*Pages 1--28 from  Microsoft Word - 35643*
 Federal  Communications  Commission  FCC  04-  22 
 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 to  Modify  or  Eliminate  Outdated  Rules  Affecting  the  Cellular  Radiotelephone  Service  and  other 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 


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 WT  Docket  No.  01-  108 


 ORDER  ON  RECONSIDERATION 
 Adopted:  February  4,  2004  Released:  February  12,  2004 
 By  the  Commission:  Commissioner  Martin  approving  in  part,  concurring  in  part,  and  issuing  a  statement. 


 I.  INTRODUCTION 
 1.  In  this  Order  on  Reconsideration,  we  resolve  petitions  for  reconsideration  of  the  Report  and  Order  in  the  Part  22  Biennial  Regulatory  Review  proceeding.  1  In  this  order,  we  affirm  the  decision  to 
 establish  a  five-  year  sunset  period  for  the  removal  of  the  Commissions  requirement  that  cellular  carriers  provide  analog  service.  We  also  affirm  the  decision  to  remove  the  rule  section  governing  electronic  serial 
 numbers  (ESNs)  in  cellular  telephones,  but  clarify  that  the  fraudulent  and  unauthorized  use  of  ESNs  remains  contrary  to  federal  law  and  Commission  policy.  Further,  we  reconsider  and  adopt  a  proposal  to 
 permit,  in  certain  circumstances,  cellular  carriers  to  extend  into  neighboring  unserved  areas  without  prior  Commission  approval.  We  also  decline  a  request  to  further  modify  our  rules  regarding  emissions 
 limitations. 
 II.  BACKGROUND 
 2.  As  part  of  its  Year  2000  Biennial  Review  of  regulations,  the  Commission  issued  a  Report  and  Order  in  which  it  amended  Part  22  of  its  rules  by  modifying  or  eliminating  various  regulations  relating  to 
 the  Cellular  Radiotelephone  Service  that  became  outdated  due  to  technological  change,  increased  competition  in  the  Commercial  Mobile  Radio  Services  (CMRS),  or  supervening  rules.  The  Commission 
 carried  out  this  review  pursuant  to  section  11  of  the  Communications  Act  of  1934,  as  amended  (Act).  2 


 1  Year  2000  Biennial  Regulatory  Review  -  Amendment  of  Part  22  of  the  Commission's  Rules  to  Modify  or 
 Eliminate  Outdated  Rules  Affecting  the  Cellular  Radiotelephone  Service  and  other  Commercial  Mobile  Radio  Services,  WT  Docket  No.  01-  108,  Report  and  Order,  17  FCC  Rcd  18401  (2002). 


 2  See  47  U.  S.  C.    161.  Section  11  specifies  that: 
 BIENNIAL  REVIEW  OF  REGULATIONS.    In  every  even-  numbered  year  (beginning  with  1998),  the  Commission  --  (1)  shall  review  all  regulations  issued  under  this  Act  in  effect  at  the  time  of  the  review  that  apply  to  the  operations  or 
 activities  of  any  provider  of  telecommunications  service;  and  (2)  shall  determine  whether  any  such  regulation  is  no 
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 Section  11  of  the  Act  requires  that  we  review  all  of  our  regulations  relating  to  providers  of  telecommunications  service  and  determine  whether  any  such  regulation  is  no  longer  necessary  in  the 
 public  interest  as  the  result  of  meaningful  economic  competition  between  providers  of  such  service.  3  In  the  event  that  we  determine  that  a  rule  is  no  longer  necessary  in  the  public  interest,  section  11  directs  the 
 Commission  to  remove  or  modify  the  rule  in  question. 
 3.  Pursuant  to  this  statutory  mandate,  the  Commission  re-  examined  its  cellular  rules  in  order  to  determine  whether  any  of  the  rules  are  no  longer  necessary  in  the  public  interest  as  a  result  of  the 
 technological  advances  and  growth  in  competition  that  have  occurred  in  mobile  telephony  since  the  rules  were  first  promulgated.  As  a  result  of  this  review,  the  Commission  made  several  changes  to  its  cellular 
 rules,  including:  modifying  its  rules  to  eliminate,  after  a  five-  year  transition  period,  the  requirement  that  carriers  provide  analog  service  compatible  with  Advanced  Mobile  Phone  Service  (AMPS)  specifications;  4 
 removing  the  manufacturing  requirements  found  in  section  22.919  governing  electronic  serial  numbers  (ESNs)  in  cellular  telephones,  and;  modifying  language  in  section  22.917  regarding  the  out-  of-  band 
 emission  limit.  The  Commission  also  addressed  a  number  of  other  Part  22  issues  raised  by  commenters,  such  as  various  proposals  seeking  to  overhaul  our  cellular  unserved  area  licensing  framework. 


 4.  In  response  to  the  Report  and  Order,  petitions  for  reconsideration  were  filed  by  AT&  T  Wireless  Services  (AWS),  the  Cellular  Telephone  and  Internet  Association  (CTIA),  and  Dobson  Communications 
 Corporation  (Dobson).  In  its  petition  for  reconsideration,  AWS  requests  that  the  Commission  reduce  the  transition  period  for  the  cellular  analog  requirement  from  five  years  to  no  more  than  30  months.  5  AWS 
 argues  that,  because  the  Commission  found  in  the  Report  and  Order  that  the  analog  requirement  was  no  longer  necessary  to  promote  its  original  purposes  of  ensuring  competition  or  nationwide  compatibility, 
 the  Commission  should  have  immediately  removed  the  requirement  rather  than  establish  a  transition  period.  AWS  maintains  that  it  was  improper  and  unnecessary  for  the  Commission  to  maintain  the  analog 
 requirement  as  a  means  to  ensure  that  persons  with  hearing  disabilities  and  emergency-  only  consumers  have  access  to  wireless  services.  Further,  AWS  argues  that,  because  the  elimination  of  the  ESN  rule 
 increases  the  risks  of  fraud  and  theft,  the  Commission  should  reinstate  the  rule  governing  ESN  design  specifications  and  extend  the  requirement  to  apply  to  all  CMRS  providers. 


 longer  necessary  in  the  public  interest  as  the  result  of  meaningful  economic  competition  between  providers  of  such  service. 
 (b)  EFFECT  OF  DETERMINATION.    The  Commission  shall  repeal  or  modify  any  regulation  it  determines  to  be  no  longer  necessary  in  the  public  interest. 
 3  Id. 
 4  The  Commission  set  out  a  five-  year  transition  period  to  ensure  that  wireless  services  are  continuing  to  be  made 
 available  to  consumers  who  do  not  have  ready  access  to  digital  phones,  such  as  persons  with  hearing  disabilities  and  911-  only  consumers.  In  order  to  monitor  the  progress  made  by  the  wireless  and  hearing  aid  industries  in  developing 


 hearing  aid-  compatibility  solutions,  and  to  ensure  that  wireless  services  are  continuing  to  be  made  available  to  persons  with  hearing  disabilities  as  well  as  911-  only  consumers,  the  Commission  required  that  nationwide  licensees 
 file  reports  with  the  Commission  no  later  than  the  third  anniversary  of  the  release  of  the  order  (February  18,  2006)  and  again  by  the  fourth  anniversary  of  the  order  (February  18,  2007).  The  information  contained  in  the  reports  will 
 be  used  to  determine  whether  or  not  the  Commission  will  initiate  a  proceeding  to  extend  the  sunset  date  or  take  appropriate  enforcement  action  against  carriers  who  fail  to  provide  access  to  telecommunications  services.  See 
 Report  and  Order,  17  FCC  Rcd  at  18471-  18419,  paras.  28-  32.  5 
 AT&  T  Wireless  Services,  Inc.  Petition  for  Reconsideration,  filed  January  16,  2003. 
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 5.  CTIA  also  requests  that  the  Commission  re-  evaluate  the  decision  to  remove  the  ESN  requirement.  6  Unlike  AWS  however,  CTIA  does  not  object  to  the  removal  of  section  22.  919,  and  does  not 
 seek  reinstatement  of  the  rule  itself.  Instead,  it  argues  that  certain  language  in  the  Report  and  Order  appears  to  suggest  that  cellular  telephone  cloning  is  now  permissible,  and  urges  that  the  Commission 
 revise  the  language. 
 6.  Dobson  seeks  reconsideration  of  the  Commissions  decision  not  to  adopt  its  proposal  to  modify  certain  aspects  of  the  Commissions  cellular  unserved  area  rules.  7  Specifically,  Dobson  argues  that  the 
 Commission  did  not  adequately  examine  whether  cellular  unserved  area  licensing  rules  continue  to  be  necessary,  and,  erred  in  failing  to  adopt  Dobsons  proposal  allowing  licensees  to  extend  into  adjacent 
 unserved  areas  of  less  than  50  square  miles  on  a  secondary  basis. 
 7.  Finally,  in  response  to  a  Public  Notice  seeking  comment  regarding  the  2002  Biennial  Regulatory  Review  proceeding,  8  Lucent  Technologies  (Lucent)  submitted  comments  arguing  that  further 
 modifications  to  the  Commission's  rules  regarding  emissions  limits  are  necessary.  9  Lucent  argues  that  the  rule  changes  made  in  the  Report  and  Order  will  require  one  spread  spectrum  system  to  comply  with  more 
 stringent  technical  requirements  than  another  system. 
 III.  DISCUSSION 
 A.  The  Commission  did  not  err  in  establishing  a  five-  year  sunset  period  for  the  analog  requirement. 


 8.  Background.  Since  the  establishment  of  the  Cellular  Radiotelephone  Service  in  the  early  1980s,  all  cellular  carriers  have  been  required  to  provide  service  in  accordance  with  the  compatibility  standard 
 for  analog  systems,  known  as  AMPS.  10  The  Commission  mandated  AMPS  compatibility  in  order  to  accomplish  two  goals:  (1)  to  enable  subscribers  of  one  cellular  system  to  be  able  to  use  their  existing 
 terminal  equipment  (i.  e.  mobile  handset)  in  a  cellular  market  in  a  different  part  of  the  country  (roaming);  and  (2)  to  facilitate  competition  by  eliminating  the  need  for  cellular  consumers  to  acquire  different 


 6  Cellular  Telephone  and  Internet  Association  Petition  for  Reconsideration,  filed  January  16,  2003. 
 7  Dobson  Communications  Corporation  Petition  for  Limited  Reconsideration,  filed  January  16,  2003. 
 8  See  "The  Commission  Seeks  Public  Comment  in  the  2002  Biennial  Review  of  Telecommunications  Regulations 
 within  the  Purview  of  the  Wireless  Telecommunications  Bureau,"  WT  Docket  No.  02-  310,  Public  Notice,  17  FCC  Rcd  18933  (2002).  In  December  2002,  Commission  staff  issued  a  report  regarding  the  Commission  rules  that  affect 


 wireless  telecommunications  carriers,  the  status  of  ongoing  and  recent  initiatives,  and  recommendations  on  whether  specific  rules  should  be  retained,  modified,  or  repealed.  See  Federal  Communications  Commission  2002  Biennial 
 Regulatory  Review,  Staff  Report  of  the  Wireless  Telecommunications  Bureau,  WT  Docket  No.  02-  310  and  GC  Docket  No.  02-  390,  18  FCC  Rcd  4243  (2002).  In  the  Staff  Report,  the  staff  noted  that  the  issues  raised  by  Lucent 
 are  within  the  scope  of  review  of  Part  22  Cellular  Biennial  Review  Report  and  Order  and  recommended  that  Lucent's  comments  regarding  out-  of-  band  emissions  limits  be  treated  as  a  petition  for  reconsideration  in  this 
 proceeding.  9 
 See  generally  Lucent  2002  Biennial  Review  Comments.  10 
 The  detailed  technical  standards  for  AMPS  were  set  out  in  the  Office  of  Engineering  and  Technology  Bulletin  No.  53  (OET  53)  in  April  1981.  The  OET  53  specifications  established  technical  operational  parameters  and 


 descriptions  of  call  processing  algorithms  and  protocols  to  be  used  by  analog  cellular  systems.  See  An  Inquiry  into  the  Use  of  the  Bands  825-  845  MHz  and  870  MHz  and  870-  890  MHz  for  Cellular  Communications  Systems; 
 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,  508  at  paras.  92-  93. 
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 handset  equipment  in  order  to  switch  between  the  two  competing  carriers  within  the  consumers  home  market  (thereby  ensuring  reasonable  consumer  costs).  Pursuant  to  section  22.901,  a  carrier  was  required 
 to  provide  service  to  any  subscriber  within  the  carriers  cellular  geographic  service  area  (CGSA),  11  including  both  the  carriers  subscribers  and  roaming  customers  that  are  using  technically  compatible 
 equipment.  12 
 9.  In  the  Report  and  Order,  the  Commission  concluded  that,  in  light  of  the  present  competitive  state  of  mobile  telephony,  the  nationwide  coverage  achieved  by  cellular  carriers,  and  the  market  demand  for 
 nationwide,  ubiquitous  coverage  by  carriers,  the  analog  requirement  has  substantially  achieved  its  purpose  of  ensuring  that  the  public  has  access  to  low-  cost,  compatible  equipment  and  to  nationwide  roaming.  13 
 The  Commission  found  that  the  objectives  of  the  analog  requirement  can  now  largely  be  accomplished  by  market  forces  without  the  need  for  regulation,  and  therefore  determined  that  the  analog  requirement 
 should  be  removed.  Although  the  Commission  concluded  that  as  a  general  matter  it  is  no  longer  necessary  to  impose  the  analog  compatibility  standard  to  achieve  the  original  purposes  of  the  rule,  the 
 Commission  found  that  eliminating  the  analog  requirement  immediately  without  a  reasonable  transition  period  would  be  extremely  disruptive  to  certain  consumers,  particularly  those  with  hearing  disabilities  as 
 well  as  emergency-  only  consumers,  who  currently  continue  to  rely  on  the  availability  of  analog  service  and  lack  digital  alternatives.  14 


 10.  Although  a  wide  variety  of  mobile  technologies  and  services  are  available  to  most  consumers,  persons  with  hearing  disabilities  are  limited  to  analog  equipment  or  a  small  number  of  digital  phones  that 
 are  currently  compatible  with  only  certain  types  of  hearing  aids.  15  Digital  choices  are  limited  because,  at  present,  nearly  all  digital  equipment  can  cause  some  interference  to  many  types  of  hearing  aids  and 
 cochlear  implants.  16  Further,  the  Commission  found  that  immediate  removal  of  the  analog  requirement 


 11  A  systems  CGSA  is  defined  as  the  geographic  area  served  by  the  system,  within  which  that  system  is  entitled  to 
 protection  and  adverse  effects  are  recognized  for  the  purpose  of  determining  whether  a  petitioner  has  standing.  11  12 
 47  C.  F.  R.    22.901;  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,  9469- 


 9470,  para.  11  (1996);  Interconnection  and  Resale  Obligations  Pertaining  to  Commercial  Mobile  Services,  CC  Docket  No.  94-  54,  Third  Report  And  Order  and  Memorandum  Opinion  and  Order  on  Reconsideration,  15  FCC  Rcd 
 15975,  para.  21  (2000).  Section  22.  901(  d)  specifically  requires  that  carriers  make  mobile  services  available  to  subscribers  whose  mobile  equipment  conforms  to  the  AMPS  compatibility  standard.  47  C.  F.  R.    22.  901(  d). 
 13  See  Report  and  Order,  17  FCC  Rcd  at  18406,  para.  8;  id.  at  18407-  18414,  paras.  9-  21. 
 14  Id.,  17  FCC  Rcd  at  18406-  18407,  para.  8;  id.  at  18414,  para.  22. 
 15  Hearing  aids  operate  in  one  of  two  modes    acoustic  coupling  or  telecoil  coupling.  In  acoustic  coupling  mode,  the 
 microphone  picks  up  surrounding  sounds  and  converts  them  into  electrical  signals.  The  electrical  signals  are  amplified  as  needed  and  then  converted  back  into  sound  by  the  hearing  aid  speaker.  In  telecoil  mode,  with  the 


 microphone  turned  off,  the  telecoil  picks  up  the  audio  signal-  based  magnetic  field  generated  by  the  voice  coil  of  a  dynamic  speaker  in  hearing  aid-  compatible  telephones,  audio  loop  systems,  or  powered  neck  loops.  The  hearing  aid 
 converts  the  magnetic  field  into  electrical  signals,  amplifies  them  as  needed,  and  converts  them  back  into  sound  via  the  speaker.  Using  a  telecoil  avoids  the  feedback  that  often  results  from  putting  a  hearing  aid  up  against  a  telephone 
 earpiece,  can  help  prevent  exposure  to  over  amplification,  and  eliminates  background  noise  which  provides  improved  access  to  the  telephone.  Some  equipment  manufacturers  have  developed  neck  loop  devices  that  make  it 
 possible  for  some  people  who  have  a  telecoil  in  their  hearing  aids  to  use  digital  mobile  phones.  Unlike  digital  handsets,  some  analog  handsets  have  telecoils  installed  that  are  compatible  with  some  telecoil  equipped-  hearing 
 aids,  obviating  the  need  for  the  separate  neck  loop.  However,  people  without  telecoil-  equipped  hearing  aids  are  unable  to  use  neck  loops  with  digital  mobile  phones  or  telecoil-  equipped  analog  phones. 
 16  The  pulsing  nature  of  RF  signals  from  digital  telephones  as  well  as  electromagnetic  energy  emitted  by  a  digital 
 phones  antenna,  backlight,  or  other  components  can  cause  interference  to  hearing  aids  and  cochlear  implants.  A 
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 would  negatively  impact  those  using  emergency  or  911-  only  phones  which  have  been  estimated  by  some  to  number  between  20-  30  million.  17  Emergency  or  911-  only  callers  include  unsubscribed  consumers  of 
 recycled  phones  that  have  been  reissued  under  some  type  of  donor  program  (such  as  those  donated  to  victims  of  domestic  violence)  as  well  as  subscribers  of  911-  only  phones  that  can  only  make  911  calls  but 
 cannot  receive  calls.  The  911-  only  subscribers  are  often  elderly  persons  who  can  not  afford  basic  wireless  service  or  do  not  want  typical  wireless  service,  but  desire  immediate  access  to  emergency 
 services.  18  Recognizing  that  telecommunications  technology  has  become  an  essential  part  of  everyday  life,  and  that  those  without  ready  access  are  at  a  disadvantage  with  respect  to  both  daily  routine  or 
 emergency  services,  the  Commission  determined  that  it  is  in  the  public  interest  to  establish  a  transition  period  during  which  time  the  wireless  industry  could  develop  solutions  for  hearing  aid-  compatibility 
 issues  and  phones  used  by  emergency-  only  callers  can  cycle  from  analog  to  digital.  19 
 11.  In  its  petition  for  reconsideration,  AWS  asserts  that  the  Commission  has  not  adequately  met  its  burden  to  demonstrate  that  the  analog  rule  remains  necessary  in  the  public  interest  for  five  additional 
 years,  either  for  the  original  purposes  of  the  rule  or  in  order  to  ensure  that  certain  consumers  have  access  to  wireless  telephony.  AWS  argues  that  section  11  of  the  Act  mandates  that  once  the  Commission  has 
 made  the  determination  that  a  rule  is  no  longer  necessary  as  a  result  of  meaningful  economic  competition,  the  Commission  must  repeal  the  rule.  20  Because  the  Commission  determined  that  the  analog  requirement 
 was  no  longer  necessary  to  promote  competition  or  roaming,  AWS  argues  that  the  Commission  should  have  immediately  removed  the  rule  rather  than  establish  a  transition  period.  AWS  maintains  that  it  was 
 improper  for  the  Commission  to  use  concerns  regarding  access  by  persons  with  hearing  disabilities  and  emergency-  only  consumers  in  deciding  whether  to  retain  the  rule  because  the  Commission  may  only 
 consider  the  original  purposes  for  which  the  rule  was  adopted.  21  AWS  argues  that,  because  there  are  other  measures  in  place  to  ensure  that  the  needs  of  hearing  impaired  or  emergency-  only  consumers  will 
 continued  to  be  served,  there  is  no  justification  for  retaining  the  analog  requirement  beyond  a  brief  transition  period.  22 


 12.  Discussion.  We  find  that  there  is  no  basis  to  reconsider  the  Commissions  decision  to  establish  the  five-  year  transition  period,  and  AWS  offers  little  rationale  supporting  the  immediate  elimination  or 
 reduction  of  the  transition  period  that  was  not  previously  considered  and  rejected  in  the  Report  and  Order.  We  conclude  that  the  Commissions  decision  to  defer  the  removal  of  the  analog  requirement  in 
 order  to  avoid  causing  significant  hardship  to  certain  consumers  fully  comports  with  our  obligations 


 cochlear  implant  is  a  surgically  implantable  device  that  is  designed  to  substitute  for  the  function  of  the  middle  ear,  cochlear  mechanical  motion,  and  sensory  cells.  A  cochlear  implant  is  comprised  of  external  and  internal 
 components.  The  external  components  include  a  microphone  that  converts  sound  into  an  electrical  signal,  a  speech  processor  that  manipulates  and  converts  the  signal,  and  a  transmitter  that  sends  the  electrical  signal  to  the  internal 
 components.  The  surgically  implanted  components  include  a  receiver  that  decodes  the  signal  from  the  speech  processor,  and  an  electrode  array  that  stimulates  the  cochlea  with  electrical  current.  The  brain  interprets  this 
 stimulation  as  sound.  See  Section  68.  4(  a)  of  the  Commissions  Rules  Governing  Hearing  Aid-  Compatible  Telephones,  Report  and  Order,  18  FCC  Rcd  6753  (2003)  (HAC  Report  and  Order). 
 17  See  id.,  18  FCC  Rcd  at  18414-  18415,  para.  23. 
 18  See  id.,  18  FCC  Rcd  at  18414-  18415,  para.  23. 
 19  See  id.,  17  FCC  Rcd  at  18414-  18419,  paras.  22-  30. 
 20  AWS  Petition  for  Reconsideration  at  2,  3. 
 21  Id.  at  6. 
 22  In  its  comments,  Western  Wireless  supports  the  immediate  elimination  of  the  analog  requirement.  Western 
 Wireless  Comments  at  2. 
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 under  section  11  of  the  Act.  We  continue  to  conclude  that  the  effects  of  an  immediate  elimination  of  the  analog  requirement  would  have  an  inordinate  impact  with  respect  to  current  analog  consumers, 
 particularly  persons  with  hearing  disabilities  and  emergency-  only  users.  We  affirm  the  conclusion  that  the  five-  year  transition  period  is  appropriate  to  ensure  that  persons  with  hearing  disabilities  and 
 emergency-  only  consumers  continue  to  have  access  to  wireless  devices,  and  we  believe  that  the  transition  period  is  essential  in  ensuring  a  smooth  migration  from  analog  to  digital  technology. 


 1.  The  Commissions  decision  to  implement  a  five-  year  sunset  of  the  analog  requirement  is  consistent  with  the  original  purposes  of  the  rule. 
 13.  In  its  petition  for  reconsideration,  AWS  argues  that  the  analog  requirement  must  be  eliminated  because  it  no  longer  serves  its  original  purposes.  AWS  as  well  as  Western  Wireless  maintain  that  under 
 the  Commissions  own  interpretation  of  section  11,  the  Commission  may  only  consider  the  purposes  for  which  the  rule  was  adopted  in  deciding  whether  to  retain  a  regulation.  23  They  argue  that,  because  the 
 Commission  found  that  the  analog  requirement  has  achieved  its  purpose  of  ensuring  that  the  public  has  access  to  low  cost,  compatible  equipment  and  to  nationwide  roaming,  the  rule  is  no  longer  necessary  and 
 must  be  removed.  24 
 14.  AWS  and  Western  Wireless  are  incorrect  in  their  assertion  that  the  Commission  retained  the  analog  requirement  for  a  policy  objective  that  is  completely  divorced  from  the  original  purposes  of  the 
 rule.  25  As  noted,  the  Commission  found  that  the  original  goals  of  ensuring  reasonable  consumer  costs  and  seamless,  nationwide  service  (i.  e.  roaming)  have  been  substantially  achieved  for  most  consumers.  26  The 
 Commission  emphasized,  however,  that  despite  the  multiple  wireless  technologies  and  services  that  are  currently  available,  there  are  certain  individuals,  specifically  emergency-  only  users  and  persons  with 
 hearing  disabilities,  who  may  not  have  readily  available  and  accessible  economic  or  technological  alternatives  to  analog  service.  27  The  Commission  found  that  such  consumers  do  not  currently  have 
 adequate  digital  alternatives  and  would  be  unduly  affected  by  the  immediate  elimination  of  the  analog  requirement.  28  In  so  doing,  the  Commission  recognized  the  reality  that  there  is  currently  little  or  no 
 meaningful  economic  competition  for  such  consumers.  The  analog  requirement  is  still  necessary,  at  least  in  the  near  term,  to  ensure  that  emergency-  only  consumers  and  persons  with  hearing  disabilities  continue 
 to  have  access  to  wireless  telephony,  and,  accordingly,  the  decision  to  implement  a  sunset  period  is  consistent  with  the  original  purposes  of  the  rule. 


 2.  The  Commission  is  not  limited  to  the  original  purpose  of  a  rule  in  determining  whether  it  remains  necessary. 
 15.  Although  the  Commissions  basis  for  establishing  a  five-  year  transition  period  is  consistent  with  the  original  purposes  of  the  analog  requirement,  we  note  that  it  would  nonetheless  be  permissible  to  retain 
 the  analog  requirement  for  other  reasons  if  we  conclude  that  it  is  in  the  public  interest  to  do  so.  AWS  is  correct  that  the  Report  and  Order  stated  that,  in  reviewing  a  regulation,  the  Commission  must  evaluate 


 23  AWS  Petition  for  Reconsideration  at  6;  Western  Wireless  Comments  at  3-  4. 
 24  AWS  Petition  for  Reconsideration  at  6,  citing  Report  and  Order,  17  FCC  Rcd  at  18406,  para.  8.;  Western 
 Wireless  Comments  at  4-  5.  25 
 AWS  Petition  at  5-  6;  Western  Wireless  Comments  at  3.  26 
 Report  and  Order,  17  FCC  Rcd  at  18406,  para.  8.  27 
 Id.  at  18414,  para.  22.  28 
 Id. 
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 whether  the  concerns  that  led  to  the  rule  or  the  rules  original  purpose  may  be  achieved  without  the  rule  or  with  a  modified  rule.  29  The  Commission,  however,  did  not  conclude  that  it  may  only  look  to  the  original 
 purposes  of  the  rule  to  determine  whether  it  remains  necessary  in  the  public  interest.  Instead,  the  Report  and  Order  itself  noted  that  the  Commission  is  not  limited  to  the  original  purposes  of  the  analog 
 requirement  in  determining  whether  the  requirement  remained  necessary.  As  noted  in  the  Report  and  Order,  the  U.  S.  District  Court  of  Appeals  for  the  D.  C.  Circuit  has  found  that  nothing  in  the  language  of 
 section  202(  h)  of  the  Telecommunications  Act  of  1996  30  indicates  that  the  Commission  is  limited  to  the  purposes  for  which  the  rule  was  adopted  when  determining  whether  or  not  it  remains  necessary.  31 
 Similarly,  there  is  no  language  in  section  11  which  suggests  that  we  are  limited  to  the  original  purpose  behind  a  rule  in  determining  whether  or  not  it  should  be  retained.  32  Indeed,  it  is  unreasonable  to  interpret 
 section  11  as  requiring  that  a  rule  must  be  repealed  if  it  has  accomplished  its  original  goals  but  yet  remains  necessary  with  respect  to  another  purpose.  33  There  is  nothing  in  the  text  of  section  11  or  its 
 legislative  history  that  suggests  that  this  is  the  appropriate  standard  for  a  biennial  review. 
 3.  Sections  255  and  332  of  the  Act  do  not  preclude  the  Commission  from  finding  that  the  analog  requirement  remains  necessary. 


 16.  Both  AWS  and  Western  Wireless  argue  that  certain  statutory  provisions  compel  us  to  remove  the  analog  requirement.  34  Section  255  of  the  Communications  Act  provides  that  manufacturers  and 
 telecommunications  services  providers  must  ensure  that  telecommunications  equipment  and  telecommunications  services  are  accessible  to  persons  with  disabilities.  Specifically,  section  255(  c)  of  the 
 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.  35  Further,  section  332  requires  that  the 
 Commission  ensure  that  providers  of  CMRS  services  are  subjected  to  technical  and  operational  rules  comparable  to  those  that  apply  to  providers  of  substantially  similar  common  carrier  services.  36  The 


 29  See  id.,  17  FCC  Rcd  at  18404,  para.  4. 
 30  See  section  202(  h)  of  the  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56.  Section  202(  h) 
 requires  the  Commission  to  review  its  ownership  rules  biennially  as  part  of  its  regulatory  reform  review  under  section  11  to  determine  whether  such  rules  are  necessary  in  the  public  interest  as  the  result  of  competition. 


 31  See  Report  and  Order,  17  FCC  Rcd  at  18404,  fn  16,  citing  Fox  Television  Stations,  Inc.  v.  FCC  et  al.,  280  F.  3d 
 1027  (D.  C.  Cir  2002)  (  Nothing  in    202(  h)  suggests  the  grounds  upon  which  the  Commission  may  conclude  that  a  rule  is  necessary  in  the  public  interest  are  limited  to  the  grounds  upon  which  it  adopted  the  rule  in  the  first  place). 


 32  Western  Wireless  argues  that  the  courts  have  yet  to  pass  on  whether,  similar  to  section  202(  h),  section  11  allows 
 the  Commission  to  base  its  decision  to  retain  a  rule  for  reasons  other  than  the  original  basis  of  the  rule.  This  fact  however,  does  not  preclude  us  from  applying  the  same  analysis  given  the  similarity  of  the  two  rules:  in  looking  to 


 the  plain  meaning  of  the  text  of  section  11  for  guidance,  nothing  in  the  language  states  that  we  must  consider  only  the  original  basis  of  the  rule. 
 33  We  agree  with  comments  that  argue  that  it  is  unlikely  that  Congress  intended  to  impose  a  standard  that  would 
 require  the  Commission  to  needlessly  initiate  a  completely  new  notice-  and-  comment  rulemaking  proceeding  simply  to  reinstate  the  rule.  See  Joint  Telematics  Comments  at  7. 


 34  AWS  Petition  at  6;  Western  Wireless  Comments  at  7;  AWS  Reply  Comments  at  4. 
 35  47  U.  S.  C.    255(  c). 
 36  47  U.  S.  C.    332. 
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 general  goal  behind  section  332  is  to  ensure  that  economic  forces  rather  than  disparate  regulatory  constraints  shape  the  development  of  the  CMRS  marketplace.  37 
 17.  The  Report  and  Order  specifically  discussed  whether  section  255  or  other  regulatory  provisions,  such  as  the  Hearing  Aid  Compatibility  Act  of  1988  (HAC  Act),  which  requires  the  Commission  to 
 establish  regulations  that  ensure  hearing-  aid  compatibility,  38  are  sufficient  to  ensure  accessibility  to  persons  with  hearing  disabilities.  39  The  Commission  found  that,  given  the  scarcity  of  digital  devices  that 
 may  be  used  with  hearing  aids,  persons  with  hearing  disabilities  could  be  left  without  access  to  mobile  telephony  services  in  the  event  that  the  analog  requirement  is  removed  immediately,  even  with  the 
 existence  of  measures  such  as  section  255  of  the  Act.  40  The  Commission  specifically  noted  that  it  was  establishing  a  transition  period  even  though,  pursuant  to  section  255,  carriers  are  otherwise  obligated  to 
 ensure  that  telecommunications  service  is  accessible  to  persons  with  disabilities.  41  The  Commission  found  that,  the  independent  requirements  of  section  255  notwithstanding,  it  was  appropriate  to  also 
 establish  a  five-  year  transition  period  in  order  to  address  the  particular  current  problem  of  hearing  aid-compatibility  with  digital  handsets,  and  ensure  access  to  mobile  telephony  service  for  persons  with 
 hearing  disabilities.  42 
 18.  AWS  and  Western  Wireless  nevertheless  maintain  that  the  Commission  failed  to  provide  a  rational  reason  as  to  why  it  was  continuing  to  apply  the  analog  requirement  in  light  of  its  finding  that 
 carriers  are  obligated  under  section  255  to  ensure  that  telecommunications  service  is  accessible  to  persons  with  disabilities.  They  state  that,  despite  comments  to  the  contrary,  43  there  is  no  basis  to  conclude  that 
 carriers  will  not  comply  with  their  obligations  under  section  255.  44  Both  point  out  that  carriers  are  now  providing  to  persons  with  hearing  disabilities  a  number  of  digital  products,  45  and  that,  until  the 


 37  Implementation  of  Sections  3(  N)  and  332  of  the  Communications  Act  -  Regulatory  Treatment  of  Mobile  Services, 
 GN  Docket  No.  93-  252,  Third  Report  and  Order,  9  FCC  Rcd  7988,  7989,  para.  4  (1994).  38 
 The  HAC  Act  requires  almost  all  new  telephones  to  provide  internal  means  for  effective  use  with  hearing  aids  that  are  designed  to  be  compatible  with  telephones  which  meet  established  technical  standards  for  hearing  aid 


 compatibility,  but  provided  an  exemption  for  certain  categories  of  phones  including  those  used  with  CMRS  and  private  mobile  radio  services  (or  PMRS).  The  Commission  recently  issued  a  Report  and  Order  which  modified  the 
 exemption  to  require  that  digital  wireless  phones  be  capable  of  being  used  effectively  with  hearing  aids.  See  generally  HAC  Report  and  Order. 
 39  See  Report  and  Order,  17  FCC  Rcd  at  18417-  18419,  paras.  27-  30. 
 40  Id.  at  18417-  18418,  para  28. 
 41  Id.,  at  18418-  18419,  paras.  30. 
 42  See  id.  at  18418-  18419,  para.  30. 
 43  See  SHHH  Comments  at  3;  TDI  Comments  at  6-  8.  These  commenters  argue  that  section  255  has  not  been  fully 
 effective  in  ensuring  that  equipment  and  services  are  accessible  to  people  with  disabilities,  and  that  section  255  will  not  provide  sufficient  safeguards  to  ensure  the  continued  availability  of  analog  services  to  persons  with  speech  or 


 hearing  disabilities.  44 
 AWS  Reply  Comments  at  4.  45 
 For  example,  AWS  notes  that  it  makes  available  a  peripheral  device,  called  the  Nokia  Neckloop,  that  allows  the  digital  phone  to  be  distanced  from  the  hearing  aid  and  also  provides  telecoil  connectivity.  AWS  Reply  Comments  at 


 4-  5.  Western  Wireless  points  out  that  CHAAMP  technology  is  available  for  use  with  Nokia  handsets  and  is  telecoil  compatible,  and  also  notes  that  wireless  loop  accessories  have  been  developed  that  can  be  plugged  into  a 
 number  of  mobile  handset  and  which  eliminates  or  substantially  reduces  interference  for  telecoil  wearers.  Western  Wireless  Comments  at  6.  Further,  Western  Wireless  states  that  there  are  a  number  of  readily-  available  alternative 
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 compatibility  issue  is  resolved,  they  will  continue  to  make  analog  available  to  consumers  in  accordance  to  the  requirements  of  section  255.  46  Given  these  considerations,  AWS  and  Western  Wireless  argue  that 
 retention  of  the  analog  rule  is  not  necessary  to  address  concerns  regarding  accessibility  for  hearing-impaired  consumers  because  section  255  expressly  requires  cellular  carriers  to  ensure  that  their  facilities 
 and  services  are  accessible  to  individuals  with  disabilities.  47 
 19.  We  disagree  that  the  provisions  of  section  255  preclude  us  from  taking  action  to  ensure  that  mobile  telephony  services  remain  available  and  accessible  to  individuals  with  hearing  disabilities.  There 
 is  no  language  in  section  255  that  indicates  that  we  are  prohibited  from  taking  action  that  we  deem  necessary  to  ensure  that  all  consumers  have  ready  access  to  wireless  services.  Indeed,  the  Commission 
 has  broad  authority  and  discretion  to  implement,  revise  or  retain  policies  if  doing  so  advances  the  public  interest.  Given  the  possible  consequences  to  persons  with  hearing  disabilities  and  emergency-  only 
 callers  of  the  immediate  removal  of  the  analog  requirement,  the  Commission  sought  to  ensure  that  wireless  services  remain  accessible  to  such  consumers  regardless  of  the  mandates  of  section  255,  i.  e.,  the 
 Commissions  action  to  defer  the  sunset  of  the  analog  requirement  was  separate  and  distinct  from  the  requirements  of  section  255.  In  the  Report  and  Order,  the  Commission  expressly  stated  that, 
 notwithstanding  a  carriers  obligation  under  section  255,  a  transition  period  was  being  established  to  safeguard  access  to  mobile  telephony.  48  The  purpose  in  implementing  the  transition  was  to  ensure  that 
 persons  with  hearing  disabilities  have  continuous  access  to  wireless  telecommunications  services  independent  of  actions  taken  by  carriers  to  fulfill  their  statutory  obligations.  While  we  do  not  doubt  that 
 carriers  take  seriously  their  obligations  to  ensure  that  telecommunications  services  are  accessible  by  persons  with  hearing  disabilities,  it  is  nonetheless  possible  for  there  to  be  disagreement  as  to  what 
 constitutes  compliance  under  section  255.  For  instance,  in  its  comments,  Western  Wireless  identifies  certain  handsets  or  accessories  that  may  be  used  with  telecoil-  equipped  hearing  aids  as  examples  of 
 digital  technologies  that  are  currently  available  to  persons  with  hearing  disabilities.  A  carrier  might  conclude  that  such  devices  satisfy  section  255,  and,  in  the  absence  of  the  analog  requirement,  determine 
 that  it  can  turn  off  its  analog  facilities.  However,  only  25-  30  percent  of  hearing  aids  sold  in  the  United  States  include  telecoils;  therefore,  the  majority  of  persons  with  hearing  disabilities  will  not  benefit  from 
 digital  devices.  49  We  concur  with  the  reasoning  of  the  Joint  Telematics  Commenters  that  resolving  complaints  or  disputes  over  whether  a  carrier  is  in  compliance  with  section  255  may  require  lengthy 
 investigation,  during  which  time  persons  with  hearing  disabilities  could  be  without  reasonable  access  to  mobile  services.  50  We  conclude  that  the  public  interest  is  better  served  by  ensuring  that  there  is  no  period 
 of  time,  while  a  section  255  complaint  is  pending,  in  which  persons  with  hearing  disabilities  would  be  without  analog  service.  Because  it  is  feasible  that  a  carrier  will  not  be  in  compliance  with  section  255,  we 
 conclude  that  it  was  appropriate  to  establish  a  transition  period  to  ensure  uninterrupted  access. 
 20.  We  also  reject  arguments  that  the  Commission  cannot  require  cellular  carriers  to  bear  the  burden  of  maintaining  a  specific  technology  at  its  competitive  disadvantage  while  similar  CMRS  providers  are 
 not  subject  to  the  same  requirement.  51  Both  AWS  and  Western  Wireless  assert  that  continuing  to  apply 


 wireless  mobile  technologies.  For  example,  T-  Mobiles  Side-  Kick  combines  a  cell  phone/  PDA  with  a  keyboard  for  email,  instant  messaging  and  web  browsing  functions.  Western  Wireless  Comments  at  6. 
 46  Western  Wireless  Comments  at  7;  AWS  Reply  Comments  at  4. 
 47  AWS  Petition  at  6;  Western  Wireless  Comments  at  7. 
 48  Report  and  Order,  17  FCC  Rcd  at  18418,  para.  30. 
 49  HAC  Report  and  Order,  18  FCC  Rcd  at  16763,  para.  22. 
 50  See  Joint  Telematics  Commenters  Comments  at  10. 
 51  AWS  Petition  at  7;  Western  Wireless  Comments  at  4. 
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 the  analog  requirement  is  violative  of  regulatory  principles  pursuant  to  section  332  because  the  analog  rule  requires  cellular  carriers  to  bear  a  regulatory  burden  that  is  not  placed  on  service  providers  in  similar 
 services.  52  AWS  and  Western  Wireless  argue  that  the  Commission  failed  to  offer  any  explanation  that  would  justify  treating  cellular  carriers  differently  from  other  wireless  carriers.  53 


 21.  The  Commission  has  previously  determined  that  while  regulatory  parity  is  a  significant  policy  that  can  yield  important  pro-  competitive  and  pro-  consumer  benefits,  parity  for  its  own  sake  is  not  required 
 by  any  provision  of  the  Communications  Act.  54  Instead,  section  332  empowers  the  Commission  to  make  a  distinction  between  different  CMRS  at  any  time  if  it  becomes  necessary  to  do  so.  55  Because  we  have 
 concluded  that  it  is  in  the  public  interest  to  ensure  that  persons  with  hearing  disabilities  and  emergency-only  carriers  have  access  to  mobile  telephony,  cellular  carriers,  as  a  consequence,  must  continue  to 
 provide  analog  service  as  cellular  is  the  only  service  in  which  every  carrier  has  analog  facilities. 
 4.  The  decision  to  establish  a  five-  year  transition  period  for  the  removal  of  the  analog  requirement  was  not  an  abuse  of  discretion. 


 22.  AWS  asserts  that,  while  it  does  not  dispute  that  the  Commission  has  wide  discretion  to  establish  the  effective  dates  for  the  elimination  of  its  rules,  the  decision  to  set  a  five-  year  transition  for  removal  of 
 the  analog  requirement  was  an  abuse  of  discretion.  56  AWS  argues  that  the  decision  to  select  five  years  as  the  transition  period  was  arbitrary  given  the  Commissions  own  findings  regarding  the  robust  nature  of 
 the  wireless  industry  and  the  significant  competitive  harms  and  costs  associated  with  maintaining  an  analog  network,  as  well  as  its  failure  to  explain  why  the  five-  year  transition  is  necessary  in  the  public 
 interest.  57  AWS  argues  that  at  the  very  least  the  Commission  must  reduce  the  transition  period  to  no  longer  than  30  months. 


 23.  We  reject  AWSs  argument  that  the  Commission  did  not  adequately  demonstrate  that  the  five-year  transition  period  is  in  the  public  interest,  and  we  disagree  with  arguments  that  a  five-  year  transition 
 period  is  an  inordinately  long  length  of  time.  As  AWS  notes,  the  Report  and  Order  stated  that  in  light  of  the  present  state  of  competition  in  the  wireless  industry,  the  analog  requirement  has  substantially  achieved 
 its  purpose  of  facilitating  competition  and  ensuring  nationwide  roaming.  58  Throughout  the  Report  and  Order,  however,  the  Commission  was  very  clear  in  stating  that,  although  there  is  a  variety  of  wireless 


 52  AWS  Petition  at  7-  9;  Western  Wireless  Comments  at  4-  5. 
 53  Western  Wireless  at  4. 
 54  See  Petition  of  the  People  of  the  State  of  California  and  the  Public  Utilities  Commission  of  the  State  of  California 
 to  Retain  Regulatory  Authority  Over  Intrastate  Cellular  Service  Rates,  PR  Docket  No.  94-  105,  Report  and  Order,  10  FCC  Rcd  7486,  7490,  para.  9  (1995). 


 55  42  U.  S.  C.    332(  c)(  1)(  a).  Implementation  of  Sections  3(  N)  and  332  of  the  Communications  Act  -  Regulatory 
 Treatment  of  Mobile  Services,  GN  Docket  No.  93-  252,  Second  Report  and  Order,  9  FCC  Rcd  1411,  1475,  para.  162  (1994);  see  also  Interconnection  and  Resale  Obligations  Pertaining  to  Commercial  Mobile  Radio  Services,  CC 


 Docket  No.  94-  54,  First  Report  and  Order,  11  FCC  Rcd  18455,  18464,  para.  15  (1996),  citing  H.  R.  Rep.  No.  103-  213,  103rd  Cong.,  1st  Sess.  491  (  Although  Section  332  of  the  Act  was  designed  to  eliminate  unwarranted 
 regulatory  disparities  among  different  classes  of  CMRS,  Congress  recognized  that  market  conditions  may  justify  differences  in  the  regulatory  treatment  of  some  providers  of  commercial  mobile  services,    and  it  therefore  permitted 
 us  some  degree  of  flexibility  to  determine  which  specific  regulations  should  be  applied  to  each  carrier").  56 
 AWS  Reply  Comments  at  7.  57 
 AWS  Reply  Comments  at  7.  58 
 Report  and  Order, 
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 technologies  and  services  available  to  most  consumers,  consumers  such  as  persons  with  hearing  disabilities  or  emergency-  only  users  may  not  have  readily  available  and  accessible  economic  or 
 technological  alternatives  to  analog  service.  59 
 24.  The  Commission  found  that,  given  the  scarcity  of  digital  devices  that  may  be  used  with  hearing  aids  as  well  as  the  fact  that  many  emergency-  only  callers  may  not  have  affordable  digital  alternatives, 
 such  consumers  could  be  left  without  access  to  mobile  telephony  services  if  the  analog  requirement  was  immediately  removed  and  carriers  are  able  to  shut  down  their  analog  facilities.  60  While  market 
 mechanisms  will,  for  the  most  part,  ensure  access  to  digital  services  for  most  consumers,  the  same  economic  incentives  do  not  exist  that  would  ensure  that  emergency-  only  consumers  and  persons  with 
 hearing  disabilities  have  adequate  access  to  digital  wireless  service  because  they  account  for  only  a  small  percentage  of  mobile  telephony  subscribers.  61  Because  emergency-  only  callers  and  persons  with  hearing 
 disabilities  must  currently  continue  to  rely  on  analog  technology  for  access  to  wireless  service,  the  Commission  found  that  the  record  in  the  proceeding  supported  a  transition  away  from,  rather  than 
 immediate  elimination  of,  the  analog  rule.  62 
 25.  In  setting  out  a  transition  period,  it  was  necessary  for  the  Commission  to  establish  a  time  frame  that  reflected  its  policy  goals  with  respect  to  the  analog  requirement;  that  is,  the  transition  period  should 
 be  long  enough  to  ensure  that  certain  categories  of  individuals  continue  to  have  access  to  wireless  telecommunications  until  digital  solutions  are  readily  available  and  accessible  to  them,  yet  be  limited  in 
 duration  in  recognition  that  the  analog  rule  is  no  longer  necessary  to  ensure  competition  and  nationwide  service  for  most  consumers.  Although  a  number  of  commenters  argued  that  the  analog  requirement 
 should  be  maintained  indefinitely  until  emergency-  only  callers  can  be  assured  of  service,  63  or  until  digital  technologies  are  fully  compatible  with  hearing  aid  devices,  64  the  Commission  concluded  that  a  transition 
 period  is  necessary  to  facilitate  the  orderly  migration  of  consumers  with  analog  handsets  to  digital  multimode  handsets.  65 


 26.  To  allay  concerns  by  certain  commenters  who  argued  that  the  analog  requirement  should  not  be  removed  until  access  to  digital  devices  is  assured  for  emergency-  only  users,  the  Commission  observed 
 that,  although  there  is  a  sizable  number  of  emergency-  only  consumers  using  analog  handsets,  it  could  be  assumed  that  the  total  number  of  such  users  will  decline  in  the  future,  as  digital  networks  expand  and 
 carriers  migrate  current  analog  customers  to  digital  services.  66  The  Commission  stated  that  unsubscribed  consumers  will  have  access  to  digital  equipment  because  digital  handsets  are  being  donated  along  with 
 analog  handsets.  67  The  Commission  found  that  it  is  reasonable  to  assume  that  the  number  of  digital  handsets  will  increase  over  time  because  the  number  of  digital  subscribers  is  approximately  three  times 
 that  of  analog  subscribers,  and  a  consumer  uses  a  handset  on  average  for  1.5  to  2.5  years  before  acquiring 


 59  See  e.  g.  Report  and  Order,  17  FCC  Rcd  at  18414,  para.  22. 
 60  Report  and  Order,  17  FCC  Rcd  at  18417-  18418,  para.  28;  id.  at  18414,  para.  22. 
 61  Id. 
 62  Id.  at  18418,  para.  28. 
 63  See  id.  at  18415,  para.  24. 
 64  See  id.  at  18418,  para.  29. 
 65  Id.  at  18415,  para.  24. 
 66  See  id.  at  18415,  para.  25. 
 67  Id. 
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 a  new  one.  68  The  Commission  concluded  that,  because  subscribers  turn  over  handsets  approximately  every  18  to  30  months,  the  five-  year  transition  period  should  be  sufficient  to  ensure  that  recipients  of 
 donated  mobile  telephones  have  access  to  digital  equipment.  69 
 27.  Similarly,  the  Commission  also  found  that  a  five-  year  period  provides  a  reasonable  time  frame  for  the  development  of  solutions  to  hearing  aid-  compatibility  issues.  70  The  progress  made  in  developing 
 digital  solutions  in  other  areas  71  caused  the  Commission  to  determine  that  the  industry  will  also  likely  be  able  to  develop  digital  solutions  for  wireless  telephones  within  a  five-  year  period.  72  In  response  to 
 concerns  that  the  five-  year  transition  period  would  expire  before  solutions  to  hearing  aid-  compatibility  problems  are  addressed,  the  Commission  stated  that  because  it  is  reserving  the  right  to  extend  the 
 transition  period  in  the  event  that  solutions  to  hearing  aid-  compatibility  problems  are  unsatisfactory,  73  the  industry  has  an  incentive  to  develop  digital  solutions  to  the  access  problem.  74 


 28.  Despite  the  rationales  set  out  in  the  Report  and  Order  supporting  a  five-  year  transition,  AWS  as  well  as  Western  Wireless  nonetheless  argue  that  there  is  simply  no  basis  to  extend  the  analog  requirement 
 for  another  five  years.  75  Both  AWS  and  Western  Wireless  claim  that  the  Commissions  statement  indicating  that,  on  average,  a  consumer  owns  a  handset  for  1.5  to  2.5  years  before  acquiring  a  new  one, 
 supports  at  most  a  transition  period  of  30  months.  76  AWS  and  Western  Wireless  both  argue  that,  given  the  robust  competition  and  the  rapid  rate  of  technological  development  that  exists  in  mobile  telephony,  it 
 is  unsupportable  to  impose  a  transition  period  that  is  more  than  twice  as  long  as  the  typical  lifespan  of  a  handset.  77 


 29.  AWS  and  Western  Wireless,  however,  place  too  much  emphasis  on  the  statement  that  the  typical  recycling  period  for  a  handset  is  18  to  30  months.  In  the  Report  and  Order,  the  Commission  sought  to 
 explain  that  it  was  unnecessary  to  retain  the  analog  requirement  indefinitely  despite  the  large  numbers  of  emergency-  only  callers  because  it  is  likely  that  digital  equipment  will  be  made  available  over  time.  The 
 Commission  surmised  that,  given  that  both  digital  and  analog  phones  are  being  donated,  that  digital 


 68  Id. 
 69  Id. 
 70  See  id.  at  18418,  para.  29. 
 71  Specifically,  the  Commission  cited  to  progress  made  by  the  industry  in  developing  digital  solutions  for  text 
 telephone,  or  TTY,  devices.  See  Revision  of  the  Commissions  Rules  to  Ensure  Compatibility  with  Enhanced  911  Emergency  Calling  Systems,  CC  Docket  No.  94-  102,  Report  and  Order  and  Further  Notice  of  Proposed 


 Rulemaking,  11  FCC  Rcd  18676,  18701  (1996);  see  Revision  of  the  Commissions  Rules  to  Ensure  Compatibility  with  Enhanced  911  Emergency  Calling  Systems,  CC  Docket  No.  94-  102,  Fourth  Report  and  Order,  15  FCC  Rcd 
 25216,  25217  at  para.  3  (2000).  72 
 Report  and  Order,  17  FCC  Rcd  at  18418,  para.  29.  73 
 As  noted,  in  order  to  monitor  the  adequacy  of  access  to  mobile  telephony  by  persons  with  hearing  disabilities  and  emergency-  only  consumers,  the  Commission  required  all  cellular  licensees  providing  nationwide  coverage  to  file 


 reports  prior  to  the  sunset  date.  If  the  reports  show  that  progress  in  providing  digital  alternatives  to  such  consumers  is  unsatisfactory,  the  Commission  has  the  option  to  initiate  a  proceeding  to  reinstate  the  analog  requirement.  See 
 Report  and  Order,  17  FCC  Rcd  at  18419,  paras.  31-  32.  74 
 Id.  at  18418,  para.  29.  75 
 AWS  Petition  at  4.  76 
 AWS  Petition  at  4-  5;  Western  Wireless  Comments  at  8-  9;  AWS  Reply  Comments  at  3-  4.  77 
 Id. 
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 subscribers  outnumber  analog  phone  subscribers,  and  that  there  is  a  rapid  turnover  rate  of  phones,  i.  e.  a  turnover  frequency  of  every  18-  30  months,  it  is  likely  that  a  sufficient  number  of  digital  phones  will  be 
 made  available  to  emergency-  only  consumers  by  the  end  of  the  five-  year  transition  period.  The  18-  30  month  period  relates  only  to  the  turnover  rate  of  a  phone.  It  was  not  intended  to  reflect  the  time  it  will 
 take  for  a  donated  digital  phone  to  get  into  the  hands  of  any  given  emergency-  only  consumer,  much  less  the  period  of  time  necessary  to  migrate  the  large  numbers  of  emergency-  only  callers  from  analog  service. 
 Moreover,  although  we  agree  that  there  is  indeed  robust  competition  in  the  wireless  telephony  marketplace,  we  reiterate  that  persons  with  hearing  disabilities  and  emergency-  only  consumers  do  not 
 benefit  in  large  part  from  such  competition. 
 30.  We  continue  to  conclude  that  five  years  is  a  reasonable  length  of  time  within  which  both  emergency-  only  users  and  persons  with  hearing  disabilities  will  likely  achieve  greater  access  to  digital 
 technologies.  As  noted  in  the  Report  and  Order,  in  some  geographic  areas  in  which  digital  coverage  is  currently  deficient,  a  five-  year  transition  will  provide  carriers  with  a  reasonable  length  of  time  to  enhance 
 coverage  before  removal  of  the  analog  requirement.  It  will  allow  for  the  continued  expansion  of  digital  networks  and  further  conversion  of  analog  networks  to  digital,  thereby  providing  for  a  more  extensive 
 network  of  digital  technologies  before  the  analog  requirement  is  removed.  78  Further,  a  five-  year  transition  period  will  provide  service  providers  an  appropriate  length  of  time  to  conduct  customer 
 outreach  in  order  to  educate  consumers  that  analog  services  may  be  discontinued  on  a  certain  date,  thereby  providing  consumers  with  time  to  migrate  from  analog  to  digital  handsets.  79 


 31.  Moreover,  the  Commission  recently  found  that  ensuring  greater  availability  of  hearing  aid-compatible  digital  phones  requires  at  least  a  five-  year  time  frame.  The  Commission  determined  in  the 
 HAC  Report  and  Order  that  it  is  feasible  for  certain  digital  wireless  phones  to  be  made  hearing  aid  compatible,  and  set  out  certain  performance  standards  as  well  as  a  schedule  for  implementation  of  those 
 requirements.  80  Specifically,  the  Commission  adopted  certain  performance  levels  set  forth  in  ANSI  C63.19  as  a  technical  standard  to  govern  digital  wireless  phone  compatibility  with  hearing  aids.  81  In  the 
 HAC  Report  and  Order,  the  Commission  required  that,  within  two  years,  each  digital  wireless  handset  manufacturer  and  each  carrier  providing  digital  wireless  services  must  make  commercially  available  at 
 least  two  handsets  for  each  interface  (CDMA,  TDMA,  GSM,  iDEN)  in  its  product  line  which  meet  the  ANSI  C63.19  performance  level  (i.  e.  U3)  for  acoustic  coupling.  82  By  the  end  of  three  years, 


 78  See  Report  and  Order,  17  FCC  Rcd  at  18411-  18412,  para  17;  id.  at  18413,  para.  20;  see  also  Sprint  Opposition  at 
 4.  79 
 See  id.  at  18415,  para.  24.  80 
 See  note  37  supra.  81 
 ANSI  C63.19  is  the  technical  standard  developed  by  Task  Group  C63.19  of  ANSI  63  (the  Accredited  Standards  Committee  on  Electromagnetic  Compatibility)  that  is  predictive  of  the  successful  use  of  digital  wireless  phones  with 


 hearing  aids.  As  noted,  hearing  aids  operate  in  either  acoustic  or  inductive  (i.  e.  telecoil)  coupling  modes.  See  supra  note  14.  With  respect  to  acoustic  coupling  mode,  ANSI  C63.  19  specifies  ratings  for  digital  wireless  phones,  U1 
 through  U4,  based  on  their  RF  emissions  levels,  with  U1  being  the  highest  emissions  and  U4  being  the  lowest  emissions.  See  HAC  Report  and  Order,  18  FCC  Rcd  at  16770,  para.  40.  The  standard  also  provides  a  methodology 
 for  rating  hearing  aids  from  U1  to  U4  based  on  their  immunity  to  interference,  with  U1  being  the  least  immune.  See  id.  As  to  telecoil  coupling  mode,  the  ANSI  standard  specifies  the  axial  field  and  radial  field  intensity  of  the  audio 
 signal's  magnetic  field  required  for  satisfactory  operation  of  digital  wireless  phones  with  hearing  aids.  The  standard  also  specifies  ratings  for  the  magnetic  field  quality  of  digital  wireless  phones  as  well  as  the  immunity  of  hearing  aids 
 to  undesired  magnetic  fields,  U1T  through  U4T.  See  id.  at  16770,  paras.  41-  42.  The  applicable  ANSI  C63.19  ratings  identified  for  acoustic  and  telecoil  coupling  mode  are  U3  and  U3T,  respectively. 
 82  Digital  wireless  service  providers  are  required  to  offer  consumers  at  least  two  compliant  phone  models  for  each 
 air  interface  they  offer,  but  not  necessarily  two  for  every  manufacturer  they  carry.  However,  the  Commission 
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 manufacturers  and  carriers  must  offer  at  least  two  digital  wireless  handsets  meeting  the  U3T  performance  level  of  providing  telecoil  coupling  capability  for  each  air  interface  offered.  83  Further,  in  order  to  ensure 
 consumers  continued  accessibility  and  a  range  of  product  options,  the  Commission  determined  that  50  percent  of  all  digital  wireless  phone  models  offered  by  manufacturers  and  service  providers  must  be 
 compliant  with  requirements  for  acoustic  coupling  by  February  18,  2008,  the  termination  date  of  the  five-year  transition  period.  84  The  Commission  determined  that  providing  such  compatibility  in  half  of  all 
 phone  models  by  the  end  of  the  five-  year  transition  is  a  feasible  interim  goal,  and  that  further  progress  would  be  made  over  time  to  make  even  more  digital  equipment  hearing  aid-  compatible.  85  The 
 Commission  concluded,  however,  that  requiring  more  (i.  e.  extend  the  requirements  to  all  digital  wireless  phones  in  the  near  term)  could  not  be  done  given  technical  and  resource  difficulties.  86  It  is  evident  then, 
 in  light  of  the  Commissions  findings  in  the  HAC  Report  and  Order,  that  at  least  a  five-  year  transition  period  is  required  to  provide  persons  with  hearing  disabilities  with  adequate  access  to  hearing  aid-compatible 
 digital  devices. 
 32.  Finally,  although  the  Commission  concluded  that  roaming  and  interoperability  concerns  advanced  by  small  and  regional  carriers  as  well  as  telematics  providers  87  were  not  sufficient  in  themselves  to  justify 
 an  indefinite  retention  of  the  analog  requirement,  88  the  Commission  nonetheless  determined  that  the  five- 


 provided  that,  within  two  years,  carriers  with  national  footprints  must  make  available  to  consumers  at  least  two  handset  models  for  each  air  interface  it  offers  to  provide  reduced  RF  emissions  (U3)  or  25  percent  of  the  total 
 number  of  phone  models  it  offers,  whichever  is  greater.  See  HAC  Report  and  Order,  18  FCC  Rcd  at  16780,  para.  65. 
 83  Id.  at  16781-  16782,  para.  71. 
 84  Id.  at  16782,  para.  72. 
 85  Id.  at  16782,  para.  73. 
 86  Id.  at  16783-  16784,  paras.  77-  80. 
 87  Telematics  providers  use  location  technology  and  wireless  communications  to  enhance  the  functionality  of  motor 
 vehicles,  and  to  provide  wireless  data  applications  in  vehicles.  Telematics  services  provide  a  number  of  automotive  and  mobile  applications,  including  safety  and  productivity  services. 


 88  See  Report  and  Order,  17  FCC  Rcd  at  18410-  18411,  para.  15;  id.  at  18412-  18413,  paras.  18-  19.  Small  and 
 regional  carriers  argued  that  the  elimination  of  the  analog  carriers  would  force  them  to  convert  to  digital  earlier  than  they  would  otherwise  in  order  to  ensure  seamless  service  to  their  customers  and  other  consumers,  or  that  such  a 


 transition  will  be  cost-  prohibitive  for  such  service  providers  or  their  customers.  Telematics  providers  asserted  that  the  elimination  of  the  rule  will  significantly  impair  their  ability  to  provide  service  because  these  systems  require 
 analog  technology  due  to  its  ubiquitous  coverage,  and  that  there  is  currently  no  other  widely-  deployed  technology  available  to  adequately  support  telematics  services.  See  Report  and  Order,  17  FCC  Rcd  at  18412,  para.  18.  For 
 example,  telematics  providers  argued  that  digital  technologies  are  not  yet  interoperable,  and  can  not  yet  transmit  both  voice  and  data  ---  an  important  telematics  feature  ---  on  the  same  call.  Id.  Moreover,  telematics  providers 
 argued  while  they  experience  the  same  difficulties  as  other  analog  reliant  provider,  they  encounter  additional  difficulties  because  the  development  cycle  (i.  e.  the  length  of  time  necessary  to  design,  test,  and  install  equipment  in 
 vehicles)  and  hardware  basis  of  telematics-  equipped  vehicles  prevents  telematics  services  from  quickly  and  easily  migrating  to  a  new  technology.  Id.  at  18412-  18413,  para.  18.  The  Commission  found,  however,  that  decisions 
 made  by  these  providers  ---  the  choice  to  switch  from  analog  to  digital  technology,  rate  at  which  the  transition  occurs,  development  cycles  of  vehicles,  choice  of  hardware  and  technology  platforms  ---  are  business  decisions  that 
 are  in  the  control  of  the  individual  provider  or,  in  the  case  of  a  telematics  provider,  by  the  original  equipment  manufacturer  with  whom  it  partners,  and  that  the  arguments  advanced  by  these  providers  did  not  constitute  sufficient 
 basis  to  warrant  the  indefinite  imposition  of  the  analog  standard.  Id.  at  18410-  18411,  para.  15;  id.  at  18413,  para.  19.  However,  because  paragraph  19  of  the  Report  and  Order  may  be  unclear,  we  clarify  that  while  the  public 
 interest  did  not  necessarily  require  the  Commission  to  take  certain  actions  in  the  Report  and  Order  regarding  the  provision  of  telematics  services,  the  Commission  did  find  it  appropriate  to  adopt  a  five-  year  sunset  period  in  order  to 
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 year  transition  period  would  be  useful  in  mitigating  any  significant  impacts  that  an  immediate  elimination  of  the  analog  requirement  might  cause.  89  Indeed,  although  the  concerns  expressed  by  regional  carriers 
 and  telematics  providers  derive  from  business  decisions  that  are  generally  within  the  control  of  the  individual  provider,  we  are  not  unmindful  of  the  potential  impacts  of  the  elimination  of  the  analog 
 requirement  on  these  service  providers  and  their  customers. 
 33.  In  this  regard,  we  continue  to  believe  that  the  five-  year  period  is  desirable  to  smooth  the  transition  from  analog  to  digital.  A  five-  year  time  frame  will  enable  regional  carriers  to  evaluate  their  current  and 
 future  technology  choices  as  well  as  those  of  their  current  roaming  partners,  and  will  provide  carriers  with  adequate  time  to  negotiate  new  contracts  where  needed  to  ensure  the  availability  of  roaming  services  to 
 their  customers.  As  noted  in  the  Report  and  Order,  demand  will  likely  increase  for  multimode/  multiband  handsets  such  that  by  the  end  of  the  five-  year  period,  these  handsets  should  be  widely  available  and 
 customers  may  choose  to  migrate  to  these  new  handsets  depending  on  their  roaming  needs.  90  Similarly,  a  five-  year  period  will  give  telematics  providers  time  to  partner  with  various  carriers  to  secure  service  on 
 the  carriers  digital  networks  and  develop  multimode  devices  that  will  provide  interoperability  and  facilitate  roaming  on  digital  networks.  Further,  given  the  public  safety  uses  of  many  telematics  devices,  91 
 the  five-  year  transition  will  allowed  continued  access  to  such  applications  for  a  reasonable  period  of  time  until  telematics  providers  are  able  to  switch  their  customers  over  to  digital  technology.  Moreover,  the 
 transition  period  will  provide  additional  time  for  other  CMRS  providers,  particularly  Personal  Communications  Service  (PCS)  carriers,  to  further  build  out  their  licensed  service  areas  thereby 
 enhancing  roaming  opportunities  for  all  consumers. 
 B.  It  is  appropriate  to  reconsider  Dobson  Communications  proposal  to  allow  cellular  licensees  to  extend,  on  a  secondary  basis,  into  adjacent  unserved  areas  of  less  than  50  square  miles 
 without  prior  Commission  approval. 
 34.  Background.  Our  cellular  unserved  area  rules  provide  that,  once  the  initial  licensee  of  a  market  completes  a  five-  year  build-  out  period,  the  portion  of  the  market  that  is  not  being  served  becomes 
 available  for  re-  licensing.  92  Under  the  unserved  area  rules,  carriers  are  only  licensed  for  areas  that  they  intend  to  serve,  and  applications  for  new  cellular  systems  must  propose  a  contiguous  cellular  geographical 


 mitigate  any  specific  impacts  that  might  affect  these  service  providers,  a  position  that  we  believe  is  consistent  with  the  public  interest. 
 89  See  Report  and  Order,  17  FCC  Rcd  at  18411,  para  17;  id.  at  18413,  para.  20. 
 90  Id. 
 91  For  example,  one  application  offered  by  certain  telematics  providers  is  automatic  crash  notification  (ACN)  which 
 automatically  call  the  appropriate  emergency  response  personnel.  Commenters  state  that,  according  to  one  study,  the  telematics  service  providers  call  was  the  first  notice  received  by  public  safety  answering  point  (PSAPs)  in 


 approximately  60%  of  incidents  and  that  telematics  services  are  receiving  and  requesting  emergency  assistance  for  more  than  900  airbag  deployments  per  month  and  for  more  than  6,  000  other  emergency  situations.  See  Joint 
 Telematics  Commenters  Comments  at  18.  92 
 47  C.  F.  R.    22.947.  Initial  licensees  in  a  market  are  given  five  years  in  which  to  construct  cell  sites  without  the  possibility  of  competing  applications  from  other  carriers.  The  unserved  area  process  begins  with  Phase  I,  which  is  a 


 one-  time,  one-  day  window  for  all  interested  parties  to  file  for  licenses  in  the  unserved  portions  of  the  market.  Unserved  areas  of  the  market  not  licensed  pursuant  to  Phase  I  become  available  for  licensing  through  Phase  II 
 procedures.  92  47  C.  F.  R.    22.  131(  b)(  3),  22.  949(  b).  A  Phase  II  application  is  granted  if  no  other  mutually  exclusive  application  is  filed  within  30  days  of  the  public  notice  of  the  initial  filing.  If  mutually  exclusive  applications  are 
 filed,  the  matter  is  resolved  via  competitive  bidding. 
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 service  area  of  at  least  50  square  miles.  93  Applications  of  an  entity  seeking  to  establish  a  new  cellular  system,  or  an  existing  licensee  requesting  an  authorization  that  would  expand  its  CGSA  or  that  would 
 produce  a  de  minimis  service  area  boundary  extension  into  unserved  area  must  be  placed  on  public  notice  for  thirty  days.  94 


 35.  In  the  Report  and  Order,  the  Commission  addressed  proposals  by  various  commenters  seeking  significant  revision  of  the  Commissions  unserved  area  rules.  95  Commenters  proposing  changes  to  the 
 rules  argued  that  the  unserved  area  licensing  scheme  must  be  amended  because  the  current  approach  is  administratively  inefficient,  delays  service  to  rural  areas  and  is  dissimilar  to  geographic  area  licensing.  96 
 A  number  of  commenters  recommended  that  the  Commission  abandon  the  per-  application  approach  of  the  unserved  areas  rules  in  favor  of  significant  changes  to  our  cellular  licensing  scheme.  Among  the 
 alternatives  submitted  included  a  proposal  by  Dobson  which  requested  that  the  Commission  permit  existing  licensees  to  cover  adjacent  unserved  areas  of  less  than  50  square  miles  on  a  secondary  basis 
 without  approval  from  the  Commission.  97  Dobson  asserted  that  the  rules  regarding  unserved  areas  between  a  cellular  licensees  CGSA  and  the  market  boundaries  or  CGSAs  of  neighboring  licensees 
 impose  filing  obligations  and  delays  in  the  introduction  of  new  coverage.  Dobson  asserted  that  if  it  seeks  to  make  engineering  modifications  to  its  CGSA-  defining  cell  sites  (i.  e.  sites  along  the  periphery  of  its 
 CGSA)  in  order  to  improve  existing  coverage  inside  the  CGSA,  it  must  file  a  major  modification  application  if  the  modifications  cause  extensions  into  unserved  area.  98  Dobson  argued  that  because  of  this 
 extension,  a  licensee  must  file  a  major  modification  application,  wait  approximately  60-  90  days  for  the  application  to  be  accepted  for  filing,  and  wait  another  30  days  once  the  public  notice  is  issued  before 
 grant  can  be  made.  99  Such  rules,  argued  Dobson  are  unnecessary  and  overly  burdensome. 
 36.  The  Commission  generally  rejected  the  proposals  submitted  by  Dobson  and  other  commenters,  stating  that  the  proposed  modifications  constituted  fundamental  changes  to  the  Commissions  cellular 
 unserved  licensing  framework,  and  as  such  were  beyond  the  scope  of  the  biennial  review.  100  The  Commission  observed  that  the  proposals  failed  to  address  key  issues,  101  or  would  increase  administrative 
 burdens.  The  Commission  also  noted  that,  under  the  current  process,  it  receives  approximately  40 


 93  47  C.  F.  R.    22.951. 
 94  47  C.  F.  R.    1.  929(  b). 
 95  Report  and  Order,  17  FCC  Rcd  at  18438-  18440. 
 96  Id.  at  18439,  para.  77. 
 97  Id.;  Dobson  Report  and  Order  Comments  at  4.  Among  the  other  proposals:  automatic  incorporation  of  areas  of  50 
 square  miles  or  less  into  the  CGSAs  of  the  first-  authorized  incumbent  adjoining  the  unserved  area,  and,  open  a  single  filing  window  resulting  in  either  the  incorporation  of  the  unserved  area  into  an  incumbent  carriers  CGSA,  or 


 an  overlay  auction  among  mutually  exclusive  applicants  for  areas  greater  than  50  square  miles,  Western  Wireless  Report  and  Order  Comments  at  6-  9;  removal  of  the  requirement  to  file  applications  in  cases  of  unserved  areas  of 
 less  than  50  square  miles  that  are  completely  surrounded  by  an  incumbents  CGSA,  AT&  T  Report  and  Order  Comments  at  5. 
 98  Dobson  Petition  at  2;  Dobson  Report  and  Order  Comments  at  3. 
 99  Dobson  Petition  at  2-  3;  Dobson  Report  and  Order  Comments  at  3. 
 100  Report  and  Order,  17  FCC  Rcd  at  18439,  para.  78. 
 101  For  example,  one  proposal  advocated  that  the  Commission  adopt  a  regulatory  approach  for  unserved  areas  that 
 closely  parallels  the  market-  based  licensing  used  for  PCS.  See  Western  Wireless  Report  and  Order  Comments  at  5-  6.  However,  the  proposal  did  not  address  related  issues  such  as  coverage  requirements,  or  operating  parameters. 
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 unserved  area  applications  each  month,  and  typically  processes  the  applications  within  45-  60  days.  102  Given  the  low  number  of  unserved  area  applications  that  are  filed  as  well  as  the  speed  with  which  such 
 applications  are  processed,  the  Commission  was  not  persuaded  that  the  burdens  imposed  by  a  major  overhaul  of  the  rules  would  be  offset  by  any  corresponding  benefits.  103 


 37.  In  response  to  the  Report  and  Order,  Dobson  requests  reconsideration  of  the  Commissions  decision  to  reject  its  proposal.  104  Dobson  argues  that  the  Commission  did  not  correctly  conduct  a  section 
 11  review  of  the  cellular  unserved  area  rules,  and  did  not  evaluate  whether  the  unserved  area  licensing  rules  remain  necessary.  105  Dobson  argues  that  nothing  in  the  Report  and  Order  suggests  that  the 
 Commission  specifically  examined  Dobsons  proposal  and  affirmatively  concluded  that  the  original  purposes  for  the  unserved  area  rules  could  not  be  achieved  by  permitting  extensions  into  unserved  area  on 
 a  secondary  basis.  106  Dobson  asserts  that  the  reasons  advanced  by  the  Commission  in  rejecting  the  unserved  area  proposals  appear  to  have  been  directed  at  those  advanced  by  other  commenters  rather  than 
 at  Dobsons  request.  107  Dobson  asserts  that  the  Commissions  failure  to  adopt  its  specific  proposal  without  advancing  any  reasons  for  doing  so  is  contrary  to  section  11  as  well  as  the  fundamental 
 requirements  of  reasoned  decision  making.  108  Further,  Dobson  argues  that,  consistent  with  the  Commissions  current  new  rural  service-  oriented  initiatives,  109  Dobsons  proposal  advances  and  improves 
 service  to  rural  areas  and  should  be  adopted  upon  reconsideration. 
 38.  Discussion.  While  we  continue  to  believe  that  major  changes  to  our  cellular  unserved  area  licensing  framework  are  beyond  the  scope  of  a  biennial  review  proceeding,  we  find  that  it  is  appropriate 
 to  reconsider  certain  aspects  of  Dobsons  request.  Unlike  proposals  advanced  by  other  commenters  which  sought  significant  revision  to  existing  rules  (for  example,  the  automatic  incorporation  of  unserved 
 areas  as  protected  CGSA  whether  or  not  actual  service  is  being  provided),  Dobson  proposes  only  slight  modification  to  our  unserved  area  rules.  We  conclude  that  adopting  Dobsons  proposal  that  we  allow 
 licensees  to  extend  into  adjacent  unserved  areas  of  less  than  50  square  miles  on  a  secondary  basis  without  prior  Commission  approval  will  provide  licensees  with  additional  flexibility  to  respond  to  operational 
 demands  in  a  manner  that  remains  consistent  with  our  unserved  area  rules.  Moreover,  we  believe  that  providing  licensees  with  this  added  flexibility  will  help  to  encourage  carriers  to  expand  into  rural  areas. 


 39.  With  respect  to  Dobsons  section  11  arguments,  we  do  not  agree  with  Dobsons  assertion  that  the  cellular  unserved  area  rules  are  no  longer  necessary.  As  noted,  the  basic  premise  of  cellular  service 
 licensing  is  that  carriers  are  only  licensed  and  provided  protection  from  incursions  from  other  licensees 


 102  Report  and  Order,  17  FCC  Rcd  at  18439,  para.  78. 
 103  Id. 
 104  Dobson  does  not  seek  reconsideration  of  proposals  raised  by  other  commenters  in  the  proceeding. 
 105  Dobson  Petition  at  5. 
 106  Dobson  Petition  at  2. 
 107  Dobson  Petition  at  5. 
 108  Dobson  Petition  at  6. 
 109  See  Facilitating  the  Provision  of  Spectrum-  Based  Services  to  Rural  Areas  and  Promoting  Opportunities  for  Rural 
 Telephone  Companies  to  Provide  Spectrum-  Based  Services,  WT  Docket  No.  02-  381,  2000  Biennial  Regulatory  Review  Spectrum  Aggregation  Limits  for  Commercial  Mobile  Radio  Services,  WT  Docket  No.  01-  14,  Increasing 


 Flexibility  to  Promote  Access  to  and  the  Efficient  and  Intensive  Use  of  Spectrum  and  the  Widespread  Deployment  of  Wireless  Services,  and  to  Facilitate  Capital  Formation,  WT  Docket  No.  03-  202,  Notice  of  Proposed  Rulemaking, 
 18  FCC  Rcd  20802  (2003). 
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 for  areas  that  they  actually  serve.  The  Commission  put  in  place  this  licensing  scheme  to  ensure  that  licensees  could  not  claim  as  protected  CGSA  areas  that  they  were  not  actually  serving  and  prevent  other 
 entities  from  providing  service  instead.  110  Because  a  licensees  protected  CGSA  is  defined  by  actual  coverage,  it  remains  necessary  for  licensees  to  file  for  approval  with  the  Commission  if  it  seeks  to  add 
 new  areas  to  its  protected  service  area.  111  Further,  as  noted  in  the  Report  and  Order,  proposals  seeking  to  significantly  overhaul,  or  remove  as  unnecessary,  the  unserved  area  rules  are  actually  advocating  a 
 fundamental  change  to  the  Commissions  cellular  service  licensing  model,  and,  as  such,  are  beyond  the  scope  of  a  biennial  review  proceeding.  112 


 40.  While  we  find  that  major  changes  to  our  cellular  licensing  framework  are  not  appropriate  here,  we  nevertheless  find  that  we  should  reconsider  and  adopt  Dobsons  proposal.  We  agree  with  Dobsons 
 argument  that  our  licensing  rules  may  be  burdensome  in  certain  cases,  such  as  where  design  changes  or  engineering  modifications  aimed  only  at  improving  coverage  within  a  licensees  existing  CGSA  results  in 
 an  extension  into  adjacent  unserved  area.  Although  we  disagree  with  Dobsons  assertion  that  there  is  an  inordinate  delay  in  processing  applications,  113  we  find  that  the  process  is  nevertheless  burdensome  if  the 
 licensee  is  not  actually  seeking  to  expand  its  service  area. 
 41.  We  find  that  Dobsons  proposal  offers  an  appropriate  solution.  Pursuant  to  Dobsons  proposal,  a  licensee  may  extend  into  adjacent  unserved  area  of  less  than  50  square  miles  without  prior  approval  by 
 the  Commission,  and  without  first  undergoing  the  major  modification  process.  We  conclude  that  this  proposal  provides  licensees  with  greater  flexibility  to  respond  to  operational  demands  yet  remains  within 
 the  framework  of  the  Commissions  existing  cellular  unserved  rules.  Any  extension  would  be  on  a  secondary  basis  only  and  will  not  become  part  of  the  licensees  CGSA  unless  the  licensee  files  a  major 
 modification  application.  114  (Although  we  are  permitting  carriers  to  bypass  the  formal  major  modification  filing  process,  we  will  require  carriers  to  notify  115  the  Commission  as  to  its  actual  service  contours  so  that 
 others  are  on  notice  of  their  presence.  116  )  If  another  licensee  is  granted  approval  to  incorporate  the  unserved  area  as  part  of  its  CGSA,  the  first  licensee  must  pull  back  its  coverage.  Because  any  extension 
 into  unserved  area  will  be  on  a  secondary  basis  only,  the  proposal  provides  licensees  with  operational  flexibility  while  also  being  consistent  with  existing  unserved  area  rules  because  the  licensee  does  not  seek 


 110  See  Amendment  of  Part  22  of  the  Commissions  Rules  to  Provide  for  Filing  and  Processing  of  Applications  for 
 Unserved  Areas  in  the  Cellular  Service  and  to  Modify  Other  Cellular  Rules,  CC  Docket  No.  90-  6,  Second  Report  and  Order,  7  FCC  Rcd  2449  (1992). 


 111  Although  Dobson  argues  that  the  requirement  to  file  applications  for  extensions  into  unserved  area  is  a  regulatory 
 burden  that  is  not  experienced  by  other  CMRS  providers,  we  note  that  other  CMRS  providers  are  licensed  under  a  geographic  market  licensing  framework  that  does  not  base  licensed  service  area  on  actual  coverage. 


 112  See  Report  and  Order,  17  FCC  Rcd  at  18439-  18440,  paras.  77-  82. 
 113  As  noted  in  the  Report  and  Order,  unserved  area  applications  are  generally  disposed  of  within  45-  60  days.  See 
 id.  at  18439,  para.  78.  114 
 A  cellular  licensee  is  entitled  to  protection  against  harmful  interference  and  subscriber  capture  only  within  its  defined  CGSA.  See  47  C.  F.  R.    22.  911(  d).  A  carrier  operating  on  a  secondary  basis  in  unserved  areas  would  not  be 


 entitled  to  such  protection  outside  of  its  CGSA.  Instead,  in  unserved  areas  in  which  it  is  operating  on  a  secondary  basis,  a  carrier  must  accept  interference  as  well  as  avoid  causing  interference  to  others,  and  must  avoid  capturing 
 customers  of  other  systems.  115 
 Licensees  may  file  such  notifications  as  minor  modifications  through  the  Commissions  Universal  Licensing  System  (ULS). 


 116  This  information  will  be  useful  to  other  licensees  with  respect  to  frequency  coordination  and  may  also  be  of  use 
 to  the  Commission  in  determining  market  conditions  and  service  availability. 
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 to  claim  the  extension  as  protected  CGSA.  117  Moreover,  we  believe  that  adopting  this  proposal  may  expedite  expansion  of  cellular  coverage  into  rural  areas.  By  providing  licensees  with  the  flexibility  to 
 extend  into  unserved  areas  without  first  having  to  go  through  the  major  modification  filing  process,  we  believe  that  licensees  will  be  more  likely  to  extend  operations  into  rural  areas.  Accordingly,  we 
 reconsider  the  decision  in  the  Report  and  Order. 
 C.  The  Commission  appropriately  removed  section  22.919  which  set  out  electronic  serial  number  (ESN)  hardware  design  requirements. 


 42.  Background.  In  the  Report  and  Order,  the  Commission  removed  section  22.919  of  its  rules,  which  established  ESN  design  requirements  for  cellular  telephone  manufacturers.  118  An  ESN  is  a  number 
 that  uniquely  identifies  a  cellular  mobile  transmitter  to  a  cellular  system.  Former  section  22.919  required  that  each  cellular  mobile  unit  have  an  ESN  that  is  not  alterable,  transferable,  removable  or  otherwise  able 
 to  be  manipulated.  The  rule  also  required  that  equipment  be  designed  in  such  a  way  that  any  attempt  to  remove,  tamper  with,  or  change  the  ESN  chip  or  other  related  components  would  render  the  mobile 
 transmitter  inoperative.  119  This  rule  section  was  originally  promulgated  to  address  the  problem  of  cellular  cloning  fraud  that  was  prevalent  in  the  mid-  1990s,  and  which  resulted  in  millions  of  dollars  in  losses  to 
 the  cellular  industry.  120 
 43.  Over  the  years,  however,  other  measures  were  developed  to  combat  cloning  fraud.  As  noted  in  the  Report  and  Order,  among  the  anti-  fraud  measures  developed  by  the  industry  include  authentication,  121 
 radio  frequency  fingerprinting,  122  and  call  profiling.  123  Moreover,  Congress  enacted  the  Wireless  Telephone  Protection  Act  of  1998  (WTPA)  to  address  fraudulent  and  unauthorized  use  of  wireless 
 telecommunications  services.  124  Further,  because  the  rule  precluded  the  ESN  host  component  from  being 


 117  Western  Wireless  urges  us  to  permit  carriers  to  serve  the  same  area  on  a  primary  basis  subject  only  to  the  filing  of 
 a  minor  modification.  As  noted,  however,  we  find  that  carriers  must  file  for  approval  if  they  seek  to  claim  additional  area  as  CGSA. 


 118  See  Report  and  Order,  17  FCC  Rcd  at  18420-  18422,  paras.  34-  39.  The  former  rule  section  also  specified  certain 
 physical  design  and  firmware  programming  requirements.  119 
 The  design  requirement  that  the  ESN  be  made  unalterable  is  referred  to  as  hardened  ESN.  120 
 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  (1994);  Report  and  Order,  17  FCC  Rcd  at  18420,  para.  34. 


 Cloning  a  cellular  telephone  involves  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.  121 
 In  authentication,  a  series  of  encoded  passwords  are  sent  over  the  airwaves  between  the  cellular  handset  and  the  cellular  network  to  validate  a  customer  each  time  a  call  is  placed  or  received.  Because  the  authentication  key  is  not 


 transmitted,  it  can  not  be  intercepted  by  third  parties.  122 
 In  radio  frequency  fingerprinting,  a  mobile  handset  is  identified  by  its  unique  radio  transmission  characteristics  in  order  to  deter  unauthorized  use  with  other,  unauthorized  equipment. 


 123  Call  profiling  enables  carriers  to  monitor  for  unusual,  sudden  changes  in  calling  patterns. 
 124  18  U.  S.  C.  A.    1029.  The  WTPA  provides,  inter  alia,  that  an  individual  has  committed  fraud  if  he  or  she 
 knowingly  and  with  intent  to  defraud  uses,  produces,  traffics  in,  has  control  or  custody  of,  or  possesses  a 
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 transferred  or  removed,  the  ESN  rule  by  definition  prevented  the  use  of  smart  card  subscriber  identity  modules  125  in  AMPS-  compatible  cellular  telephones.  126  After  reviewing  the  original  purpose  of  the  rule, 
 the  advanced  fraud  control  technologies  measures  developed  to  combat  fraud  since  the  adoption  of  the  rule,  as  well  as  comments  submitted  in  the  proceeding,  the  Commission  concluded  that  the  ESN 
 requirements  were  no  longer  necessary  as  a  preventative  measure  against  cellular  cloning  fraud.  127  The  Commission  therefore  removed  section  22.919  of  its  rules. 


 44.  In  response,  two  entities  seek  reconsideration  of  the  decision  to  remove  the  ESN  rule.  Although  it  did  not  initially  submit  comments  on  the  matter,  AWS  now  argues  that  the  ESN  rule  remains  essential 
 to  fulfill  its  original  purpose  of  deterring  cloning  fraud  and  reducing  incentives  to  steal  handsets.  128  AWS  asserts  that  not  only  does  the  Commissions  removal  of  the  ESN  requirements  increase  the  carriers  risk 
 of  fraud,  it  could  also  make  wireless  subscribers  a  target  for  thieves  seeking  expensive  next  generation  handsets  for  resell.  AWS  also  argues  that  the  same  issues  are  present  in  technologies  other  than  analog. 
 Accordingly,  AWS  not  only  requests  that  the  Commission  reinstate  the  ESN  hardening  rule,  it  also  asks  the  Commission  to  extend  the  requirements  to  cover  all  CMRS  devices  regardless  of  technology  or 
 frequency  band.  129 
 45.  CTIA  also  asks  the  Commission  to  revisit  the  ESN  issue.  Unlike  AWS,  CTIA,  who  supported  the  removal  of  section  22.919,  does  not  request  that  the  Commission  reverse  its  decision  to  remove  the  ESN 
 requirement.  Instead,  CTIA  requests  that  the  Commission  remove  language  in  paragraph  39  of  the  Report  and  Order  that  stated  that  analog  cellular  cloning  by  legitimate  subscribers  would  no  longer  be  a  violation 
 of  the  Commissions  rules.  130  CTIA  argues  that  the  language  is  inconsistent  with  federal  law  and  Commission  policy  and  has  serious  consequences  with  respect  to  carrier  operations.  131 


 46.  Discussion.  We  continue  to  conclude  that  the  original  basis  for  establishing  the  hardened  ESN  design  requirements,  i.  e.  to  deter  cloning  and  fraud,  may  be  achieved  without  our  intervention  in  light  of 
 developments  in  federal  law  and  the  deployment  of  advanced  fraud  control  technologies.  We  continue  to  believe  that  it  is  unnecessary  to  mandate  detailed  hardware  design  requirements  given  the  success  the 
 wireless  industry  has  had  in  developing  other  more  effective  anti-  fraud  measures.  We  agree,  however,  that  the  language  in  paragraph  39  of  the  Report  and  Order  regarding  cloned  phones  may  have  had  an 


 telecommunications  instrument  that  has  been  modified  or  altered  to  obtain  unauthorized  use  of  telecommunications  services,  or  knowingly  uses,  produces,  traffics  in,  has  control  or  custody  of,  or  possesses  hardware  or  software, 
 knowing  it  has  been  configured  to  insert  or  modify  telecommunication  identifying  information  associated  with  or  contained  in  a  telecommunications  instrument  so  that  such  instrument  may  be  used  to  obtain  telecommunications 
 service  without  authorization.  18  U.  S.  C.  A.    1029(  a)(  7),  (a)(  9).  125 
 Smart  card  subscriber  identity  modules  are  tiny  cards  containing  an  embedded  electronic  chip  that  is  programmed  with  the  subscribers  identification,  billing  and  other  information.  Generally  tamper-  proof,  smart  cards  can  be 


 switched  from  one  mobile  telephone  to  another,  making  it  easy  to  change  from  one  system  to  another.  Smart  card  technology  protects  a  subscribers  identity  and  preference  from  theft  or  disclosure,  yet  is  easily  transferable  from 
 one  telephone  to  another.  126 
 See  Report  and  Order,  17  FCC  Rcd  at  18421,  para.  36;  see  also  NPRM,  16  FCC  Rcd  at  para.  36.  127 
 Report  and  Order,  17  FCC  Rcd  at  18421,  paras.  36-  37.  128 
 AWS  Petition  at  9-  10.  129 
 AWS  Petition  at  10.  130 
 CTIA  Petition  at  1.  131 
 CTIA  Petition  at  1-  2. 
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 unintended  affect.  Accordingly,  we  clarify  that  the  fraudulent  and  unauthorized  use  of  ESNs  remains  contrary  to  federal  law  and  Commission  policy. 
 47.  In  its  Petition  for  Reconsideration,  AWS  argues  that,  unless  each  mobile  has  a  unique,  factory-  set  ESN  that  cannot  be  manipulated  or  transferred  without  rendering  the  handset  inoperative,  stolen  handsets 
 can  be  re-  registered  on  a  carriers  network  under  a  new  name  without  detection.  132  AWS  observes  that,  with  hardened  ESN,  there  is  little  utility  in  a  stolen  handset  because  a  carrier  will  deactivate  it  once  a 
 customer  reports  it  missing,  or,  if  the  ESN  chip  is  tampered  with  or  removed,  the  phone  is  rendered  inoperative.  133  AWS  argues  that,  without  a  hardened  ESN  host  component,  the  value  or  utility  of  the 
 handset  increases  and  the  incentive  to  steal  handsets  will  grow,  134  particularly  so  as  wireless  devices  incorporate  more  features  and  become  more  expensive.  135  AWS  maintains  that  the  measures  cited  in  the 
 Report  and  Order  that  have  been  established  to  combat  cloning  fraud,  such  as  the  Wireless  Telephone  Protection  Act  of  1998  and  the  development  of  authentication  protocols,  would  do  little  to  deter  criminals 
 from  altering  ESNs  because  the  new  ESNs  could  not  be  associated  with  the  stolen  phones.  136  Moreover,  AWS  argues  that,  because  the  same  concerns  exists  for  handsets  using  technologies  other  than  analog,  the 
 Commission  should  require,  for  all  CMRS  handsets,  a  unique  identifier  that  cannot  be  tampered  with  without  disabling  the  phone.  137 


 48.  We  are  not  persuaded  by  arguments  that  we  must  continue  to  mandate  ESN  design  requirements  in  order  to  prevent  fraud.  138  We  prefer,  as  a  general  policy,  to  allow  market  forces  to  determine  technical 
 standards  wherever  possible,  and  to  avoid  mandating  detailed  hardware  design  requirements  for  telecommunications  equipment,  except  where  doing  so  is  necessary  to  achieve  a  specific  public  interest 
 goal.  139  Although  there  may  be  instances  in  which  we  conclude  that  it  is  necessary  to  establish  specific  design  requirements,  we  continue  to  find  that  mandating  ESN  design  specifications  is  no  longer  necessary 
 or  warranted  because  of  other  measures  that  the  wireless  industry  has  developed  to  accomplish  the  same  goal.  Moreover,  we  note  that  in  removing  the  ESN  requirements  from  its  rules,  the  Commission  was  not 
 precluding  equipment  manufacturers  from  continuing  to  produce  handsets  using  ESN  hardening.  Wireless  equipment  manufacturers  and  carriers  may  continue  to  utilize  hardened  ESN  as  a  fraud  deterrent 
 if  they  wish  to  do  so.  140 


 132  AWS  Petition  at  2. 
 133  AWS  Petition  at  10. 
 134  AWS  Petition  at  10-  11. 
 135  AWS  asserts  that  the  enhanced  utility  of  stolen  handsets  would  result  in  an  increase  in  the  illicit  secondary 
 market  for  handsets  as  well  as  make  wireless  customers  a  much  more  attractive  target  for  street  criminals.  AWS  Petition  at  11. 


 136  AWS  Petition  at  11. 
 137  See  AWS  Petition  at  10-  12.  As  an  example,  AWS  notes  that  in  accordance  with  GSM  industry  standards, 
 manufacturers  embed  a  unique  serial  number  in  all  1900  MHz  GSM  handsets  known  as  the  International  Mobile  Equipment  Identity  (IMEI).  AWS  states  that,  although  the  GSM  industry  standards  provide  that  the  IMEI  may  not 


 be  changed  after  the  mobiles  final  production  and  that  IMEI  must  be  resistant  to  tampering  by  any  means  (physical,  electrical,  or  by  software),  thieves  may  find  ways  to  change  handset  identifications. 
 138  See  generally  AWS  Petition  at  9-  15;  Western  Wireless  Comments  at  11-  13;  RCA  Comments  at  6  (arguing  that 
 small  carriers  do  not  have  the  resources  to  utilize  other  methods  of  fraud  prevention).  139 
 See  Report  and  Order,  17  FCC  Rcd  at  18421,  para.  35;  NPRM,  16  FCC  Rcd  11185,  para.  35.  140 
 We  are  not  persuaded  by  the  assertion  that  equipment  manufacturers  will  have  no  incentive  to  produce  handsets  with  ESN  hardening  in  the  absence  of  section  22.  919.  We  find  it  unlikely,  given  the  tremendous  resources  that  are 
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 49.  We  also  decline  to  mandate  specific  design  requirements  for  non-  cellular  CMRS  for  the  same  reasons.  We  do  not  currently  impose  such  anti-  fraud  measures  in  our  rules  affecting  other  CMRS 
 services,  and,  we  are  not  aware  that  the  industry  has  had  problems  with  its  fraud  prevention  efforts  in  the  absence  of  Commission  rules  requiring  that  equipment  manufacturers  design  handsets  to  become 
 inoperable  if  tampered  with.  It  appears  that  the  wireless  industry  has  been  successful  thus  far  in  developing  and  implementing  fraud  control  measures  without  our  involvement.  There  is  nothing  in  the 
 record  that  leads  us  to  conclude  that  it  is  necessary  to  begin  imposing  specific  design  standards  at  this  juncture.  141 


 50.  While  we  find  that  the  decision  to  eliminate  the  ESN  design  requirements  was  appropriate,  we  agree  with  CTIA  that  it  is  necessary  to  clarify  language  in  paragraph  39  of  the  Report  and  Order 
 regarding  the  use  of  cellular  cloning  by  legitimate  subscribers.  The  Report  and  Order  provided  that  in  the  absence  of  section  22.919,  the  cloning  of  phones  by  legitimate  subscribers  is  not  a  violation  of  the 
 Commissions  rules  but  is  instead  a  contractual  matter  to  be  judged  according  to  the  terms  of  the  applicable  contract.  142  CTIA  argues  that  paragraph  39  should  be  reconsidered  for  a  variety  of  reasons. 
 For  example,  CTIA  argues  that  this  language  conflicts  with  the  WTPA  by  allowing  those  engaging  in  cloning  to  claim  that  they  are  acting  consistent  with  Commission  policy.  143  Further,  CTIA  asserts  that, 
 with  respect  to  cloned  mobile  stations,  cellular  carriers  will  not  be  able  to  exercise  the  effective  operational  control  required  by  section  22.927  of  the  Commissions  rules  because  carriers  will  not  be 
 able  to  distinguish  one  mobile  station  from  the  other.  This  inability  to  distinguish  between  the  phones  creates  serious  operational  difficulties  in  the  set  up  and  delivery  of  calls  simultaneously  initiated  by 
 cloned  phones.  144  CTIA  states  that  the  Report  and  Order  language  may  encourage  entities  not  affiliated  with  carriers  to  offer  cloning  service  to  the  carriers  subscribers,  thereby  leading  to  a  panoply  of 
 operational  problems:  misdirected  incoming  calls,  the  inability  to  make  simultaneous  calls  on  handsets  with  the  same  MIN/  ESN,  fraud  losses  from  cloned  devices  not  under  the  control  of  the  subscriber  as  well 
 as  denial  of  service  by  the  subscribers  own  carrier  when  the  carriers  anti-  fraud  software  is  triggered  by  the  cloned  handsets.  145  Moreover,  CTIA  argues  that  the  use  of  cloned  handsets  will  thwart  PSAP  call- 


 expended  by  the  wireless  industry  to  develop  and  implement  anti-  fraud  measures,  that  equipment  manufacturers  will  seek  to  design  and  configure  their  products  in  such  a  way  that  will,  if  AWS  is  correct,  allow  criminals  to  easily 
 defeat  all  other  anti-  fraud  safeguards,  and  we  find  it  unlikely  that  a  manufacturer  would  be  successful  in  marketing  such  devices.  See  Western  Wireless  Comments  at  12,  n.  46. 
 141  AWS  Petition  at  14.  AWS  also  notes  that  imposing  such  design  requirements  with  respect  to  non-  cellular  CMRS 
 would  further  the  regulatory  goal  of  encouraging  growth  and  innovation  in  wireless  services.  AWS  Petition  at  14.  AWS  states  that  the  ability  to  use  the  IMEI  as  an  identifier  for  wireless  devices  would  alleviate  problems 


 encountered  in  attempting  to  develop  third  generation  applications  using  transitory  device  identifiers  such  as  dynamic  IP  addresses  or  subscriber  telephone  numbers.  AWS  states  that  if  the  identifier  is  subject  to  change  when 
 the  device  registers  on  the  mobile  network,  then  the  application  generally  will  not  function  properly.  AWS  argues  that  unless  and  until  the  IMEI  can  be  trusted  as  a  unique,  tamper-  proof  identity  element,  the  wireless  industry  will 
 avoid  developing  new  wireless  applications  around  it.  We  decline  to  impose  hardware  design  standards  for  this  reason.  Again,  our  policy  is  to  allow  market  forces  to  determine  technical  standards  wherever  possible,  absent  a 
 public  interest  reason  to  the  contrary.  We  do  not  find  it  necessary  or  desirable  to  impose  a  technical  standard  simply  to  encourage  the  wireless  industry  to  develop  new  applications. 
 142  See  Report  and  Order,  18  FCC  Rcd.  at  18422,  para.  39. 
 143  For  example,  the  WTPA  requires  a  showing  of  intent  with  respect  to  certain  prohibited  acts.  CTIA  argues  that  a 
 person  possessing  or  using  a  cloned  phone  or  equipment  used  to  clone  phones  could  cite  to  the  Report  and  Order  as  permitting  cloning. 


 144  CTIA  Petition  at  5. 
 145  CTIA  Petition  at  6. 
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 back  attempts  because  cellular  networks  are  not  designed  to  complete  calls  to  multiple  devices  with  identical  MIN/  ESN  combinations.  146 
 51.  We  note  that  the  language  in  paragraph  39  was  directed  toward  legitimate  cell  phone  uses  as  agreed  to  by  carriers  and  their  subscribers.  The  intent  of  the  paragraph  was  to  allow  carriers,  in  the 
 absence  of  section  22.919,  to  examine  whether  there  are  permissible,  legitimate  uses  of  a  cloned  phone  by  its  own  subscribers,  and,  if  so,  to  control  such  use  contractually.  In  reviewing  this  matter,  however,  we 
 agree  that  the  language  in  paragraph  39  was  imprecise  and  may  be  misconstrued.  We  are  certainly  cognizant  of  the  operational  problems  that  could  occur  with  phones  having  the  same  ESN,  and  we 
 continue  to  believe  that  the  altering  of  cellular  phones  to  emulate  ESNs  without  receiving  the  permission  of  the  relevant  cellular  licensee  should  not  be  permitted.  Accordingly,  we  clarify  that  the  fraudulent  or 
 unauthorized  use  of  a  cloned  phone,  whether  by  a  third  party  or  a  legitimate  subscriber,  remains  prohibited  by  federal  law  and  by  Commission  policy. 


 D.  It  is  not  necessary  to  further  modify  the  Commissions  rules  regarding  emission  limits  for  cellular  and  PCS. 
 52.  Background.  In  the  Report  and  Order,  the  Commission  amended  sections  22.917  and  24.  238  of  its  rules,  which  specify  out-  of-  band  radio  frequency  emissions  limits  with  respect  to  cellular  and  PCS 
 operations.  147  The  Commission  sought  to  define  the  out-  of-  band  emission  limits  in  such  a  way  as  to  provide  an  adequate  measure  of  interference  protection  to  other  licensees  and  services  in  adjacent 
 spectrum,  while  also  allowing  licensees  the  flexibility  to  establish  a  different  limit  where  appropriate.  148  The  Commission  modified  its  rules  based  on  the  fact  that  it  is  pursuing  a  less  regulatory  approach  with 
 respect  to  its  services  and  seeks  to  allow  carriers  to  deploy  technologies  that  best  fit  the  needs  of  the  market.  The  Commission  specifically  sought  to  make  its  rules  more  technology-  neutral  in  order  to 
 encourage  greater  deployment  of  advanced  technologies.  149  In  adopting  these  changes,  the  Commission  pointed  out  that,  in  the  Wireless  Communications  Service  (WCS),  licensees  are  provided  certain 
 flexibility  with  respect  to  operations  at  the  edge  of  their  authorized  spectrum.  150  Because  the  Commission  seeks  to  ensure  regulatory  uniformity  where  possible,  the  Commission  found  it  appropriate  to  amend 
 sections  22.917  and  24.238  to  also  provide  similar  flexibility  to  cellular  and  PCS  licensees  regarding  emissions  limits.  Also,  the  specific  language  adopted  for  the  modified  rules  is  consistent  with 
 International  Telecommunications  Union  (ITU)  standards  for  emissions.  151  Therefore,  in  modifying  the  rules,  the  Commission  sought  to  provide  additional  flexibility  for  cellular  and  PCS  licensees,  harmonize 
 procedures  in  the  WCS,  PCS,  and  cellular  rules  as  well  as  make  the  Commissions  rules  regarding  out-  of-band  emissions  consistent  with  ITU  recommendations. 


 53.  Lucent  submitted  comments  with  respect  to  the  2002  Biennial  Regulatory  Review  proceeding,  arguing  that  further  modifications  to  the  Commission's  rules  regarding  emissions  limits  are  necessary.  152 


 146  CTIA  Petition  at  7. 
 147  Report  and  Order,  18  FCC  Rcd  at  18424-  18426,  paras.  43-  46.  The  emission  limits  are  used  to  minimize 
 interference  into  adjacent  spectrum.  148 
 Id.  at  para.  44.  149 
 Id.  at  18425,  para.  45.  150 
 Id.  at  18424,  para.  44.  151 
 The  ITU  is  an  arm  of  the  United  Nations  responsible  for  the  global  oversight  and  implementation  of  international  telecommunications  policy. 


 152  See  generally  Lucent  2002  Biennial  Review  Comments. 
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 Lucent  states  that  the  evolution  to  third  generation  systems  will  enhance  the  growth  of  spread  spectrum  technology  through  the  continued  deployment  of  CDMA2000  and  the  planned  use  of  Universal  Mobile 
 Telecommunications  Systems  (UMTS).  153  Lucent  argues  that  the  measurement  procedures  for  emissions  in  sections  22.  917(  b)  and  24.  238(  b),  as  modified  in  the  Report  and  Order,  subjects  carriers  that  employ 
 UMTS  to  more  stringent  requirements  than  carriers  that  deploy  CDMA2000.  154  Lucent  argues  that  because  a  UMTS  system  would  be  operating  on  a  wider  bandwidth  than  a  CDMA2000  system,  a  UMTS 
 carrier  may  not  operate  as  close  to  the  edge  of  its  assigned  spectrum  at  the  same  transmitting  power  as  a  CDMA2000  carrier.  Lucent  believes  that  emissions  from  either  CDMA2000  or  UMTS  spread  spectrum 
 systems  into  the  spectrum  immediately  outside  and  adjacent  to  the  frequency  block  will  be  similar,  and  that  the  emission  limitations  should  not  discriminate  between  these  spectrum  technologies. 


 54.  Discussion.  We  find  insufficient  basis  to  further  modify  section  22.  917  and  24.  238  as  requested  by  Lucent.  The  changes  made  to  sections  22.917  and  24.238  in  the  Report  and  Order  enable  licensees  to 
 operate  transmitters  on  frequencies  closer  to  the  edge  of  their  authorized  spectrum  than  full  compliance  with  sections  22.917  and  24.  238  would  normally  allow  by  modifying  how  out-  of-  band  emissions  are 
 measured.  Sections  22.917  and  24.238  affect  how  close  to  the  edge  of  its  authorized  spectrum  that  a  licensee  may  operate  as  a  function  of  the  emission  bandwidth  in  which  it  operates.  155  In  other  words,  the 
 emissions  standard  is  one  of  proportionality:  the  wider  the  bandwidth  used  by  a  licensee,  the  farther  the  licensee  must  operate  from  the  edge  of  its  assigned  spectrum  in  order  to  avoid  affecting  operations  in 
 adjacent  spectrum. 
 55.  Although  Lucent  argues  that  the  Commissions  rules  regarding  out-  of-  band  emissions  impose  greater  restrictions  on  UMTS  as  compared  with  CDMA2000,  sections  22.917  and  24.238  in  fact  apply  the 
 same  emissions  requirement  on  both  types  of  systems.  As  noted,  the  amount  of  bandwidth  used  influences  how  far  from  the  band  edge  a  provider  may  operate  without  causing  interference  to  adjacent 
 spectrum.  Because  UMTS  systems  have  greater  bandwidth  and  capacity  than  CDMA2000  systems,  a  UMTS  provider  must  operate  farther  from  its  assigned  band  edge  than  would  a  CDMA2000  licensee. 
 Allowing  UMTS  licensees  to  operate  as  proposed  by  Lucent  runs  the  risk  of  increasing  the  effect  of  the  UMTS  operations  on  licensees  operating  in  adjacent  spectrum.  Although  Lucent  states  that  emissions 


 153  CDMA2000  is  a  3G  wireless  standard  based  on  CDMA  (IS-  95);  UMTS,  also  known  as  wide-  band  CDMA  (W-CDMA), 
 is  a  3G  wireless  protocol  that  is  the  successor  to  GSM.  154 
 Lucent  2002  Biennial  Review  Comments  at  1-  2.  Specifically,  Lucent  states  that,  consistent  with  the  requirement  that  the  power  of  any  emission  outside  of  authorized  operating  frequency  ranges  must  be  attenuated  below  the 


 transmitting  power  (P)  by  a  factor  of  at  least  43  +  10  log(  P),  a  CDMA2000  system  would  be  allowed  emissions  of  -13  dBm  in  a  12.  5  KHz  band  (one  percent  of  the  CDMA2000  carrier  band  width  of  1.  25  MHz)  within  the  1  MHz 
 band  immediately  adjacent  to  the  frequency  block,  but  a  UMTS  system  would  be  required  to  meet  the  -13  dBm  objective  in  50  KHz  (one  percent  of  the  UMTS  carrier  band  width  of  5  MHz).  Lucent  asserts  that  this  results  in  a 
 requirement  that  is  approximately  6dB  more  stringent  for  UMTS  emissions.  Lucent  argues  that  because  a  resolution  bandwidth  of  12.  5  kHz  is  currently  allowed  and  is  appropriate  for  the  1.  25  MHz  CDMA  system,  it  should  also  be 
 appropriate  for  the  wider  bandwidth  UMTS  system  as  well.  Lucent  2002  Biennial  Review  Comments  at  2-  3.  155 
 In  order  to  determine  compliance  with  the  out-  of-  band  emission  limit,  sections  22.  917(  b)  and  24.  238(  b)  both  specify  that 


   in  the  1  MHz  bands  immediately  outside  and  adjacent  to  the  frequency  block  a  resolution  bandwidth  of  at  least  one  percent  of  the  emission  bandwidth  of  the  fundamental  emission  of  the  transmitter  may  be  employed. 
 A  narrower  resolution  bandwidth  is  permitted  in  all  cases  to  improve  measurement  accuracy  provided  the  measured  power  is  integrated  over  the  full  required  measurement  bandwidth  (i.  e.  100  kHz  or  1  percent  of 
 emission  bandwidth,  as  specified).  The  emission  bandwidth  is  defined  as  the  width  of  the  signal  between  two  points,  one  below  the  carrier  center  frequency  and  one  above  the  carrier  center  frequency,  outside  of  which  all 
 emissions  are  attenuated  at  least  26  dB  below  the  transmitter  power.  See  47  C.  F.  R.    22.  917(  b),  24.  238(  b). 
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 from  either  CDMA2000  or  UMTS  spread  spectrum  systems  into  the  spectrum  immediately  outside  and  adjacent  to  the  assigned  frequencies  will  be  similar,  it  does  not  provide  support  for  this  argument.  We 
 find  that  the  modifications  previously  made  to  sections  22.917  and  24.238  were  sufficient  to  provide  ample  flexibility  to  licensees,  while  also  treating  all  technologies  consistently,  and,  accordingly,  we 
 decline  to  further  modify  these  rules.  156 
 IV.  PROCEDURAL  MATTERS 
 A.  Supplemental  Regulatory  Flexibility  Act  Certification. 
 56.  The  Regulatory  Flexibility  Act  of  1980,  as  amended  (RFA)  157  requires  that  a  regulatory  flexibility  analysis  be  prepared  for  rulemaking  proceedings,  unless  the  agency  certifies  that  "the  rule  will  not  have  a 
 significant  economic  impact  on  a  substantial  number  of  small  entities."  158  The  RFA  generally  defines  "small  entity"  as  having  the  same  meaning  as  the  terms  "small  business,"  "small  organization,"  and  "small 
 governmental  jurisdiction."  159  In  addition,  the  term  "small  business"  has  the  same  meaning  as  the  term  "small  business  concern"  under  the  Small  Business  Act.  160  A  small  business  concern  is  one  which:  (1)  is 
 independently  owned  and  operated;  (2)  is  not  dominant  in  its  field  of  operation;  and  (3)  satisfies  any  additional  criteria  established  by  the  Small  Business  Administration.  As  required  by  the  RFA,  a  Final 
 Regulatory  Flexibility  Analysis  was  incorporated  in  the  Report  and  Order.  This  Supplemental  Final  Regulatory  Flexibility  Analysis  is  limited  to  matters  raised  on  reconsideration. 


 57.  In  this  Order  on  Reconsideration,  we  affirm  the  decision  to  establish  a  five-  year  sunset  period  for  the  analog  requirement.  We  also  affirm  the  decision  to  remove  the  rule  section  governing  electronic 
 serial  numbers  (ESNs)  in  cellular  telephones,  but  clarify  that  the  fraudulent  and  unauthorized  use  of  ESNs  remains  contrary  to  federal  law  and  Commission  policy.  Further,  we  reconsider  and  adopt  a  proposal  to 
 permit,  in  certain  circumstances,  cellular  carriers  to  extend  on  a  secondary  basis  into  neighboring  unserved  without  prior  Commission  approval.  We  also  decline  a  request  to  further  modify  our  rules 
 regarding  emissions  limitations. 


 156  Lucent  also  raised  this  issue  in  the  Commissions  proceeding  regarding  Advanced  Wireless  Services.  See  Service 
 Rules  for  Advanced  Wireless  Services  in  the  1.7  GHz  and  2.1  GHz  Bands,  WT  Docket  No.  02-  353,  Report  and  Order,  18  FCC  Rcd  25162  (2003).  In  that  proceeding  the  Commission  stated:  We  continue  to  believe  that  the 


 existing  rule,  as  adopted  in  the  [Report  and  Order],  provides  the  most  appropriate  way  of  measuring  out-  of-  band  emissions  into  adjacent  spectrum.  Our  goal  in  developing  out-  of-  band  emission  standards  is  to  provide  for  a  minimal 
 and  predictable  level  of  interference  into  adjacent  spectrum.  Our  existing  rule  serves  that  purpose.  The  modification  proposed  by  Lucent,  however,  could  enable  licensees  with  emission  bandwidth  greater  than  1.25  MHz  to  potentially 
 place  greater  amounts  of  energy  into  adjacent  bands.  We  therefore  decline  to  adopt  this  proposal  to  modify  our  rules    (citations  omitted).  Id.  at  para.  94. 
 157  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  Act  of  1996  (SBREFA). 


 158  5  U.  S.  C.    605(  b). 
 159  5  U.  S.  C.    601(  b). 
 160  5  U.  S.  C.  601(  3)  (incorporating  by  reference  the  definition  of  "small  business  concern"  in  the  Small  Business 
 Act,  15  U.  S.  C.    632).  Pursuant  to  5  U.  S.  C.    601(  3),  the  statutory  definition  of  a  small  business  applies  "unless  an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity 


 for  public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definitions(  s)  in  the  Federal  Register." 
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 58.  The  general  effect  of  this  decision  on  small  business  entities  will  be  to  allow  cellular  carriers  to  avoid  processing  delays  in  certain  situations.  Otherwise,  the  Order  on  Reconsideration  affirms  or 
 codifies  decisions  previously  made  in  the  Report  and  Order.  Accordingly,  we  certify  that  this  decision  will  not  have  a  significant  economic  impact  on  a  substantial  number  of  small  entities.  The  Commission 
 will  send  a  copy  of  the  Order  on  Reconsideration  including  a  copy  of  this  certification,  in  a  report  to  Congress  pursuant  to  the  Congressional  Review  Act  of  1996.  161  In  addition,  the  Order  on 
 Reconsideration  and  this  certification  will  be  sent  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration,  and  will  be  published  in  the  Federal  Register. 


 B.  Paperwork  Reduction  Act  Analysis. 
 59.  The  Order  on  Reconsideration  has  been  analyzed  with  respect  to  the  Paperwork  Reduction  Act  of  1995,  Pub.  L.  104-  13,  and  found  to  impose  new  or  modified  recordkeeping  requirements  or  burdens  on 
 the  public.  Implementation  of  these  new  or  modified  reporting  or  recordkeeping  requirements  will  be  subject  to  approval  by  the  Office  of  Management  and  Budget  (OMB)  and  will  go  into  effect  upon 
 publication  in  the  Federal  Register  of  OMB  approval. 
 V.  ORDERING  CLAUSES 
 60.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  sections  1-  4,  222,  227,  and  303(  r)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151-  154,  222  and  227;  and  section  1.108  of  the 
 Commission's  Rules,  47  C.  F.  R.    1.108,  this  Order  on  Reconsideration  in  WT  Docket  No.  01-  108  IS  ADOPTED. 


 61.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  section  405  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    405,  and  section  1.429  of  the  Commission's  rules,  47  C.  F.  R.    1.429,  the  petition 
 for  Limited  Reconsideration  filed  by  Dobson  Communications  Corporation,  Inc.,  is  GRANTED  to  the  extent  indicated  herein. 


 62.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  section  405  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    405,  and  section  1.429  of  the  Commission's  rules,  47  C.  F.  R.    1.429,  the  Petition 
 for  Reconsideration  filed  by  the  Cellular  Telecommunications  and  Internet  Association  is  GRANTED  to  the  extent  indicated  herein. 


 63.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  section  405  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    405,  and  section  1.429  of  the  Commission's  rules,  47  C.  F.  R.    1.429,  the  Petition 
 for  Reconsideration  filed  by  the  AT&  T  Wireless  Service,  Inc.,  is  DENIED. 
 FEDERAL  COMMUNICATIONS  COMMISSION 


 Marlene  H.  Dortch  Secretary 


 161  See  5  U.  S.  C.    801(  a)(  1)(  A). 
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 27 
 APPENDIX 
 List  of  Petitioners  and  Commenters 
 Petitions 
 AT&  T  Wireless  Services,  Inc.  (AWS)  Cellular  Telecommunications  &  Internet  Association  (CTIA) 
 Dobson  Communications  Corporation  (Dobson) 
 Comments/  Oppositions 
 American  Honda  Motor  Co.,  Inc.,  ATX  Technologies,  Inc.,  Deere  &  Company;  General  Motors  Corporation,  Mercedes-  Benz  USA,  LLC,  OnStar  Corporation,  Toyota  Motor  North  America, 
 Inc.,  Volkswagen  of  America,  Inc.  (Joint  Telematics  Commenters)  Rural  Cellular  Association  (RCA) 
 Self  Help  For  Hard  Of  Hearing  People  (SHHH)  Sprint  Corporation  (Sprint) 
 Telecommunications  For  The  Deaf,  Inc.  Western  Wireless  Corporation  (Western  Wireless) 


 Reply  Comments 
 AWS  Joint  Telematics  Commenters 


 Ex  Partes 
 AWS  Joint  Telematics  Commenters,  including  Sprint  and  RCA 
 OnStar  Corporation 
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 28 
 STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN 
 APPROVING  IN  PART  AND  CONCURRING  IN  PART 


 Re:  Year  2000  Biennial  Regulatory  Review    Amendment  of  Part  22  of  the  Commissions  Rules  To  Modify  or  Eliminate  Outdated  Rules  Affecting  the  Cellular  Radiotelephone  Service  and  other 
 Commercial  Mobile  Radio  Services,  Order  on  Reconsideration,  WT  Docket  No.  01-  108 
 I  approve  in  part  and  concur  in  part  for  the  reasons  stated  in  my  earlier  statement  in  this  proceeding.  See  Separate  Statement  of  Commissioner  Kevin  J.  Martin,  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,  Report  and  Order,  17 
 FCC  Rcd  1840  (2002).  Moreover,  as  I  have  explained,  I  disagree  with  the  standard  the  Commission  has  adopted  for  biennial  reviews  pursuant  to  Section  11  of  the  Communications  Act,  47  U.  S.  C.    161(  a).  See 
 generally  Separate  Statement  of  Commissioner  Kevin  J.  Martin,  2002  Biennial  Regulatory  Review,  Report,  18  FCC  Rcd  4726  (2003). 
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