 
 (Section  22.911). 

 x  Service  commencement  and  construction  periods  (Section  22.946). 

 5.  We  seek  comment  on  potential  modification  or  elimination  of  certain  other 
 Part  22  rules  that  apply  both  to  cellular  and  to  other  CMRS.  Specifically,  we  propose  to 
 modify  or  eliminate  Section  22.323,  which  imposes  conditions  on  the  provision  of 
 incidental  services  by  Public  Mobile  Services  providers.  5  In  connection  with  our 
 review  of  the  incidental  services  rule,  we  also  consider  whether  our  rules  should  be 

 3  Biennial  Review  Staff  Report  at    104. 
 4  Biennial  Review  Report  at    67. 
 5  The  Commission  recently  removed  one  of  the  conditions  in    22.  323,  which  had  required  licensees  to 
 notify  the  Commission  before  providing  incidental  services  pursuant  to  that  rule.  See  Amendment  of  the 
 Commissions  Rules  to  Permit  Flexible  Service  Offerings  in  the  Commercial  Mobile  Radio  Services,  FCC 
 00-  246,  WT  Docket  No.  96-  6,  Second  Report  and  Order  and  Order  on  Reconsideration, 
 15  FCC  Rcd.  14,  680  (rel.  July  20,  2000)  (CMRS  Flexibility  Second  Report  and  Order  and  Order  on 
 Reconsideration). 
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 amended  to  facilitate  more  flexible  use  of  spectrum  licensed  to  CMRS  providers.  In 
 particular,  we  address  the  possibility  of  Paging  and  Radiotelephone  Service  licensees 
 using  assigned  paging  channels  to  transmit  audio  programming  of  interest  to  a  narrow  or 
 specialized  audience. 

 6.  We  also  seek  comment  on  our  proposal  to  eliminate  or  modify  certain 
 cellular  anti-  trafficking  rules,  specifically  Sections  22.937,  22.  943,  and  22.945.  We 
 propose  to  eliminate  or  modify  these  rules  intended  to  prevent  speculation,  lottery  abuse, 
 and  trafficking  in  licenses,  as  they  were  adopted  during  a  period  when  the  Commission 
 resolved  mutually  exclusive  applications  for  initial  cellular  services  through  lottery, 
 rather  than  the  current  system  of  resolving  such  mutually  exclusive  applications  through 
 competitive  bidding. 

 II.  BACKGROUND 
 7.  The  Commissions  Part  22  rules  regulating  cellular  telephone  service  were 
 largely  adopted  in  the  early  1980s  when  the  service  was  initiated.  6  At  the  time  these  rules 
 were  adopted,  the  two  prospective  cellular  carriers  in  each  market  (one  of  which  would 
 be  affiliated  with  the  incumbent  LEC  in  each  market)  were  anticipated  to  be  the  only 
 facilities-  based  providers  of  mobile  telephony,  thus  creating  a  duopoly  market  for  this 
 service.  7  One  of  our  earliest  goals  for  the  cellular  service  was  that  of  nationwide 
 technological  compatibility  of  equipment,  so  that  mobile  telephone  subscribers  to  a 
 cellular  system  in  one  part  of  the  country  would  be  able  to  use  their  existing  terminal 
 equipment  while  roaming  --  i.  e.,  using  a  different  cellular  system  in  another  part  of  the 
 country.  8  To  ensure  technical  uniformity  in  the  deployment  of  cellular  service,  the 
 Commission  adopted  detailed  technical  requirements  for  the  provision  of  analog  cellular 
 service.  Mandated  technical  standards  also  facilitated  competition  by  eliminating  the 

 6  See  47  C.  F.  R.    22.  900  et  seq.  The  Cellular  Radiotelephone  Service  initially  was  titled  the  Domestic 
 Public  Cellular  Radio  Telecommunications  Service.  See  Revision  of  Part  22  of  the  Commissions  Rules 
 Governing  the  Public  Mobile  Services,  CC  Docket  No.  92-  115,  Report  and  Order,  9  FCC  Rcd  6513,  6538 
 (1994)  (changing  name)  (hereinafter  Part  22  Rewrite). 

 7  The  Commission  initially  decided  to  license  only  one  cellular  carrier  in  any  given  area  but  later 
 reconsidered  and  modified  its  initial  decision.  See  An  Inquiry  into  the  Use  of  the  Bands  825-  845  MHz  and 
 870-  890  MHz  for  Cellular  Communications  Systems,  CC  Docket  No.  79-  318,  86  FCC  2d  469,  482  (1981). 

 8  See  An  Inquiry  Relative  to  the  Future  Use  of  the  Frequency  Band  806-  960  MHz;  and  Amendment  of  Parts 
 2,  18,  21,  73,  74,  89,  91,  and  93  of  the  Rules  Relative  to  Operations  in  the  Land  Mobile  Service  Between 
 806  and  960  MHz,  Docket  No.  18262,  Second  Report  and  Order,  46  FCC  2d  752,  801  Appendix  C,  III(  f) 
 (1974);  Memorandum  Opinion  and  Order,  51  FCC  2d  945,  1009  Appendix  F,  IV(  f)  (1975);  see  also  An 
 Inquiry  Into  the  Use  of  the  Bands  825-  845  MHz  and  870-  890  MHz  for  Cellular  Communications  Systems; 
 and  Amendment  of  Parts  2  and  22  of  the  Commissions  Rules  Relative  to  Cellular  Communications 
 Systems,  78  FCC  2d  984,  1002  at    52-  63  (1980). 
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 need  for  cellular  mobile  telephone  users  to  acquire  a  different  type  of  terminal  equipment 
 in  order  to  switch  between  the  two  competing  carriers  in  their  home  market  area.  9 

 8.  In  addition  to  setting  forth  technical  requirements  for  analog  cellular 
 service,  the  Commission  also  regulated  the  provision  of  incidental  services  by  cellular 
 and  other  Part  22  service  providers.  10  The  incidental  services  rule  allowed  Part  22 
 licensees  to  provide  incidental  telecommunications  services  other  than  the  primary 
 service  for  which  they  were  licensed,  but  only  if  such  services  were  directly  related  to 
 that  primary  service.  If  the  primary  service  were  mobile  telephone  service,  for  example, 
 such  incidental  services  could  include  telephone  answering,  alerting,  dialing,  and 
 directory  assistance.  In  addition,  the  rule  prohibited  cross-  subsidization  of  the  incidental 
 service,  thereby  protecting  primary  service  subscribers  from  impaired  service  or  higher 
 costs. 

 9.  In  addition,  those  initial  cellular  licenses  not  granted  to  incumbent  LECs 
 were  awarded  primarily  by  lottery,  which  caused  the  Commission  to  adopt  regulations  to 
 prevent  speculation  and  trafficking  in  licenses.  The  cellular  anti-  trafficking  rules,  which 
 include  Sections  22.937,  22.943  and  22.945,  require  an  applicant  for  a  new  cellular 
 system  to  make  a  demonstration  of  financial  qualification  at  the  time  of  application  filing, 
 limit  certain  assignments  and  transfers  of  cellular  authorizations,  and  prohibit  parties 
 from  having  any  direct  or  indirect  interest  in  more  than  one  application  for  authority  to 
 operate  a  new  cellular  system  in  the  same  cellular  market.  These  rules  were  adopted 
 during  a  period  when  the  Commission  resolved  mutually  exclusive  applications  through 
 lottery.  Since  that  time,  however,  the  Commission  has  ceased  to  use  lotteries  and  now 
 resolves  mutually  exclusive  applications  for  initial  cellular  licenses  through  competitive 
 bidding. 

 III.  DISCUSSION 
 10.  Most  of  our  existing  rules  for  cellular  service  have  now  been  in  force  for 
 nearly  two  decades.  During  that  time,  however,  the  technologies  used  by  carriers  to 
 provide  cellular  service  have  changed  radically.  Newer  technology  has  allowed  cellular 
 service  providers  to  increase  the  capacity  of  their  systems;  to  offer  better  quality  service, 
 advanced  calling  features,  enhanced  reliability  and  privacy;  and  to  compete  increasingly 
 with  the  wireline  telephone  network.  In  addition,  PCS  and  Specialized  Mobile  Radio 
 (SMR)  providers  have  entered  the  mobile  telephony  market,  significantly  changing  the 
 competitive  landscape.  We  have  also  replaced  the  lottery  process  with  licensing  by 
 auction. 

 9  Early  cellular  terminal  equipment  was  very  expensive;  consequently,  having  to  change  equipment  in  order 
 to  switch  to  a  competing  carrier  would  have  been  cost-  prohibitive.  Today,  cellular  telephones  are  much 
 less  expensive,  and  the  equipment  cost  is  often  subsidized  by  the  carrier. 

 10  47  C.  F.  R.    22.  323. 
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 11.  We  have  taken  some  steps  to  accommodate  these  developments.  In 
 general,  we  have  allowed  the  introduction  of  new  digital  cellular  system  technologies 
 through  rule  making  or  waiver  proceedings  that  have  established  exceptions  to  our 
 original  cellular  technical  rules.  11  Moreover,  unlike  our  approach  to  analog  cellular 
 technology,  we  did  not  promulgate  detailed  technical  standards  for  digital  cellular 
 telephones.  12  Similarly,  we  have  not  imposed  technical  standards  on  PCS  and  SMR 
 systems.  In  those  more  recent  proceedings,  however,  we  have  not  re-  examined  our 
 original  cellular  rules  to  determine  whether  they  remain  relevant  and  appropriate  in  light 
 of  advancing  technology  and  current  competitive  conditions.  As  a  result,  our  cellular 
 service  rules  currently  regulate  the  earliest  form  of  cellular  more  closely  than  the  more 
 complex  and  advanced  digital  services  that  have  followed. 

 12.  It  is  time  to  re-  examine  our  original  cellular  service  rules,  as  well  as 
 certain  other  Part  22  rules  that  date  back  to  the  cellular  duopoly  era.  As  discussed  in 
 greater  detail  below,  we  tentatively  conclude  that  many  of  these  rules  are  no  longer 
 necessary,  and  that  some  of  them  may  in  fact  be  counterproductive.  Therefore,  we 
 initiate  this  proceeding  to  review  these  rules  and  consider  which  of  them  should  be 
 eliminated  or  modified  as  a  result  of  competitive  or  technological  developments.  We 
 note  that  while  we  focus  our  inquiry  in  this  NPRM  on  specific  rules,  we  also  invite 
 comment  on  whether  we  should  modify  any  additional  provisions  of  our  Part  22  rules. 

 A.  General  Cellular  Rules:  Cellular  Service  Requirements  and  Limitations 
 13.  Section  22.901  of  the  Commissions  rules,  entitled  Service  requirements 
 and  limitations,  sets  forth  various  general  cellular  service  requirements.  Though  the  rule 
 has  been  amended  several  t  imes  since  its  init  ial  adoption,  it  appears  to  remain  outdated  in 
 several  respects.  First,  the  rule  is  drafted  as  though  the  principal  technology  used  for 
 cellular  service  is  analog  technology;  13  digital  technology,  clearly  the  state-  of-  the-  art 
 technology  in  use  today,  is  not  referred  to  explicitly  in  the  rule  and  falls  within  the  rules 
 classification  of  alternative  technologies.  14  As  a  result,  we  tentatively  conclude  that  the 
 rule  should  be  revised  to  avoid  characterization  of  particular  technologies  as  primary  or 
 alternative.  15  Specifically,  we  propose  deleting  the  current  Section  22.901(  d),  which 
 addresses  alternative  cellular  technologies,  and  adding  the  following  language  to  the 

 11  See  Amendment  of  Parts  2  and  22  of  the  Commissions  Rules  to  Permit  Liberalization  of  Technology 
 and  Auxiliary  Service  Offerings  in  the  Domestic  Public  Cellular  Radio  Telecommunications  Service, 
 GEN.  Docket  No.  87-  390,  Report  and  Order,  3  FCC  Rcd  7033  (1988). 

 12  Id.  at    16. 

 13  Proposed  changes  in  rules  referencing  the  Commissions  mandated  analog  technology  compatibility 
 standard,  Analog  Mobile  Phone  Service  (AMPS),  will  be  discussed  in  greater  detail  infra    19  et  seq. 

 14  47  C.  F.  R.    22.  901(  d). 

 15  While  we  tentatively  conclude  that  the  rule  should  no  longer  imply  that  any  technology  is  primary  and 
 others  are  alternative,  we  defer  judgment,  in  light  of  the  issues  discussed  infra  Section  III.  B.  1.,  as  to 
 whether  the  Commission  should  retain  the  analog  compatibility  standard. 
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 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.  16  We  seek  comment  on  this  proposed  change. 

 14.  Second,  Section  22.901(  a)  of  the  rule  currently  requires  that  cellular 
 licensees  provide  subscribers  with  information  regarding  the  service  area  of  the  cellular 
 provider.  17  This  requirement  is  not  placed  on  other  providers  of  CMRS  services, 
 including,  in  particular,  PCS  service  providers.  Even  so,  these  other  providers  typically 
 give  customers  service-  area-  related  information.  We  seek  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.  We  also  seek  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. 

 15.  Third,  currently  Section  22.901(  b)  requires  the  cellular  licensee  to  notify 
 the  Commission  in  the  event  that  a  subscribers  request  for  service  is  denied  due  to  lack 
 of  cellular  system  capacity.  18  We  note  first  that  the  rule  as  currently  drafted  does  not 
 provide  any  mechanism  for  ameliorating  any  instance  of  a  lack  of  system  capacity. 
 Moreover,  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.  Thus,  it  appears  that  this  rule  may  impose  a  regulatory  reporting  burden  on 
 cellular  service  providers  without  countervailing  benefits.  Therefore,  we  seek  comment 
 on  deleting  Section  22.901(  b). 

 16.  Fourth,  the  first  sentence  of  the  introductory  paragraph  in  Section  22.901 
 of  the  Commissions  rules  provides  as  follows:  Cellular  system  licensees  must  provide 
 cellular  mobile  radiotelephone  service  upon  request  to  all  cellular  subscribers  in  good 
 standing  .  .  .  .  19  We  propose  deleting  this  language.  We  note  that  no  comparable 
 requirements  are  placed  on  other  CMRS  services.  Moreover,  cellular  service  providers 
 will  continue  to  be  required  to  comply  with  Sections  201  and  202  of  Title  II  of  the  Act, 
 which  apply  to  all  common  carriers.  20  Those  sections  require  cellular  carriers,  like  all 
 common  carriers,  to  provide  service  on  reasonable  request,  to  have  charges,  practices, 
 classifications,  and  regulations  that  are  just  and  reasonable,  and  to  avoid  unjust  or 

 16  See  Appendix  A  for  full  text  of  the  rule  changes  proposed  in  this  Notice. 
 17  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). 

 18  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). 

 19  47  C.  F.  R.    22.  901  (emphasis  added). 

 20  47  U.  S.  C.    201  &  202. 
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 unreasonable  discrimination  in  their  charges,  practices,  classifications,  regulations, 
 facilities,  or  services.  We  seek  comment  on  this  proposed  change. 

 17.  Fifth,  the  existing  introductory  paragraph  to  Section  22.901  provides  that  a 
 cellular  system  may  terminate  service  when  a  subscriber  operates  a  cellular  telephone  in 
 an  airborne  aircraft.  21  We  propose  to  delete  this  specific  reference  because  it  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  The  Commission  has  previously  made 
 clear  that  a  Part  22  provider  may  refuse  or  terminate  service  in  the  event  that  a  subscriber 
 operates  a  telephone  in  violation  of  the  Commissions  rules.  23  Thus,  an  express  rule 
 allowing  a  cellular  provider  to  refuse  or  terminate  service  is  unnecessary.  Indeed,  there  is 
 no  equivalent  rule  for  either  PCS  or  SMR  service.  We  note  that  deleting  this  termination 
 provision  of  Section  22.901  would  in  no  way  affect  or  change  any  otherwise  applicable 
 rights  or  obligations  of  a  cellular  licensee.  We  therefore  seek  comment  on  this  proposal. 
 Alternatively,  if  commenters  believe  that  an  express  termination  rule  is  necessary,  we 
 seek  comment  on  whether  the  existing  provision,  which  addresses  only  unlawful 
 operation  of  a  cellular  telephone  in  an  aircraft,  should  be  broadened  to  allow  service 
 termination  for  violation  of  any  Commission  rule.  That  is,  a  cellular  system  licensee  may 
 terminate  service  when  a  subscriber  or  other  customer  operates  a  cellular  telephone  in 
 violation  of  any  applicable  rule  .  .  .  . 

 B.  Cellular  Technical  Rules 
 1.  Analog  Cellular  Compatibility  Standard 
 18.  Background.  When  the  Commission  established  cellular  service  in  1981,  it 
 required  all  cellular  carriers  to  design  their  systems  in  compliance  with  the  then-  existing 
 industry  compatibility  standard  for  analog  systems,  commonly  known  as  Advanced 
 Mobile  Phone  Service  (AMPS).  The  then-  existing  AMPS  specifications  were  referenced 
 and  incorporated  in  the  April  1981  version  of  Office  of  Engineering  and  Technology 
 Bulletin  No.  53  (OET  53).  OET  53,  which  is  still  in  effect,  contains  specifications  for 

 21  47  C.  F.  R.    22.  901. 
 22  We  note  that  language  clarifying  a  carriers  right  to  deny  service  to  a  customer  who  violates  Commission 
 rules  may  have  been  helpful  in  the  context  of  an  express  requirement  to  serve  subscribers  in  good  standing. 
 As  discussed  above,  however,  we  are  proposing  to  delete  this  express  service  requirement. 

 23  See  Amendment  of  Sections  of  Part  21  (now  Part  22)  of  the  Commissions  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  F.  C.  C.  2d  84,  86,    8  (1980)  (  If  a  subscriber  fails  to  meet  any  of 
 the  responsibilities  discussed  above  [including  compliance  with  the  Commissions  rules],  the  carrier  may 
 refuse  or  suspend  service  until  the  subscriber  has  corrected  the  deficiency  in  question.). 
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 technical  operational  parameters  and  detailed  descriptions  of  call  processing  algorithms 
 and  protocols  to  be  used  by  analog  cellular  systems.  24 

 19.  Originally,  all  cellular  carriers  were  required  to  provide  service  exclusively  in 
 accordance  with  the  technical  specifications  of  OET  53.  Cellular  carriers  were  not 
 allowed  to  provide  analog  service  that  did  not  comply  with  OET  53,  or  to  provide  mobile 
 voice  services  using  any  other  technology.  In  addition  to  restrictions  regarding  the  type 
 of  technology  that  they  could  utilize,  cellular  carriers  were  significantly  limited  in  the 
 breadth  of  services  that  they  could  offer.  For  example,  cellular  carriers  were  not  allowed 
 to  provide  non-  mobile  voice  services,  including  fixed  wireless  and  paging  services.  As 
 cellular  technology  and  the  competitive  market  evolved,  however,  the  Commission 
 allowed  cellular  carriers  flexibility  to  utilize  alternative  technologies  and  provide  new 
 types  of  services.  In  1988,  the  Commission  adopted  the  so-  called  cellular  flexibility 
 rule,  which  allowed  cellular  carriers  to  utilize  alternative  technological  platforms  for 
 cellular  service,  provided  that  they  continued  to  provide  compatibility  with  AMPS,  as 
 defined  in  OET  53,  to  their  analog  customer  base.  25  This  enabled  cellular  carriers  to 
 begin  offering  digital  service  to  their  customers  as  an  alternative  to  analog  service.  26  In 
 1996,  the  Commission  adopted  the  CMRS  Flex  First  Report  and  Order,  which  allowed 
 all  CMRS  providers,  including  cellular,  to  offer  fixed  service  on  a  co-  primary  basis  with 
 mobile  service,  thus  increasing  the  breadth  of  services  CMRS  carriers  could  provide.  27 

 20.  Although  cellular  carriers  have  considerably  more  flexibility  now  than  when 
 the  service  was  established,  many  of  the  original  rules  relating  to  analog  service  still 
 apply  to  cellular  service.  As  noted  above,  Section  22.  901  currently  requires  a  cellular 
 carrier  to  provide  service  to  any  subscriber  in  good  standing  within  the  carriers  Cellular 
 Geographic  Service  Area  (CGSA),  including  any  analog  subscribers.  28  This  rule  applies 
 to  both  in-  market  customers  and  roaming  customers  that  are  using  technically  compatible 

 24  See  An  Inquiry  Into  the  Use  of  the  Bands  825-  845  MHz  and  870-  890  MHz  for  Cellular  Communications 
 Systems;  and  Amendment  of  Parts  2  and  22  of  the  Commissions  Rules  Relative  to  Cellular 
 Communications  Systems,  CC  Docket  No.  79-  318,  Report  and  Order,  86  FCC  2d  469,  1508  at    92-  93. 
 (1981).  The  OET  53  specifications  were  largely  based  on  an  Electronics  Industries  Association  working 
 paper  describing  technical  specifications  of  the  two  original  developmental  cellular  systems. 

 25  Amendment  of  Parts  2  and  22  of  the  Commissions  Rules  to  Permit  Liberalization  of  Technology  and 
 Auxiliary  Service  Offerings  in  the  Domestic  Public  Cellular  Radio  Telecommunications  Service,  3  FCC 
 Rcd  7033  (1988),  Report  and  Order,  GEN.  Docket  No.  87-  390  (1988). 

 26  Id.  Another  type  of  analog  cellular  service,  Narrowband  Analog  Mobile  Phone  Service  (N-  AMPS),  is  in 
 use  in  some  cellular  systems.  Although  not  a  digital  service,  N-  AMPS  is  considered  an  alternative 
 technology  pursuant  to  Section  22.901(  d)  of  the  Commissions  rules,  and  as  such  it  is  not  subject  to  the 
 requirements  applicable  to  AMPS. 

 27  See  Amendment  of  the  Commissions  Rules  to  Permit  Flexible  Service  Offerings  in  the  Commercial 
 Mobile  Radio  Services,  WT  Docket  No.  96-  6,  First  Report  and  Order  and  Further  Notice  of  Proposed 
 Rulemaking,  11  FCC  Rcd  8965  (1996)  (CMRS  Flex  First  Report  and  Order). 

 28  47  C.  F.  R.    22.901. 
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 equipment.  29  The  current  Section  22.901(  d)  further  provides  that  a  cellular  carrier  who 
 provides  mobile  service  must  make  it  available  to  subscribers  whose  mobile  equipment 
 conforms  to  the  analog  compatibility  standard  referenced  in  OET  53.  This  effectively 
 requires  the  carrier  to  continue  to  provide  AMPS-  type  analog  service  so  long  as  the 
 carrier  continues  to  have  analog  customers  or  roamers  on  its  system.  30  Furthermore, 
 Section  22.933  provides  that  the  technical  requirements  for  analog  service  continue  to  be 
 governed  by  the  OET  53  standard  in  effect  since  1981.  31 

 21.  We  have  taken  a  less  regulatory  approach  to  technological  compatibility  in 
 services  established  since  cellular.  When  we  established  PCS,  we  decided  that  each  PCS 
 licensee  would  be  allowed  to  determine  what  type  of  service  to  provide.  32  In  accordance 
 with  this  flexible  use  policy,  we  did  not  adopt  any  rules  that  impose  technical  standards 
 for  PCS,  as  we  had  previously  done  in  cellular,  but  permitted  licensees  to  implement 
 technologies  of  their  own  choice.  33  Thus  far,  most  broadband  PCS  licensees  have  chosen 
 to  establish  cellular-  like  public  mobile  telephone  services  that  compete  directly  with 
 cellular  service.  As  could  be  anticipated,  some  of  these  new  broadband  PCS  services  are 
 technically  incompatible  with  other  PCS  systems.  Yet,  even  in  the  absence  of 
 Commission  rules  requiring  technological  compatibility,  most  broadband  PCS  carriers 
 are  establishing  systems  that  offer  nationwide  service.  34  They  have  done  so  by  building 
 nationwide  systems  (i.  e.,  voluntarily  using  compatible  technology),  by  making  roaming 
 arrangements  with  other  carriers  that  are  using  compatible  technology,  or  by  providing 
 dual  and  triple  mode  telephones  (i.  e.,  terminals  capable  of  operating  on  two  or  more 
 technically  dissimilar  systems).  35 

 22.  Similarly,  international  industry  standards  groups  of  the  International 
 Telecommunications  Union  recently  adopted  a  flexible  standard  for  a  third  generation 
 (3G)  of  mobile  telephone  technology,  known  as  IMT-  2000,  that  will  promote  global 

 29  See  Interconnection  and  Resale  Obligations  Pertaining  to  Commercial  Mobile  Services,  CC  Docket  No. 
 94-  54,  Second  Report  and  Order  and  Third  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  9462  (1996), 
 recon.,  FCC  00-  251  (rel.  Aug.  28,  2000). 

 30  See  47  C.  F.  R.    22.  901(  d).  This  provision  only  applies  to  cellular  carriers  who  provide  mobile  services. 
 Thus,  a  cellular  carrier  that  elected  to  provide  exclusively  fixed  service,  in  accordance  with  the  CMRS  Flex 
 First  Report  and  Order,  could  avoid  this  requirement.  As  a  practical  matter,  however,  no  cellular  carrier 
 has  sought  to  provide  fixed  service  on  an  exclusive  basis. 

 31  47  C.  F.  R.    22.  933. 

 32  PCS  licensees  may  provide  any  type  of  mobile  or  fixed  service,  excluding  a  broadcasting  service.  See  47 
 C.  F.  R.    24.3. 

 33  The  Commission  does  require,  however,  that  systems  provide  service  to  roaming  subscribers  in  cases  in 
 which  the  technology  is  compatible.  See  47  C.  F.  R.    20.12(  c). 

 34  Some  PCS  systems  even  offer  roaming  on  systems  in  Europe  and  other  parts  of  the  world. 

 35  In  the  early  1980s,  when  the  cellular  technical  compatibility  rules  were  adopted,  dual-  mode  or  multiple-mode 
 mobile  telephones  were  thought  to  be  prohibitively  expensive. 
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 interoperability.  36  Also  on  the  drawing  board  are  software-  defined  radios,  which  are 
 terminal  units  that  can  be  simply  reprogrammed  to  operate  with  many  current  and  future 
 modulation  schemes  and  call  processing  algorithms.  These  developments  highlight  the 
 trend  away  from  single-  technology  compatibility  standards  and  towards  technological 
 solutions  that  seek  other  ways  to  provide  compatibility  while  embracing  multiple 
 technologies. 

 23.  Discussion.  In  light  of  these  factors,  we  seek  comment  on  whether  we  should 
 modify  or  eliminate  the  rules  governing  the  provision  of  analog  service  by  cellular 
 systems  pursuant  to  particular  technological  specifications.  The  AMPS  standard  that  is 
 referenced  and  incorporated  in  OET  53  may  well  have  helped  in  the  early  years  of 
 cellular  to  facilitate  competition  between  the  two  competing  cellular  carriers  in  any  given 
 area.  Today,  however,  the  competitive  market  for  mobile  telephone  service  often 
 includes  not  only  the  two  cellular  carriers  but  several  PCS  and  SMR  providers  as  well, 
 who  are  not  subject  to  any  Commission-  mandated  technological  standards.  As  a  result,  a 
 panoply  of  mobile  telephone  technologies  and  services  are  now  available  or  under 
 development.  At  the  same  time,  although  many  subscribers  are  benefiting  from  the 
 increased  availability  of  a  wide  variety  of  mobile  services,  we  note  that  some  subscribers 
 may  not  have  readily  available  and  accessible  economic  or  technological  alternatives  to 
 analog  for  mobile  services.  Accordingly,  we  are  mindful  that  the  Commission  must 
 consider  the  ramifications  of  eliminating  the  analog  compatibility  standard  for  these 
 subscribers.  In  this  context,  we  wish  to  reexamine  whether  the  Commissions  analog 
 service  compatibility  requirement  remains  necessary  or  useful  to  facilitate  competition  or 
 to  ensure  the  availability  of  valuable  service  to  all  consumers.  If  we  decide  to  retain 
 some  form  of  analog  compatibility  requirement,  we  further  seek  comment  on  how  the 
 requirement  should  be  modified  to  reflect  changes  in  technology  and  in  the  relevant 
 industry  standard. 

 24.  We  seek  comment  on  whether  the  proliferation  of  competitive  mobile 
 telephone  services  suggests  that  market  forces  may  now  provide  a  sufficient  incentive  for 
 cellular  providers  to  utilize  compatible  and/  or  interoperable  technologies  to  meet 
 consumer  demand  for  nationwide  operating  capability.  As  noted  above,  PCS  and  other 
 CMRS  licensees  offer  service  that  is  compatible  nationwide,  and  many  consumers  need 
 and  have  come  to  expect  this  capability,  notwithstanding  the  absence  of  Commission-mandated 
 technical  specifications  in  those  services.  In  addition,  the  declining  cost  to  the 
 subscriber  of  terminal  equipment,  and  discounts  offered  by  many  carriers  to  new 
 subscribers  on  such  equipment,  appear  to  have  reduced  the  disincentive  for  consumers  to 
 switch  between  providers,  even  when  the  existing  equipment  must  be  abandoned  because 

 36  See  Press  Release  ITU/  99-  4,  dated  March  25,  1999,  ITU  approves  key  characteristics  for  the  radio 
 interfaces  of  third  generation  mobile  systems,  which  may  be  viewed  at  the  following  internet  site: 
 http://  www.  itu.  int/  newsroom/  press/  releases/  1999/  99-  04.  html.  See  also  Press  Release  ITU/  99-  22,  dated 
 November  5,  1999,  IMT-  2000  Radio  Interface  Specifications  Approved  in  ITU  Meeting  in  Helsinki, 
 which  may  be  viewed  at  the  following  internet  site:  http://  www.  itu.  int/  newsroom/  press/  releases/  1999/  99-22.html. 
 See  generally  ITU  Press  Release,  dated  May  8,  2000,  ITU  gives  final  approval  to  IMT-  2000 
 radio  interface  specifications,  which  may  be  viewed  at  the  following  internet  site: 
 http://  www.  itu.  int/  newsroom/  press/  releases/  2000/  10.  html. 
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 the  systems  use  incompatible  technologies.  Additionally,  some  providers  offer  dual  or 
 triple-  mode  mobile  telephones  that  allow  the  customer  to  obtain  roaming  service  from 
 other  providers  who  use  different  technologies.  Thus,  most  customers  have  an  array  of 
 options  to  obtain  a  mobile  telephone  service  with  nationwide  interoperability  if  that  is 
 what  they  need,  or  to  select  a  perhaps  more  economical  offering  providing  regional 
 coverage,  if  that  option  better  satisfies  their  requirements.  We  seek  comment  on  whether 
 retaining  the  cellular  analog  compatibility  standard  remains  necessary  or  useful  to 
 promote  nationwide  interoperability  in  light  of  these  trends. 

 25.  We  also  seek  comment  on  whether  eliminating  the  mandatory  analog 
 compatibility  standard  could  provide  public  interest  benefits  by  making  it  easier  for 
 cellular  carriers  to  migrate  to  digital  technologies.  Specifically,  we  seek  comment  on  the 
 extent  of  any  spectral  efficiencies  that  could  be  gained.  For  example,  would  eliminating 
 the  analog  service  requirement  effectively  free  up  additional  spectrum,  or  is  so  little  of 
 the  spectrum  being  used  for  analog  services  that  eliminating  this  requirement  would  have 
 little  impact?  To  what  extent  is  digital  service  more  spectrum  efficient  than  analog 
 service? 

 26.  We  also  seek  comment  on  whether  eliminating  this  rule  would  have  any 
 impact  on  the  continued  provision  of  service  to  existing  analog  cellular  customers.  In 
 1999,  there  were  approximately  41.9  million  analog  subscribers  nationwide.  37  This  figure 
 represents  a  drop  from  the  previous  years  figure  of  44.1  million  analog  cellular 
 subscribers.  38  In  the  Fifth  CMRS  Competition  Report,  we  noted  that  the  overall  number 
 of  analog  cellular  subscribers  is  on  a  downward  trend,  as  new  subscribers  increasingly 
 choose  digital  service  over  analog,  and  some  cellular  carriers  seek  to  migrate  current 
 analog  subscribers  to  digital.  Nonetheless,  in  light  of  the  significant  remaining  base  of 
 analog  customers,  we  seek  comment  on  whether  eliminating  this  rule  would  have 
 deleterious  effects  on  subscribers.  If  so,  should  we  consider  alternatives  to  outright 
 elimination,  such  as  phasing  out  the  requirement  over  time? 

 27.  We  are  also  interested  in  whether  deleting  the  requirement  to  provide  analog 
 service  would  have  any  significant  consequences  for  rural  consumers,  given  that  they  are 
 more  likely  to  subscribe  to  analog  cellular  service  than  other  types  of  consumers.  39  More 
 specifically,  we  seek  comment  on  the  likely  treatment  by  the  competitive  market  of  these 
 consumers  when  they  roam.  40  The  Commission  is  currently  considering  whether  it 

 37  Annual  Report  and  Analysis  of  Competitive  Market  Conditions  With  Respect  to  Commercial  Mobile 
 Services,  FCC  00-  289,  Fifth  Report,  15  FCC  Rcd.  17,660  (rel.  Aug.  18,  2000)  (Fifth  Annual  CMRS 
 Competition  Report). 

 38  Id. 

 39  Fifth  Annual  CMRS  Competition  Report  at  Appendix  F,  Maps  2-  5  (digital  cellular  and  PCS  coverage 
 maps  showing  rural  consumers  less  likely  to  reside  in  areas  with  digital  coverage). 

 40  Roaming  occurs  when  the  subscriber  of  one  CMRS  provider  utilizes  the  facilities  of  another  CMRS 
 provider  with  which  the  subscriber  has  no  direct  pre-  existing  services  or  financial  relationship  .  .  .  . 
 Automatic  and  Manual  Roaming  Obligations  Pertaining  to  Commercial  Mobile  Radio  Services,  FCC  00-361, 
 WT  Docket  00-  193,  Notice  of  Proposed  Rulemaking,    2  (rel.  Nov.  1,  2000). 
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 should  modify  the  rules  that  relate  to  roaming  and,  in  particular,  whether  it  should 
 mandate  automatic  roaming.  41  We  seek  comment  on  the  relationship  between  potential 
 elimination  of  the  analog  service  compatibility  requirement  and  our  roaming  rules, 
 particularly  with  respect  to  effects  on  rural  consumers. 

 28.  In  the  same  vein,  we  seek  comment  on  whether  Commission-  mandated 
 technological  compatibility  is  more  critical  for  regional,  or  smaller,  cellular  carriers  than 
 for  nationwide  carriers.  We  note  that  nationwide  carriers  by  definition  maintain  a 
 national  footprint  for  their  services,  which  may  obviate  the  need  for  technological 
 compatibility  while  roaming.  We  seek  comment  on  the  effect  eliminating  the  mandatory 
 analog  compatibility  standard  may  have  on  regional  carriers,  particularly  in  the  roaming 
 context. 

 29.  We  also  seek  comment  on  the  possible  impact  of  eliminating  this  rule  on 
 certain  existing  programs  and  services.  We  note  that  some  charitable  organizations 
 collect  previously  used  cellular  telephones  so  that  they  may  in  turn  be  given  to  the  elderly 
 or  others  exclusively  for  911  purposes.  Many  of  these  telephones  use  analog  technology. 
 Would  changing  our  current  rules  affect  these  charitable  programs?  Also,  we  are  aware 
 that  there  are  existing  applications  that  employ  analog  technology  that  will  continue  to  be 
 necessary.  For  example,  General  Motors  OnStar  automobile  assistance  system  uses 
 analog  cellular  technology.  42  We  seek  comment  on  how  our  proposed  changes  will  affect 
 OnStar  and  other  existing  analog  services,  and  the  people  who  use  such  services. 

 30.  In  particular,  we  seek  comment  on  the  potential  effect  of  eliminating  the 
 analog  service  requirement  on  people  with  hearing  disabilities.  We  note  that  TTY  users 
 must  use  analog  technology  because  digital  wireless  systems  are  not  currently  compatible 
 with  TTYs,  although  digital  TTYs  are  under  development.  43  In  addition,  we  are  aware 
 that  digital  technologies  are,  for  the  most  part,  not  currently  compatible  with  hearing  aid 
 technologies.  44  We  will  not  take  any  action  that  would  undermine  service  to  persons  with 
 disabilities.  We  note  that  Section  255  of  the  Communications  Act  requires  that  [  a] 

 41  Id.  at    1. 
 42  See  http://  www.  onstar.  com/  visitors/  html/  ao_  faq.  htm  (setting  forth  General  Motors  reasons  for 
 employing  analog  technology  in  its  OnStar  system). 

 43  Pursuant  to  the  Commissions  E-  911  rules,  service  providers  must  be  able  to  pass  TTY  calls  on  wireless 
 systems.  Since  1997,  the  Commission  has  suspended  the  enforcement  of  this  rule  as  it  applies  to  digital 
 wireless  carriers,  pending  industrys  implementation  of  solutions  which  would  allow  for  compatibility 
 between  TTYs  and  digital  systems.  See  Revision  of  the  Commissions  Rules  to  Ensure  Compatibility  with 
 Enhanced  911  Emergency  Calling  Systems,  FCC  00-  436,  CC  Docket  94-  102,  Fourth  Report  and  Order,   
 27-  8  (rel.  Dec.  14,  2000)  (establishing  June  30,  2002  as  the  deadline  by  which  digital  wireless  service 
 providers  must  transmit  911  calls  made  with  TTY  devices). 

 44  See  Letter  from  the  Wireless  Access  Coalition  to  Secretary,  FCC  (dated  Oct.  7,  2000)  (requesting  that  the 
 Commission  reopen  proceedings  to  consider  whether  to  revoke  the  exemption  of  digital  mobile  telephones 
 from  hearing-  aid  compatibility  requirements). 
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 provider  of  telecommunications  service  shall  ensure  that  the  service  is  accessible  to  and 
 usable  by  individuals  with  disabilities,  if  readily  achievable.  45  Were  we  to  delete  the 
 requirement  that  cellular  carriers  provide  analog  service,  this  section  would  still  require 
 TTY  and  hearing  aid  compatibility,  as  well  as  other  accessibility  features  to  be 
 incorporated  into  cellular  systems,  where  readily  achievable.  We  seek  comment  on 
 whether  deleting  the  analog  service  requirement  would  present  accessibility  problems  for 
 people  with  disabilities,  or  whether  the  independent  requirements  of  Section  255  would 
 sufficiently  address  any  such  problems. 

 31.  As  discussed  above,  we  seek  to  ensure  that  eliminating  the  analog 
 compatibility  standard  does  not  adversely  affect  existing  analog  subscribers,  or  groups 
 that  are  particularly  dependent  on  access  to  analog-  based  cellular  technology.  We  are 
 therefore  reluctant  to  eliminate  this  requirement  if  doing  so  will  significantly  impair  the 
 access  of  these  users  to  wireless  telecommunications  services.  If  we  ultimately  decide  to 
 retain  some  form  of  analog  compatibility  standard  for  cellular  service,  either  on  a 
 transitional  or  a  long-  term  basis,  we  must  address  the  fact  that  the  version  of  the  AMPS 
 standard  that  is  referenced  and  incorporated  in  our  rules  is  seriously  out  of  date.  As 
 discussed  above,  OET  53,  which  was  issued  by  OET  in  1981,  incorporates  the  then-current 
 AMPS  standard,  and,  as  a  result,  reflects  the  state  of  the  art  in  cellular  technology 
 as  it  was  in  the  late  1970s.  We  note  that  since  that  time,  the  AMPS  standard  has  been 
 extensively  revised  by  the  Telecommunications  Industry  Association  (TIA)  to 
 incorporate  advances  in  technology,  changes  in  algorithms,  new  features,  and  anti-  fraud 
 countermeasures.  46  However,  we  have  never  included  any  of  these  TIA  revisions  in  our 
 rules.  Moreover,  OET  53  is  outdated  in  several  other  respects  as  well,  because  it 
 incorporates  references  to  sections  of  Part  15  and  Part  22  of  the  Commissions  rules  that 
 have  been  recodified  or  removed.  47  We  therefore  seek  comment,  if  we  do  not  eliminate 
 the  analog  service  requirement  in  its  entirety,  on  whether  and  how  we  should  update  our 
 rules. 

 2.  Electronic  Serial  Number  Rule 
 32.  Background.  Section  22.919  of  the  Commissions  rules  sets  forth  Electronic 
 Serial  Number  (ESN)  48  design  requirements  for  manufacturers  of  cellular  telephones.  49 

 45  47  U.  S.  C.    255(  c). 
 46  The  latest  revision  by  the  TIA  is  contained  in  the  standard  publication  ANSI  TIA/  EIA-  553-  A-  99  Mobile 
 Station    Base  Station  Compatibility  Standard  (published  November  1,  1999),  which  is  available  for 
 purchase  from  Global  Engineering  Documents,  15  Inverness  East,  Englewood,  CO  80112. 

 47  OET  issued  a  July  1983  revision  of  Bulletin  No.  53.  However,  this  revision  was  never  incorporated  into 
 the  Commissions  rules. 

 48  An  ESN  is  a  32  bit  binary  number  that  uniquely  identifies  a  cellular  mobile  transmitter  to  a  cellular 
 system. 

 49  Section  22.  919  was  adopted  in  1994  as  a  part  of  the  Part  22  rewrite  and  was  intended  to  codify  and 
 expand  upon  the  ESN  guidelines  given  in  OET  53.  See  Part  22  Rewrite,  9  FCC  Rcd  at  6525. 
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 More  specifically,  that  section  imposes  the  following  requirements.  First,  each  cellular 
 mobile  telephone  must  have  a  unique  factory-  set  ESN  that  is  not  alterable,  transferable, 
 removable  or  otherwise  able  to  be  manipulated.  Second,  each  cellular  telephone  must  be 
 designed  such  that  any  attempt  to  remove  or  tamper  with  the  ESN  or  its  related 
 components  will  render  the  transmitter  inoperative.  Finally,  certain  physical  design  and 
 firmware  programming  requirements  must  be  satisfied.  Section  22.919  does  not  apply  to 
 PCS  or  SMR  telephones,  and  there  are  no  similar  rules  applicable  to  those  services  in  Part 
 24  (PCS)  or  Part  90  (SMR). 

 33.  Discussion.  We  seek  comments  on  whether  Section  22.  919  continues  to  be 
 necessary  in  light  of  developments  since  the  rule  was  adopted.  The  sole  purpose  of  the 
 ESN  rule  was  to  address  the  problem  of  cellular  cloning  fraud  50  that  was  prevalent  in 
 the  early  1990s.  Codifying  into  the  Code  of  Federal  Regulations  the  hardened  ESN  51 
 design  specification  in  OET  53  was  said  by  cellular  industry  fraud  control  experts  to  be 
 helpful  in  building  a  successful  legal  case  when  prosecuting  fraud  perpetrators.  Since 
 that  time,  however,  Congress  has  enacted  the  Wireless  Telephone  Protection  Act  of  1998, 
 which  addresses  the  unauthorized  use  of  access  codes  for  the  purpose  of  fraudulently 
 obtaining  telecommunications  services.  52  Furthermore,  the  cellular  industry  developed 
 new  encryption  technology  to  eliminate  most  cloning  fraud  by  the  use  of  a  second,  more 
 secure,  access  protocol  generally  known  as  authentication,  in  which  the  key  to  use 
 authorization  is  never  transmitted  over  the  airwaves  and  thus  is  not  susceptible  of  being 
 intercepted  by  third  parties.  Other  anti-  fraud  systems  and  countermeasures  include  radio 
 frequency  fingerprinting,  which  measures  the  exact  parameters  of  the  authorized  phone 
 to  forestall  unauthorized  use  with  other,  unauthorized  equipment,  and  call  profiling,  in 
 which  use  is  monitored  for  unusual,  sudden  changes  in  calling  patterns. 

 34.  Because  the  hardened  ESN  provisions  of  Section  22.919  require  that  the 
 ESN  host  component  not  be  transferable  or  removable,  they  by  definition  preclude  the 
 use  of  smart  card  subscriber  identity  modules  in  AMPS-  compatible  cellular  telephones 
 and  thus  complicate  the  possible  use  of  such  modules  in  multiple-  mode  telephones  for 
 which  one  of  the  modes  is  AMPS.  Smart  card  subscriber  identity  modules  are  postage 
 stamp  sized  cards  containing  an  embedded  electronic  chip  that  is  programmed  with  the 
 subscribers  identification,  billing  and  preference  information.  Smart  cards  are  largely 
 tamper-  proof  and  are  widely  used  throughout  the  world  in  Global  Mobile  System  (GSM) 
 mobile  telephone  systems.  A  subscriber  can  remove  his  or  her  smart  card  from  one 

 50  Cloning  a  cellular  telephone  means  intentionally  altering  the  internally-  stored  telephone  number 
 (MIN),  system  identification  number  (SID)  and  unique  factory-  set  ESN  of  a  cellular  telephone  so  as  to 
 duplicate  the  MIN,  SID  and  ESN  of  another  cellular  telephone.  Because  the  original  cellular  systems  relied 
 solely  on  these  three  numbers  to  identify  a  particular  cellular  telephone  for  access  and  billing  purposes, 
 cloning  a  cellular  telephone  created  additional  telephones  that  appeared  to  be  the  same  telephone  to  these 
 systems.  By  cloning  the  cellular  telephone  of  a  legitimate  subscriber,  third  parties  could  use  the  cloned 
 cellular  telephone  to  make  calls  that  would  later  be  billed  to  the  unsuspecting  legitimate  subscriber. 

 51  The  term  hardened  ESN  refers  to  the  design  requirement  that  the  ESN  be  made  absolutely  unalterable 
 (i.  e.,  physically  impossible  to  alter,  by  any  person,  for  any  reason). 

 52  See  18  U.  S.  C    1029(  a)(  7)  (2000). 
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 mobile  telephone  and  insert  it  into  another,  making  it  easy  to  change  from  one  system  to 
 another.  One  of  the  main  reasons  for  employing  smart  card  technology  is  that  the 
 subscribers  identity  and  preferences  can  be  secure  from  theft  or  disclosure,  yet  are  easily 
 transferable  from  one  telephone  instrument  to  another.  Some  parties  believe  that  smart 
 cards  now  provide  better  protection  from  fraudulent  tampering  than  do  hardened  ESN 
 components.  53 

 35.  As  a  general  policy,  we  prefer  to  allow  market  forces  to  determine  technical 
 standards  wherever  possible,  and  thus  we  do  not  adopt  rules  mandating  detailed  hardware 
 design  requirements  for  telecommunications  equipment,  except  where  doing  so  is 
 necessary  to  achieve  a  specific  public  interest  goal.  Although  mandating  design 
 requirements  is  sometimes  necessary  to  ensure  interoperability  or  compatibility  or  to 
 provide  a  degree  of  certainty  for  manufacturers  and  consumers  in  cases  where  the  market 
 has  failed  to  settle  on  a  standard,  doing  so  also  entails  a  risk  of  freezing  technological 
 development  and  discouraging  further  innovation.  In  light  of  this  principle  and  the 
 changed  circumstances  we  have  outlined  above,  we  need  to  consider  whether 
 Section  22.919  should  be  retained. 

 36.  We  tentatively  conclude  that  the  original  reasons  for  establishing  the  hardened 
 ESN  design  requirements  in  our  rules  are  no  longer  compelling  in  light  of  changes  in 
 federal  law  and  the  widespread  deployment  of  advanced  fraud  control  technologies. 
 Furthermore,  there  is  some  evidence  that  the  hardened  ESN  requirements  may  actually  be 
 counterproductive  by  deterring  the  incorporation  of  smart-  card  technology  in  AMPS-compatible 
 telephones.  We  also  believe  it  is  significant  that  no  similar  requirement 
 applies  to  PCS  or  SMR  service.  Accordingly,  we  propose  to  remove  Section  22.  919  from 
 our  rules,  and  we  request  comment  generally  on  this  proposal.  We  also  seek  comment  as 
 to  whether  it  is  still  necessary  or  helpful  to  have  a  Commission  rule  addressing  wireless 
 fraud  and,  if  so,  whether  it  would  be  desirable  to  add  such  a  rule  to  Part  20  (where  it 
 would  be  applicable  to  all  CMRS,  not  just  the  Cellular  Radiotelephone  Service)  stating 
 explicitly  that  tampering  with  telecommunications  equipment  in  order  to  obtain 
 unauthorized  access  to  telecommunications  services  is  prohibited  by  federal  law. 

 3.  Channelization  Requirements 
 37.  Background.  Section  22.905  identifies  the  part  of  the  electromagnetic 
 spectrum  that  is  allocated  to  the  Cellular  Radiotelephone  Service  and  divides  it  into  two 
 blocks,  labeled  A  and  B.  It  also  sets  forth  a  channelization  plan  that  divides  each  block 
 into  416  paired  30  kHz  channels  and  designates  21  of  these  paired  channels  in  each  block 
 as  control  channels.  54  This  channelization  plan  is  the  basic  scheme  for  the  original 
 compatible  analog  cellular  technology.  Alternative  technologies,  including  the  two 

 53  See  http://  www.  gemplus.  com/  app/  wireless/  role/  index.  htm  for  a  leading  smart  card  manufacturers  views 
 on  the  security  advantages  of  smart  cards. 

 54  This  channelization  plan  is  referenced  in  OET  53,  Section  2.  1.  1.  1,  by  its  former  codification, 
 section  22.  902  of  the  Commissions  rules.  The  current  rule,  section  22.  905,  contains  a  typographical  error: 
 in  the  Block  B  control  channel  pairs,  last  line,  it  should  read  835.  620  instead  of  835.920. 
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 principal  digital  technologies  that  many  cellular  licensees  have  deployed,  are  exempt 
 from  this  channelization  plan  rule.  55 

 38.  Discussion.  We  tentatively  conclude  that  it  is  unnecessary  to  retain  in  our 
 rules  the  channelization  plan  used  by  the  original  analog  cellular  technology.  Because 
 the  older  analog  technology  to  which  the  channelization  plan  applies  is  well  established 
 nationwide,  removing  the  plan  from  the  rules  would  not  pose  any  risk  of  decreased 
 cellular  technical  compatibility.  As  we  stated  above,  market  forces  alone  should  be 
 sufficient  to  cause  CMRS  carriers  to  continue  to  deploy  systems  that  provide  nationwide 
 operating  capability.  Accordingly,  we  propose  to  amend  Section  22.  905  by  removing  the 
 channelization  plan  and  to  reword  the  remainder  of  that  section  such  that  it  specifies  only 
 which  portions  of  the  electromagnetic  spectrum  are  allocated  to  the  Cellular 
 Radiotelephone  Service  and  what  frequency  ranges  within  that  allocation  make  up  the 
 two  initial  blocks  (A  and  B).  We  further  propose  to  remove  the  phrase  the  channeling 
 requirements  of  Section  22.905  from  Section  22.901(  d)(  2),  as  those  requirements  would 
 no  longer  exist.  We  seek  comment  on  these  proposals. 

 4.  Modulation  Requirements  and  In-  band  Emissions  Limitations 
 39.  Background.  Section  22.915  of  our  rules  requires  that  cellular  systems  be 
 capable  of  providing  service  using  the  modulation  types  described  in  the  OET  53  analog 
 compatibility  specification.  Section  22.915  also  provides  technical  specifications  for 
 (1)  the  performance  of  audio  filter  and  deviation  limiter  circuitry  in  analog  cellular 
 telephones  and  (2)  adjust  ment  of  the  modulat  ion  levels  in  analog  cellular  telephones. 
 Section  22.917  of  our  rules  prescribes  emission  masks  limiting  both  in-  band  and  out-  of-band 
 radio  frequency  emissions.  56  Paragraph  (a)  of  Section  22.917  provides  that  analog 
 modulated  emissions  may  be  transmitted  only  on  the  communication  channels  (channels 
 other  than  the  control  channels  identified  in  the  channelization  plan  discussed  in  the 
 preceding  section  of  this  notice).  As  with  the  channelization  rule,  alternative 
 technologies,  including  the  two  principal  digital  technologies  that  many  cellular  licensees 
 use,  are  exempted  from  these  two  rules,  with  the  exception  of  out-  of-  band  emission 
 limits.  57 

 40.  Discussion.  In  developing  the  rules  governing  PCS  and  other  similar  services 
 that  are  licensed  by  spectrum  blocks,  we  determined  that  it  is  not  necessary  to  select  a 

 55  See  47  C.  F.  R.    22.  901(  d)(  2).  Of  the  digital  technologies  commonly  used  to  provide  cellular  telephone 
 service,  the  time-  division  multiple  access  (TDMA)  technology  uses  the  same  spacing  and  channel  center 
 frequencies  as  are  specified  in  section  22.  905  for  the  original  analog  technology,  while  the  code-  division 
 multiple  access  (CDMA)  technology  uses  an  entirely  different  channelization  plan. 

 56  Manufacturers  of  cellular  telephone  transmission  equipment  conforming  to  the  original  analog 
 technology  may  elect  to  comply  with  the  alternative  in-  band  emission  mask  set  forth  in  paragraph  (c)  of 
 section  22.  917  in  lieu  of  complying  with  both  the  section  22.  915  audio  filter  design  requirements  and  the 
 matching  in-  band  emission  mask  in  paragraph  (b)  of  section  22.  917. 

 57  See  47  C.  F.  R.    22.  901(  d)(  2). 
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 particular  technology  to  be  used  or  to  specify  in  our  rules  the  technical  details,  such  as 
 modulation  parameters,  of  any  particular  technology.  Instead,  we  have  allowed  licensees 
 considerable  flexibility  to  choose  any  technology  that  enables  them  to  operate  efficiently, 
 by  adopting  only  minimal  rules  limiting  out-  of-  band  radio  frequency  emissions. 

 41.  Therefore,  consistent  with  our  policy  concerning  PCS  and  other  similar 
 services  and  our  proposal  supra  to  eliminate  the  OET  53  analog  cellular  compatibility 
 specification,  we  propose  to  remove,  in  the  introductory  paragraph  of  Section  22.  915,  the 
 requirement  that  cellular  systems  have  the  capability  to  provide  service  using  the 
 modulation  types  described  in  OET  53.  We  also  propose  to  remove  all  rules  governing 
 audio  filter  and  deviation  limiter  performance,  modulation  levels,  and  in-  band  radio 
 frequency  emission  limits.  Because  we  are  proposing  to  remove  the  channelization 
 requirements,  including  the  designation  of  control  and  communication  channels,  we  also 
 propose  to  remove  the  rule  requiring  that  analog  emissions  be  transmitted  only  on  the 
 communication  channels. 

 42.  We  do  not  propose  to  remove  the  out-  of-  band  emission  limit  contained  in 
 Section  22.917,  but  we  invite  comment  as  to  how  this  out-  of-  band  limit  should  be  defined 
 in  our  rules  in  order  to  effectively  provide  an  adequate  measure  of  interference  protection 
 to  other  licensees  and  services,  while  allowing  licensees  the  flexibility  to  establish  a 
 different  limit  where  appropriate.  In  particular,  should  licensees  be  allowed  to  operate 
 transmitters  on  frequencies  closer  to  the  edge  of  their  authorized  spectrum  than  full 
 compliance  with  our  out-  of-  band  emission  limits  would  normally  permit,  provided  that 
 all  of  the  potentially  affected  parties  (i.  e.,  adjacent  spectrum  licensees)  contractually 
 agree  to  the  practice?  58  Our  Wireless  Communications  Service  (WCS)  rules  provide  this 
 type  of  flexibility.  59  We  believe  that  cellular  and  broadband  PCS  licensees  would  benefit 
 from  the  same  flexibility.  Accordingly,  we  propose  to  harmonize  the  wording  and 
 provisions  of  out-  of-  band  emission  limit  rules  applicable  to  the  Cellular  Radiotelephone 
 Service  and  broadband  PCS  with  those  applicable  to  WCS.  60  Finally,  in  recent 
 proceedings  where  services  have  been  established  with  flexible  technology  and 
 channelization,  the  Commission  has  adopted  detailed  requirements  governing 
 measurement  and  equipment  settings  and  procedures  to  be  used  in  certifying  transmitting 
 equipment  for  use  in  those  services  pursuant  to  Part  2,  Subpart  J  of  our  rules.  61  We  seek 
 comment  as  to  whether  similarly  detailed  rules  will  be  necessary  if  we  adopt  more 

 58  Last  year,  certain  broadband  PCS  licensees  and  equipment  manufacturers  asked  the  Wireless 
 Telecommunications  Bureau  to  interpret  the  broadband  PCS  emission  limit  rule  as  being  inapplicable  in  the 
 case  where  adjacent  spectrum  is  separately  licensed  to  the  same  entity,  or  a  cooperating  entity.  In  response, 
 the  Bureau  granted  relief  in  the  form  of  a  waiver.  See  Omnipoint  Request  for  Broadband  Declaratory 
 Ruling  or  Waiver  Concerning  PCS  Emission  Limits  Rule  Section  24.  238,  DA  00-  1767,  15  FCC  Rcd  13422 
 (2000). 

 59  See  47  C.  F.  R.    27.  53(  a)(  10). 

 60  See  proposed  rules    22.  917  and  24.  238  in  Appendix  A. 
 61  See,  e.  g.,  47  C.  F.  R.    27.  53(  d). 
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 flexible  emission  limit  rules  for  the  cellular  service  and  PCS,  or  whether  a  more  general 
 rule  is  adequate.  62  We  seek  comment  on  these  closely  related  issues. 

 5.  Wave  Polarization  Requirement 
 43.  Background.  Section  22.367(  a)(  4)  of  the  Commissions  rules  provides  that 
 electromagnetic  waves  radiated  by  base,  mobile,  and  auxiliary  test  transmitters  in  the 
 Cellular  Radiotelephone  Service  must  be  vertically  polarized.  In  addition  to  its  role  in 
 promoting  technical  compatibility,  this  rule  was  intended  to  reduce  the  likelihood  of 
 interference  from  cellular  transmitters  to  broadcast  television  (TV)  reception  on  the  upper 
 UHF  TV  channels.  63 

 44.  On  September  25,  1998,  Andrew  Corporation  (Andrew)  filed  a  petition  for 
 rulemaking  requesting  that  we  amend  Section  22.367  to  eliminate  the  requirement  that 
 cellular  base  stations  radiate  only  vertically  polarized  radio  waves.  64  The  Wireless 
 Telecommunications  Bureau  (WTB)  denied  this  petition,  stating  that,  although  it 
 appeared  that  the  petition  may  have  had  some  merit,  the  public  interest  would  be  better 
 served  by  considering  this  matter  along  with  other  potential  Part  22  rule  amendments  in 
 connection  with  the  year  2000  Biennial  Review.  65 

 45.  In  its  petition,  Andrew  argued  that  adoption  of  the  proposed  rule  change 
 would  make  the  use  of  polarization  diversity  antenna  arrays  66  for  base  stations  in  the 
 cellular  service  more  economical  and  result  in  smaller  antenna  arrays,  by  eliminating  the 
 need  for  either  a  third  component  antenna  or  additional  associated  equipment.  67  Andrew 
 noted  that  the  Commission  had  reallocated  the  adjacent  TV  Channels  60-  69  for  land 

 62  See  proposed  rule  paragraphs  Sections  22.  917(  b)  and  24.  238(  b)  in  Appendix  A. 

 63  See  Part  22  Rewrite,  9  FCC  Rcd  at  6558.  We  note  that  alternative  services  are  exempt  from  wave 
 polarization  requirements  pursuant  to    22.  901(  d)(  2). 

 64  Andrew  Corporation,  Petition  for  Rulemaking,  filed  September  18,  1998  (Andrew  Petition).  The 
 Andrew  Petition  was  placed  on  public  notice.  See  Public  Notice,  Report  No.  2304  (rel.  Nov.  3,  1998). 

 65  See  Andrew  Corporation,  DA  00-  455  (rel.  March  1,  2000). 

 66  A  polarization  diversity  antenna  array  comprises  two  receiving  antennas  positioned  orthogonally  at 
 angles  plus  and  minus  45  degrees  to  vertical.  In  urban,  high  multipath  environments,  polarization  diversity 
 antenna  arrays  can  substitute  for  the  larger  space  diversity  antenna  arrays  commonly  used  for  cellular  base 
 stations.  The  smaller  size  of  the  polarization  diversity  antenna  array  reduces  the  visual  impact  of  the 
 cellular  base  station  tower,  which  may  assist  the  carrier  when  seeking  local  zoning  approval.  Andrew  also 
 ascribed  other  technical  and  operational  advantages  to  polarization  diversity  antenna  arrays.  See  Andrew 
 Petition  at  4,  5. 

 67  Polarization  diversity  antenna  arrays  currently  can  be  used  at  cellular  base  stations.  To  comply  with  the 
 current  rule,  however,  carriers  transmitting  compatible  analog  transmissions  must  additionally  use  either  a 
 third  antenna  producing  vertically  polarized  waves  (and  a  third  transmission  line)  or  a  power  splitter  and 
 two  duplexors  to  feed  equal  and  properly  phased  transmitting  power  to  each  of  the  two  antennas  in  the 
 array.  If  the  rule  is  amended  as  we  propose,  carriers  could  transmit  using  one  of  the  two  antennas  in  the 
 array,  resulting  in  a  slant-  polarized  wave  rather  than  a  vertically-  polarized  wave. 
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 mobile  use  and  questioned  whether  the  wave  polarization  rule  is  effective  in  protecting 
 television  reception  in  any  event.  Additionally,  Andrew  asserted  that  the  scattering 
 environment  in  which  todays  small  portable  cellular  telephones  operate  tends  to  de-polarize 
 their  signals  to  such  an  extent  that  maintaining  the  same  wave  polarization  for  all 
 cellular  base  stations  typically  provides  no  interoperability  benefit.  In  view  of  these 
 changed  circumstances,  Andrew  argued,  the  vertical  wave  polarization  rule  does  not 
 serve  or  is  no  longer  needed  to  serve  the  purposes  for  which  it  was  adopted.  68 

 46.  In  comments  supporting  the  Andrew  Petition,  AirTouch  Communications, 
 Inc.  (AirTouch)  noted  that  PCS  and  SMR  operators  are  not  subject  to  a  wave  polarization 
 rule.  In  light  of  the  Commissions  commitment  to  regulatory  symmetry,  AirTouch 
 argued,  cellular  operators  should  no  longer  be  subject  to  the  wave  polarization 
 requirement  either.  69  GTE  Service  Corporation  (GTE),  in  its  comments,  agreed  that 
 vertical  polarization  is  not  needed  to  reduce  the  probability  of  interference.  GTE  also 
 suggested  that  eliminating  the  wave  polarization  requirement  could  reduce  carrier 
 antenna  costs,  allow  efficient  use  of  antenna  sites,  foster  more  aesthetically  pleasing 
 antenna  sites,  and  promote  regulatory  parity.  70 

 47.  Discussion.  We  find  that  the  reasons  given  by  Andrew  to  modify  the  wave 
 polarization  rule  appear  to  be  persuasive,  and  we  tentatively  conclude  that  we  should 
 relax  this  portion  of  the  rule  wit  h  regard  to  all  cellular  stations.  71  Accordingly  we  propose 
 to  amend  Section  22.367  of  our  rules  to  provide  that  cellular  stations  are  not  limited  as  to 
 wave  polarizat  ion.  72  We  invite  additional  comments  on  this  proposal.  We  seek  comment 
 as  to  what,  if  any,  interference  or  other  adverse  effects  might  be  caused  to  any  fixed  or 
 mobile  telecommunications  or  broadcast  services  operating  in  the  cellular  service 
 spectrum  or  adjacent  spectrum,  which  currently  use  horizontal  wave  polarization  and  rely 
 on  compliance  with  Section  22.367  to  provide  cross-  polarization  isolation. 

 6.  Assignment  of  System  Identification  Numbers 
 48.  Background.  Section  22.941  of  the  Commissions  rules  sets  forth  the 
 procedure  by  which  the  Commission  assigns  system  identification  numbers  (SIDs)  to 
 systems  in  the  Cellular  Radiotelephone  Service.  SIDs  are  used  by  cellular  systems  to 
 identify  the  home  system  of  a  cellular  telephone  and  by  cellular  telephones  to  determine 

 68  Andrew  Petition  at  8. 
 69  Comments  of  AirTouch,  filed  December  3,  1998,  at  4. 
 70  Comments  of  GTE,  filed  December  3,  1998,  at  2. 
 71  Although  Andrew  requested  relief  only  for  cellular  base  stations,  we  believe  that  the  rule  should  be 
 amended  for  cellular  mobile  and  auxiliary  test  stations  as  well. 

 72  We  further  propose  to  eliminate  the  reference  to  section  22.  367  contained  in  section  22.  901(  d)(  2),  which 
 would  be  rendered  unnecessary  by  the  proposed  amendment  to  section  22.  367. 
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 their  roaming  status.  73  SIDs  are  also  used  by  cellular  systems  as  part  of  the  mobile 
 identification  process  for  billing  purposes.  SIDs  are  treated  by  the  Commission  as  a  term 
 of  the  cellular  system  license.  They  are  first  assigned  to  cellular  systems  by  the 
 Commission  during  initial  application  processing  74  and  they  may  be  altered  subsequently 
 as  a  minor  modification  of  station  license,  by  notification  to  the  Commission.  75  There  are 
 no  Commission  rules  requiring  or  providing  for  the  assignment  of  system  identification 
 numbers  for  PCS,  SMR  or  any  other  CMRS. 

 49.  The  Commission  began  assigning  cellular  SIDs  in  the  early  1980s  at  the 
 request  of  the  Electronics  Industry  Association  (EIA).  Even  though  SIDs  were  made  a 
 term  of  cellular  licenses,  the  Commission  accepted  no-  fee  informal  (letter)  applications  to 
 modify  SID  assignments  throughout  the  1980s.  Under  that  system,  a  licensee  had  to  wait 
 until  the  Commission  approved  its  SID  modification  request  and  issued  a  replacement 
 license  bearing  the  change  before  using  the  modified  SID.  In  1994,  the  Commission 
 adopted  the  SID  assignment  rules  now  used,  under  which  cellular  licensees  may  begin 
 using  other  SIDs  (subject  to  consent  of  any  affected  licensees)  without  first  seeking  and 
 obtaining  Commission  approval,  but  are  required  to  notify  the  Commission  of  SID 
 modifications  after  the  fact.  76 

 50.  Discussion.  We  believe  that  it  is  unnecessary  to  retain  our  current  cellular 
 SID  rules.  The  assignment  of  cellular  SIDs  is  not  required  by  statute,  and  there  is  no 
 public  policy  reason  that  SIDs  must  be  a  term  of  Cellular  Radiotelephone  Service 
 authorizations.  77  When  we  proposed  the  current  SID  rules  in  1992,  we  also  sought 
 comment  on  the  possibility  of  a  private  sector  entity  coordinating  the  use  of  SIDs  outside 
 of  the  Commission  licensing  process.  78  Unfortunately,  no  such  entity  came  forward  at 
 that  time,  and  so  the  Commission  adopted  the  proposed  rules  and  has  continued  to  assign 
 cellular  SIDs  and  accept  notifications  of  SID  changes.  Recently  however,  the  Cellular 
 Telecommunications  and  Internet  Association  suggested,  in  comments  about  the 
 Commissions  Year  2000  Biennial  Review  Report,  that  the  Commission  should  turn  the 

 73  In  the  introductory  paragraph  of  section  22.941,  one  sentence  reads  SIDs  are  transmitted  by  cellular 
 systems  so  that  cellular  mobile  stations  can  determine  whether  the  system  through  which  they  are 
 communicating  is  a  system  to  which  they  subscribe,  or  whether  they  are  considered  by  the  system  to  be 
 roamers.  This  is,  however,  somewhat  of  an  oversimplification  of  the  situation  with  current  cellular 
 systems.  Many  systems  transmit  two  or  more  different  SIDs  in  order  to  treat  subscribers  of  certain  other 
 systems  as  non-  roamers. 

 74  See  47  C.  F.  R.    22.  941(  a),  (c). 

 75  See  47  C.  F.  R.    22.  941(  b). 
 76  See  Part  22  Rewrite,  Appendix  A,  9  FCC  Rcd  at  6574. 
 77  See  Revision  of  Part  22  of  the  Commissions  Rules  Governing  the  Public  Mobile  Services,  Notice  of 
 Proposed  Rulemaking,  CC  Docket  No.  92-  115,  7  FCC  Rcd  3658,  3673-  74  (1992)  (hereinafter  Part  22 
 Rewrite  NPRM);  Part  22  Rewrite,  9  FCC  Rcd  at  6574. 

 78  See  Part  22  Rewrite  NPRM,  Appendix  A,  7  FCC  Rcd  at  3674. 
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 function  of  coordinating  Cellular  Radiotelephone  Service  SIDs  over  to  its  subsidiary 
 CIBERNET,  which  already  performs  this  function  for  PCS. 

 51.  We  propose  to  no  longer  include  SIDs  as  a  term  of  cellular  licenses  and  to 
 amend  Section  22.941  of  our  rules  to  remove  the  notification  requirement.  We  plan  to 
 retain  the  requirement  that  a  cellular  system  may  transmit  another  systems  SID  only  if 
 that  system  consents  to  such  use.  We  seek  comment  on  these  proposals,  and  we  again 
 invite  proposals  under  which  SID  coordination  functions  would  be  carried  out  by  an 
 industry  organization  such  as  CIBERNET,  rather  than  by  the  Commission.  79 

 7.  Determination  of  Cellular  Geographic  Service  Area 
 52.  Section  22.911(  a)  of  our  rules  sets  forth  a  standardized  method  for 
 determining  the  CGSA  of  a  cellular  system.  80  The  standard  method  uses  a  general 
 mathematical  formula  to  calculate  distances  along  the  cardinal  radials  81  to  the  service  area 
 boundary  (SAB)  of  each  cell  in  the  system.  82 

 53.  Paragraph  (b)  of  Section  22.911  provides,  however,  that  any  cellular  licensee 
 may  apply  for  a  modification  of  its  licensed  CGSA  if  it  believes  that  the  standard  method 
 produces  a  CGSA  that  is  substantially  different  from  the  actual  coverage  of  its  system. 
 When  preparing  to  file  an  application  requesting  such  a  modification,  the  licensee  must 
 employ  alternative  methods  (actual  measurements,  more  accurate  prediction  models  or  a 
 combination  of  the  two)  to  determine  the  location  of  the  median  32  dBPV/  m  field 
 strength  contour  and  the  distances  along  cardinal  radials  to  that  contour.  In  describing 
 how  these  distances  to  the  median  32  dBPV/  m  contours  must  be  used  to  determine  the 
 CGSA,  paragraphs  (b)(  1)  and  (b)(  3)  of  Section  22.911  use  the  term  SAB  in  several 
 places.  In  our  experience,  this  occasionally  leads  licensees  erroneously  to  believe  that 
 they  may  employ  the  alternative  methods  to  determine  an  SAB,  as  opposed  to  the  CGSA, 
 and  then  to  use  that  erroneously-  determined  SAB  in  connection  with  various  other  rules 
 that  govern  SAB  extensions  (Section  22.912,  for  example)  or  the  traffic  capture 
 protection  rule  (Section  22.911(  d)(  2)). 

 79  We  note,  for  example,  that  in  September  1997,  the  Commission  discontinued  assigning  cellular 
 manufacturers  codes,  a  portion  of  the  ESN;  this  function  is  now  performed  by  the  Telecommunications 
 Industry  Association.  See  http://  www.  tiaonline.  org/  pubs/  press_  releases/  1997/  97-  71.cfm.  See  also 
 http://  www.  cibernet.  com/. 

 80  Within  its  CGSA,  a  cellular  system  is  entitled  to  protection  from  co-  channel  and  first-  adjacent  channel 
 interference  and  from  capture  of  subscriber  traffic  by  adjacent  systems  on  the  same  channel  block.  See 
 47  C.  F.  R.    22.912(  d). 

 81  Cardinal  radials  are  eight  imaginary  straight  lines  extending  radially  on  the  ground  from  an  antenna 
 location,  defined  according  to  specified  azimuths.  See  id.  at    22.  99  (defining  cardinal  radials). 

 82  An  SAB  measures  the  service  area  of  a  particular  cell  site  and  is  a  component  of  the  CGSA,  which  is  a 
 composite  of  the  service  areas  of  all  of  the  cells  in  the  particular  cellular  system.  It  also  is  used  to  evaluate 
 extensions  and  traffic  capture.  See  id.  at    22.  911-  12. 
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 54.  We  wish  to  clarify  that  the  SAB  of  a  cell  and  the  32  dBPV/  m  contour  that  is 
 used  when  preparing  an  alternative  CGSA  determination  are  not  the  same.  The  SAB  is 
 the  boundary  calculated  using  the  mathematical  formulas  and  methods  set  forth  in 
 paragraph  (a)  of  Section  22.911,  regardless  of  the  actual  median  field  strength  along  this 
 boundary  (as  measured  or  predicted  with  more  elaborate  methodology).  On  the  other 
 hand,  the  32  dBPV/  m  contour  is  the  locus  of  points  where  the  predicted  or  measured 
 median  field  strength  finally  drops  to  32  dBPV/  m,  regardless  of  how  far  these  points  may 
 actually  be  from  the  cell  site.  We  are  proposing,  therefore,  to  reword  portions  of 
 paragraphs  (b)(  1)  and  (b)(  3)  of  Section  22.911  to  eliminate  use  of  the  term  SAB  in  those 
 paragraphs  and  thereby  eliminate  the  confusion  that  sometimes  arises. 

 8.  Service  Commencement  and  Construction  Periods 
 55.  Section  22.946  of  the  Commissions  rules,  entitled  Service 
 commencement  and  construction  periods  for  cellular  systems,  sets  forth  timing 
 requirements  relat  ing  to  the  deployment  of  new  cellular  systems.  This  sect  ion  was 
 amended  in  the  Commissions  Universal  Licensing  System  proceeding.  83  There  was  an 
 apparent  oversight  in  the  ULS  proceeding  and,  as  a  result,  the  table  referred  to  in  this 
 section,  entitled  Commencement  of  Service,  was  inadvertently  deleted  when  this  rule 
 was  amended.  Because  channel  blocks  have  been  authorized  in  all  of  the  top  90  cellular 
 markets,  one  of  the  three  entries  in  the  table,  which  referred  to  the  construction 
 requirements  for  the  first  cellular  system  authorized  in  each  channel  block  in  these 
 markets,  is  obsolete.  Thus,  we  use  this  opportunity  to  propose  amending  Section  22.946 
 to  reflect  the  correct  and  updated  information.  We  also  use  this  opportunity  to  propose 
 deleting  the  final  phrase  of  Section  22.946(  b),  which  prohibits  cellular  system  licensees 
 from  intentionally  serv[  ing]  only  roamer  stations.  84  Historically,  this  prohibit  ion  was 
 necessary  because  cellular  markets  were  duopolistic  and,  as  a  result,  if  one  of  the  two 
 carriers  served  only  roamers,  then  there  would  be  no  competition  for  cellular  service  to 
 subscribers.  In  the  currently  competitive  market  for  cellular  services,  we  believe  that  this 
 prohibition  is  no  longer  needed.  We  seek  comment  on  these  proposed  changes. 

 C.  Incidental  Services  Rule 
 56.  Background.  Section  22.323  of  the  Commissions  rules  85  authorizes  carriers 
 operating  in  the  Public  Mobile  Radio  Services  to  provide  other  communications  services 
 incidental  to  the  primary  public  mobile  service,  provided  certain  conditions  are  met.  In 
 general,  Section  22.323  requires  carriers  providing  incidental  services  to  protect  mobile 
 subscribers  by  ensuring  that:  (1)  the  costs  and  charges  of  subscribers  not  wishing  to  use 
 incidental  services  are  not  increased  as  a  result  of  the  carriers  provision  of  incidental 

 83  ULS  Report  and  Order,  13  FCC  Rcd.  21027  (1998),  ULS  Memorandum  Opinion  and  Order  on 
 Reconsideration,  14  FCC  Rcd.  11,  145  (1999). 

 84  47  C.  F.  R.  22.946(  a). 

 85  47  C.  F.  R.    22.  323. 
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 services  to  other  subscribers;  (2)  the  quality  and  availability  of  primary  public  mobile 
 service  does  not  materially  deteriorate;  and  (3)  provision  of  such  incidental  services  is  not 
 inconsistent  with  the  Communications  Act  of  1934  or  the  Commissions  rules  and 
 policies. 

 57.  In  1996,  in  the  CMRS  Flex  First  Report  and  Order,  we  found  that  many 
 CMRS  carriers  were  seeking  to  provide  a  wide  range  of  fixed  wireless  service  offerings 
 to  customers  and  that  carriers  proposed  to  combine  fixed  and  mobile  technologies  into 
 integrated  service  packages.  86  We  found  it  in  the  public  interest  to  afford  carriers  greater 
 flexibility  in  providing  innovative  wireless  services  to  meet  customer  demands,  stimulate 
 wireless  competition  in  the  local  exchange  markets  and  encourage  further  innovation  and 
 experimentation  in  the  development  of  wireless  services.  Accordingly,  we  amended  our 
 rules  to  allow  CMRS  carriers  to  provide  fixed  wireless  services  on  a  co-  primary  basis 
 with  commercial  mobile  services.  87  We  did  not,  however,  amend  or  modify 
 Section  22.323  as  it  applies  to  incidental  services  offered  by  Part  22  licensees. 

 58.  In  the  CMRS  Flex  Second  Report  and  Order  adopted  in  July  2000,  we  further 
 amended  our  rules  to  clarify  that  fixed  wireless  services  provided  pursuant  to  Section 
 22.901(  d)  of  the  Commissions  rules  88  are  not  subject  to  the  incidental  services 
 restrictions  set  forth  in  Section  22.323  of  the  Commissions  rules.  89  At  the  same  time,  we 
 also  eliminated  the  Section  22.323  condition  that  licensees  notify  the  Commission  prior 
 to  providing  incidental  services.  90  Additionally,  we  indicated  that  the  continuing  need  for 
 Section  22.323  would  be  revisited  as  part  of  the  biennial  review  of  all  regulations  that 
 apply  to  providers  of  telecommunications  service.  91 

 59.  In  February,  2000,  the  WTB  addressed  a  petition  for  rulemaking  filed  by 
 FreePage  Corporation  (FreePage),  which  requested  that  we  amend  Section  22.323  to 
 permit  paging  licensees  to  use  their  assigned  channels  to  transmit  audio  programming  of 
 interest  to  a  narrow  or  specialized  audience.  Possible  services  cited  by  FreePage 
 included,  without  limitation,  childrens  programming,  foreign  language  programming, 
 and  reading  services  for  persons  who  have  sight  disabilities.  FreePage  referred  to  this 
 proposed  service  as  Limited  Program  Distribution  Service  (LPDS).  By  Public  Notice,  the 

 86  See  Amendment  of  the  Commissions  Rules  to  Permit  Flexible  Service  Offerings  in  the  Commercial 
 Mobile  Radio  Services,  WT  Docket  No.  96-  6,  First  Report  and  Order  and  Further  Notice  of  Proposed 
 Rulemaking,  11  FCC  Rcd  8965,  8967    3  (1996)  (CMRS  Flex  First  Report  and  Order). 

 87  See  id.;  4  7  C.  F.  R.    22.  901(  d)  (codifying  co-  primary  authorization  for  cellular  service). 

 88  47  C.  F.  R.    22.  901(  d). 
 89  See  Amendment  of  the  Commissions  Rules  to  Permit  Flexible  Service  Offerings  in  the  Commercial 
 Mobile  Radio  Services,  WT  Docket  No.  96-  6,  Second  Report  and  Order  and  Order  on  Reconsideration, 
 FCC  00-  246  (rel.  Jul.  20,  2000)  (CMRS  Flex  Second  Report  and  Order). 

 90  See  id.  at  7,    13. 

 91  See  id.  at  8,    14. 
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 WTB  requested  comments  on  whether  Section  22.323  should  be  amended  to  include  the 
 LPDS  service  proposed  by  FreePage  as  an  incidental  service  and  on  whether  any  other 
 Commission  rules  should  be  amended  to  permit  more  flexible  use  of  spectrum  licensed  to 
 CMRS  providers.  92  Four  parties,  including  FreePage,  filed  comments.  93 

 60.  Discussion.  Having  recently  removed  the  prior  notice  requirement,  we 
 tentatively  conclude  that  the  three  remaining  conditions  in  Section  22.  323  also  are  no 
 longer  necessary.  Section  22.323(  a)  imposes  the  condition  that  the  costs  and  charges  to 
 subscribers  not  wishing  to  receive  incidental  services  may  not  be  increased  as  a  result  of 
 the  provision  of  incidental  services  to  other  subscribers.  Because  of  the  competitive 
 wireless  environment,  however,  CMRS  licensees  are  not  subject  to  federal  rate  regulation 
 and  are  not  permitted  to  file  tariffs  with  the  Commission.  Under  these  circumstances,  we 
 tentatively  conclude  that  this  rate  restriction  is  unnecessary,  as  any  dissatisfied  subscriber 
 will  have  the  option  of  switching  to  a  competing  carrier.  In  addition,  the  meaning  of  the 
 restriction  in  a  deregulated,  detariffed  environment  is  unclear.  For  the  same  reasons,  we 
 tentatively  conclude  that  the  Section  22.323(  b)  condition  regarding  the  quality  and 
 availability  of  the  primary  public  mobile  service  is  no  longer  necessary.  We  also 
 tentatively  conclude  that  it  is  unnecessary  to  expressly  remind  carriers  in  this  rule  of  their 
 obligation  to  comply  with  applicable  provisions  of  the  Act  and  of  our  rules  and  policies. 
 Accordingly,  we  propose  to  delete  all  three  of  the  remaining  conditions  in 
 Section  22.323,  and  we  seek  comment  on  these  proposed  deletions. 

 61.  As  to  the  remaining  portion  of  Section  22.323,  we  recognize  that  the  rule 
 simply  may  no  longer  be  necessary  in  the  current  wireless  marketplace,  for  various 
 reasons.  In  particular,  we  have  permitted  CMRS  carriers  substantial  flexibility  to  provide 
 a  wide  variety  of  service  offerings,  and  we  have  made  clear  that  carriers  offering  co-primary 
 fixed  service  pursuant  to  Section  22.901(  d)  and  the  CMRS  Flex  First  Report  and 
 Order  are  not  subject  to  the  requirements  of  Section  22.  323.  On  the  other  hand,  some 
 carriers  have  argued  that  express  provision  for  incidental  services  is  helpful  in 
 demonstrating  to  state  commissions  that  certain  services  must  be  treated  as  CMRS 
 exempt  from  state  and  local  regulation  of  rates  and  entry,  94  and  GTE  has  argued  that 

 92  See  Public  Notice,  Wireless  Telecommunications  Bureau  Seeks  Public  Comment  on  Petition  to  Amend 
 47  C.  F.  R.  Section  22.  323  to  Allow  CMRS  Licensees  to  Provide  Limited  Program  Distribution  Service, 
 DA  00-  160  (WTB  rel.  Feb.  9,  2000)  (FreePage  PN).  A  separate  order  denied  FreePages  request  for  a 
 waiver,  a  developmental  license  or  an  experimental  license  to  offer  its  proposed  service.  See  FreePage 
 Corporation,  DA  00-  159  (WTB  rel.  Feb.  9,  2000). 

 93  In  addition  to  FreePages  comments,  comments  in  support  of  FreePages  petition  were  filed  by 
 Chadmoore  Wireless  Group,  Inc.  and  Arch  Communications  Group,  Inc.,  and  comments  opposing 
 FreePages  petition  were  filed  by  the  National  Association  of  Broadcasters.  Reply  comments  were  filed  by 
 FreePage. 

 94  See  id.  at  6,    10,  7,  13  (discussing  comments);  CMRS  Flex  First  Report  and  Order,  11  FCC  Rcd  at 
 8968-  69  (holding  that  mobile  or  fixed  incidental  services  offered  by  CMRS  carriers  fall  within  the 
 definition  of  mobile  service  and  are  subject  to  CMRS  regulation).  CMRS  are  statutorily  exempt  from  state 
 and  local  government  regulation  of  rates  and  entry  under  section  332(  c)(  3)  of  the  Communications  Act, 
 47  U.  S.  C.    332(  c)(  3). 
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 Section  22.323  remains  necessary  as  applied  to  air-  ground  service.  95  In  light  of  these 
 considerations,  we  seek  comment  on  whether  the  authorization  of  incidental  services 
 under  Section  22.323  of  our  rules  remains  necessary  as  applied  to  some  or  all  Part  22 
 services. 

 62.  As  part  of  our  consideration  of  modifying  or  eliminating  Section  22.323,  we 
 also  seek  comment  on  FreePages  request  that  Section  22.  323  be  amended  to  include  the 
 LPDS  service  proposed  by  FreePage  as  an  incidental  service.  We  invite  comments  on 
 whether  spectrum  assigned  to  CMRS  licensees  could  be  used  for  the  LPDS  service 
 proposed  by  FreePage.  In  particular,  we  would  be  interested  in  comments  addressing 
 whether  the  service  proposed  by  FreePage  is  in  fact  a  broadcast  service,  and,  therefore, 
 whether  we  would  need  to  change  existing  spectrum  allocation  and  service  rules  to 
 permit  LPDS  service  in  spectrum  assigned  to  CMRS  licensees.  More  generally,  we  also 
 request  comments  on  what  effects,  if  any  (e.  g.,  interference,  service  preclusion,  or 
 redundancy  of  service  offerings),  the  implementation  of  FreePages  LPDS  proposal 
 would  have  on  other  authorized  service  offerings  or  services  proposed  in  pending 
 Commission  rulemaking  proceedings.  Finally,  we  are  particularly  interested  in  receiving 
 comments  from  members  of  the  disability  community  regarding  how  they  might  benefit 
 from  a  revision  of  the  Commissions  rules  that  would  permit  use  of  the  spectrum  for 
 programming  to  narrow  or  specialized  audiences.  96 

 D.  Cellular  Anti-  Trafficking  Rules 
 63.  Background.  Sections  22.937,  97  22.943,  98  and  22.945  99  of  the  Commissions 
 rules  were  originally  adopted  under  former  rule  sections  to  prevent  speculation  and 
 trafficking  in  cellular  licenses,  which  were  primarily  awarded  by  lottery  after  1984.  100 
 Section  22.937  currently  requires  an  applicant  for  a  new  cellular  system  to  make  a 
 demonstration  of  financial  qualification,  at  the  time  of  application  filing,  that  it  has  a 
 separate  market  specific  firm  financial  commitment  or  available  financial  resources  to 
 construct  and  operate  a  cellular  system  for  one  year.  The  required  demonstration  must 
 include  an  assessment  of  estimated  costs,  source  of  financing,  a  lenders  statement  or 

 95  See  CMRS  Flex  Second  Report  and  Order  at  5-  6,    10  (describing  GTE  comments). 

 96  Parties  who  addressed  these  matters  in  comments  filed  in  response  to  the  FreePage  PN  need  not  repeat 
 their  comments  in  response  to  this  Notice.  See  supra  note  90  (listing  comments  received  in  response  to 
 FreePage  PN).  We  will  enter  those  comments  in  the  record  in  this  docket. 

 97  47  C.  F.  R.    22.  937. 

 98  47  C.  F.  R.    22.  943. 
 99  47  C.  F.  R.    22.  945. 
 100  The  first  30  Metropolitan  Statistical  Area  (MSA)  licenses  were  awarded  through  comparative  hearings 
 and  the  Commission  adopted  rules  in  1984  to  award  licenses  for  the  remaining  MSAs  and  RSAs  through 
 random  selection.  See,  e.  g.,  Amendment  of  the  Commissions  Rules  To  Allow  the  Selection  from  Among 
 Mutually  Exclusive  Competing  Cellular  Applications  Using  Random  Selection  or  Lotteries  Instead  of 
 Comparative  Hearings,  CC  Docket  No.  83-  1096,  98  FCC  2d  175  (1984). 
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 certain  financial  statements  in  cases  of  personal  or  internal  financing.  Section  22.  937 
 was  originally  adopted  in  1981  as  former  Section  22.917.  101  In  adopting  former 
 Section  22.917,  the  Commission  stated  that  cellular  applicants  must  demonstrate  that 
 they  are  financially  qualified  to  construct  their  proposed  facility  and  to  operate  it  for  a 
 reasonable  period  of  time.  Such  a  demonstration  is  necessary  because  of  the  large  capital 
 investment  required  to  finance  the  highly  sophisticated  technology  associated  with 
 cellular  operations  and  because  cellular  service  is  in  an  early  stage  of  development  and 
 must  be  viewed  as  a  relatively  high-  cost  business  venture.  102 

 64.  Section  22.943  103  sets  forth  limitations  on  assignments  and  transfers  of  cellular 
 authorizations  and  provides  that  such  assignments  or  transfers  are  subject  to  anti-trafficking 
 provisions  of  former  Section  22.139,  with  certain  exceptions.  104  The 
 Commissions  anti-  trafficking  rules  generally  prohibit  acquiring  an  authorization  for  the 
 principal  purpose  of  speculation  or  profit  resale.  The  cellular  anti-  trafficking  rules 
 specifically  permit  the  transfer  of  cellular  licenses  awarded  by  lottery  after  construction. 
 This  policy  was  intended  to  balance  the  public  interest  in  efficient  use  of  the  spectrum 
 through  free  transferability  of  licenses  with  a  deterrent  for  insincere  applicants  to 
 speculate  in  unbuilt  facilities.  105 

 65.  Section  22.945  governs  interests  in  applicants  with  mutually  exclusive 
 applications  for  a  new  cellular  system  and,  with  limited  exceptions,  prohibits  parties  from 
 having  any  direct  or  indirect  interest  in  more  than  one  application  for  authority  to  operate 
 a  new  cellular  system  in  the  same  cellular  market.  106  Section  22.945  was  originally 

 101  47  C.  F.  R.    22.  917  (1981).  See  An  Inquiry  into  the  Use  of  the  Bands  825-  845  MHz  and  870-  890  MHz 
 for  Cellular  Communications  Systems,  CC  Docket  No.  79-  318,  86  FCC  2d  469  (1981). 

 102  Id.  at  501.  The  Commission  also  indicated  that  because  the  cellular  rules  provide  that  only  two  cellular 
 systems  can  operate  in  the  same  geographic  area,  the  inability  of  any  cellular  licensee  to  provide  service 
 could  significantly  inconvenience  the  public  and  would  cause  a  huge  amount  of  spectrum  to  be  unused. 
 Id.  at  502. 

 103  Section  22.  943  was  originally  adopted  as  former  Section  22.  920  in  1984.  See  Amendment  of  the 
 Commissions  Rules  To  Allow  the  Selection  from  Among  Mutually  Exclusive  Competing  Cellular 
 Applications  Using  Random  Selection  or  Lotteries  Instead  of  Comparative  Hearings,  CC  Docket  No.  83- 
 1096,  98  F.  C.  C.  2d  175  (1984). 

 104  Section  22.  139  was  incorporated  into  consolidated  Commission  rule  Section  1.  948(  i),  47  C.  F.  R. 
   1.  948(  i).  See  Biennial  Regulatory  Review    Amendment  of  Parts  0,  1,  13,  22,  24,  26,  27,  80,  87  ,90,  95, 
 97,  and  101  of  the  Commissions  rules  to  Facilitate  the  Development  and  Use  of  the  Universal  Licensing 
 System  in  the  Wireless  Telecommunications  Services,  WT  Docket  No.  98-  20,  13  FCC  Rcd  21,  027  (1998). 
 The  Section  22.943  exceptions  to  the  anti-  trafficking  rule  permit  the  filing  of:  1)  applications  reflecting  the 
 trading  of  an  ownership  interest  in  an  authorized  but  unconstructed  cellular  system  in  one  market  for  a 
 commensurate  interest  in  a  cellular  system  in  another  market;  and  2)  applications  to  transfer  or  assign  a 
 cellular  authorization  obtained  by  lottery  after  commencement  of  service. 

 105  98  FCC  Rcd.  at  217. 

 106  In  general,  the  exceptions  to  the  prohibition  against  having  an  interest  in  more  than  one  cellular 
 application  in  the  same  cellular  market  are  for  licensees  of  existing  systems  whose  cellular  geographic 
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 adopted  as  former  Section  22.921  in  1984,  107  and  was  intended  to  prevent  abuses  of  the 
 lottery  process  by  prohibiting  the  filing  of  multiple  applications  in  the  same  market  by 
 those  with  either  a  majority  interest  in  an  entity  or  a  minority  interest  which  may  in  fact 
 be  a  controlling  interest  in  the  applicant.  The  Commission  recognized  that 
 [  d]  etermining  whether  a  minority  share  owner  has  the  power  to  exercise  control,  either 
 positive  or  negative,  is  very  difficult  and  time-  consuming.  108  By  precluding  participation 
 in  more  than  one  application  per  market  in  cellular  lotteries,  the  Commission  could  avoid 
 numerous  protracted  challenges  to  selectees  and  litigation  of  that  difficult  issue  after 
 holding  lotteries.  109 

 66.  Discussion.  We  propose  to  eliminate  or  substantially  modify  Sections 
 22.937,  22.943,  and  22.945  because  these  rules  were  adopted  primarily  during  a  period 
 when  mutually  exclusive  applications  for  initial  licenses  not  granted  to  incumbent  LECs 
 were  resolved  by  lottery.  110  As  the  Commission  is  now  required  to  resolve  mutually 
 exclusive  applications  for  initial  cellular  licenses  through  competitive  bidding,  rather  than 
 lottery,  certain  sections  of  these  rules  are  outdated  and  no  longer  serve  the  public  interest. 
 We  therefore  seek  comment  on  the  proposals  discussed  below. 

 67.  Section  22.937  of  the  Commissions  rules  was  adopted  at  the  inception  of  the 
 cellular  radiotelephone  service  to  ensure  that  proposed  cellular  carriers  had  the  financial 
 ability  to  construct  and  operate  a  viable  cellular  system  in  the  licensed  market.  The 
 financial  demonstration  is  no  longer  necessary  as  the  cellular  radiotelephone  service  has 
 existed  for  almost  twenty  years  and  there  are  two  authorized  cellular  carriers  in  all  MSAs 
 and  virtually  all  RSAs.  In  addition,  our  rules  have  been  amended  to  permit  interested 
 parties  to  file  applications  for  any  areas  not  served  by  cellular  carriers  after  the  expiration 
 of  the  applicable  five-  year  build-  out  period,  and  such  applications  are  subject  to 
 competitive  bidding.  We  therefore  propose  to  eliminate  the  financial  demonstration 
 requirement  set  forth  in  Section  22.937  in  all  cases,  except  comparative  renewal 
 proceedings.  We  seek  comment  on  this  proposal. 

 service  area  (CGSA)  abuts  a  proposed  CGSA  and  for  ownership  interests  in  publicly  traded  corporations  of 
 less  than  5  per  cent. 

 107  See  Amendment  of  the  Commissions  Rules  To  Allow  the  Selection  from  Among  Mutually  Exclusive 
 Competing  Cellular  Applications  Using  Random  Selection  or  Lotteries  Instead  of  Comparative  Hearings, 
 CC  Docket  No.  83-  1096,  98  F.  C.  C.  2d  175  (1984). 

 108  Id.  at  218,  fn.  117. 

 109  Id.  at  218.  However,  the  Commission  determined  that  interests  of  less  than  1  per  cent  would  not  be 
 considered  in  the  ownership  analysis. 

 110  After  July  1,  1997,  the  Commission  was  prohibited  from  issuing  any  license  or  permit  using  a  system  of 
 random  selection.  The  Commission  is  now  required  to  resolve  mutually  exclusive  applications  for  initial 
 licenses  through  competitive  bidding.  See,  1997  Balanced  Budget  Act,  Pub.  L.  No.  105-  33,  111  Stat.  251, 
 at  Section  3002(  a),  codified  at  47  U.  S.  C.    309(  i),(  j)  (1997). 
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 68.  Section  22.943  imposes  anti-  trafficking  limitations  on  cellular  licensees 
 seeking  to  assign  or  transfer  their  authorizations.  This  rule  was  adopted  in  the  lottery  era 
 and,  as  noted,  mutually  exclusive  applications  for  initial  cellular  authorizations  are 
 currently  resolved  through  competitive  bidding.  Other  wireless  services,  which  are  also 
 required  to  resolve  mutually  exclusive  applications  through  competitive  bidding,  are  not 
 subject  to  service-  specific  rules  to  prohibit  license  trafficking  or  (except  in  the  case  of 
 PCS  entrepreneur  blocks)  to  specific  holding  periods  prior  to  assignment  or  transfer  of 
 licenses  acquired  through  competitive  bidding.  We  therefore  propose  to  eliminate 
 Section  22.943  to  the  extent  it  prohibits  trafficking  in  cellular  licenses  and  prohibits 
 unserved  area  licensees  from  assigning  or  transferring  an  authorization  until  the  system 
 has  provided  service  to  subscribers  for  at  least  one  year.  The  service-  specific  anti-trafficking 
 rule  set  forth  in  Section  22.943  appears  to  be  unnecessary  and  duplicative,  as 
 former  Section  22.139,  which  is  referenced  in  Section  22.943,  has  been  revised  and 
 consolidated  into  Part  1  of  our  rules  applicable  to  all  wireless  services.  111 

 69.  Notwithstanding  our  proposal  to  eliminate  Sections  22.937  and  22.943,  we  do 
 not  propose  to  revise  or  eliminate  rules  pertaining  to  cellular  comparative  renewal 
 proceedings,  with  the  possible  exception  of  Section  22.943(  c).  Although  the  Commission 
 is  required  to  resolve  mutually  exclusive  applications  for  initial  cellular  licenses  through 
 competitive  bidding,  competing  applications  filed  against  an  existing  cellular  licensees 
 renewal  application  may  need  to  be  resolved  through  a  comparative  renewal  proceeding 
 pursuant  to  Section  22.935  of  the  Commissions  rules.  112  A  comparative  hearing  is  held 
 among  all  qualified  mutually  exclusive  applicants  if  the  existing  licensee  fails  to  make  a 
 showing  entitling  it  to  a  renewal  expectancy,  which  would  require  the  competing 
 applications  to  be  denied.  113  As  a  result,  we  propose  to  retain  the  financial  demonstration 
 requirement  only  as  it  relates  to  cellular  renewal  proceedings,  specifically  Section 
 22.937(  g),  114  which  provides  that  initial  cellular  applicants  competing  against  a  cellular 
 renewal  application  must  make  an  appropriate  financial  demonstration.  In  this  limited 
 context,  the  financial  status  of  a  cellular  applicant  may  be  an  important  element  in  a 
 comparative  hearing  proceeding.  We  also  seek  comment  on  whether  we  should  retain 
 Section  22.943(  c),  which  provides  that  the  Commission  does  not  accept  applications  for 
 consent  to  assign  or  transfer  a  cellular  authorization  acquired  by  a  current  licensee  for  the 

 111  Section  1.  948(  i)  provides  that  [  a]  pplications  for  approval  of  assignment  or  transfer  may  be  reviewed  by 
 the  Commission  to  determine  if  the  transaction  is  for  purposes  of  trafficking  in  service  authorizations.  47 
 C.  F.  R    1.  948(  i).  Thus,  the  Commission  may  still,  in  its  discretion,  require  submission  of  an  affirmative 
 showing  to  demonstrate  that  the  assignor  did  not  acquire  the  authorization  for  the  principal  purpose  of 
 speculation  or  profitable  resale  of  the  authorization.  47  C.  F.  R.    1.948(  i)(  2).  See  also  Forbearance  from 
 Applying  Provisions  of  the  Communications  Act  to  Wireless  Telecommunications  Carriers,  WT  Docket 
 No.  98-  100,  First  Report  and  Order,  FCC  00-  311,    29-  33  (rel.  Sept.  8,  2000)(  discussing  Section 
 1.948(  i)). 

 112  See  47  C.  F.  R.    22.  935. 

 113  See  47  C.  F.  R.    22.  935(  c);  see  also  47  C.  F.  R.    22.  940  (setting  forth  the  relevant  criteria  to  be 
 considered  in  comparative  renewal  proceedings). 

 114  47  C.  F.  R.    22.  937(  g). 
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 first  time  as  a  result  of  a  comparative  renewal  proceeding  until  the  system  has  provided 
 service  to  subscribers  for  at  least  three  years.  115  We  seek  comment  generally  on  these 
 proposals. 

 70.  Section  22.945,  which  prohibits  parties  from  having  any  direct  or  indirect 
 interest  in  more  than  one  application  for  authority  to  operate  a  new  cellular  system  in  the 
 same  cellular  market,  was  adopted  solely  to  prevent  lottery  system  abuses.  We  believe 
 the  rule  is  therefore  obsolete  for  the  current  cellular  radiotelephone  service,  where 
 lotteries  are  no  longer  permitted  and  competitive  bidding  is  required  to  be  implemented 
 to  resolve  mutually  exclusive  applications.  For  example,  an  applicant  filing  more  than 
 one  application  for  a  specific  unserved  area  under  our  current  rules  would  have  no 
 advantage  over  other  applicants  seeking  an  authorization  for  the  same  geographic  area; 
 all  mutually  exclusive  applicants  would  be  resolved  through  competitive  bidding  rather 
 than  lottery.  We  note  that  we  are  not  addressing  in  this  proceeding  the  requirements  of 
 Section  22.942,  116  which  prohibits  the  same  or  affiliated  parties  from  having  certain 
 interests  in  cellular  licenses  for  both  channel  blocks  in  overlapping  cellular  geographic 
 service  areas  (  cellular  cross-  ownership  rule).  We  are  examining  that  rule  in  a  separate 
 biennial  review  proceeding.  117 

 IV.  ADMINISTRATIVE  MATTERS 
 A.  Initial  Regulatory  Flexibility  Act 
 71.  The  Initial  Regulatory  Flexibility  Analysis  is  attached  to  this  Notice  as 
 Appendix  B. 

 B.  Paperwork  Reduction  Act 
 72.  This  Notice  also  proposes  to  eliminate  existing  information  collections.  As 
 part  of  our  continuing  effort  to  reduce  paperwork  burdens,  we  invite  the  public  and  the 
 Office  of  Management  and  Budget  (OMB)  to  take  this  opportunity  to  comment  on  the 
 reduction  of  information  collection  burden,  as  required  by  the  Paperwork  Reduction  Act 
 of  1995,  Public  Law  104-  13.  Public  and  agency  comments  are  due  at  the  same  time  as 
 other  comments  on  this  Notice;  OMB  comments  are  due  60  days  from  date  of  publication 
 of  this  Notice  in  the  Federal  Register.  Comments  should  address:  (a)  whether  the 
 proposed  collection  of  information  is  necessary  for  the  proper  performance  of  the 
 functions  of  the  Commission,  including  whether  the  information  shall  have  practical 
 utility;  (b)  the  accuracy  of  the  Commission's  burden  estimates;  (c)  ways  to  enhance  the 
 quality,  utility,  and  clarity  of  the  information  collected;  and  (d)  ways  to  minimize  the 

 115  See  47  C.  F.  R.    22.  943(  c). 
 116  47  C.  F.  R.    22.  942. 
 117  2000  Biennial  Regulatory  Review    Spectrum  Aggregation  Limits  for  Commercial  Mobile  Radio 
 Services,  WT  Docket  No.  01-  14,  NPRM,  FCC  01-  28  (rel.  1/  23/  01). 
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 burden  of  the  collection  of  information  on  the  respondents,  including  the  use  of 
 automated  collection  techniques  or  other  forms  of  information  technology. 

 C.  Ex  Parte  Rules 
 73.  This  proceeding  will  be  treated  as  a  "permit-  but-  disclose"  proceeding  subject 
 to  the  "permit-  but-  disclose"  requirements  under  Section  1.1206(  b)  of  the  Commissions 
 rules.  118  Ex  parte  presentations  are  permissible  if  disclosed  in  accordance  with 
 Commission  rules,  except  during  the  Sunshine  Agenda  period  when  presentations, 
 ex  parte  or  otherwise,  are  generally  prohibited.  Persons  making  oral  ex  parte 
 presentations  are  reminded  that  a  memorandum  summarizing  a  presentation  must  contain 
 a  summary  of  the  substance  of  the  presentation  and  not  merely  a  listing  of  the  subjects 
 discussed.  More  than  a  one-  or  two-  sentence  description  of  the  views  and  arguments 
 presented  is  generally  required.  119  Additional  rules  pertaining  to  oral  and  written 
 presentations  are  set  forth  in  Section  1.1206(  b). 

 D.  Filing  of  Comments  and  Reply  Comments 
 74.  Pursuant  to  applicable  procedures  set  forth  in  Sections  1.415  and  1.419  of  the 
 Commission's  Rules,  47  C.  F.  R.    1.  415  and  1.419,  interested  parties  may  file  comments 
 in  response  to  this  Notice  on  or  before  July  2,  2001  and  reply  comments  on  or  before 
 August  1,  2001.  Comments  may  be  filed  using  the  Commission's  Electronic  Comment 
 Filing  System  ("  ECFS")  or  by  filing  paper  copies.  120  Comments  filed  through  the  ECFS 
 can  be  sent  via  the  Internet  to:  <http://  www.  fcc/  e-  file/  ecfs.  html>.  Generally,  only  one 
 copy  of  an  electronic  submission  must  be  filed.  If  multiple  docket  or  rulemaking 
 numbers  appear  in  the  caption  of  this  proceeding,  however,  commenters  must  transmit 
 one  electronic  copy  of  the  comments  to  each  docket  or  rulemaking  number  referenced  in 
 the  caption.  In  completing  the  transmittal  screen,  commenters  should  include  their  full 
 name,  postal  service  mailing  address,  and  the  applicable  docket  or  rulemaking  number. 
 Parties  may  also  submit  an  electronic  comment  by  Internet  e-  mail.  To  get  filing 
 instructions  for  e-  mail  comments,  commenters  should  send  an  e-  mail  to  ecfs@  fcc.  gov, 
 and  should  include  the  following  words  in  the  body  of  the  message,  "get  form<  your  e-mail 
 address>."  A  sample  form  and  directions  will  be  sent  in  reply. 

 75.  Parties  who  choose  to  file  by  paper  must  file  an  original  and  four  copies  of 
 each  filing.  If  participants  want  each  Commissioner  to  receive  a  personal  copy  of  their 
 comments,  an  original  plus  nine  copies  must  be  filed.  If  more  than  one  docket  or 
 rulemaking  number  appears  in  the  caption  of  this  proceeding  commenters  must  submit 

 118  47  C.  F.  R    1.  1206(  b). 
 119  See  id.  at    1.1206(  b)(  2). 
 120  See  In  re  Electronic  Filing  of  Documents  in  Rulemaking  Proceedings,  13  FCC  Rcd.  11322  (1998) 
 (amending  Parts  0  and  1  of  the  Commissions  rules  to  allow  electronic  filing  of  comments  and  other 
 pleadings). 
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 two  additional  copies  for  each  additional  docket  or  rulemaking  number.  All  filings  must 
 be  sent  to  the  Commission's  Secretary,  Magalie  Roman  Salas,  Office  of  the  Secretary, 
 Federal  Communications  Commission,  445  12th  Street,  S.  W.,  Washington,  D.  C.  20554. 
 The  WTB  contact  for  this  proceeding  is  Lauren  M.  Van  Wazer. 

 76.  Written  comments  by  the  public  on  the  proposed  and/  or  modified  information 
 collections  are  due  July  2,  2001.  Written  comments  must  be  submitted  by  the  Office  of 
 Management  and  Budget  (OMB)  on  the  proposed  and/  or  modified  information 
 collections  on  or  before  60  days  after  date  of  publication  in  the  Federal  Register.  In 
 addition  to  filing  comments  with  the  Secretary,  a  copy  of  any  comments  on  the 
 information  collection  burden  reduction(  s)  contained  herein  should  be  submitted  to  Judy 
 Boley,  Federal  Communications  Commission,  Room  1-  C804,  445  12th  Street,  SW, 
 Washington,  DC  20554,  or  via  the  Internet  to  jboley@  fcc.  gov  and  to  Virginia  Huth, 
 OMB  Desk  Officer,  10236  NEOB,  725  -  17th  Street,  N.  W.,  Washington,  DC  20503,  or 
 via  the  Internet  to  vhuth@  omb.  eop.  gov. 

 V.  ORDERING  CLAUSES 
 77.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  Sections  4(  i),  11,  and  303(  r) 
 of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  161  and  303(  r), 
 respectively,  NOTICE  IS  HEREBY  GIVEN  of  the  proposals  described  in  this  Notice  of 
 Proposed  Rulemaking. 

 78.  IT  IS  FURTHER  ORDERED  that  the  Commissions  Consumer  Information 
 Bureau,  Reference  Information  Center,  shall  send  a  copy  of  this  Notice  of  Proposed 
 Rulemaking,  including  the  Initial  Regulatory  Flexibility  Analysis  and  Final  Regulatory 
 Flexibility  Certification  regarding  broadband  PCS,  to  the  Chief  Counsel  for  Advocacy  of 
 the  Small  Business  Administration. 

 Federal  Communications  Commission 
 Magalie  Roman  Salas 
 Secretary 
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 APPENDIX  A 
 PROPOSED  RULE  CHANGES 
 I.  Title  47,  part  22  of  the  Code  of  Federal  Regulations,  47  CFR  part  22,  is  amended  as  follows: 

 1.  The  authority  citation  for  part  22  continues  to  read  as  follows: 
 AUTHORITY:  47  U.  S.  C.  154,  222,  303,  309  and  332. 

 2.  Section  22.323  is  amended  by  revising  it  in  its  entirety  to  read  as  follows: 
   22.  323  Incidental  communication  services. 
 Carriers  authorized  to  operate  stations  in  the  Public  Mobile  Services  may  use  these  stations  to 
 provide  other  telecommunications  services  incidental  to  the  primary  public  mobile  service(  s)  for 
 which  the  authorizations  were  issued. 

 3.  Section  22.367  is  amended  by  removing  and  reserving  paragraph  (a)(  4)  and  by 
 revising  paragraph  (d),  to  read  as  follows: 

   22.367  Wave  polarization. 
 *  *  *  *  * 
 (a)  *  *  * 
 (4)  [Reserved] 
 *  *  *  *  * 
 (d)  Any  polarization.  Base,  mobile  and  auxiliary  test  transmitters  in  the  Cellular 
 Radiotelephone  Service  are  not  limited  as  to  wave  polarization.  Public  Mobile  Service  stations 
 transmitting  on  channels  higher  than  960  MHz  are  not  limited  as  to  wave  polarization. 

 4.  Section  22.377  is  amended  by  removing  paragraph  (c). 
 5.  Section  22.901  is  amended  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.  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 
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 co-  primary  services.  In  providing  cellular  services,  each  cellular  system  may  incorporate  any 
 technology  that  meets  all  applicable  technical  requirements  in  this  part. 

 Section  22.905  is  revised  to  read  as  follows: 
   22.905  Frequency  bands. 
 The  following  frequency  bands  are  allocated  for  assignment  to  service  providers  in  the 
 Cellular  Radiotelephone  Service. 

 (a)  Channel  Block  A:  869    880  MHz  paired  with  824    835  MHz,  and  890    891.5  MHz 
 paired  with  845    846.5  MHz. 

 (b)  Channel  Block  B:  880    890  MHz  paired  with  835    845  MHz,  and  891.5    894  MHz 
 paired  with  846.5    849  MHz 

 6.  Section  22.911  is  amended  by  revising  paragraphs  (b)(  1)  and  (b)(  3),  to  read  as 
 follows: 

   22.911  Cellular  geographic  service  area. 
 *  *  *  *  * 
 (b)  *  *  * 

 (1)  The  alternative  CGSA  determination  must  define  the  CGSA  in  terms  of  distances  from 
 the  cell  sites  to  the  32  dBPV/  m  contour  along  the  eight  cardinal  radials,  with  points  in  other 
 azimuthal  directions  determined  by  the  method  given  in  paragraph  (a)(  6)  of  this  section.  *  *  * 

 *  *  *  *  * 
 (3)  The  provision  for  alternative  CGSA  determinations  was  made  in  recognition  that  the 
 formula  in  paragraph  (a)(  1)  of  this  section  is  a  general  model  that  provides  a  reasonable 
 approximation  of  coverage  in  most  land  areas,  but  may  substantially  under-  predict  or  over-  predict 
 coverage  in  specific  areas  with  unusual  terrain  roughness  or  features,  and  may  be  inapplicable  for 
 certain  purposes,  e.  g.,  cells  with  a  coverage  radius  of  less  than  8  kilometers  (5  miles).  *  *  * 

 *  *  *  *  * 
 7.  Section  22.915  is  removed. 
 8.  Section  22.917  is  revised  to  read  as  follows: 
   22.917  Emission  limitations  for  cellular  equipment. 
 The  rules  in  this  section  govern  the  spectral  characteristics  of  emissions  in  the  Cellular 
 Radiotelephone  Service. 
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 (a)  Out  of  band  emissions.  The  power  of  any  emission  outside  of  the  authorized  operating 
 frequency  ranges  must  be  attenuated  below  the  transmitting  power  (P)  by  a  factor  of  at  least 
 43  +  10  log(  P)  dB. 

 (b)  Measurement  procedure.  Compliance  with  the  limitation  in  paragraph  (a)  is  based  on  the 
 use  of  measurement  instrumentation  employing  a  resolution  bandwidth  of  1  MHz  or  more. 
 However,  for  measurements  within  1  MHz  of  the  center  of  the  main  emission  bandwidth,  a 
 resolution  bandwidth  of  not  less  than  1%  of  the  main  emission  bandwidth  may  be  employed.  For 
 the  purpose  of  this  section,  the  main  emission  bandwidth  is  the  continuous  width  of  the  signal 
 outside  of  which  all  emissions  are  attenuated  by  at  least  26  dB  below  the  transmitting  power. 
 Either  peak  or  average  measurements  may  be  used,  provided  that  both  the  emissions  and  the 
 reference  transmitter  power  are  measured  the  same  way.  When  measuring  emissions,  the 
 transmitter  must  be  set  to  operate  as  close  to  each  of  the  upper  and  lower  channel  block  edges  as 
 the  design  permits  for  normal  operation. 

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

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

 9.  Section  22.919  is  removed. 
 10.  Section  22.921  is  amended  to  read  as  follows: 
   22.921  911  call  processing  procedures;  911-  only  calling  mode. 
 Mobile  telephones  manufactured  after  February  13,  2000  that  are  capable  of  operating  in  the 
 analog  mode  described  in  the  standard  publication  ANSI  TIA/  EIA-  553-  A-  99  Mobile  Station   
 Base  Station  Compatibility  Standard  (published  November  1,  1999  -  available  for  purchase  from 
 Global  Engineering  Documents,  15  Inverness  East,  Englewood,  CO  80112),  must  incorporate  a 
 special  procedure  for  processing  911  calls.  Such  procedure  must  recognize  when  a  911  call  is 
 made  and,  at  such  time,  must  override  any  programming  in  the  mobile  unit  that  determines  the 
 handling  of  a  non-  911  call  and  permit  the  call  to  be  transmitted  through  the  analog  systems  of 
 other  carriers.  This  special  procedure  must  incorporate  one  or  more  of  the  911  call  system 
 selection  processes  endorsed  or  approved  by  the  FCC. 

 11.  See  Section  III.  B.  1,  supra,  for  discussion  relating  to  Section  22.933. 
 12.  Section  22.937  is  amended  by  revising  it  to  read  as  follows: 
   22.937  Demonstration  of  financial  qualifications  in  cellular  renewal  proceedings. 
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 Each  applicant  for  a  new  cellular  system  whose  application  is  competing  with  a  cellular 
 renewal  application  must  demonstrate  that  it  has,  at  the  time  the  application  is  filed,  either  a  firm 
 financial  commitment,  an  irrevocable  letter  of  credit  or  a  performance  bond  in  the  amount  of  its 
 realistic  and  prudent  estimated  costs  of  construction  and  any  other  expenses  to  be  incurred  during 
 the  first  year  of  operating  its  proposed  system  (the  irrevocable  letter  of  credit  or  performance 
 bond  must  be  from  the  type  of  financial  institution  described  in  paragraph  (b)  of  this  section),  or 
 available  resources,  as  defined  in  paragraph  (c)  of  this  section,  necessary  to  construct  and  operate 
 its  proposed  cellular  system  for  one  year. 

 (a)  The  firm  financial  commitment  may  be  contingent  on  the  applicant  obtaining  an 
 authorization.  The  applicant  must  also  list  all  of  its  realistic  and  prudent  estimated  costs  of 
 construction  and  any  other  expenses  to  be  incurred  during  the  first  year  of  operating  its  proposed 
 system. 

 (b)  The  firm  financial  commitment  required  above  shall  be  obtained  from  a  state  or  federally 
 chartered  bank  or  savings  and  loan  association,  another  recognized  financial  institution,  or  the 
 financial  arm  of  a  capital  equipment  supplier;  shall  specify  the  terms  of  the  loan  or  other  form  of 
 credit  arrangement,  including  the  amount  to  be  borrowed,  the  interest  to  be  paid,  the  amount  of 
 the  commitment  fee  and  the  fact  that  it  has  been  paid,  the  terms  of  repayment  and  any  collateral 
 required;  and  shall  contain  a  statement: 

 (1)  That  the  lender  has  examined  the  financial  conditions  of  the  applicant,  including  audited 
 financial  statements  where  applicable,  and  has  determined  that  the  applicant  is  creditworthy; 

 (2)  That  the  lender  has  examined  the  financial  viability  of  the  proposal  for  which  the 
 applicant  intends  to  use  the  commitment; 

 (3)  That  the  lender  is  committed  to  providing  a  sum  certain  to  the  particular  applicant; 
 (4)  That  the  lender's  willingness  to  enter  into  the  commitment  is  based  solely  on  its 
 relationship  with  the  applicant;  and, 

 (5)  That  the  commitment  is  not  in  any  way  guaranteed  by  an  entity  other  than  the  applicant. 
 (c)  An  applicant  intending  to  rely  on  personal  or  internal  resources  must  submit: 
 (1)  Audited  financial  statements  certified  within  one  year  of  the  date  of  the  cellular 
 application,  indicating  the  availability  of  sufficient  net  current  assets  to  construct  and  operate  the 
 proposed  cellular  system  for  one  year; 

 (2)  A  balance  sheet  current  within  60  days  of  the  date  of  filing  its  application  that  clearly 
 shows  the  continued  availability  of  sufficient  net  current  assets  to  construct  and  operate  the 
 proposed  cellular  system  for  one  year;  and, 

 (3)  A  certification  by  the  applicant  or  an  officer  of  the  applicant  organization  attesting  to  the 
 validity  of  the  unaudited  balance  sheet. 

 (d)  Applicants  intending  to  rely  upon  financing  obtained  through  a  parent  corporation  must 
 submit  the  information  required  by  paragraph  (c)  of  this  section,  as  the  information  pertains  to  the 
 parent  corporation. 
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 (e)  As  an  alternative  to  relying  upon  a  firm  financial  commitment,  an  irrevocable  letter  of 
 credit,  or  a  performance  bond  from  a  financial  institution  as  described  in  paragraph  (b)  of  this 
 section,  an  applicant  may  state  that  it  has  placed  in  an  escrow  account  sufficient  cash  to  meet  its 
 construction  and  first-  year  operating  expenses.  Such  a  statement  must  specify  the  amount  of 
 cash,  the  escrow  account  number  and  the  financial  institution  where  the  escrow  account  is 
 located. 

 (f)  Any  competing  application  filed  against  the  renewal  application  of  an  incumbent  cellular 
 system  licensee  that  does  not  demonstrate,  at  the  time  it  is  initially  filed,  that  the  competing 
 applicant  has  sufficient  funds  to  construct  and  operate  for  one  year  its  proposed  cellular  system 
 will  be  dismissed. 

 13.  Section  22.941  is  revised  to  read  as  follows: 
   22.941  System  identification  numbers. 
 System  identification  numbers  (SIDs)  are  transmitted  by  cellular  systems  to  cellular 
 telephones  in  their  areas.  Reception  of  a  SID  so  transmitted  enables  cellular  telephones  to 
 establish  whether  they  would  be  in  a  home  or  roamer  status  when  receiving  service  from  the 
 cellular  system.  The  SID  of  a  cellular  system  is  also  programmed  into  the  cellular  telephones  that 
 are  subscribed  to  that  system.  A  cellular  telephone  transmits  the  programmed  SID  (among  other 
 numbers)  when  seeking  service  from  a  cellular  system,  enabling  that  system  to  determine  whether 
 the  telephone  is  one  of  its  subscribers  or  a  roamer;  and  if  a  roamer,  what  the  home  system  of  that 
 cellular  telephone  is.  SIDs  are  also  used  for  various  billing  purposes. 

 (a)  Each  cellular  system  must  have  at  least  one  SID  that  is  associated  uniquely  with  it. 
 Cellular  system  licensees  must  coordinate  the  usage  of  SIDs  to  ensure  that  this  requirement  is 
 met. 

 (b)  Cellular  systems  may  transmit  only  their  SID(  s)  or  the  SID(  s)  of  other  cellular  systems. 
 A  cellular  system  may  transmit  the  SID(  s)  of  another  cellular  system  only  if  the  licensee  of  that 
 system  concurs  with  such  use  of  its  SID. 

 14.  Section  22.943  is  amended  by  revising  it  to  read  as  follows: 
   22.943  Limitations  on  transfer  of  control  and  assignment  for  authorizations  issued  as  a  result  of  a  comparative  renewal  proceeding. 

 Except  as  otherwise  provided  in  this  section,  the  FCC  does  not  accept  applications  for 
 consent  to  transfer  of  control  or  for  assignment  of  the  authorization  of  a  cellular  system  that  has 
 been  acquired  by  the  current  licensee  for  the  first  time  as  a  result  of  a  comparative  renewal 
 proceeding  until  the  system  has  provided  service  to  subscribers  for  at  least  three  years. 

 (a)  The  FCC  may  accept  and  grant  applications  for  consent  to  transfer  of  control  or  for 
 assignment  of  the  authorization  of  a  cellular  system  that  is  to  be  transferred  as  a  part  of  a 
 bona  fide  sale  of  an  on-  going  business  to  which  the  cellular  operation  is  incidental. 
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 (b)  The  FCC  may  accept  and  grant  applications  for  consent  to  transfer  of  control  or  for 
 assignment  of  the  authorization  of  a  cellular  system  that  is  to  be  transferred  as  a  result  of  the 
 death  of  the  licensee. 

 (c)  The  FCC  may  accept  and  grant  applications  for  consent  to  transfer  of  control  or  for 
 assignment  of  authorization  if  the  transfer  or  assignment  is  pro  forma  and  does  not  involve  a 
 change  in  ownership. 

 15.  Section  22.945  is  removed. 
 16.  Section  22.946  is  amended  by  revising  it  in  its  entirety  to  read  as  follows: 
   22.  946  Service  commencement  and  construction  periods  for  cellular  systems. 
 This  section  specifies  the  service  commencement  and  construction  requirements  for  cellular 
 systems.  Related  rule  provisions  and  notification  requirements  are  contained  in    1.946  of  this 
 chapter. 

 (a)  Commencement  of  service.  Each  new  cellular  system  licensed  in  markets  91-  306  must  be 
 partially  constructed  and  begin  providing  service  to  subscribers  within  18  months.  All  other 
 cellular  systems  must  be  at  least  partially  constructed  and  begin  providing  service  to  subscribers 
 within  12  months,  beginning  on  the  date  of  grant  of  the  initial  authorization.  The  grant  of  any 
 subsequent  authorizations  (such  as  for  major  modifications)  do  not  extend  this  period.  To  satisfy 
 this  requirement,  a  cellular  system  must  be  interconnected  with  the  public  switched  telephone 
 network  (PSTN)  and  must  be  providing  service  to  mobile  stations  operated  by  its  subscribers  and 
 roamers.  A  cellular  system  is  considered  to  be  providing  service  only  if  mobile  stations  can 
 originate  telephone  calls  to  and  receive  telephone  calls  from  wireline  telephones  through  the 
 PSTN. 

 NOTE  TO  PARAGRAPH  (A)  OF    22.946:  The  first  cellular  system  authorized  on  each  channel  block  in 
 markets  1  through  90,  inclusive,  was  allowed  36  months,  rather  than  12  months,  to  commence  providing 
 service.  The  first  cellular  system  authorized  on  each  channel  block  in  markets  other  than  markets 
 1  through  90,  inclusive,  was  allowed  18  months,  rather  than  12  months,  to  commence  providing  service. 
 These  longer  startup  periods  that  were  afforded  to  first-  authorized  cellular  systems  have  all  elapsed. 

 (b)  Construction  period  for  specific  facilities.  The  construction  period  applicable  to  specific 
 new  or  modified  cellular  facilities  for  which  a  separate  authorization  is  granted  is  one  year, 
 beginning  on  the  date  the  authorization  is  granted. 

 II.  Title  47,  part  24  of  the  Code  of  Federal  Regulations,  47  CFR  part  24,  is  amended  as  follows: 

 1.  The  authority  citation  for  part  24  continues  to  read  as  follows: 
 AUTHORITY:  47  U.  S.  C.  154,  301,  302,  303,  309  and  332. 

 2.  Section  24.238  is  revised  to  read  as  follows: 
   24.238  Emission  limitations  for  Broadband  PCS  equipment. 
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 The  rules  in  this  section  govern  the  spectral  characteristics  of  emissions  in  the  Broadband 
 Personal  Communications  Service. 

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

 (b)  Measurement  procedure.  Compliance  with  the  limitation  in  paragraph  (a)  is  based  on  the 
 use  of  measurement  instrumentation  employing  a  resolution  bandwidth  of  1  MHz  or  more. 
 However,  for  measurements  within  1  MHz  of  the  center  of  the  main  emission  bandwidth,  a 
 resolution  bandwidth  of  not  less  than  1%  of  the  main  emission  bandwidth  may  be  employed.  For 
 the  purpose  of  this  section,  the  main  emission  bandwidth  is  the  continuous  width  of  the  signal 
 outside  of  which  all  emissions  are  attenuated  by  at  least  26  dB  below  the  transmitting  power. 
 Either  peak  or  average  measurements  can  be  used,  provided  that  both  the  emissions  and  the 
 reference  transmitter  power  are  measured  the  same  way.  When  measuring  emissions,  the 
 transmitter  must  be  set  to  operate  as  close  to  each  of  the  upper  and  lower  frequency  block  edges 
 as  the  design  permits  for  normal  operation. 

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

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

 As  required  by  the  Regulatory  Flexibility  Act  (RFA),  121  the  Commission  has  prepared 
 this  Initial  Regulatory  Flexibility  Analysis  (IRFA)  of  the  possible  significant  economic 
 impact  on  small  entities  of  the  policies  and  proposals  in  this  Notice  of  Proposed 
 Rulemaking  (NPRM),  WT  Docket  No.  01-  108.  Written  public  comments  are  requested 
 on  this  IRFA.  These  comments  must  be  filed  in  accordance  with  the  same  filing 
 deadlines  for  comments  on  the  rest  of  this  NPRM,  as  set  forth  in  Section  IV.  C.,  supra, 
 and  they  must  have  a  separate  and  distinct  heading  designating  them  as  responses  to  the 
 IRFA.  The  Commission  will  send  a  copy  of  this  NPRM,  including  this  IRFA,  to  the 
 Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration  (SBA)  in  accordance 
 with  the  RFA.  122  In  addition,  the  NPRM  and  IRFA  (or  summaries  thereof)  will  be 
 published  in  the  Federal  Register.  123 

 A.  Need  for,  and  Objectives  of,  the  Proposed  Rules 
 As  part  of  our  2000  biennial  regulatory  review  pursuant  to  Section  11  of  the 
 Communications  Act  of  1934,  as  amended  (Communications  Act),  we  are  required  to 
 review  all  of  our  regulations  that  are  applicable  to  providers  of  telecommunications 
 service  to  determine  whether  any  rule  is  no  longer  in  the  public  interest.  More 
 specifically,  in  the  Biennial  Review  Report,  the  Commission  indicated  that  it  would 
 initiate  a  rulemaking  proceeding  to  identify  and  address  potentially  outdated  technical 
 rules  governing  cellular  service,  based  on  the  staffs  recommendations  that  were  included 
 in  the  Biennial  Review  Staff  Report.  124  The  staff  report  notes  that  many  of  the  Part  22 
 technical  rules  regulating  cellular  telephone  service  date  back  to  the  inception  of  the 
 service  in  the  early  1980s  and,  given  the  significant  technological  changes  and  growth  in 
 competition  for  cellular  services  since  that  time,  the  rules  may  be  obsolete.  In  particular, 
 the  Notice  seeks  comment  on  elimination  of  the  cellular  analog  compatibility  standard 
 and  the  Electronic  Serial  Number  (ESN)  rule,  as  well  as  modifying  several  other 
 technical  rules.  125  In  the  same  vein,  some  of  the  cellular  anti-  trafficking  rules  may  be 
 outdated  because  they  were  adopted  during  a  period  when  the  Commission  resolved 

 121  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). 

 122  See  5  U.  S.  C.    603(  a). 

 123  Id. 
 124  Biennial  Regulatory  Review,  CC  Docket  No.  00-  175,  Report,  FCC  00-  456  (adopted  December  29, 
 2000;  released  January  17,  2001)  (Biennial  Review  Report);  Biennial  Regulatory  Review  2000  Updated 
 Staff  Report,  released  January  17,  2001  (Biennial  Review  Staff  Report). 

 125  The  specific  technical  rules  include:  Sections  22.  367(  a)(  4),  22.  901,  22.  905,  22.  911,  22.  915,  22.  917, 
 22.919,  22.  933,  22.  941,  and  22.  946  of  the  Commissions  rules. 
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 mutually  exclusive  applications  for  initial  cellular  services  through  lottery,  rather  than  the 
 current  system  of  resolving  such  mutually  exclusive  applications  through  competitive 
 bidding.  126  We  also  take  this  opportunity  to  reevaluate  certain  other  Part  22  rules  that 
 apply  both  to  cellular  and  to  other  CMRS,  specifically  Section  22.323,  which  imposes 
 conditions  on  the  provision  of  incidental  services  by  Public  Mobile  Services 
 providers.  127 

 B.  Certification  Regarding  Broadband  PCS  With  regard  to  broadband  Personal  Communications  Service  (PCS),  we  certify, 
 pursuant  to  the  RFA,  that  the  proposed  changes  to  Section  24.238,  emissions  limitations, 
 would  not  have  a  significant  economic  impact  on  a  substantial  number  of  small 
 broadband  PCS  providers.  128  The  proposed  changes  to  this  rule  would  reduce  the 
 compliance  burden  on  these  entities  by  allowing  these  entities  greater  flexibility  to 
 establish  out-  of-  band  emissions  limits  to  be  used  at  specified  band  edges.  129  Specifically, 
 the  proposed  Section  24.238(  c)  would  allow  parties  to  establish  alternative  out-  of-  band 
 emissions  limits  pursuant  to  private  contractual  arrangements    a  practice  that  is  not 
 permitted  by  the  current  rule.  This  proposal  would  effectively  codify  and  expand  upon  a 
 waiver  that  the  Wireless  Telecommunications  Bureau  (Bureau)  granted  for  all  broadband 
 PCS  licensees  in  August  2000.  130  In  that  waiver  grant,  the  Bureau  waived  Section  24.238 
 insofar  as  it  limits  out-  of-  band  emissions  on:  (1)  adjacent  contiguous  frequency  blocks 
 that  are  separately  assigned  to  the  same  PCS  licensees,  and  (2)  adjacent  contiguous 
 frequency  blocks  that  are  assigned  to  different  PCS  licensees  who  have  entered  into  an 
 agreement(  s)  concerning  interference  protection  to  the  adjacent  spectrum.  131  The 
 proposed  rule  change  would  allow  somewhat  more  flexibility  to  licensees  because  it 
 would  not  limit  a  licensees  ability  to  contract  for  alternative  emissions  limitations  to 
 only  those  frequency  blocks  that  are  both  adjacent  and  contiguous.  Because  our  proposed 
 change  would  effectively  codify  a  waiver  that  permits  greater  flexibility  for  broadband 
 PCS  licensees,  the  proposed  changes  to  Section  24.238  would  not  have  a  significant 
 economic  impact  on  broadband  PCS  providers. 

 C.  Legal  Basis  The  potential  actions  on  which  comment  is  sought  in  this  NPRM  would  be  authorized 
 under  Sections  1,  4(  i),  11,  and  303(  r)  of  the  Communications  Act  of  1934,  as  amended,  47 
 U.  S.  C.    151,  154(  i),  161,  and  303(  r). 

 126  The  specific  cellular  anti-  trafficking  rules  include:  Sections  22.  937,  22.  943,  and  22.  945  of  the 
 Commissions  rules. 

 127  See  47  C.  F.  R.    22.  323. 

 128  See  5  U.  S.  C.    605. 
 129  See  para.  42,  supra. 
 130  Omnipoint  Request  for  Broadband  Declaratory  Ruling  or  Waiver  Concerning  PCS  Emissions  Limits 
 Rule  Section  24.238,  DA  00-  1767,  15  FCC  Rcd.  13,  422  (2000). 

 131  Id.  at    1. 
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 D.  Description  and  Estimate  of  the  Small  Entities  Subject  to  the  Rules  The  RFA  requires  that  an  initial  regulatory  flexibility  analysis  be  prepared  for  notice-and- 
 comment  rulemaking  proceedings,  unless  the  Agency  certifies  that  the  rule  will  not, 
 if  promulgated,  have  a  significant  impact  on  a  substantial  number  of  small  entities.  132 
 The  RFA  generally  defines  the  term  small  entity  as  having  the  same  meaning  as  the 
 terms  small  business,  small  organization,  and  small  governmental  jurisdiction.  133 
 In  addition,  the  term  small  business  has  the  same  meaning  as  the  term  small  business 
 concern  under  the  Small  Business  Act.  134  A  small  business  concern  is  one  which:  (1)  is 
 independently  owned  and  operated;  (2)  is  not  dominant  in  its  field  of  operation;  and  (3) 
 satisfies  any  additional  criteria  established  by  the  SBA.  135  This  IRFA  describes  and 
 estimates  the  number  of  small-  entity  licensees  and  manufacturers  that  may  be  affected  if 
 the  proposals  in  this  NPRM  are  adopted. 

 This  NPRM  could  result  in  rule  changes  that,  if  adopted,  would  affect  small 
 businesses  that  currently  are  or  may  become  Cellular  Radiotelephone  Service  providers 
 that  are  regulated  under  Subpart  H  of  Part  22  of  the  Commissions  rules.  In  addition,  the 
 proposed  changes  to  Section  22.323  of  the  Commissions  rules  would,  if  adopted,  affect 
 service  providers  that  are  regulated  under  any  provisions  of  Part  22  of  the  Commissions 
 rules.  These  include,  in  addition  to  Cellular  Radiotelephone  Service  providers,  providers 
 of  Paging  and  Radiotelephone  (Common  Carrier  Paging),  Air-  Ground  Radiotelephone, 
 Offshore  Radiotelephone,  and  Rural  Radiotelephone  services.  In  addition,  pursuant  to 
 Section  90.493(  b)  of  the  Commissions  rules,  paging  licensees  on  exclusive  channels  in 
 the  929-  930  MHz  bands  are  subject  to  the  licensing,  construction,  and  operation  rules  set 
 forth  in  Part  22.  136  As  this  rulemaking  proceeding  applies  to  multiple  services,  we  will 
 analyze  the  number  of  small  entities  affected  on  a  service-  by-  service  basis.  In  addition  to 
 service  providers,  some  of  the  proposed  rule  changes  may  also  affect  manufacturers  of 
 cellular  telecommunications  equipment.  We  will  include  a  separate  discussion  regarding 
 the  number  of  small  cellular  equipment  manufacturing  entities  that  are  potentially 
 affected  by  the  proposed  rule  changes. 

 1.  Cellular  Radiotelephone  Service.  Neither  the  Commission  nor  the  SBA  has 
 developed  a  definition  of  small  entities  applicable  to  cellular  licensees.  Therefore,  the 
 applicable  definition  of  small  entity  is  the  definition  under  the  SBA  rules  applicable  to 

 132  5  U.  S.  C.    603(  b)(  3). 
 133  Id.    601(  6). 
 134  Id.    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.  Id. 

 135  Small  Business  Act,  15  U.  S.  C.    632  (1996). 

 136  See  47  C.  F.  R.    90.  493(  b). 
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 radiotelephone  (wireless)  companies.  This  provides  that  a  small  entity  is  a 
 radiotelephone  company  employing  no  more  than  1,500  persons.  137  According  to  the 
 Bureau  of  the  Census,  only  twelve  radiotelephone  firms  from  a  total  of  1,178  such  firms, 
 which  operated  during  1992,  had  1,000  or  more  employees.  138  Therefore,  even  if  all 
 twelve  of  these  firms  were  cellular  telephone  companies,  nearly  all  cellular  carriers  were 
 small  businesses  under  the  SBAs  definition.  In  addition,  we  note  that  there  are  1,  758 
 cellular  licenses;  however,  a  cellular  licensee  may  own  several  licenses.  In  addition, 
 according  to  the  most  recent  Telecommunications  Industry  Revenue  data,  808  carriers 
 reported  that  they  were  engaged  in  the  provision  of  either  cellular  service  or  PCS,  which 
 are  placed  together  in  the  data.  139  We  do  not  have  data  specifying  the  number  of  these 
 carriers  that  are  not  independently  owned  and  operated  or  have  more  than  1,500 
 employees,  and  thus  are  unable  at  this  time  to  estimate  with  greater  precision  the  number 
 of  cellular  service  carriers  that  would  qualify  as  small  business  concerns  under  the  SBAs 
 definition.  Consequently,  we  estimate  that  there  are  808  or  fewer  small  cellular  service 
 carriers  that  may  be  affected  by  these  proposals,  if  adopted. 

 2.  Paging.  The  Commission  has  adopted,  and  the  SBA  has  approved,  a  two-  tier 
 definition  of  small  businesses  in  the  context  of  auctioning  licenses  in  the  paging  services. 
 Under  this  definition,  a  small  business  is  defined  as  either  (1)  an  entity  that,  together  with 
 its  affiliates  and  controlling  principals,  has  average  gross  revenues  for  the  three  preceding 
 years  of  not  more  than  $3  million,  or  (2)  an  entity  that,  together  with  affiliates  and 
 controlling  principals,  has  average  gross  revenues  for  the  three  preceding  calendar  years 
 of  not  more  than  $15  million.  The  Commission  has  estimated  that  as  of  January  1998, 
 there  were  more  than  600  paging  companies  in  the  United  States.  140  We  do  not  have  data 
 specifying  the  number  of  these  carriers  that  are  not  independently  owned  and  operated  or 
 meet  the  small  business  thresholds  set  forth  above,  or  the  number  of  these  carriers  that  are 
 regulated  under  Part  22  of  the  Commissions  rules,  and  thus  are  unable  at  this  time  to 
 estimate  with  precision  the  number  of  affected  paging  carriers  that  would  qualify  as  small 
 business  concerns  under  our  definition.  However,  we  estimate  that  the  majority  of 
 existing  paging  providers  qualify  as  small  entities  under  our  definition.  Consequently, 
 we  estimate  that  there  are  up  to  approximately  600  currently  licensed  small  paging 
 carriers  that  may  be  affected  by  the  rule  changes  proposed  in  the  NPRM.  In  addition, 
 high  bids  were  placed  at  auction  in  March  2000  for  985  new  geographic  area  paging 
 licenses,  and  an  additional  15,645  geographic  area  paging  licenses  are  expected  to  be 
 awarded  following  future  auctions.  In  the  March  2000  auction,  high  bids  were  placed  on 
 paging  licenses  by  57  entities  that  qualify  as  small  businesses  under  the  Commissions 
 definition.  Licenses  have  been  granted  to  56  of  these  entities,  and  the  application  of  the 

 137  13  C.  F.  R.    121.  201,  SIC  code  4812. 
 138  1992  Census,  Series  UC92-  S-  1,  at  Table  5,  SIC  code  4812. 
 139  See  Telecommunications  Industry  Revenues:  1999,  Industry  Analysis  Division,  Common  Carrier  Bureau 
 (Sept.  2000). 

 140  Implementation  of  Section  6002(  b)  of  the  Omnibus  Budget  Reconciliation  Act  of  1993,  Third  Report,  13 
 FCC  Rcd  19746,  19792  (1998). 
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 other  entity  remains  pending.  Thus,  in  addition  to  existing  licensees,  should  the 
 Commission  adopt  the  rule  changes  proposed  in  the  NPRM  either  57  or  58  license 
 winners  in  the  recent  auction  would  be  affected  small  entities,  and  up  to  15,645  winners 
 of  paging  licenses  in  future  auctions  would  be  affected  small  entities. 

 3.  Air-  Ground  Radiotelephone  Service.  The  Commission  has  not  adopted  a 
 definition  of  small  business  specific  to  the  Air-  Ground  radiotelephone  service.  141 
 Accordingly,  we  use  the  SBA  definition  applicable  to  radiotelephone  companies,  i.  e.,  an 
 entity  employing  no  more  than  1,500  persons.  There  are  approximately  100  licensees  in 
 the  Air-  Ground  radiotelephone  service,  and  the  Commission  estimates  that  almost  all  of 
 them  qualify  as  small  entities  under  the  SBA  definition. 

 4.  Offshore  Radiotelephone  Service.  This  service  operates  on  several  ultra 
 high  frequency  (UHF)  TV  broadcast  channels  that  are  not  used  for  TV  broadcasting  in 
 the  coastal  area  of  the  states  bordering  the  Gulf  of  Mexico.  At  present,  there  are 
 approximately  55  licensees  in  this  service.  The  Commission  has  not  adopted  a  definition 
 of  small  business  specific  to  the  Offshore  Radiotelephone  Service.  Accordingly,  we  use 
 the  SBA  definition  applicable  to  radiotelephone  companies,  i.  e.,  an  entity  employing  no 
 more  than  1,500  persons.  The  Commission  is  unable  at  this  time  to  estimate  the  number 
 of  licensees  that  would  qualify  as  small  entities  under  the  SBA  definition  for 
 radiotelephone  communications.  The  Commission  assumes,  for  purposes  of  this  IRFA, 
 that  all  of  the  55  licensees  are  small  entities,  as  that  term  is  defined  by  the  SBA. 

 5.  Rural  Radiotelephone  Service.  The  Commission  has  not  adopted  a 
 definition  of  small  entity  specific  to  the  Rural  Radiotelephone  Service.  142  A  significant 
 subset  of  the  Rural  Radiotelephone  Service  is  the  Basic  Exchange  Telephone  Radio 
 Systems  (BETRS).  143  We  therefore  use  the  SBA  definition  applicable  to  radiotelephone 
 companies;  i.  e.,  an  entity  employing  no  more  than  1,500  persons.  There  are 
 approximately  1000  licensees  in  the  Rural  Radiotelephone  Service,  and  the  Commission 
 estimates  that  almost  all  of  them  qualify  as  small  entities  under  the  SBA  definition. 

 6.  Cellular  Equipment  Manufacturers.  Some  of  the  proposed  actions  in  the 
 NPRM  will  also  affect  manufacturers  of  cellular  equipment.  The  Commission  does  not 
 know  how  many  cellular  equipment  manufacturers  are  in  the  current  market.  The  1994 
 County  Business  Patterns  Report  of  the  Bureau  of  the  Census  estimates  that  there  are  920 

 141  Air-  ground  radiotelephone  service  is  defined  in  Section  22.  99  of  the  Commissions  rules,  47  C.  F.  R. 
   22.  99. 

 142  Rural  Radiotelephone  Service  is  defined  in  Section  22.  99  of  the  Commissions  rules,  47  C.  F.  R.    22.99. 

 143  BETRS  is  defined  in  Sections  22.  757  and  22.  729  of  the  Commissions  rules,  47  C.  F.  R.    22.  757, 
 22.729. 
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 companies  that  make  communications  subscriber  equipment.  This  category  includes  not 
 only  cellular  equipment  manufacturers,  but  television  and  AM/  FM  radio  manufacturers 
 as  well.  Thus,  the  number  of  cellular  equipment  manufacturers  is  considerably  lower 
 than  920.  Under  SBA  regulations,  a  communications  equipment  manufacturer,  which 
 includes  not  only  U.  S.  cellular  equipment  manufacturers  but  also  firms  that  manufacture 
 radio  and  television  broadcasting  and  other  communications  equipment,  must  have  a  total 
 of  750  or  fewer  employees  in  order  to  qualify  as  a  small  business  concern.  144  Census 
 Bureau  data  from  1992  indicate  that  at  that  time  there  were  an  estimated  858  such  U.  S. 
 manufacturers  and  that  778  (91%)  of  these  firms  had  750  or  fewer  employees  and  would 
 therefore  be  classified  as  small  entities.  145  Using  our  current  estimate  of  cellular 
 equipment  manufacturers  and  the  previous  percentage  estimate  of  small  entities,  we 
 estimate  that  our  current  action  may  affect  approximately  837  small  cellular  equipment 
 manufacturers. 

 E.  Description  of  Projected  Reporting,  Recordkeeping  and  Other  Compliance 
 Requirements  This  NPRM  neither  proposes  nor  anticipates  any  additional  reporting,  recordkeeping 

 or  other  compliance  measures. 
 F.  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.  146 

 As  stated  earlier,  several  of  the  Commissions  technical  and  anti-  trafficking  cellular 
 rules  may  be  outdated.  Therefore,  modifying  or  eliminating  these  rules  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.  Also,  amending  or  deleting  the  incidental  services  rules  may 
 allow  licensees  in  the  Part  22  services  greater  flexibility  in  the  types  of  services  they 
 offer.  In  the  NPRM,  the  Commission  has  set  forth  various  options  it  is  considering  for 
 each  rule,  from  modifying  rules  to  eliminating  them  altogether.  As  discussed  in  the 
 NPRM,  the  effect  of  any  rule  change  on  the  regulatory  burden  of  both  licensees  and 

 144  13  C.  F.  R.    121.  201,  Standard  Industrial  Classification  (SIC)  code  3663. 
 145  U.  S.  Dept.  of  Commerce,  1992  Census  of  Transportation,  Communications  and  Utilities  (issued  May 
 1995),  SIC  code  3663  (estimate  created  by  the  Census  Bureau  under  contract  to  the  Office  of  Advocacy, 
 SBA). 

 146  See  5  U.  S.  C.    603. 
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 equipment  manufacturers  will  be  a  significant  criterion  in  determining  appropriate 
 Commission  action. 

 We  note  that  the  entire  intent  underlying  our  actions  here  is  to  lessen  the  levels  of 
 regulation,  consistent  with  our  mandate  for  undertaking  biennial  reviews.  We  have 
 therefore  described,  supra,  various  alternatives  to  lessen  the  regulatory  burden  on  carriers 
 and  equipment  manufacturers,  including  small  entities.  We  seek  comment  on  any 
 additional  appropriate  alternatives. 

 G.  Federal  Rules  that  May  Duplicate,  Overlap  or  Conflict  with  the  Proposed  Rules  None. 
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 Federal  Communications  Commission  FCC  01-  153 
 47 
 SEPARATE  STATEMENT  OF 
 COMMISSIONER  GLORIA  TRISTANI 

 Re:  Year  2000  Biennial  Regulatory  Review    Amendment  of  Part  22  of  the 
 Commissions  Rules  to  Modify  or  Eliminate  Outdated  Rules  Affecting  the  Cellular 
 Radiotelephone  Service  and  other  Commercial  Mobile  Radio  Services,  Notice  of 
 Proposed  Rulemaking 

 As  part  of  our  Section  11  biennial  review  process,  this  Notice  proposes  to  modify 
 or  eliminate  numerous  rules  that  apply  to  the  Cellular  Radiotelephone  Service    the  two 
 cellular  licenses    under  Part  22  of  the  Commissions  rules.  Many  of  these  rules  date 
 back  to  the  inception  of  this  service  in  the  early  1980s,  and  it  is  time  we  conduct  a 
 thorough  review.  I  have  some  concerns,  however,  and  write  separately  to  express  my 
 view  that  the  Commission  should  look  hard  at  consumer  interests  and,  in  particular,  the 
 interests  of  Americans  with  disabilities,  as  we  engage  in  our  upcoming  debate. 

 While  most  of  us  have  access  to  a  full  array  of  exciting  wireless  services  and 
 innovative  applications,  millions  of  Americans  with  hearing  and  speech  disabilities  are 
 limited  to  analog-  based  service  offerings.  To  date,  digital  wireless  technology  is  still  not 
 compatible  with  text  telephone  (TTY)  devices  and  most  hearing  aids.  Time  and  again, 
 the  Commission  has  granted  digital  technology-  based  wireless  providers  extensions  and 
 exempt  ions  from  compat  ibilit  y  requirements.  1  In  reaching  these  decisions,  I  have  found 
 some  level  of  comfort  in  the  knowledge  that  during  the  interim  the  disability  community 
 has  had  the  choice  of  two  analog  cellular  providers  in  each  market.  I  remain  committed 
 to  that  choice  as  long  as  digital  wireless  technology  remains  inaccessible. 

 Without  question,  there  are  consumer  and  public  interest  benefits  to  migrating 
 from  analog  to  digital  wireless  services:  higher  quality  service  offerings,  additional 
 service  features,  and  more  efficient  use  of  the  spectrum,  to  name  a  few.  In  my 
 judgement,  however,  the  fundamental  ability  of  all  Americans    including  Americans 

 1  Since  1997,  the  Commission  has  suspended  the  E-  911  rule  requiring  service  providers  to  pass  on  TTY 
 calls  as  it  applies  to  digital  wireless  systems.  See  Revision  of  the  Commissions  Rules  to  Ensure 
 Compatibility  with  Enhanced  911  Emergency  Calling  Systems,  Memorandum,  Opinion  and  Order,  12  FCC 
 Rcd  22665,    59  (E-  911  Proceeding)  (suspending  enforcement  of  TTY  requirement  until  October  1,  1998); 
 E-  911  Proceeding  Order,  13  FCC  Rcd  21746,    8  (1998)  (Wireless  Telecommunications  Bureau  Order 
 extending  suspension  through  November  15,  1998);  E-  911  Proceeding  Order,  14  FCC  Rcd  694,    10 
 (1998)  (Wireless  Telecommunications  Bureau  Order  extending  suspension  through  December  31,  1998); 
 E-  911  Proceeding  Order,  14  FCC  Rcd  1700,    4  (1998)  (granting  over  100  temporary  waivers  of  the  rule); 
 Order,  14  FCC  Rcd  3304  (1999);  E-  911  Proceeding  Fourth  Report  and  Order,  FCC  00-  436,  CC  Docket 
 No.  94-  102  (rel.  Dec.  14,  2000)    27-  8  (establishing  June  30,  2002  as  the  deadline  for  digital  wireless 
 providers  to  be  capable  of  transmitting  911  calls  made  using  TTY  devices).  The  Hearing  Aid 
 Compatibility  Act  of  1988  exempted  telephones  used  with  public  mobile  services  from  mandatory 
 compatibility.  47  U.  S.  C.    610(  b)(  2)(  A)(  i);  see  47  C.  F.  R.    68.  4(  a).  The  Commission,  however,  is 
 statutorily  required  to  periodically  assess  this  exemption.  47  U.  S.  C.    610(  b)(  2)(  C).  Today,  digital 
 wireless  devices  are  not  hearing  aid  compatible.  We  have  before  us  a  request  to  review  this  exemption. 
 See  Letter  from  the  Wireless  Action  Coalition  to  William  Caton,  Secretary,  FCC  (Oct.  7,  2000).  I  believe 
 we  should  move  ahead  and  assess  the  exemption. 
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 48 
 with  disabilities    to  access  wireless  telecommunications  services  must  be  paramount.  It 
 is  our  moral  duty  and  statutory  obligation  to  ensure  access  to  the  communications 
 revolution  2  ;  it  is  the  public  interest. 

 The  Notice,  nonetheless,  seeks  comment  on  elimination  of  the  analog  service 
 requirement.  While  it  notes  that  the  Commission  is  reluctant  to  eliminate  this 
 requirement  if  doing  so  will  significantly  impair  the  access  of  these  users  to  wireless 
 telecommunications  services,  3  I  would  have  preferred  a  tentative  conclusion  that  this 
 agency  will  not  consider  eliminating  the  requirement  until  TTY-  and  hearing  aid-compatible 
 digital  equipment  is  available  to  the  public.  The  Commission  seeks  comment 
 on  the  rule,  however,  and  so  I  encourage  the  disability  community  to  participate  in  this 
 rulemaking  and  educate  us  about  their  experiences    and  frustrations    with  wireless 
 services.  In  addition,  I  hope  we  will  learn  the  views  of  the  analog  customer  base  more 
 broadly,  particularly  those  rural  customers  whose  ability  to  roam  could  be  affected  by 
 elimination  of  the  rule. 

 On  a  separate  note,  this  item  seeks  comment  on  eliminating  the  requirement  that 
 cellular  licensees  inform  prospective  subscribers  of  the  area  in  which  reliable  service 
 can  be  expected.  4  The  item  observes  that  PCS  providers  and  other  CMRS  operators  are 
 not  subject  to  this  rule,  and  these  other  providers  typically  give  customers  service-  area-related 
 informat  ion.  5  At  this  time,  I  question  whether  meaningful  compet  it  ion  makes  a 
 rule  ensuring  the  provision  of  accurate  service  area  information  no  longer  necessary  in 
 the  public  interest.  6  Indeed,  a  competitive  marketplace  could  prompt  some  providers  to 
 take  liberties  in  their  marketing  practices.  7  I  look  forward  to  reviewing  the  record  on  this 
 matter. 

 I  nonetheless  support  adoption  of  this  Notice  as  we  examine  our  rules  pursuant  to 
 the  Section  11  biennial  review  process.  I  hope  that  the  questions  posed  here  will  prompt 
 people  with  disabilities  and  other  consumers  to  participate  actively  in  this  proceeding. 

 2  Section  255  of  the  Communications  Act  requires  that  a  provider  of  telecommunications  service  shall 
 ensure  that  the  service  is  accessible  to  and  usable  by  individuals  with  disabilities,  if  readily  achievable.  47 
 U.  S.  C.    255(  c).  In  Section  1  of  the  Act,  moreover,  the  Congress  charged  the  Commission  with  the 
 responsibility  to  make  available,  so  far  as  possible,  to  all  the  people  of  the  United  States  .  .  .  a  rapid, 
 efficient,  Nation-  wide,  and  world-  wide  wire  and  radio  communications  service.  47  U.  S.  C.    151. 

 3  Notice  at    31. 

 4  Id.  at  n.  16  (quoting  47  C.  F.  R.    22.  901(  a)). 
 5  See  id.  at    14. 
 6  47  U.  S.  C.    161(  b). 
 7  The  Commission  currently  has  before  it  a  complaint  that  a  PCS  provider  has  engaged  in  a  print 
 advertising  campaign  that  includes  misleading  home  coverage  area  information.  See  Letter  from  Andrea  C. 
 Levine,  Vice  President,  National  Advertising  Division,  Council  of  Better  Business  Bureaus,  Inc.  to  David 
 Solomon,  Chief,  Enforcement  Bureau,  FCC  (April  12,  2001).  While  I  take  no  position  as  to  the  underlying 
 merits  of  that  complaint,  I  note  that  many  consumers  view  quality  of  service  and  extent  of  network 
 coverage,  along  with  price,  as  the  critical  factors  in  choosing  a  CMRS  provider. 
48