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iii$//Second R&O,Alloc. of Spectrum Trans.from Govt. Use - 4660-4685 MHz, FCC 95-
319//$
$/Part 26 - General Wireless Communications Service/$
                                                                 FCC 95-319
                                Before the
                    FEDERAL COMMUNICATIONS COMMISSION
                             Washington,  D.C.
In the Matter of                             )
                                             )
Allocation of Spectrum Below         )     ET Docket No. 94-32
5 GHz Transferred from                       )
Federal Government Use                       )
                                             )
4660-4685 MHz                        )
SECOND REPORT AND OR   DER
Adopted:  July 31, 1995                 Released:  August 2, 1995
By the Commission:
                             TABLE OF CONTENTS
                                                      Paragraph
   I.  INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
  II.  BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
 III.  DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
            A.      Service Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
            B.      Use of Spectrum. . . . . . . . . . . . . . . . . . . . . . . . . . 29
            C.      Assignment Method. . . . . . . . . . . . . . . . . . . . . . . . . 38
            D.      Channelization; Aggregation. . . . . . . . . . . . . . . . . . . . 48
            E.      License Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
            F.      Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
            G.      Competitive Bidding Issues . . . . . . . . . . . . . . . . . . . . 61
            H.      Technical Rules. . . . . . . . . . . . . . . . . . . . . . . . . .111
            I.      License Term . . . . . . . . . . . . . . . . . . . . . . . . . . .114
            J.      Construction Requirements. . . . . . . . . . . . . . . . . . . . .116
            K.      Regulatory Status. . . . . . . . . . . . . . . . . . . . . . . . .122
            L.      Licensing Issues . . . . . . . . . . . . . . . . . . . . . . . . .127
IV.  ORDERING CLAUSES
 V.  PROCEDURAL MATTERS
                              I. INTRODUCTION
            1.  By this action, the Commission creates the General Wireless Communications
Service (GWCS), and adopts rules for licensing of this service in the 4660-4685 MHz band.
The 25 megahertz of spectrum in the 4660-4685 MHz band was transferred from Federal
Government to private sector use and was allocated to the Fixed and Mobile services in the
First Report and Order in this proceeding adopted February 7, 1995.  Designating this
spectrum for use by a new General Wireless Communications Service will benefit the public
by permitting and encouraging the introduction of new uses and the enhancement of existing
uses. These new and enhanced uses will create new jobs, foster economic growth, and
improve access to communications by industry and the American public.
                              II. BACKGROUND
            2.  The Omnibus Budget Reconciliation Act of 1993  (Reconciliation Act) required
that the Secretary of Commerce identify 200 megahertz of spectrum then allocated for use by
Federal Government agencies that could be transferred to private sector use. All of the 200
megahertz of spectrum recommended for reallocation had to be located below 5 gigahertz,
with at least 100 megahertz of this being below 3 gigahertz. The Reconciliation Act also
required the Secretary of Commerce to issue within six months of its enactment a report
making a preliminary identification of reallocable bands of frequencies and to issue within 18
months a final report recommending the spectrum for reallocation. In its report making a
preliminary identification of spectrum, the Department of Commerce was required to identify
at least 50 megahertz of spectrum for immediate reallocation. The remaining spectrum was
required to be made available over a ten-year period.
            3.  In accordance with the requirements of the Reconciliation Act, on February 10,
1994, the Department of Commerce released its report making a preliminary identification of
spectrum for reallocation (Preliminary Report). The frequency bands identified for
reallocation in the Preliminary Report are listed in Appendix A of the Preliminary Report.
Three of these frequency bands, 2390-2400 MHz, 2402-2417 MHz, and 4660-4685 MHz,
were identified for immediate reallocation and are now available for private sector use. The
Reconciliation Act also required that the Commission allocate, and propose regulations to
assign, the 50 megahertz of spectrum that is immediately available no later than 18 months
after its enactment (i.e., by February 10, 1995).
            4.  On May 4, 1994, the Commission released a Notice of Inquiry in this proceeding
seeking information on potential applications for the 50 megahertz of spectrum transferred
from Federal Government use. Following this, we released a Notice of Proposed Rule
Making  on November 8, 1994, proposing that all 50 megahertz of the transferred spectrum
be allocated to Fixed and Mobile services. The Commission subsequently adopted a First
Report and Order and Second Notice of Proposed Rule Making on February 7, 1995. In the
Order, the Commission allocated the 2390-2400 MHz band for use by unlicensed Personal
Communications Services (PCS) devices, provided for continued use of the 2402-2417 MHz
band by devices operating in accordance with Part 15 of our Rules, upgraded the allocation of
both of these bands for use by the Amateur service from secondary to primary, and allocated
the 4660-4685 MHz band for use by Fixed and Mobile services. The Second NPRM proposed
to designate the 4660-4685 MHz band for use by a new service, GWCS.
            5.  We received 13 comments and five reply comments in response to the Second
NPRM for use of the 4660-4685 MHz band. Several parties interested in providing
commercial services support our proposal for GWCS with licenses assigned by competitive
bidding. Parties opposing the designation of the 4660-4685 MHz spectrum for GWCS have
provided information regarding specific services that they believe should receive a specific
allocation in the 4 GHz band.
                            III. DISCUSSION
A.  Service Rules
            6.  Background.  In the Second NPRM in this proceeding, the Commission proposed
to create a new service, the General Wireless Communications Service (GWCS), for licensing
of the 4660-4685 MHz band. This new service would allow a licensee to provide a range of
Fixed or Mobile services. As stated in the Second NPRM, GWCS would provide licensees an
opportunity to use the spectrum flexibly in order to meet the needs of consumers. For
example, licensees could use this spectrum for dispatch service, point-to-point microwave,
aeronautical audio and visual service, wireless local loop services, and terrestrial fixed and
mobile auxiliary broadcast operations. Services that would not be within the proposed GWCS
category included Broadcast services, Radiolocation services, and Satellite services (including
the Mobile Satellite Service).
            7.  We proposed to establish the flexible GWCS service classification in order to
enhance the ability of service providers to meet a variety of user needs. We tentatively
concluded that a flexible allocation of this spectrum would likely generate the highest and best
use of the spectrum and ensure that it is used for services that are highly valued by licensees
and their customers, whether the ultimate use is for private or commercial use. We also
acknowledged the possibility that these needs might better be accommodated by rules that
prescribe the use of the 4660-4685 MHz frequency band only by specific services. Interested
parties who opposed our proposed establishment of a GWCS category were asked to suggest
ways in which use of the 4660-4685 MHz band could be limited to specific services. For
example, we sought comment on (1) what services should be treated as eligible; (2) whether
we should divide channels in the band in a manner which assigns Fixed services exclusively
to certain channels and Mobile services exclusively to other channels in the band; (3) whether
we should establish priorities for Fixed service or Mobile service use of some or all of the
channels established in the band; and (4) whether we should assign some or all channels
established in the band for exclusive use by private Fixed or Mobile Services. Proponents of
this alternative approach for designating services in the 4660-4685 MHz frequency band were
asked to provide facts and arguments supporting their view that such an approach would
better serve the Commission's objectives and the public interest than would the establishment
of GWCS, which would permit use of the spectrum for these as well as other applications.
            8.  Comments. The majority of commenters support the designation of the 4660-4685
MHz band for the flexible GWCS category. ATI, PCIA, Leaco, Bell Atlantic, WCAI, In-
Flight, and the SBA all expressed support for GWCS. WCAI applauds the proposal as
offering the greatest possible incentive and opportunity to develop and introduce innovative
service offerings based on emerging new technologies, and suggests that the Commission
adopt rules governing the 4660-4685 MHz band that generally permit the licensee flexibility
to use the spectrum as it sees fit within its geographic area, subject only to compliance with
interference protection requirements. WCAI further states that an open, flexible service
definition for the 4660-4685 MHz band will provide the most effective approach for achieving
universality, speed of deployment, diversity of services, and competitive delivery. The SBA
describes the allocation as "Solomonic," given the diversity of views in the record on the
appropriate use of the band. Bell Atlantic states that the proposed rules are consistent with
the goal of promoting innovation and the best use of the available spectrum. The flexible use
approach, allowing this spectrum to be used for a variety of current services and others not
yet even developed would, according to Bell Atlantic, result in more efficient use of spectrum
than a service-specific approach, which could cause the band to be under-utilized in some
areas where demand for a particular service might be less than the available spectrum.
            9.  Entities supporting the designation of GWCS in the 4660-4685 MHz band indicate
that it would allow use of the spectrum for a variety of purposes. ATI commends the GWCS
proposal as a rare, possibly unique, opportunity to allow wireless cable operators to provide
the return-channel capability they need to offer competitive, interactive information services.
Leaco indicates that the spectrum can be used for a variety of interactive video, voice, and
data services. Leaco opposes rules limiting use of the band only to specific services, urging
that the Commission allow the various GWCS services to develop before considering any
allocations for specific services. Bell Atlantic states that a flexible use approach would allow
use of this spectrum for wireless local loop services, interactive video services, dispatch
services, data services, and others not yet developed. In-Flight seeks to use the spectrum to
provide nationwide multi-channel live audio and video programming service to commercial
airline passengers. In earlier comments, Tadiran proposed that 4660-4685 MHz be used for
in-building communications.
            10.  Comments opposing the GWCS, and proposing the allocation of the spectrum to
specific services, were filed by API, APCO, and MSTV. API, representing the oil and gas
industry, proposes that the 4660-4685 MHz band be allocated for primary fixed use and
narrowband channels to replace, to a limited extent, loss of the narrowband allocation from
the 2 GHz bands to Personal Communications Services (PCS). API states that
telecommunications facilities such as point-to-point and point-to-multipoint systems in the
Private Operational-Fixed Microwave Service are used to support the search for, production,
safe pipeline transmission, processing, and delivery of oil and gas products. TIA and Alcatel
support API's proposal in reply comments. APCO also proposes designating the band for
specific uses, in particular urging that at least a portion of the band be designated for public
safety mobile and aeronautical video operations. APCO states that public safety agencies do
not currently have any dedicated channels for live "bird's eye view" video operations, and this
capability would be valuable in various emergency situations. MSTV contends that the 4660-
4685 MHz band could best be used to support advanced broadcast auxiliary operations. It
requests that the band be allocated to wideband advanced digital video services and terrestrial
fixed and mobile auxiliary operations. ATI proposes that the band be allocated in whole or
in part for use as a return channel by wireless cable providers.
            11.  Commenters opposing GWCS contend that GWCS is technically unsound and will
retard innovation in the use of this spectrum. MSTV argues that GWCS will be plagued by
interference problems caused from the operation of mutually-incompatible services.
Opposition commenters also contend that auctioning GWCS spectrum would be unlawful.
API, APCO, and MSTV argue that utilizing auctions involving a variety of fixed and mobile
services would be an improper means of allocating spectrum, because auctions are permitted
under Section 309(j) of the Act only to assign licenses among mutually exclusive applicants,
not to determine spectrum allocations. They also question whether auctions necessarily lead
to the "highest and best use" of the spectrum. API submits that only commercial users have
subscriber bases to meet proposed construction requirements and to provide funds for auction
bids, while private users would not ordinarily be able to compete. API asserts that the
Commission's proposal would force private users to rely on commercial providers who cannot
adequately meet the needs of private users during emergencies, and generally offer more
expensive and less suitable communications, or no service at all in some remote areas.
APCO contends that the use of auctions deprives state and local government public safety
agencies of any opportunity to obtain new radio spectrum for critical police, fire, emergency
medical, and other communications systems, because these agencies will never be able to
compete with for-profit commercial entities for spectrum.
            12.  Decision.  We will adopt the proposed General Wireless Communications Service
for the 4660-4685 MHz block, largely as proposed in the Second NPRM. Under GWCS,
licensees may provide any Fixed or Mobile service except Broadcast services, Radiolocation
services, and Satellite services, including the Mobile Satellite Service. This flexible, broadly
defined service should accommodate a wide variety of potential Fixed and Mobile service
uses, including all of those identified by the commenters, such as voice, video, and data
transmission, private microwave, broadcast auxiliary, and ground-to-air voice and video. The
flexibility of GWCS should also help make frequencies available for new technologies and
services, including those that have been mentioned in the current comments and those that
may be developed in the years ahead. In addition, as a service category that is not limited to
specific past and current uses, but is available for the implementation of future technologies,
we expect that GWCS will encourage research and investment to invent, develop, and market
new technologies, and spur their deployment to serve consumers. We are not persuaded by
arguments of some commenters that this spectrum would be better employed by assignments
to specific current and planned services. The flexible GWCS approach should permit a range
of qualified uses, including those preferred by each of the commenters, while permitting new
technologies and services to emerge and encouraging efficient use of this spectrum.
            13.  Under the Reconciliation Act, the spectrum reallocated from Federal Government
use is to be allocated and assigned to public use under a plan that makes frequencies available
for new technologies and services, and stimulates the development of such technologies. We
believe that the General Wireless Communications Service will foster the accomplishment of
these goals. The record in this proceeding demonstrates that there are several new
technologies and services that might make effective use of this spectrum. The flexibility of
GWCS permits a wide variety of such uses to be made of this spectrum, including all the
technologies and services proposed in the comments. Entities seeking to introduce these new
technologies and services would have the opportunity to obtain spectrum necessary to do so.
GWCS will give such new technologies the opportunity to prove themselves in competition
with others in the marketplace.
            14.  GWCS should also foster efficient use of the spectrum. Each licensee will have
the opportunity and the incentive to make efficient use of the spectrum licenses it obtains. A
licensee will not be constrained to employ the spectrum for a single use. Instead, the
flexibility of GWCS will encourage licensees to find ways to use the spectrum for the variety
of services allowed under the license, either for its private use or to meet current and future
needs of its subscribers. The most valuable uses of this spectrum also may differ in urban and
rural parts of the Nation, or in regions with different industries, and may change over time.
The flexibility of GWCS will permit licensees to adapt to these circumstances without the
need for Commission intervention, further contributing to efficient use.
            15.  Of equal importance, GWCS will accommodate and spur the development of new
technologies and services. The Fixed and Mobile allocation and the GWCS service category
will provide a block of spectrum that will accommodate a broad range of new technologies
and services, with a minimum of administrative restrictions and requirements. Inventors and
entrepreneurs seeking frequencies for future technologies and services will not need to bring
their proposals for use of this spectrum to the Commission and succeed in the process of
obtaining changes in allocation or assignment. Rather, they will have the opportunity to
negotiate with GWCS licensees to provide the new technology or service, based on the market
value of current uses. If a new technology or service can make better, more efficient use of
the spectrum, licensees are likely to migrate quickly to that use, especially in the competitive
market that we expect will emerge.
            16.  Commenters have not persuaded us that limiting assignments to any of their
specific proposed uses of the spectrum would better meet the goals of the Reconciliation Act,
the Communications Act, and the public interest. Restricting the 4660-4685 MHz spectrum to
defined uses or services, such as the specific uses proposed by various commenters, would
tend to reduce the attractiveness of this spectrum for new technologies and services.
Assignment of the block exclusively to broadcast auxiliary service (BAS), as requested by
MSTV, would preclude the use of the spectrum for the new services proposed in the
comments, and from any future alternative technology or use that might be developed.
Similarly, the request of API and other commenters to assign portions of this spectrum
exclusively to fixed microwave systems would have the effect of  barring its use for new
technologies and services. Moreover, the representations of API that additional spectrum is
needed to accommodate fixed microwave systems that will be displaced by PCS is not
persuasive. This topic was the focus of much consideration in our proceeding identifying
spectrum for emerging technologies  and a recent NTIA study projects that spectrum needs
for long haul fixed microwave systems will remain constant or decrease slowly, and that
spectrum above 15 GHz can accommodate users displaced by PCS. Commenters have
provided no substantive support to demonstrate that sufficient spectrum for relocation has not
been identified. We similarly find no evidentiary basis for API's claim that its proposed
allocation of the band to private fixed users is justified by any public safety needs that are not
adequately met by current allocations.
            17.  Moreover, as we discussed above, GWCS is flexible enough to permit these
specific uses, as well as the other uses identified in the comments. If GWCS spectrum
assignment applications submitted by qualified parties now seeking service-specific allocations
are not mutually exclusive, those parties will be granted licenses to provide the specific
services they wish to provide, as well as other permissible GWCS services. In the event the
spectrum is assigned by auction because of mutual exclusivity, they will also be able to
participate and seek to obtain licenses. Private users such as the oil and gas industry
companies API represents are often large, well-capitalized businesses. API presents no
persuasive evidence that private users will be unable to acquire spectrum by auction to satisfy
any unmet needs. For example, these companies can seek to win licenses at auction and share
or sell the spectrum they don't need for their own operations. There is also no reason to
expect that commercial providers will be unwilling to provide the services and facilities
private users require, including emergency services. If this spectrum is auctioned, we would
expect that winning bidders would compete eagerly to provide service to private users in a
cost-effective manner.
            18.  We also believe that any interference issues that may arise among GWCS
licensees can be satisfactorily resolved by general non-interference standards and technical
rules. We have eliminated many potential sources of unacceptable interference by barring use
of GWCS for Broadcast services, Radiolocation services, and Satellite services. Licensees for
GWCS should be able to provide other qualified Fixed and Mobile services without
unacceptable interference with other users of this or other spectrum. In addition, the grant of
each GWCS license will be made subject to the condition that the licensee not cause
unacceptable interference with any other licensee or service. Failure to abide by this condition
will render the licensee subject to fines, damages, or forfeiture of the license. We are adopting
technical rules similar to those in place for PCS. To the extent it proves necessary, we can
consider whether revisions to those rules are warranted after GWCS licenses are assigned.
            19.  We find no merit in arguments that the Fixed and Mobile allocation of this
spectrum itself, and establishment of the flexible GWCS designation for assigning this
spectrum, are unlawful. As we discussed in the First Report and Order, the Communications
Act authorizes and Commission precedent supports allocating frequencies to more than one
radiocommunication service, and assigning licenses for use by a broadly defined service. The
Commission is required by the National Telecommunications and Information Administration
Organization Act (NTIAO Act) to issue regulations to allocate the 50 megahertz of spectrum
that the Secretary of Commerce identified and recommended for immediate reallocation from
Federal Government use no later than 18 months from enactment of the Reconciliation Act.
For purposes of this portion of the NTIAO Act, the term "allocation" is defined as "an entry
in the National Table of Frequency Allocations of a given frequency band for the purpose of
its use by one or more radiocommunication services."  The Table of Frequency Allocations
often contains allocations to more than one type of service and such allocations are
specifically authorized in this instance by the NTIAO Act. Therefore, our allocation of the
4660-4685 MHz band to Fixed and Mobile Services is permissible and consistent with
established practice.
            20.  We believe that such an allocation is consistent with the Commission's obligations
under the Communications Act. The Commission has broad authority under the
Communications Act to allocate spectrum. Our authority derives from Section 303 of the
Communications Act, which provides:
            Except as otherwise provided in this Act, the Commission from time to time, as
            public convenience, interest, or necessity requires shall --
            (a) Classify radio stations;
            (b) Prescribe the nature of the service to be rendered by each class of licensed
            stations and each station within any class;
            (c) Assign bands of frequencies to the various classes of stations, and assign
            frequencies for each individual station . . . .
Nothing in the language of Section 303 establishes or suggests any limitation or restriction on
the Commission's discretion to prescribe the nature of the service to be rendered over radio
frequencies or authority to assign (or allocate) frequencies to the various classes of stations.
Moreover, nothing in the language of Section 303 or its legislative history suggests that the
Commission is prohibited from assigning spectrum to stations for more than one permissible
use, or otherwise limits the Commission's discretion in making spectrum allocations that it
deems to serve the public interest. With respect to allocation decisions, courts have accorded
"substantial deference" to Commission determinations.
            21.  Commission precedent also supports the permissibility of allocating spectrum in a
manner that allows for its use by a broadly defined service. In 1986, the Commission
allocated 2 megahertz of spectrum for a new General Purpose Mobile Service (GPMS)
accessible to all land mobile, maritime mobile, and aeronautical mobile uses. In that
instance, the Commission found that the GPMS allocation served the public interest. The
Commission rejected claims that such an allocation was unlawful, noting that "[n]othing in
Sections 303(a)-(c) suggests the Commission is not permitted to take into account marketplace
forces when exercising its spectrum allocation responsibilities under the public interest
standard."  Our current approach is also similar to that taken in our Emerging Technologies
proceeding, ET Docket No. 92-9. In that proceeding, the Commission allocated 220 megahertz
of spectrum to the Fixed and Mobile services and identified it for use by emerging
technologies. Later, we permitted PCS providers to use 140 megahertz of this spectrum. We
disagree with the contention made by some commenters that the current approach differs from
that applied in allocating spectrum for PCS. While we envision service rules designed to
accommodate a variety of uses, as with PCS, we conclude that the action we take in this
Order fulfills our responsibility to employ a regulatory structure that provides for use of the
spectrum that is in the public interest.
            22.  Moreover, our allocation and service designation decisions are not so broad as to
permit use of the 4660-4685 MHz band for any purpose. Allocation to the Fixed and Mobile
services and designation to GWCS will allow licensees to use the spectrum to provide any
Fixed service, including Aeronautical Fixed, fixed point-to-point, and fixed point-to-multipoint
systems, and any Mobile service, including Aeronautical mobile, Land mobile, or Maritime
mobile service as long as those services meet the interference rules established for GWCS.
The allocation does not, however, allow licensees to use the spectrum for Broadcast services,
Radiolocation services, or any Satellite services, including the Broadcast or Mobile Satellite
Service.
            23.  Footnote US245.  In the Second NPRM we noted that in addition to the Fixed
and Mobile service allocation we have adopted in the First Report and Order, 4660-4685 MHz
is allocated on a co-primary basis for non-government fixed-satellite service (FSS) space-to-
Earth links, with use limited to international inter-continental systems and subject to a case-
by-case electromagnetic analysis in accordance with US footnote 245 of the Table of
Frequency Allocations. In the NOI in this proceeding we had requested comment on the
necessity of maintaining the US245 restrictions on FSS use of this band, considering that it
would no longer be available for Federal Government use. We received no comments
addressing this issue in response to the NOI. To facilitate the shared use of this band, we
proposed in the Second NPRM to maintain the restrictions set forth in US footnote 245 on use
of 4660-4685 MHz and requested comments on this proposal. Commenters seeking the
elimination of this restriction were asked to  describe fully how FSS service use would be
compatible with Fixed and Mobile GWCS services.
            24.  We received only one comment regarding our proposal to retain US footnote 245
of the Table of Frequency Allocations, in order to facilitate shared use of this band. PCIA
states that the retention of footnote US 245, which restricts fixed-satellite space-to-Earth links,
is necessary to prevent interference to terrestrial based mobile services. We will adopt our
proposal in the Second NPRM and retain the restriction in this footnote.
            25.  Public Safety.  Under the NTIAO Act, the Commission's plan for allocating and
assigning former Federal Government spectrum must contain appropriate provisions to ensure
not only the availability of frequencies for new services, but also "the safety of life and
property in accordance with the policies of Section 1 of the [Communications Act]" In the
current record, APCO proposes designating at least a portion of the 4660-4685 MHz band for
public safety mobile and aeronautical video operations. APCO asserts that law enforcement
and other public safety agencies do not currently have any dedicated channels for live "bird's
eye view" video operations, which it says would be valuable for emergency situations.
            26.  We are firmly committed to ensuring that wireless and wired communications
resources are deployed to promote the safety of life and property, as well as to carry out the
other public interest goals of the Communications Act. The FCC and NTIA recently formed a
Public Safety Wireless Advisory Committee to prepare a report on operational, technical and
spectrum requirements of Federal, state and local public safety entities through the year
2010. This Committee is expected to begin its work in the very near future. The plan we are
developing for the 200 MHz or more of Federal Government spectrum scheduled to be
reallocated to non-Government use over the next 10 years will contain provisions to address
how the reallocated Federal Government spectrum can best be used to satisfy unmet national
safety needs. We are directed by statute to submit and implement this plan one year after
receipt of NTIA's Spectrum Reallocation Final Report, in early 1996.
            27.  The current record does not, however, provide a sound basis for concluding that
any or all of the 4660-4685 MHz band should be assigned as APCO suggests. In its
comments requesting a dedicated channel for public safety mobile and aeronautical video
operations, APCO recognizes that public safety video operations are now possible through
frequency sharing with amateurs and broadcasters. It also suggests that the public safety
needs it identifies may be met by priority access to some video channels. Moreover, it is
unclear whether these needs, to the extent they are not currently met and could not be met
using current broadcast auxiliary allocations, require nationwide channel assignments. APCO's
request appears to be based primarily on the needs of the Los Angeles County Sheriff's
Department. The extent of the need for public safety mobile and aeronautical video channels
in other parts of the Nation is unclear.
            28.  It is our hope and intent that the gaps we have identified in the current record
regarding the scope of public safety needs for additional wireless spectrum, and how those
needs might best and most efficiently be met, will spur public safety organizations and other
interested parties to work together to help us develop an effective plan for using wireless
communications to meet any unmet and future public safety needs. The FCC-NTIA Public
Safety Wireless Advisory Committee will offer one useful forum for such efforts. One of the
tasks undertaken by the advisory committee will be to identify spectrum for federal, state, and
local public safety use. As part of that process, the advisory committee may explore potential
public safety uses of the 4635-4660 MHz band. We expect to begin proceedings in the near
future to allocate and establish rules for assigning this band, which consists of reallocated
Federal Government spectrum which is scheduled to become available in January 1997. This
band is directly adjacent to the 4660-4685 MHz band we are designating to GWCS in this
Order and thus has essentially the same technical characteristics and potential uses.  The
record in the proceeding to allocate and assign the 4635-4660 MHz band should also provide
information useful for developing an overall plan for allocating and assigning the reallocated
Federal Government spectrum.
B.  Use of Spectrum
            29.  Background.  We expect that the General Wireless Communications Service will
benefit the public by providing licensees the opportunity to use the spectrum in a variety of
ways they find appropriate. In the Second NPRM, we tentatively concluded that it is likely
that these uses will principally involve the provision of subscriber-based services. Based on
this conclusion, we proposed to use competitive bidding as the assignment method for this
spectrum if mutually exclusive applications are filed. Section 309(j)(2)(A) of the
Communications Act provides that competitive bidding may be used by the Commission to
assign spectrum if the "principal use" of the spectrum involves, or is reasonably likely to
involve, the transmission or reception of communications signals to subscribers for
compensation.
            30. In the Competitive Bidding Second Report and Order, we established a general
framework for evaluating whether particular service classifications can be considered to be
used principally for the provision of subscriber-based services. We concluded therein that we
will determine principal use by comparing the amount of non-subscription use made by the
licensees in a service as a class with the amount of subscriber-based use "on the basis of
information throughput, time, or spectrum." We found that the competitive bidding
assignment method is permissible if "at least a majority of the use of a Commission regulated
service or class of service [is] for service to subscribers for compensation."  In arriving at
this approach, we rejected the notion that we must examine individual applications to
determine each licensee's intended use of the spectrum. In the Second NPRM we sought
comment regarding whether that general framework should be used with regard to the
assignment of spectrum in the 4660-4685 MHz band.
            31.  Based on the record, we tentatively concluded in the Second NPRM that the
principal use of this spectrum under our proposed General Wireless Communications Service
would involve, or was reasonably likely to involve, the receipt by the licensee of
compensation from subscribers in return for enabling those subscribers to receive or transmit
communications signals. These subscriber-based services include interactive wireless cable
and other wireless data, voice, and interactive services. A number of commenters also
proposed uses of this spectrum that would not be subscriber-based, such as for broadcast
auxiliary services. Accordingly, we requested further comment on this tentative conclusion.
Commenters addressing this issue were requested to describe fully the service that they
contemplated for the spectrum, whether the service would be Fixed or Mobile, and whether it
would be private (for a licensee's internal use), commercial (subscriber-based), or non-
common carriage but subscriber-based.
            32.  To help us make an accurate determination regarding the extent to which this
spectrum will be used for subscriber-based services, we also requested that commenters
describe their spectrum needs and provide an indication of the degree of competition expected
within a particular geographic service area. Commenters were also expected to describe as
accurately as possible the types of geographic areas in which they would anticipate operating
(e.g., rural, urban, top 50 markets), since the likelihood of subscriber use may vary among
geographic areas.
            33.  Comments.  Most commenters say that the principal use of this spectrum will be
subscription-based. A few of the commenters disagree with that conclusion. PCIA asserts that
there is no record in this proceeding to support the conclusion that the band would be used
primarily for subscriber-based services. MSTV concurs, and states that among potential uses
of GWCS only one, wireless cable, qualifies as a subscriber service. It claims there is no
evidence in the record to support the conclusion that a majority of the band's uses will be
subscriber-based, and that a mere assumption that this will be so does not satisfy the
"reasonable likelihood" standard. UTC also states that the only evidence in the record that
the principal use of the spectrum will be for subscriber-based services are the comments of
entities that expressed interest in using it for interactive video or wireless cable.
            34.  In contrast, Bell Atlantic and Leaco state that the band is likely to be used for
such consumer-oriented applications as interactive video, and voice and data services. ATI
also foresees the use of this band for subscriber-based wireless cable services. In-Flight's
proposed ground-to-air video and audio service would also apparently be provided to
subscribing airline passengers or the airlines themselves.
            35.  The only comments responding to our request for information regarding spectrum
needs, the degree of competition in geographic service areas, or the geographic areas in which
operations are likely to be established, were filed by Leaco and In-Flight. Leaco says it
operates in rural areas of New Mexico and Texas and could use all 25 megahertz of the block
to provide wireless voice, data, and video services in this region. It does not anticipate any
competing licensees in those areas. In-Flight states that it plans to seek a nationwide license
and indicates that other companies may compete in providing nationwide ground-to-air
services.
            36. Decision.  We believe it is likely that the principal use of this band will be for
subscription services. A majority of the commenters support this view and indicate that they
anticipate using GWCS spectrum for various types of wireless video, audio, and data
transmission services, wireless cable, or for ground-to-air video. All of these services are
likely to be subscriber-based and there may well be several entities seeking spectrum to
compete in providing these services. Entities wishing to provide subscriber-based services also
appear likely, at least in some cases, to seek nationwide licenses. For example, In-Flight states
that it requires a nationwide license to provide ground-to-air video. We agree with In-Flight's
assertion that it may well face competitors who also wish to provide services to subscribing
airlines and their passengers, and those competitors are also likely to seek nationwide licenses
for portions of the 4660--4685 MHz block.
            37.  By contrast, it is uncertain that non-subscriber-based users will seek or obtain
GWCS spectrum. APCO indicates that GWCS would not accommodate the video operations
of public safety agencies and others. These views reinforce the likelihood that GWCS
licensees are likely to provide primarily subscriber-based services. We reject the contention
from PCIA and MSTV that the evidence in the record is not sufficient to support a finding
that the principal use of a GWCS service in the 4660-4685 MHz band would be subscriber-
based services, and that GWCS would not be used primarily for such services. PCIA and
MSTV provide no basis for this conclusion and, as we have discussed, the record strongly
supports the conclusion that GWCS will principally be used for subscriber-based services such
as wireless cable, other voice, data, and video services, and ground-to-air video.
C.  Assignment Method
            38.  Background.  Sections 309(j)(1) and 309(j)(2) of the Communications Act
permit auctions where mutually exclusive applications for initial licenses or construction
permits are accepted for filing by the Commission and where the principal use of the
spectrum will involve or is reasonably likely to involve the receipt by the licensee of
compensation from subscribers in return for enabling those subscribers to receive or transmit
communications signals. As we explained above, we believe that the principal use of this
spectrum will meet these requirements. In addition, Section 309(j)(2)(B) requires the
Commission, before it may adopt the use of auctions to award licenses, to determine that use
of competitive bidding will promote the objectives described in Sections 1 and 309(j)(3) of
the Communications Act.
            39.  In the Second NPRM, we tentatively concluded that the use of competitive
bidding to assign licenses in the 4660-4685 MHz band would promote these objectives. We
explained that auctioning licenses in this band is likely to lead to more speedy initiation of
services than would use of comparative hearings, and that auctions will place licenses in the
hands of those who value the spectrum most highly. Thus, competitive bidding would
promote the availability, to all the people of the United States, of a rapid, efficient,
nationwide, and worldwide telecommunications system with adequate facilities at reasonable
charges, satisfying the objectives of Section 1 and Section 309(j)(3) of the Communications
Act.
            40.  We also requested comments on other possible assignment methods. For
example, if the principal use of the spectrum is found to be subscriber-based services, the only
alternative to competitive bidding would be comparative hearings. On the other hand, we
noted that if the principal use will not involve subscriber-based services, the Commission has
discretion in cases of mutually exclusive applications to employ either lotteries or comparative
hearings to assign licenses. We tentatively concluded that, in the latter case, a lottery system
would be preferable to comparative hearings because it would expedite the grant of licenses
and be capable of resulting in the provision of adequate service to users.
            41.   Comments.  We have already discussed comments addressing whether GWCS
meets the initial statutory requirements for assignment by auction. As we have explained, the
principal use of spectrum is reasonably likely to involve subscriber-based services, and thus
GWCS is eligible for assignment by competitive bidding as well as by comparative hearings,
in cases where mutually exclusive applications are filed. Most commenters apparently assume
that mutually exclusive applications will be filed and that auctions should be used to assign
licenses. None of the comments proposes the use of comparative hearings rather than
auctions in the event that mutually exclusive applications are filed for GWCS licenses. Leaco
states that it is not opposed to the competitive bidding process in general. UTC questions
whether auctions will lead to more rapid deployment of new technologies and services than
other licensing schemes, in view of the fact that the PCS systems that were licensed by
auction are not operational yet, and argues that the Interactive Video Data Service auction
indicates that auction winners do not necessarily have an incentive to deploy service or new
technology rapidly. UTC does not, however, appear to propose comparative hearings.
            42.  Decision.  We conclude that, in cases of mutually-exclusive applications, GWCS
spectrum should be assigned by auction, as we tentatively concluded in the Second NPRM.
Based on our experience with comparative hearings, lotteries, and auctions, we believe that
auctions will in this case achieve the statutory objectives of Section 309(j)(3) of the
Communications Act.
            43.  Section 309(j)(3) of the Communications Act sets forth Congress's four objectives
for competitive bidding, as follows:
            (A)  the development and rapid deployment of new technologies, products, and
            services for the benefit of the public, including those residing in rural areas, without
            administrative or judicial delays;
            (B)  promoting economic opportunity and competition and ensuring that new and
            innovative technologies are readily accessible to the American people by avoiding
            excessive concentration of licenses and by disseminating licenses among a wide variety
            of applicants, including small businesses, rural telephone companies, and businesses
            owned by members of minority groups and women;
            (C)  recovery for the public of a portion of the value of the public spectrum made
            available for commercial use and avoidance of unjust enrichment through the methods
            employed to award uses of that resource; and
            (D)  efficient and intensive use of the electromagnetic spectrum.
            44.  We believe that using a system of competitive bidding for assignments in the
4660-4685 MHz band will promote these four objectives. First, our experience with the use of
auctions to award licenses to provide both narrowband and broadband PCS demonstrates that
auctions will, more quickly than other licensing schemes, lead to the development and rapid
deployment of new technologies, products, and services, thus satisfying the objective
expressed in Section 309(j)(3)(A). UTC's suggestion that the Commission has no experience
to declare that auctions will lead to more rapid deployment of service or technology, because
PCS systems are not operational yet, ignores the  advantages of auctions over comparative
hearings and lotteries. The licensing  of PCS has proceeded far more rapidly than would have
been the case if we had used comparative hearings or lotteries. We expect that an auction of
GWCS spectrum will produce similar benefits in assigning spectrum to qualified licensees as
quickly as possible.
            45.  Second, we have in this Order adopted competitive bidding rules that will advance
the objectives of Section 309(j)(3)(B) relating to the promotion of economic opportunity and
the dissemination of licenses among a wide variety of applicants. These rules include the
channelization of the block, limitations on ownership, geographic license areas, and provisions
for partitioning of licenses.
            46.  Third, use of auctions to assign 4660-4685 MHz band licenses clearly advances
the goals of Section 309(j)(3)(C) by enabling us to recover for the public a portion of the
value of the public spectrum and avoid problems of unjust enrichment. Finally, as we stated
in the Competitive Bidding Second Report and Order, auctions tend "to reinforce the desire of
licensees to make efficient and intensive use of . . . spectrum. Auctions make explicit what
others are willing to pay to use the spectrum, and the licensees' need to recoup the out-of-
pocket expenditure for a license should provide additional motivation to get the most value
out of the spectrum."  We anticipate that the system of competitive bidding we are adopting
in this Order will lead to the issuance of licenses to those parties who value the licenses most
highly and who thus can be expected to make efficient and intensive use of the spectrum, as
contemplated by Section 309(j)(3)(D).
            47.  One important aspect of any assignment method is determining whether
applications are mutually exclusive. In the Second NPRM, we proposed to use a 30-day filing
window or other application cut-off method to allow for competing applications. We also
sought comment on whether some other type of filing system would be more appropriate for
determining whether initial applications are mutually exclusive. None of the commenters
addresses this issue, except UTC, or suggests alternatives to the proposed 30-day filing
window. UTC expresses no opinion as to the allocation of the 4660-4685 MHz band, but
contends that the GWCS proposal constitutes "allocation by auction," which it opposes. UTC
further contends that the proposed 30-day filing window represents one aspect of an attempt
to encourage the filing of mutually exclusive applications, a precondition of auctions, rather
than proposing solutions to avoid mutual exclusivity. We have discussed the rationale and
legal basis for allocating this spectrum to Fixed and Mobile services and for designating it for
the GWCS in the Second Notice and elsewhere in this Report and Order. UTC does not
propose any other application method or period, and we believe that the 30-day filing window
will provide a fair and reasonable opportunity for entities seeking to obtain GWCS licenses.
We will adopt the 30-day filing window as proposed for GWCS applications.
D. Channelization; Aggregation
            48.  Background.  In the Second NPRM, we proposed that the 4660-4685 MHz band
be licensed in five blocks, each of which would be 5 megahertz wide. We also proposed to
permit licensees to obtain multiple 5 megahertz blocks. Based on available information about
the likely services to be provided in this band, we tentatively concluded that no licensee
would need more than 15 megahertz in a single market area. Therefore, we proposed to limit
a single entity from obtaining more than three of these blocks in a single geographic licensing
area. We also proposed that, regardless of the specific service to be provided, this spectrum
will not count against the 45 megahertz spectrum cap that applies to certain commercial
mobile radio service (CMRS) licensees, noting that the equipment to provide service
competitive with CMRS is not now available for this higher frequency band, and that this
allocation for single, unpaired bands is not likely to be competitive with other two-way
CMRS services using paired frequency bands in the near future.
            49.  Comments.  Leaco, opposing our limitation proposal, states that a limit on the
amount of GWCS spectrum used for interactive video would be detrimental to rural providers
seeking to use the technology for the provision of interactive video services in rural areas.
Bell Atlantic also supports setting no limits on the number of blocks bidders may acquire. It
also agrees that this spectrum should not be counted against the 45 MHz spectrum cap that
applies to certain CMRS licensees. In contrast, ATI and WCAI support a 10 megahertz limit
that is stricter than the 15 megahertz limit proposed by the Commission. ATI and WCAI
contend that a 10 megahertz limit would assure that there are at least three wireless cable
service providers in each geographic area.
            50.  Decision.  We adopt the proposed channelization plan consisting of five 5
megahertz blocks. We also adopt the proposed aggregation limit of 15 megahertz of spectrum
that may be obtained by a single entity. This limit will ensure that at least two competing
entities will be able to provide GWCS-based services in each license area, helping achieve the
statutory goals of encouraging competition and avoiding excessive concentration of licenses.
At the same time, this 15 megahertz limit should permit licensees to acquire adequate
spectrum to provide effective services. The 10 MHz limit proposed by ATI and WCAI is
based on the assumption that only wireless cable providers will operate under GWCS and is,
therefore, overly restrictive. The 15 megahertz aggregation limit will permit this level of
competition while allowing flexibility that may be useful for some service plans, now and in
the future. We believe further that competition may well be possible in many rural areas.
Leaco presents no evidence to support a need for permitting the monopolization of this
spectrum by rural telephone companies, and we expect encouraging competition will be
beneficial, not detrimental to rural customers. We also adopt our tentative conclusion not to
count this spectrum against the 45 megahertz spectrum cap that applies to certain CMRS
licenses. As we indicated in the Second NPRM, we do not expect that it will be feasible to
offer GWCS services that are competitive with existing and planned CMRS services in the
near future. As wireless technology and services develop, however, we may consider revisions
to the CMRS spectrum cap, other spectrum aggregation rules, and standards for review of
mergers or acquisitions that may affect the concentration of spectrum, in order to ensure
vigorous competition in wireless services and to implement the Communications Act.
E.  License Areas
            51.  Background.  Under our Fixed and Mobile allocation, we proposed that all
licenses issued be based on 51 Major Trading Areas (MTA) and MTA-like areas. We also
expressed our concern regarding the importance of providing areas small enough to deploy
"niche" services, or services aimed at rural or relatively rural areas, while providing a large
enough area for those licensees that wish to provide wide-area or regional service. We
tentatively concluded that MTAs provide the best compromise in this situation. We did not
propose to restrict the number of MTAs in which a party may obtain a license. Thus, under
our proposal a licensee would be permitted to aggregate licenses to offer a regional or
nationwide service.
     52.  On the other hand, because the MTA may be too large for some licensees, we
proposed to permit licensees to lease the rights to operate a general wireless communication
system within portions of their authorized geographic service area or transfer a portion of
their license to partition their service area geographically, allowing another party to be
licensed in the partitioned area. As stated in the Second NPRM, such a transfer would be
subject to Commission approval as required by the Communications Act. In particular, we
requested that commenters address specific procedures for leasing or partitioning a geographic
area. For example, we asked whether the Commission should use partitioning procedures
similar to those used for cellular licenses and adopted for broadband PCS licenses. Entities
that believe that licensing should be based on areas other than MTAs were asked to support
their alternative proposal.
     53.  Comments:  RMC objects to the use of  MTA or BTA listings without a license
agreement. The majority of the GWCS supporters oppose licensing on an MTA basis and
propose smaller license regions. ATI opposes MTAs, and instead recommends the use of
smaller service areas such as Metropolitan Statistical Areas (MSAs) or Rural Service Areas
(RSAs), which it contends would better promote deployment of the "niche" services and
services aimed at rural or relatively rural areas. ATI supports the Commission's tentative
conclusion in the Second NPRM to use combinatorial bidding procedures and urges the
Commission to implement MSA and RSA service areas, or at most BTA service areas, along
with combinatorial bidding. ATI contends that use of anything larger than  BTA service areas
will defeat the Commission's objective of providing for a wide variety of usage within the
GWCS. PCIA believes that it may be more appropriate to use the Economic Areas (EAs)
developed by the Bureau of Economic Analysis (BEA), Department of Commerce. PCIA
states that EAs better approximate the natural radio usage patterns of users.
     54.  Leaco submits that under specific circumstances (i.e., in rural areas where
competition does not exist) market forces do not ensure that spectrum is awarded to those
who value it most. By auctioning large market areas, Leaco argues, the Commission lumps
rural areas, where auctions might not be required because of the lack of mutually exclusive
applications, with highly competitive urban areas where mutually exclusive applications are
sure to exist. Leaco suggests that licenses be awarded using cellular MSAs and RSAs. For
those providers serving larger areas, adjacent geographic areas could be consolidated. WCAI
also supports the use of MSA and RSAs, stating that before an MTA can be partitioned, it
must be acquired at auction. WCAI argues that it is asking too much of an entity that
contemplates providing a local service to expect it to make the financial commitment
necessary to acquire an MTA, even if that entity can then recoup part of its cost through
partitioning. It is more reasonable to provide for smaller licensing areas, while affording those
that desire to serve larger areas the opportunity to accumulate contiguous areas. While
deferring to the FCC's discretion to award spectrum on an MTA basis, the U.S. Small
Business Administration "generally supports awards of licenses on a Basic Trading Area
(BTA) basis because it requires less capital to obtain a license and construct an operational
system."
     55.  Only Bell Atlantic and In-Flight support MTAs. In reply comments, In-Flight
contends that partitioning will meet the objective that proponents of small service areas desire,
and that it would be inequitable to award GWCS licenses to serve smaller areas than MTAs
because those interested in applying for a nationwide license have no option but GWCS, while
those interested in mobile GWCS in rural areas have the option of applying for PCS
licenses. Bell Atlantic states that the Commission's proposal to base license areas on MTAs
has proved successful to date in the PCS arena and should be adopted here as well, along with
partitioning.
     56.  Decision. We will issue GWCS licenses based on EA-like geographic areas. Use
of the smaller EA areas, as created and maintained by the U.S. Department of Commerce's
Bureau of Economic Affairs, appears to be more consistent with the likely uses of GWCS
licenses than use of MTAs and will increase opportunities for small businesses and other
designated entities to obtain GWCS licenses. We agree with PCIA that the BEA Economic
Areas approximate the natural radio usage patterns of users, as the boundaries of those areas
are based on local area economic activity, local interindustry economic relationships, and
internal population movements such as commuting patterns. Use of EAs will in addition
address Leaco's concerns, facilitating the provision of wireless GWCS services in rural areas.
EA-based licenses also avoid the copyright problems and issues associated with MTAs. With
the 172 EAs, plus 3 EA-like areas for Guam and the Northern Marianas, Puerto Rico and the
United States Virgin Islands, and American Samoa, we will be awarding 875 licenses (five 5
MHz blocks in 175 EAs),  more than three times as many licenses as would have been
awarded using MTA-based regions. As the comments indicate, this change will allow more
opportunities for designated entities to obtain licenses, and at lower cost for each license. We
do not believe use of EAs will be unfair to licensees seeking to provide regional or
nationwide service. Those entities will have the opportunity to aggregate licenses to serve
those areas, and we are adopting bidding procedures that should be fair to small and large
bidders alike.
     57.  The complete list of EA and EA-like areas is shown in Appendix C. The five 5
MHz blocks will be designated as Blocks A through E:  Block A (4660-4665 MHz), Block B
(4665-4670 MHz), Block C (4670-4675 MHz) , Block D (4675-4680 MHz) and Block E
(4680-4685 MHz). This configuration of licenses should contribute to competition and
flexibility in use of these licenses.
F.  Eligibility
     58.  Background.  In the Second NPRM, we proposed, in the event we determined
that it is reasonably likely that GWCS services would be commercial services, that there be no
restrictions on eligibility to apply for licenses in this band other than those foreign ownership
restrictions that apply to CMRS and common carrier fixed system licensees, and the
restriction on foreign governments or their representatives related to the holding of  private
mobile radio service licenses. Although rural telephone companies would be eligible, we did
not propose to treat them differently than other applicants. We sought comment on these
proposals. We also requested that commenters seeking spectrum for non-commercial services
(either private mobile radio services or private fixed services) provide as complete information
as possible regarding eligibility restrictions that should apply.
     59.  Comments.  Bell Atlantic, the only commenter addressing these issues, supports
the proposal to impose no categorical restrictions on license eligibility in this band, reasoning
that an open policy will help ensure that the entire industry can apply its entrepreneurial
talents to the most innovative use of this spectrum.
     60.  Decision.  We adopt our proposed broad eligibility standards for GWCS
applications. Opening the GWCS market to a wide range of applicants will permit and
encourage entrepreneurial efforts to develop new technologies and services, while helping to
ensure the highest and best use of this spectrum.
G.  Competitive Bidding Issues
     61.  In the Second NPRM, we proposed to use auctions to issue licenses for GWCS
services in the 4660-4685 MHz band that meet the statutory auction criteria. We sought
comment on a wide range of issues related to competitive bidding.
     1.  Competitive Bidding Design
            a.  General Competitive Bidding Principles
     62.  The Competitive Bidding Second Report and Order, as modified by the
Competitive Bidding Reconsideration Order, established the criteria to be used in selecting
which auction design method to use for each particular auctionable service. Generally, we
concluded that awarding licenses to those parties who value them most highly will foster
Congress's policy objectives. In this regard, we noted that since a bidder's ability to introduce
valuable new services and to deploy them quickly, intensively, and efficiently increases the
value of a license to that bidder, an auction design that awards licenses to those bidders with
the greatest willingness to pay tends to promote the development and rapid deployment of
new services and the efficient and intensive use of the spectrum.
     63.  Based on this analysis, we concluded that, where the licenses to be auctioned are
interdependent and their value is expected to be high, simultaneous multiple round auctions
would best achieve the Commission's goals for competitive bidding. We also noted,
however, that simultaneous multiple round auctions may not be appropriate for all licenses.
For example, where there is less interdependence among licenses, there is less benefit to
auctioning them simultaneously. Similarly, we explained that, when the values of particular
licenses to be auctioned are low relative to the costs of conducting a simultaneous multiple
round auction, we may consider auction designs that are relatively simple, with low
administrative costs and minimal costs to the auction participants.
            b.  Competitive Bidding Methodology for Licenses in the 4660-4685 MHz Band
     64.  Background.  In the Second NPRM,  we proposed to use simultaneous multiple
round bidding for licensing of the proposed 5 MHz-wide MTA spectrum blocks. Based on the
record and our experience with the auctioning of other licenses, we expected that such
licenses would be of sufficient value to warrant the use of simultaneous auctions. We also
expressed the view that the value of these licenses for certain contemplated uses would be
significantly interdependent because of the desirability of aggregation across spectrum blocks
and geographic regions. We also tentatively proposed to auction all licenses simultaneously,
because of the relatively high value and significant interdependence of the licenses. We asked
commenters to address these tentative conclusions and whether any other competitive bidding
designs might be more appropriate for the licensing of this spectrum.
     65.  Comments. In-Flight, the only commenter addressing these issues, supports
awarding GWCS licenses in a single, simultaneous auction, in order to provide incentives for
companies desiring to provide nationwide service to apply for a GWCS license.
     66.  Decision.  We will adopt the tentative conclusion in the Second NPRM and
auction this spectrum by simultaneous multiple round bidding. This bidding methodology will
allow bidders to express the value of the interdependency among licenses better than if
licenses are auctioned separately. Moreover, simultaneous multiple round bidding will provide
bidders with the opportunity to pursue back-up strategies that enable them most efficiently to
obtain the license combinations which satisfy their service needs. Simultaneous multiple round
bidding is thus most likely to award GWCS licenses to bidders who value them the most
highly and who are most likely to deploy new technologies and services rapidly. We reserve
the discretion to hold one or more auctions. In addition, we reserve the discretion to test
alternative procedures. We will announce by Public Notice before each auction the
competitive bidding design to be employed in a particular auction.
            c.  Combinatorial Bidding
     67.  Combinatorial bidding is an auction method which allows applicants to bid for
multiple licenses as all-or-nothing packages, e.g., all licenses nationwide on a particular
spectrum block, with the licenses awarded as a package if the combinatorial bid is greater
than the sum of the high bids on the individual licenses in the package. In the Competitive
Bidding Second Report and Order, we recognized the potential benefits of combinatorial
bidding in facilitating aggregations, but expressed concern about the complexity and cost of
combinatorial bidding and the potential of such auctions to award licenses in combinations
even though they may be of greater value if awarded separately. The advantage of
combinatorial bidding is that it might be structured to award spectrum as either multiple or
aggregated packages, based on the most valued use. The disadvantages are the complexity and
cost of such bidding, and the potential that the procedures chosen will award licenses in
combinations even though they might be of greater value if awarded separately.
     68. In the Second NPRM, we sought comments on whether to allow combinatorial
bidding for GWCS services, because it may be necessary or at least highly desirable that
spectrum used for some services (e.g., air-ground service) be licensed to the same entity
nationwide. While geographic aggregation is generally facilitated in a simultaneous auction, a
business plan that depends critically on winning every regional license on a particular block
nationwide may be at a disadvantage absent combinatorial bidding even if it represents the
highest-valued use of the spectrum. We discussed in the Second NPRM methods to
overcome this difficulty, such as allowing the submission of  combinatorial bids for all local
licenses on the same spectrum blocks, but limiting combinatorial bids to nationwide
aggregations in order to address concerns that unlimited combinatorial bidding might prove
overly complex. We also discussed methods of addressing "free rider" situations that might
result in licenses being assigned to those who value the licenses most highly. We suggested,
for example, requiring a 5 percent bidding premium for a combinatorial, nationwide bid to be
accepted. We also requested comment on other auction designs, such as the "Electronic
Interactive Combinatorial Auction" (EICA) using the "Adaptive User Selection Mechanism"
(AUSM) as developed by Banks, Ledyard, and Porter and proposed by NTIA.
     69.   Comments.   In-Flight, the only commenter addressing these issues, supports
combinatorial bidding as necessary to allow participation by applicants desiring to provide a
nationwide service. In-Flight also proposes that any applicant requiring a nationwide license
be permitted to bid for a generic license, without specifying the channel block (or blocks) on
which service would be provided. Under this proposal, the applicant for a nationwide license
to operate on a single channel block would be the winning bidder if its bid was one of the top
five bids when judged against the nationwide aggregated bids for each of the five GWCS
channel blocks. In-Flight explains that this approach would reduce the risk that a nationwide
applicant would be subject to a anticompetitive blocking action by a competitor, who
otherwise might only need to bid on a single local license from the channels specified by the
nationwide applicant to succeed in blocking the applicant's bid.
     70. In-Flight also contends that this approach would reduce any "free rider" benefits
that otherwise might accrue to an applicant for a nationwide license under combinatorial
bidding, because other bidders would not know on which channel block (or blocks) the
combinatorial bidder would operate if it submits a winning bid.
     71.  Decision.  We do not adopt combinatorial bidding, but will establish reduced bid
withdrawal penalties for entities seeking nationwide licenses that should achieve results similar
to combinatorial bidding, with far less uncertainty and complexity. The record in this
proceeding does not, in our view, provide a sound basis for adopting combinatorial bidding.
The only comments on this issue were submitted as reply comments by In-Flight. These
comments do not address adequately the practical problems with implementing combinatorial
bidding for which we sought comment in the Second NPRM. The comments do not, for
example, address the issue of whether we should limit combinatorial bids to nationwide
licenses, in order to reduce the complexity of the auction, or whether a bidding premium
should be required of combinatorial bidders, or whether "stand-by queue" mechanisms should
be employed. Of greatest significance, the record does not provide an adequate basis for
concluding that any specific combinatorial bidding scheme would not be biased toward either
individual or combinatorial bidders, resulting in an inefficient outcome.
     72.   We also conclude that the increased risk a bidder faces in seeking to aggregate
individual EA licenses in order to offer a nationwide service can be addressed by reducing
the withdrawal penalty for the nationwide bidder. As we discussed in the Second NPRM,
geographic aggregation is generally facilitated in a simultaneous auction, but a bidder whose
business plan depends critically on winning every license on a particular block nationwide
may nonetheless be at a disadvantage. This problem could arise because of the increased risk
a nationwide aggregator may face if the total price of the aggregation rises above its value to
that bidder, but the bidder is not outbid on all its high bids. The nationwide aggregator may
then be forced either to withdraw its remaining high bids late in the auction, possibly
incurring a bid withdrawal penalty, or to pay too much for the remaining licenses. This risk
could discourage nationwide bidders from fully expressing the value of nationwide
aggregations, causing the spectrum to go to lower valued uses.
     73.   One way to address this concern is to modify auction rules to limit the risk
associated with bid withdrawal for those seeking nationwide aggregations, while still
discouraging insincere bidding. To accomplish this, we will limit the withdrawal penalty for
nationwide bidders to 5 percent of the aggregate withdrawn bids. The withdrawal penalty
would be calculated as the difference between the sum of the withdrawn bids and the sum of
the subsequent high bids on the withdrawn licenses up to a maximum of 5 percent of the
withdrawn bids. Calculating the penalty in this way will reduce the expected penalty
because bidders will "get credit" for the amounts by which subsequent high bids exceed the
prices at which bids are withdrawn. To discourage insincere bidding, nationwide bidders
would be required to declare the number of nationwide aggregations for which they will bid
and to be active in every round of bidding on sufficient licenses to create the number of
declared aggregations. We describe these and other  modifications to bid withdrawal penalties
and auction activity rules for nationwide aggregations in Appendix E. While these changes to
the withdrawal and activity rules must be somewhat complex to ensure a fair and efficient
auction, they should nonetheless be far simpler and easier to administer than combinatorial
bidding. This approach should also permit a speedier auction, especially because, as we
pointed out above, no detailed, practicable combinatorial bidding plan has been proposed or
developed in this proceeding.
            d.  Bidding Procedures
     74.  Background.  We also sought comment in the Second NPRM on bidding
procedures to be used in the 4660-4685 MHz  auctions, including bid increments, duration of
bidding rounds, stopping rules, and activity rules. Assuming that we would use simultaneous
multiple round auctions, we generally proposed to use the same or similar bidding procedures
to those used in simultaneous multiple round bidding for MTA-based PCS licenses. We
sought comment on whether any variations on these procedures should be adopted for licenses
in the 4660-4685 MHz band.
     75.  Comments; Decision.  None of the comments addresses these bidding procedures
issues, except with respect to designated entities, as we discuss in the next section of this
Order. Based upon our successful experience in auctioning PCS spectrum and the absence of
any dispute concerning the efficacy of the bidding procedures used there, we will adopt
essentially the same procedures for GWCS licenses. We will describe these procedures briefly
in this section of the Order. Additional, more detailed information on bidding procedures and
other auction information will be made public prior to the auction.
     2.  Procedural and Payment Issues
     76.  In the Competitive Bidding Second Report and Order, as modified by the
Competitive Bidding Reconsideration Order, the Commission established general procedural,
payment, and penalty rules for auctions, but also stated that such rules may be modified on a
service-specific basis. As discussed below, we will generally follow the procedural,
payment, and penalty rules established in Subpart Q of Part 1 of the Commission's Rules.
            a. Upfront Payments
     77.  As in the case of other auctionable services, we will  require participants in the
4660-4685 MHz auction to tender to the Commission, in advance of the auction, a substantial
upfront payment as a condition of bidding in order to ensure that only serious, qualified
bidders participate in auctions and to ensure payment of the penalty (discussed infra) in the
event of bid withdrawal or default. For GWCS, we adopt the standard upfront payment
formula of $0.02 per pop per MHz for the largest combination of MHz-pops a bidder
anticipates bidding on in any single round of bidding. We do not find it necessary to set a
minimum upfront payment for these licenses.
            b.  Down Payment and Full Payment for Licenses Awarded by Competitive
                    Bidding
     78.  The Competitive Bidding Second Report and Order generally required successful
bidders to tender a 20 percent down payment on their bids to discourage default between the
auction and licensing and to ensure payment of the penalty if such default occurs. We
concluded that a 20 percent down payment was appropriate to ensure that auction winners
have the necessary financial capabilities to complete payment for the license and to pay for
the costs of constructing a system, while at the same time not being so onerous as to hinder
growth and diminish access. We adopt this 20 percent downpayment requirement for 4660-
4685 MHz GWCS licenses. Winning bidders will thus be required to supplement their upfront
payments with a down payment sufficient to bring their total deposits up to 20 percent of
their winning bid(s).
            c.  Bid Withdrawal, Default, and Disqualification
     79.  We adopt the bid withdrawal, default, and disqualification rules for 4660-4685
MHz licensing based on the procedures established in our general competitive bidding rules.
Under these procedures, any bidder who withdraws a high bid during an auction before the
Commission declares bidding closed, or defaults by failing to remit the required down
payment within the prescribed time, will be required to reimburse the Commission in the
amount of the difference between its high bid and the amount of the winning bid the next
time the license is offered by the Commission, if the subsequent winning bid is lower. One
exception, as we discussed above, is that we will limit the bid withdrawal payments for
nationwide bidders to 5 percent of the withdrawn bids. See  75 supra. A defaulting auction
winner will be assessed an additional amount of three percent of the subsequent winning bid
or three percent of the amount of the defaulting bid, whichever is less. In the event that an
auction winner defaults or is otherwise disqualified, we will re-auction the license either to
existing or new applicants. The Commission will retain discretion, however, to offer the
license to the next highest bidder at its final bid level if the default occurs within five
business days of the close of bidding.
     3. Regulatory Safeguards
            a. Unjust Enrichment Provisions
     80.  The Reconciliation Act directs the Commission to "require such transfer
disclosures and anti-trafficking restrictions and payment schedules as may be necessary to
prevent unjust enrichment as a result of the methods employed to issue licenses and
permits." We will adopt the transfer disclosure requirements contained in Section 1.2111(a)
of our rules for all 4660-4685 MHz licenses obtained through the competitive bidding process.
In addition, we adopt the specific rules governing unjust enrichment by designated entities,
discussed below, as proposed in the Notice. Generally, applicants transferring their licenses
within three years after the initial license grant will be required to file, together with their
transfer application, the associated contracts for sale, option agreements, management
agreements, and all other documents disclosing the total consideration received in return for
the transfer of its license.
            b.  Performance Requirements
     81.  The Reconciliation Act requires the Commission to "include performance
requirements, such as appropriate deadlines and penalties for performance failures, to ensure
prompt delivery of service to rural areas, to prevent stockpiling or warehousing of spectrum
by licensees or permittees, and to promote investment in and rapid deployment of new
technologies and services."  In the Competitive Bidding Second Report and Order, we
decided that it was unnecessary and undesirable to impose additional performance
requirements, beyond those already provided in the service rules, for all auctionable services.
 Our 4660-4685 MHz service rules contain specific performance requirements, such as the
requirement to construct and provide service within a specific period of time. Thus, we do not
adopt any additional performance requirements for competitive bidding purposes.
            c.  Rules Prohibiting Collusion
     82.  In the Competitive Bidding docket, we adopted special rules prohibiting collusive
conduct in the context of competitive bidding. We indicated that such rules would serve the
objectives of the Reconciliation Act by preventing parties, especially the largest firms, from
agreeing in advance to bidding strategies that divide the market according to their strategic
interests and disadvantage other bidders. We will apply these rules to the 4660-4685 MHz
service. Under these procedures, bidders will be required to identify on their applications all
parties with whom they have entered into any consortium arrangements, joint ventures,
partnerships, or other agreements or understandings that relate to the competitive bidding
process. Bidders will also be required to certify that they have not entered into any explicit or
implicit agreements, arrangements, or understandings with any parties, other than those
identified, regarding the amount of their bid, bidding strategies or the particular properties on
which they will or will not bid.
     4.  Designated Entities
            a.  Introduction
     83.  In authorizing the Commission to use competitive bidding, Congress directed the
Commission to advance various objectives and consider several alternative methods for
achieving them. Specifically, the statute provides that, in establishing eligibility criteria and
bidding methodologies, the Commission shall "promot[e] economic opportunity and
competition and ensur[e] that new and innovative technologies are readily accessible to the
American people by avoiding excessive concentration of licenses and by disseminating
licenses among a wide variety of applicants, including small businesses, rural telephone
companies, and businesses owned by members of minority groups and women." Small
businesses, rural telephone companies and businesses owned by minorities and/or women are
collectively referred to as "designated entities." Section 309(j)(4)(A) provides that the
Commission "shall consider alternative payment schedules and methods of calculation,
including lump sums or guaranteed installment payments, with or without royalty payments or
other schedules or methods . . . and combinations of such schedules and methods." The
statute also requires the Commission to "ensure that small businesses, rural telephone
companies, and businesses owned by members of minority groups and women are given the
opportunity to participate in the provision of spectrum-based services."  To achieve that
goal, the statute indicates that the Commission should "consider the use of tax certificates,
bidding preferences, and other procedures."
     84.  In the Competitive Bidding docket, we established eligibility criteria and general
rules that would govern the award of special provisions for designated entities  We also
enumerated several possible special provisions that could be applied to designated entities in
particular services, including installment payments, spectrum set-asides, bidding credits, and
tax certificates. In addition, we set forth rules to prevent unjust enrichment by designated
entities seeking to transfer licenses obtained through use of one of these special provisions.
     85.  In keeping with the general parameters set forth in the Competitive Bidding
docket, we proposed in the Second NPRM specific measures and eligibility criteria for
designated entities in the 4660-4685 MHz service, designed to ensure that such entities are
given the opportunity to participate both in the competitive bidding process and in the
provision of service in the 4660-4685 MHz band. We sought comment on these proposals,
and specifically on identifying special provisions tailored to the unique characteristics of the
service or services that might be offered in the 4660-4685 MHz band, in order to create
meaningful incentives and opportunities in the service for small businesses and businesses
owned by minorities and/or women.
     86.  In the Second NPRM, we discussed and sought comment on these special
provisions for designated entities:
     1) for businesses owned by women and minorities we proposed that installment
     payments be available on all licenses and that a bidding credit of 25 percent be
     available on one of the five proposed spectrum blocks;
     2) for small business we sought comment on allowing a reduced down payment
     requirement coupled with installment payments;
     3) we did not believe that special preferences are needed to ensure adequate
     participation of rural telephone companies;
     4) we sought comments on reducing upfront payments to encourage participation in the
     auction, particularly by all eligible designated entities; and
     5) we sought comment on whether and how to designate one 5 MHz spectrum block
     as an "entrepreneurs' block."
We also discussed and solicited comments on issues of the eligibility criteria for designated
entities and provisions to prevent unjust enrichment by trafficking in licenses acquired through
the use of bidding credits or installment payments.
     87.  Comments. Commenters addressing methods of ensuring that designated entities
will participate in an auction of 4660-4685 MHz spectrum primarily urge that licenses be
awarded on geographic areas smaller than MTAs. Leaco states that "[i]f the licenses areas are
smaller in size, rural telephone companies like Leaco would be able to acquire licenses
without special considerations." The SBA supports licenses on a smaller, Basic Trading
Area basis because it requires less capital to obtain a license and construct an operational
system. It states that "[l]arge service territories generally are appealing to large businesses and
small firms have little chance of obtaining the financing needed to bid for MTA licenses
absent special provisions." ATI similarly supports smaller license areas than MTAs, and
proposes entrepreneurial set-asides for small companies in order to "at least allow wireless
cable operators to bid for spectrum in competition with other comparably smaller business
entities."
     88.  To the extent that special provisions are needed for designated entities, SBA
supports the adoption of bidding credits. SBA and ATI urge in addition that bidding
preferences for businesses owned by women and minorities should also extend to small
businesses, which are also designated entities. Leaco submits that rural telephone companies
should be given all of the bidding preferences awarded to other entities. Although SBA
argues that bidding credits should apply to all small businesses, it notes that some differences
in preferences for women and minorities may be appropriate to compensate for their greater
difficulty in attracting capital than other small businesses. WCAI believes that Congress's
intent can best be served by permitting installment payments by small businesses in the same
manner at the Commission did for PCS.
     89.  Several commenters also support entrepreneurial blocks, especially if licenses are
awarded on an MTA basis. SBA proposes an entrepreneurs' block for which all designated
entities would be eligible so long as the entities' net worth was within the $40 million net
worth criteria established for the MTA narrowband PCS auction. SBA states that this
definition is consistent with definitions adopted by the Commission for other services and
approved by the SBA, that it isolates those companies that have significantly greater difficulty
in obtaining capital than larger enterprises, and that these companies are sufficiently large that
they could survive in a competitive wireless communications marketplace. ATI and WCAI
also support $40 million standard used for PCS as appropriate here. ATI proposes an
entrepreneurial set aside of at least two 5 megahertz channels.
     90.  Decision.  Our plan to award licenses for the 4660-4685 MHz band based on  EA
regions, will substantially enhance the opportunities for designated entities to participate in the
GWCS license auction. Partitioning of licenses will further increase the opportunities for
designated entities. Based on our experience in the other auctions we have held to date, we
are also adopting bidding and payment provisions that will help ensure that the auction
assigns licenses to the bidders who value them most highly, while encouraging the
participation of designated entities. Specifically, we will permit small business licensees to
make their payments in installments computed at a reasonable rate of interest (the rate for ten
year U.S. Treasury obligations plus 2.5 percent). Small businesses will in addition be
permitted to make reduced down payments and interest-only payments in the first two years
of the license term, and will be allowed a 10 percent bidding credit on all blocks of spectrum.
We also adopt rules to prevent unjust enrichment from bidding preferences. We do not adopt
an entrepreneurial set aside, but will apply the designated entity bidding preferences to all five
spectrum blocks.
     (1)  Eligibility for Bidding Credits, Installment  Payments, and Reduced Down
            Payments
     91.  We will limit eligibility for bidding credits, installment payments and reduced
down payments to small businesses, including those owned by members of minority groups
and women. Both the SBA and ATI encouraged the Commission to apply bidding credits to
all small businesses. On the basis of this record, we lack the information necessary to set
different eligibility criteria for minority and women-owned entities that do not meet our small
business size standards in order to achieve the goals of Section 309(j) in the GWCS
services. By providing credits on all blocks, licensing the blocks based on EA geographic
areas, and permitting disaggregation and partitioning, we will create substantial opportunities
for all small businesses, including those owned by minorities and women. For example, as we
pointed out in our NPRM for 900 MHz SMR licensing, U.S. Census Data shows that
approximately 99 percent of all women-owned businesses and 99 percent of all minority-
owned businesses generated net receipts of $1 million or less. Thus, we will capture the
overwhelming majority of minority and women-owned businesses in the small business
category.
     92.  On March 15, 1995, in response to a request filed by Telephone Electronics Corp
(TEC) alleging that our rules violated equal protection principles under the Constitution, the
U.S. Circuit Court for the District of Columbia issued an Order stating that "those portions"
of the Commission's Order "establishing minority and gender preferences . . . for that auction
shall be stayed pending completion of judicial review."  The court explained that TEC had
"demonstrated the requisite likelihood of success on the merits."  The stay, however, was
subsequently lifted on May 1, 1995, on TEC's motion, after TEC decided to withdraw its
lawsuit. Most recently, the Supreme Court decided in Adarand Constructors, Inc. v. Pena
that "all racial classifications . . . must be analyzed by a reviewing court under strict
scrutiny."  The Court ruled that any federal program that makes distinctions on the basis of
race must serve a compelling governmental interest and must be narrowly tailored to serve
that interest. We believe that the holdings in Adarand and in the TEC case would affect any
proposal to incorporate gender- and race-based measures into our GWCS auction rules and
could potentially delay the provision of service to the public. The effect of the various
actions we have taken to reduce the capital requirements for operating GWCS services should
also be of particular benefit to minority and women-owned businesses. Our experience in
prior auctions suggests that installment payments are particularly successful in encouraging
participation in spectrum licensing by businesses that have difficulty attracting capital, a
common condition of minority and women-owned businesses.
     93. Small Business Definition. The Second NPRM requested comment on whether we
should utilize the SBA net worth/net income definition of a small business (a net worth not in
excess of $6 million with average net income after Federal income taxes for the preceding
years not in excess of $2 million) we adopted in the Competitive Bidding Second Report and
Order or, in the alternative, a gross revenue standard like that used in the broadband PCS
context (average gross revenues for the three preceding years not in excess of $40 million).
We also proposed to apply the same affiliation and attribution rules for calculating revenues
that we have previously adopted in the PCS context.
     94.  Comments.  The SBA believes that a definition of small businesses as those with
less than $40 million in revenues is appropriate to be consistent with definitions previously
adopted by the SBA and the Commission, as well as to isolate those companies that have
significantly greater difficulty in obtaining capital, but also are sufficiently large that they
could survive in a competitive wireless communications marketplace. It considers survivability
"particularly critical" where, as here, the market is not well-defined. ATI proposes that the
Commission apply revenue and asset criteria such as those established by the Commission for
eligibility to bid for the Block C and F Broadband PCS allocations (i.e., gross revenues of
less than $125 million in each of the last two years and total assets of less than $500
million.) WCAI states that because at least some of the services that may be offered over
the band will be PCS-like and require capital expenditure on the same order as PCS, use of
the same eligibility requirements in appropriate.
     95.  Decision. Our decision to base GWCS licenses on EAs, rather than the larger
MTAs, will substantially reduce the capital costs of acquiring GWCS licenses and
constructing operational systems. In this case, however, it seems likely that there will be a
greater range of license sizes, from the local EA-like areas to regional and, possibly, national
license aggregations. The capital costs of operational GWCS facilities are thus likely to vary
widely as well. The flexibility to aggregate or disaggregate licenses may stimulate other
license configurations. Overall, the capital requirements of this service may be similar to
broadband PCS and we will adopt the small business definition adopted there, namely any
firm, together with its attributable investors and affiliates, with average gross revenues for the
three preceding years not in excess of $40 million. We also apply to 4660-4685 MHz
applicants the same affiliation and attribution rules for calculating revenues that we have
previously adopted in the PCS context.
     (2) Installment Payments and Down Payments
     96.  We believe that ensuring the opportunity for small businesses to participate in
providing service in the 4660-4685 MHz band is important for the telecommunications
industry. The record in the Competitive Bidding docket indicates that small businesses have
not become major participants in telecommunications. The record in that docket also shows
that small businesses have particular difficulties obtaining capital. Payment and bidding
procedures that reduce capital outlays and risks are thus especially likely to enhance the
opportunities and ability of small businesses to participate successfully in spectrum auctions.
As we discussed in the Second NPRM, it appears that installment payments may have been
more effective than bidding credits in attracting capital in the regional narrowband PCS
auction, possibly because installment payments shift some of the financial risk of future
failure to the Government. Therefore, we adopt installment payments for any GWCS
licensee meeting the definition of a small business.
     97.  Under this approach, small business licensees may elect to pay their winning bid
amount (less upfront payments) in installments over the ten year term of the license, with
interest charges to be fixed at the time of licensing at a rate equal to the rate for ten year U.S.
Treasury obligations plus 2.5 percent. Installment payments would be due quarterly on the
anniversary of the day the license was granted. Timely payment of all installments would be a
condition of the license grant and failure to make such timely payments would be grounds for
revocation of the license.
     98.  We will also adopt additional payment preferences to further reduce the capital
needs of small businesses. Small business licensees will be permitted to make interest-only
installment payments during the first two years of the license. We also reduce down
payments for small businesses to 5 percent of the winning bid due five days after the auction
closes and the remaining 5 percent down payment due five days after Public Notice that the
license is ready for grant.
     (3)  Bidding Credits
     99.  In the Second NPRM, we proposed a 25 percent bidding credit on one of the five
proposed spectrum blocks for small businesses owned by women and minorities. These
bidding credits would be available exclusively to minority and women-owned businesses. We
also proposed installment payments for these entities and sought comment on whether
installment payments should also be available for small businesses. We did not believe that
special preferences were needed to ensure adequate participation of rural telephone companies
in the provision of services in this spectrum, in view of the uncertainty concerning what
specific uses may emerge in this band, the potential prices that licenses may bring, the effects
of provisions for partitioning or leasing spectrum, and the advantages of incumbency and
economies of scale that may  already benefit rural telephone companies. We sought comment
on this analysis.
     100.  Comments. Leaco urges that, if the Commission uses MTA geographic licensing
areas, rural telephone companies should be given all of the bidding preferences awarded to
other designated entities, including bidding credits, installment payments, and reduced upfront
payments. The SBA opines that the same rationale for awarding bidding credits - the
difficulty in raising capital and the low participation by small business in wireless
telecommunications -- militates against limiting the bidding credit to women and minority
enterprises. It supports a 25 percent bidding credit for women and minorities and a 10 percent
bidding credit for small businesses.
     101.  Decision. We adopt a 10 percent bidding credit for all small businesses. As
discussed above, we are adopting installment payments for small business bidders and the
small EA geographic licensing areas. These changes will substantially reduce the capital costs
of acquiring local GWCS licenses and providing service. Such changes should be of particular
benefit to small businesses and rural telcos. In our judgment, these and other provisions of the
licensing and auction rules should ensure that small businesses will be able to participate
effectively in obtaining GWCS licenses, whether or not those licenses are auctioned.
     102.  We remain concerned that small businesses, including those owned by women
and minorities, will find it difficult to obtain the capital to compete effectively in GWCS
auctions against large corporations and small telephone companies, with their potential
advantages in incumbency and economies of scale in using existing facilities. To address these
inequalities, we will adopt a 10 percent bidding credit for small businesses. This credit is
smaller than the 25 percent for a single spectrum block we had proposed originally, and
smaller than the credits we have adopted for other services. We find it reasonable in view of
other revisions to our proposed rules which will benefit designated entities, including the EA-
based license areas and the availability of installment payments. We are also widening the
scope of the bidding credit by permitting eligible entities to apply the credit to all GWCS
licenses. Taken together, we believe that these bidding preferences will carry out the
Congressional intent and provide designated entities, including small businesses owned by
women and minorities, with a meaningful opportunity to obtain GWCS licenses.
     (4) Transfer Restrictions and Unjust Enrichment Provisions
     103.  Restrictions on the transfer or assignment of licenses acquired by designated
entities are intended to promote the Congressional intent that designated entities be permitted
to participate in the provision of spectrum-based services, not simply to profit from
trafficking in licenses acquired with the help of bidding preferences. In the Second NPRM,
we proposed a payment requirement on transfers of such licenses to entities that are not DEs.
DEs seeking to transfer a license to an entity that is not a DE would be required to reimburse
the government for the amount of the bidding credit, plus interest at the rate imposed for
installment financing at the time the license was awarded, before the transfer would be
permitted. The amount of the penalty would be reduced over time so that a transfer in the
first two years of the license would result in a payment of 100 percent of the value of the
bidding credit; in year three of the license term the payment would be 75 percent; in year four
the penalty would be 50 percent and in year five the payment would be 25 percent, after
which there would be no payment.
     104. Decision. There were no comments on this issue. We adopt the proposed transfer
restrictions as a reasonable means of ensuring that bidding preferences are used by designated
entities as the statute intends. Because the bidding preferences we are adopting apply to all
small businesses, the transfer restrictions will similarly apply to small businesses that transfer
licenses acquired with the assistance of bidding preferences to entities that are not small
businesses under the definition we are adopting for GWCS.
     (5) Rural Telephone Company Partitions
     105.  In the Second NPRM we proposed to permit partitioning of MTA-based licenses,
to permit licensees to lease the rights to operate a GWCS system within portions of their
geographic service area or transfer their license to partition their service areas geographically,
allowing another party to be licensed in the partitioned area, subject to Commission
approval. Leaco and SBA both recommended licensing of geographic areas smaller than
MTAs, while also supporting partitioning if MTAs were adopted. Leaco also urges that
winning bidders be given the flexibility to subdivide and license the market to another entity
regardless of the size of the geographic service areas selected by the Commission. We
believe that, even with license blocks based on the smaller EA regions, partitioning may help
provide additional opportunities for small businesses to participate in providing GWCS-based
services to customers. We will therefore adopt partitioning procedures for rural telephone
companies similar to those used for cellular licenses and adopted for broadband PCS licenses.
We adopt the definition of a rural telephone company in Part 1, Subpart Q of our Rules, viz.,
any local exchange carrier including affiliates with 100,000 access lines or fewer.
     (6) Entrepreneurs' Block
     106. Our Second NPRM sought comment on whether to designate one 5 MHz
spectrum block as an "entrepreneurs'" block. We were concerned that, even considering the
special provisions proposed for designated entities, those entities would have difficulties
competing for 4660-4685 MHz licenses against large firms with significant financial
resources. We also sought comment on how eligibility for such a block should be defined.
     107.  Comments. The SBA favors an entrepreneurs' block open for all designated
entities who do not exceed the small company definition established for the MTA narrowband
PCS auctions. ATI proposes an entrepreneurial set-aside of at least two 5 MHz, which it
says would at least allow wireless cable operators to bid for spectrum in competition with
other comparably smaller business entities. WCAI similarly proposes setting aside two 5
MHz channels, because many of the services contemplated for the band will require more than
5 MHz.
     108.  Decision. We have decided not to adopt an entrepreneurs' block for this band.
The large number of GWCS licenses that will be available, the relatively small geographic
license areas, the flexibility of license aggregation and partitioning, the installment payment
option, and the bidding credits for all blocks should stimulate extensive opportunities for
participation in GWCS licensing by designated entities, including small businesses. In
addition, due to the range of possible services that licensees may provide, the size of any
effective set-aside is unclear. WCAI and ATI suggest that a single 5 megahertz block would
not be adequate for some GWCS services. To the extent this is the case, a set-aside of one 5
megahertz block may be ineffective in facilitating participation of designated entities in
GWCS licensing while barring other potential licensees from making efficient use of this
band. On the other hand, a larger set-aside might make adequate spectrum available for
designated entities, but preclude use of the spectrum by other potential licensees seeking to
provide other services.
     109.  A single nationwide set-aside may also impede efficient use of this spectrum in
different regions of the country where the band may be best suited to different uses. Set-
asides also would tend to undercut a basic goal of GWCS, that of establishing a flexible
spectrum block that will encourage the introduction and development of new technologies and
services. A set-aside of spectrum for one set of licensees would prevent others from using the
spectrum for new technologies and services, while discouraging them from undertaking the
necessary research and development.
     110.  In sum, we believe that bidding credits, installment payment options, and the
other approaches we have adopted will generate sufficient incentives to encourage
participation in GWCS licensing by small businesses. Unlike a set-aside, they also should not
generate the risk of inefficient use of the 4660-4685 MHz spectrum and of dampening
incentives for innovation.
H.  Technical Rules
     111.  Background.  In the Second NPRM we proposed general and minimal technical
restrictions that are based on the PCS rules. Specifically, we proposed to limit the field
strength at licensees' service area boundaries to 55 dBu unless licensees operating in adjacent
areas agree to higher field strengths along their mutual border. We stated that licensees
would be expected to coordinate their operations at the service area boundaries. Unlike PCS,
where we require the power of any emission outside of the licensee's frequency block to be
attenuated below the transmitter power (P) by at least 43 plus 10log10(P) or 80 decibels,
whichever is less, we did not propose to establish adjacent-channel interference limits at the
frequency boundaries between licensees in this band. Instead, we stated that we would
encourage licensees to resolve adjacent channel interference problems. We did, however,
propose to require licensees to attenuate the power below the transmitter power (P) by at least
43 plus 10log10(P) or 80 decibels, whichever is less, for any emission at the edges of the
4660-4685 MHz band. We requested comment on  these proposals and any other technical
rules that commenters believe are appropriate.
     112.  Comments.  Leaco agrees with our proposed approach to establish flexible
technical rules in the GWCS band. However, Leaco argues that rural and urban areas present
different requirements and suggests allowing licensees to request waivers of any technical
rules adopted. WCAI echoes the merits of flexible technical standards. Bell Atlantic
agrees that the PCS rules provide the best model and opposes the specification of a maximum
transmitter power restriction as long as licensees do not exceed the maximum permissible
field strength at the border of their licensed areas. In its comments opposing GWCS, MSTV
states that the vagaries of the GWCS service, such as what technical standards will apply and
what geographic range is possible, will prevent prospective users from making rational
investment decisions and manufacturers from developing the appropriate equipment.
     113.  Decision.  Based on the record, we are adopting the technical rules as proposed
in the Second NPRM. The PCS-based technical rules appear to be the best available rules to
govern the GWCS designation. However, we recognize that the technical rules may need to be
adjusted to suit the needs of the licensees if the ones we adopt prove to insufficient. As
proposed in the Second NPRM, we expect that in the first instance licensees will seek to
resolve any interference at their borders among themselves.
I.  License Term
     114.  Background.  The Communications Act allows the Commission to establish a
license term of up to 10 years, except for television or radio broadcasting stations, which may
have a license term of up to 5 and 7 years, respectively. For services in the 4660-4685 MHz
band, we proposed to establish a license term of 10 years, with a renewal expectancy similar
to that of PCS and cellular telephone licensees. We stated in the Second NPRM that this
relatively long license term, combined with a high renewal expectancy, should help provide a
stable regulatory environment that will be attractive to investors and, thereby, encourage
development of this new frequency band. We noted, however, that commenters have proposed
using this band for auxiliary broadcast service and the statute requires that the term of any
license for the operation of any auxiliary broadcast station or equipment must be concurrent
with the term of the license for such primary television station. Therefore, we asked that
commenters address whether we should allow differing license terms in this band.
     115.  Comments; Decision.  We received only two comments concerning the license
term. Leaco and MSTV both support a 10 year license term. We adopt a 10 year
licensing term for GWCS. This period is supported by the comments and, as we discussed in
the Second NPRM, should provide a stable regulatory environment that will attract investors
and encourage the development of this new band. We also conclude that a GWCS licensee
that provides a broadcast auxiliary-type service will not generally be subject to the limited
license term of a radio or television station license. Under Section 307(c), the limitation of a
broadcast auxiliary license term to the period of the term of a primary station only applies
where the auxiliary license is "for the operation of any auxiliary broadcast station or
equipment which can be used only in conjunction with a primary radio, television, or
translator station." Broadcast auxiliary operations are generally managed by coordinators on
behalf of various eligible broadcast stations, not limited to a primary station. Therefore, the
statutory provision that requires a shorter license term will generally not apply, except in the
case of an applicant seeking to use GWCS for auxiliary broadcast use by a single station,
within the meaning of Section 307(c).
J.  Construction Requirements
     116.  Background.  In the Second NPRM we acknowledged that the very wide array
of potential services that could be offered in this band makes it difficult to develop
construction requirements that can be applied fairly and equitably, without skewing the
workings of the market. We also recognized our responsibility to ensure that the spectrum we
assign is used effectively. Therefore, we proposed to require build-out rules modeled on those
adopted for broadband PCS. Specifically, we proposed that within five years, licensees in this
band offer service to one-third of the population in the area in which they are licensed.
Further, licensees would have to serve two-thirds of the population in the area in which they
are licensed within ten years of being licensed. We stated that failure by any licensee to meet
these construction requirements will result in forfeiture of the license and the licensee will be
ineligible to regain it. We requested comment on whether these requirements are appropriate
for private radio licensees that may not have to serve particular population segments within
their service areas. In addition, we asked for comment on whether the Commission should
establish a licensee defined service area, such as a cellular geographic service area (CGSA)
which would allow the Commission to license areas to a different party when the existing
licensee has not constructed. We stated that such a proposal might encourage licensees to
cover a larger geographic area or allow a new licensee to provide a service where the existing
licensee believes that it is uneconomical to provide service in that area.
     117.  Comments.  Leaco strongly urges the Commission not to adopt population-based
service benchmarks, arguing that such benchmarks would provide no incentive for licensees to
offer service to large rural areas of the country. Leaco instead proposes that construction
deadlines be based on geographic area rather than population. Leaco submits that the
Congressional requirement to ensure service to rural America can be met only if all licensees
are required to relinquish their rights to serve any portion of their licensed markets which are
unserved at the end of five years.
     118.  Bell Atlantic, on the other hand, urges the Commission not to prescribe deadlines
for construction. Bell Atlantic states that the successful bidder's incentive to earn a return on
its investment as early as possible provides enough incentive to use the spectrum in the most
technically and economically efficient manner. Bell Atlantic further asserts that the flexible
GWCS allocation policy for this spectrum reduces the need to impose a construction schedule,
and that the proposed "aggressive" construction schedule may constrain licensees from using
at least part of the spectrum for truly innovative technologies that may require longer lead
times.
     119.  PCIA states that the implementation of geographic or population build-out
requirements as proposed are inappropriate for private user systems. PCIA asserts that, for
private users constructing systems to meet their own needs, it would not be spectrally efficient
or cost effective to require that systems be built where there is no need for service.
     120.  In reply comments, In-Flight states that longer construction deadlines encourage
speculators. In-Flight proposes that the Commission require that each GWCS licensee provide
service to at least 70 percent of the population within its service area within three years of the
license grant date and at least 85 percent of the population within five years of the grant
data.
     121.  Decision.  We will adopt the proposed build-out rules, modeled on those adopted
for broadband PCS. These rules will require that within five years licensees in this band
offer service to one-third of the population in the area in which they are licensed, and to serve
two-thirds within ten years of being licensed. These requirements should conform with the
Act's direction that we "include performance requirements, such as appropriate deadlines and
penalties for performance failures, to ensure prompt delivery of service to rural areas, to
prevent stockpiling or warehousing of spectrum by licensees or permittees, and to promote
investment in and rapid deployment of new technologies and services." Our adoption of
EA-based licensing areas should largely moot Leaco's concerns that population-based build-
out rules will not ensure that service will be provided in rural areas. We also believe that
these rules, with their five and ten year deadlines, provide adequate time for licensees to
develop and offer services. They also should not discourage the introduction of new services
that can often be expected to use the in-place wireless infrastructure. We will consider waivers
or modifications of the build-out rules based on demonstrations that the spectrum is being
used efficiently, not warehoused or stockpiled. Failure by any licensee to meet the
construction requirements will result in forfeiture of the license and the licensee will be
ineligible to regain it. Overall, we believe that the broadband PCS-based standards strike a
reasonable balance by allowing flexibility for licensees while implementing the goals and
directives of the Act.
K. Regulatory Status
     122.  Background. The Communications Act and Commission rules often apply
differing requirements based on the type of service and the regulatory status of licensees. For
example, the Reconciliation Act created new statutory categories for mobile services:
commercial mobile radio service (CMRS) and private mobile radio service (PMRS). The
Reconciliation Act provides that CMRS providers are treated as common carriers, but allows
the Commission the authority to forbear from applying certain sections of Title II. For
Fixed services, the Commission applies a judicial standard for determining whether a licensee
is providing a common carrier service. The Commission does not have express statutory
authority to forbear from applying any provisions of Title II to fixed service common carriers.
     123.  The new GWCS category for the 4660-4685 band would allow licensees to
provide a variety or combination of Fixed and Mobile services. Under this service, both Fixed
and Mobile applications would be permitted and an individual licensee could provide a
number of Fixed and Mobile services. In the Second NPRM, we observed that it may be
difficult to determine the regulatory status of GWCS licensees. We proposed to rely on
applicants to identify specifically the type of service or services they intend to provide, and
require them to include sufficient detail to enable the Commission to determine if the service
will be Fixed or Mobile, and whether it will be offered as a commercial mobile radio service,
a private mobile radio service, a common carrier Fixed service, or a private Fixed service. We
requested comment on the most efficient manner in which to administer the requirements of
the Communications Act and our rules, and grant licensees as much operational flexibility as
possible.
     124.  We also solicited comments on whether the Commission should develop a new
application long form for this general allocation or require an applicant to be responsible for
filing the appropriate license application based upon the nature of the service designated by
the applicant. Based on the showing made in the application form and actual service provided,
the licensee would be subject to those rules and statutory requirements that apply to such
service. We also requested that commenters address whether it is necessary for the
Commission to require licensees to notify the Commission if they change the type of service
offered using some or all of their licensed spectrum even though the new use would be
permissible under our rules.
     125.   Comments. The only comments addressing this issue were filed by Leaco.
Leaco believes that Commission rules give fairly clear definitions for fixed, mobile, private
carrier, or common carrier service. However, mobile services are sometimes used on an
ancillary basis as fixed services. Leaco states that, as a practical matter, neither the licensee
nor the Commission can easily determine whether cellular mobile phones are being used as a
fixed or mobile service. Leaco suggests that licensees initiating a new GWCS service first file
a letter notifying the Commission of the proposed service. The notification letter should be
filed fifteen days before the licensee files its regular application for service. The Commission,
under Leaco's proposal, would have fifteen days to review the licensee's proposal and notify
the licensee if the characterization of the service is inaccurate. Leaco reasons that this
intermediate step would allow more flexibility and save the licensee and Commission staff
time in processing inappropriately filed applications.
     126.  Decision.  We will adopt the proposed approach of relying on applicants to
identify the type of GWCS service or services each will provide, with sufficient detail to
enable the Commission to determine the applicant's regulatory status. This approach should
allow us to carry out our responsibilities while imposing minimal regulatory requirements
upon licensees. Leaco's proposal that licensees seeking to initiate a new GWCS service file a
separate letter 15 days prior to its regular application for service would add another
procedural step for both licensees and Commission staff. The proposed added step would
usually be unnecessary and would tend to delay the offering of new services. We believe that
it would be in the public interest to develop an application form for the new service. Leaco's
comments convince us that requiring applicants to determine the appropriate application to file
based on the intended service offering would cause confusion and administrative burdens for
GWCS applicants. By developing a standard application form, we should be able to minimize
administrative burdens and delay while collecting necessary information. Consolidating
regulatory status matters with other issues that might be raised in applications should also
provide a fair opportunity for any party in interest to raise relevant issues in a petition to deny
the application. To clarify and simplify the regulatory status of licensees, we will also adopt
a presumption that GWCS licenses are providing fixed common carrier services, which
appears from the record to be the most likely and common use of this spectrum. This
presumption may be rebutted by an appropriate showing. We delegate to the Wireless
Telecommunications Bureau authority to develop forms appropriate to collect this data, and to
monitor changes in licensee status.
L. Licensing Issues
     127.  We requested comment in the Second NPRM on whether the Commission is
required or should find that it is in the public interest to adopt additional licensing rules in
order to comply with the statutory requirement that we adopt assignment rules before August
10, 1995. For example, Section 309(b)(1) of the Communications Act requires all applications
for common carrier station authorizations (other than minor amendments excepted under
Section 309(c)) to be placed on public notice for 30 days prior to grant, and Section 309(d)
allows petitions to deny to be filed against such applications during the public notice period.
Because some licensees may provide common carrier service, we sought comment on whether
the Commission should adopt public notice and petition to deny procedures for some or all
applicants in the 4660-4685 MHz band. If we adopted such procedures, we proposed to use
rules similar to those contained in Section 22.130 of our Rules. We also sought comment on
whether to adopt rules regarding the amendment of applications and/or license modifications.
     128.  Finally, we requested comments on whether any existing application or
regulatory fees would apply if we develop a new service. In addition, we noted that Section
310(d) of the Communications Act provides that no construction permit or station license may
be transferred, assigned, or otherwise disposed of without Commission approval based on a
finding that the public interest, convenience, and necessity will be served by the transaction.
We sought comment on specific rules we should adopt in order to implement this provision of
the Communications Act for purposes of licensing services in the 4660-4685 MHz frequency
band.
     129.  Comments. Leaco states that initial applications for any service in the GWCS
band should be subject to the public notice requirements of Section 309(d) of the Act and the
transfer/assignment requirements of Section 310(d). It recommends that initial applications for
any service in the GWCS band be placed on public notice for 30 days prior to grant to allow
interested parties to file petitions to deny, a procedure that would allow the public to comment
on whether the proposed service has been properly classified and its regulatory status.
     130.  Decision.  At present, it appears unnecessary to adopt additional license rules for
GWCS. We will follow the statutory provisions of Section 309(d) for public notice and other
requirements. With respect to other licensing issues, we will consider whether any additional
rules are necessary, and what form those rules should take, after we have proceeded with the
application and licensing process. We should at that time have a more detailed understanding
of the services licensees intend to provide and their regulatory status.
                                                         IV. ORDERING CLAUSES
     131.  Accordingly, IT IS ORDERED that Part 26 of the Commission's Rules is added
as set forth in the attached Appendix D. This action is taken pursuant to Sections 4(i), 303(r),
309, and 332 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r),
309, and 332.
     132.  IT IS FURTHER ORDERED that the rule changes made herein WILL
BECOME EFFECTIVE at the time of their publication in the Federal Register.
                          V. PROCEDURAL MATTERS
Final Regulatory Flexibility Analysis
     133.   A Final Regulatory Flexibility Act Statement is contained in Appendix B of this
Second Report and Order.
Contact Persons
     134. For further information concerning this proceeding, contact Karen Rackley (202)
418-0620 or Dan Grosh (202) 418-1534, Wireless Telecommunications Bureau, Policy
Division.
FEDERAL COMMUNICATIONS COMMISSION
                                                         William F. Caton
                                                         Acting Secretary
                                APPENDIX A
Comments
1.   American Petroleum Institute (API)
2.   American Telecasting Inc. (ATI)
3.   Association for Maximum Service Television, Inc. and Other Major Television
     Broadcasting Entities (MSTV)
4.   Association of Public-Safety Communications Officials-International, Inc. (APCO)
5.   Bell Atlantic
6.   Chief Counsel for Advocacy of the United States Small Business Administration
     (SBA)
7.   Ladybug Mountain PCS Corp.
8.   Leaco Rural Telephone Cooperative, Inc. (Leaco)
9.   Motorola, Inc. (Motorola)
10.  Personal Communications Industry Association (PCIA)
11.  Rand McNally & Company (RMC)
12.  UTC
13.  The Wireless Cable Association International, Inc. (WCAI)
Reply Comments
1.   Alcatel Network Systems, Inc.
2.   American Telecasting Inc.
3.   In-Flight Phone Corporation
4.   Association for Maximum Service Television, Inc. and Other Major Television
     Broadcast Entities (MSTV)
5.   Telecommunications Industry Association

                                APPENDIX B
                   Final Regulatory Flexibility Analysis
I.   Need and Purpose of this Action:
   This action is taken in further response to the Omnibus Budget Reconciliation of 1993
(which the mandated the identification and transfer of spectrum currently allocated for use by
the Federal Government which could be allocated for private sector use, and the and the
ensuing Preliminary Spectrum Reallocation Report published by the Department of
Commerce, which identified such spectrum. The establishment of the General Wireless
Communications Service is intended to permit and encourage the introduction of new services
and the enhancement of existing services. These new and enhanced services and uses will
create new jobs, foster economic growth, and improve access to communications by industry
and the public.
II.  Summary of Issues Raised by the Public Comments in Response to the Initial
Regulatory Flexibility Analysis:
No comments were filed in response to the Initial Regulatory Flexibility Act Statement
III. Significant Alternatives Considered and Rejected:
   Representatives of the public safety community, the fixed microwave community, and
the broadcast industry opposed designating the 4 GHz band to the General Wireless
Communications Service (GWCS) and asked that the Commission instead the band be
allocated to their own specific existing services. The Second Notice of Proposed Rule
Making acknowledged the option of limiting the use of the 4660-4685 MHz frequency band
to specific services, and invited comment on this possibility. However, the Commission finds
that the flexible GWCS approach should permit a range of qualified uses, including those
preferred by commenters opposed to such an approach, while permitting new technologies
and services to emerge and encouraging efficient use of this spectrum, thus best satisfying
the goals of the Reconciliation Act. Restricting this spectrum to defined uses or services
would tend to reduce the attractiveness of this spectrum for new technologies and services.
Moreover, GWCS is flexible enough to permit such specific uses as well as other uses. The
Commission finds that it has the legal authority, supported by precedence to allocate the
spectrum in this manner and that establishing the GWCS is the option which most satisfies
the concerns of the Reconciliation Act while responding to the needs of the public and of
existing licensees.
   The Commission also elects to resolve instances of mutually-exclusive applications by
auction rather than by comparative hearing. The comments filed in this proceeding support
assignment of mutually-exclusive applications by auction and leads to the conclusion that an
auction process best comports with the objectives set forth in Section 509(j)(3) of the
Communications Act. The Commission's experience indicates that assignment such
applications by auction is quicker than other licensing schemes, promotes economic
opportunity and the dissemination of licenses among a wide variety of applicants, and enables
the Commission to recover for the public a portion of the value of the public spectrum and
avoid problems of unjust enrichment.
   The Second NPRM proposed that all license issued by based on the 51 major trading
areas (MTA) and MTA-like areas as a compromise between providing areas small enough to
deploy services aimed at rural or relatively rural areas, while providing a large enough area
for those licensees that wish to provide wide-area or regional service. The majority of
GWCS supporters opposed licensing on an MTA basis and proposed smaller license regions.
To accommodate the range of possible GWCS uses, the Commission elects to issue GWCS
licenses based on three different geographic areas. Two of the five blocs will be assigned as
a nationwide license, one will be assigned within five regional license areas, and the
remaining two will be assigned based on EA-like geographical areas. The Commission
believes that assigning licenses based on a range of geographic areas gives all potential
licensees an opportunity to acquire spectrum within a geographic area that suits the natural
technical and market area for the intended use. Moreover, the Commission anticipates that by
giving licensees substantial flexibility to aggregate or disaggregate geographic regions, we
will encourage intensive and efficient use of this spectrum.

                                APPENDIX C
               Codes and Names for BEA Economic Areas (EAs)
Codes from 001 to 172 are assigned to the new EAs in approximate geographic order,
beginning with 001 in northern Maine, continuing south to Florida, then north to the Great
Lakes, and continuing in a serpentine pattern to the West Coast. Except for the Western
Oklahoma EA (126), the Northern Michigan EA (058), and the 17 EAs that mainly
correspond to consolidated metropolitan statistical areas (CMSAs), each EA is named for the
metropolitan area or city that is the node of its largest component economic area (CEA) and
that is usually, but not always, the largest metropolitan area or city in the EA. Each CEA
consists of a single economic node and the surrounding counties that are economically related
to the node. The following list provides EA codes and names. EA boundaries and codes are
shown on the map following the list.
 EA
Code   Name
 001   Bangor, ME
 002   Portland, ME
 003   Boston-Worcester-Lawrence-
     Lowell-Brockton, MA-NH
 004   Burlington, VT
 005   Albany-Schenectady-Troy, NY
 006   Syracuse, NY
 007   Rochester, NY
 008   Buffalo-Niagara Falls, NY
 009   State College, PA
 010   New York-No. New Jersey-
     Long Island, NY-NJ-CT-PA
 011   Harrisburg-Lebanon-Carlisle, PA
 012   Philadelphia-Wilmington-Atlantic
     City, PA-NJ-DE-MD
 013   Washington-Baltimore,
     DC-MD-VA-WV
 014   Salisbury, MD
 015   Richmond-Petersburg, VA
 016   Staunton, VA
 017   Roanoke, VA
 EA
Code   Name
 018   Greensboro-Winston-Salem-
     High Point, NC
 019   Raleigh-Durham-Chapel Hill, NC
 020   Norfolk-Virginia Beach-Newport
     News, VA-NC
 021   Greenville, NC
 022   Fayetteville, NC
 023   Charlotte-Gastonia-Rock Hill,
     NC-SC
 024   Columbia, SC
 025   Wilmington, NC
 026   Charleston-North Charleston, SC
 027   Augusta-Aiken, GA-SC
 028   Savannah, GA
 029   Jacksonville, FL
 030   Orlando, FL
 031   Miami-Fort Lauderdale, FL
 032   Fort Myers-Cape Coral, FL
 033   Sarasota-Bradenton, FL
 034   Tampa-St. Petersburg-Clearwater,
     FL
  EA
Code   Name
 035   Tallahassee, FL
 036   Dothan, AL
 037   Albany, GA
 038   Macon, GA
 039   Columbus, GA-AL
 040   Atlanta, GA
 041   Greenville-Spartanburg-
     Anderson, SC
 042   Asheville, NC
 043   Chattanooga, TN-GA
 044   Knoxville, TN
 045   Johnson City-Kingsport-Bristol, TN-VA
 046   Hickory-Morganton, NC
 047   Lexington, KY
 048   Charleston, WV
 049   Cincinnati-Hamilton, OH-KY-IN
 050   Dayton-Springfield, OH
 051   Columbus, OH
 052   Wheeling, WV-OH
 053   Pittsburgh, PA
 054   Erie, PA
 055   Cleveland-Akron, OH
 056   Toledo, OH
 057   Detroit-Ann Arbor-Flint, MI
 058   Northern Michigan, MI
 059   Green Bay, WI
 060   Appleton-Oshkosh-Neenah, WI
 061   Traverse City, MI
 062   Grand Rapids-Muskegon-
     Holland, MI
 063   Milwaukee-Racine, WI
 064   Chicago-Gary-Kenosha,
     IL-IN-WI
 065   Elkhart-Goshen, IN
 066   Fort Wayne, IN
 067   Indianapolis, IN
 068   Champaign-Urbana, IL
 069   Evansville-Henderson, IN-KY
 070   Louisville, KY-IN
 071   Nashville, TN
 072   Paducah, KY
 073   Memphis, TN-AR-MS
 074   Huntsville, AL
 EA
Code   Name
 075   Tupelo, MS
 076   Greenville, MS
 077   Jackson, MS
 078   Birmingham, AL
 079   Montgomery, AL
 080   Mobile, AL
 081   Pensacola, FL
 082   Biloxi-Gulfport-Pascagoula, MS
 083   New Orleans, LA
 084   Baton Rouge, LA
 085   Lafayette, LA
 086   Lake Charles, LA
 087   Beaumont-Port Arthur, TX
 088   Shreveport-Bossier City, LA
 089   Monroe, LA
 090   Little Rock-North Little Rock, AR
 091   Fort Smith, AR-OK
 092   Fayetteville-Springdale-Rogers, AR
 093   Joplin, MO
 094   Springfield, MO
 095   Jonesboro, AR
 096   St. Louis, MO-IL
 097   Springfield, IL
 098   Columbia, MO
 099   Kansas City, MO-KS
 100   Des Moines, IA
 101   Peoria-Pekin, IL
 102   Davenport-Moline-Rock Island, IA-IL
 103   Cedar Rapids, IA
 104   Madison, WI
 105   La Crosse, WI-MN
 106   Rochester, MN
 107   Minneapolis-St. Paul, MN-WI
 108   Wausau, WI
 109   Duluth-Superior, MN-WI
 110   Grand Forks, ND-MN
 111   Minot, ND
 112   Bismarck, ND
 113   Fargo-Moorhead, ND-MN
 114   Aberdeen, SD
 115   Rapid City, SD
 116   Sioux Falls, SD
 117   Sioux City, IA-NE
 EA
Code   Name
 118   Omaha, NE-IA
 119   Lincoln, NE
 120   Grand Island, NE
 121   North Platte, NE
 122   Wichita, KS
 123   Topeka, KS
 124   Tulsa, OK
 125   Oklahoma City, OK
 126   Western Oklahoma, OK
 127   Dallas-Fort Worth, TX
 128   Abilene, TX
 129   San Angelo, TX
 130   Austin-San Marcos, TX
 131   Houston-Galveston-Brazoria, TX
 132   Corpus Christi, TX
 133   McAllen-Edinburg-Mission, TX
 134   San Antonio, TX
 135   Odessa-Midland, TX
 136   Hobbs, NM
 137   Lubbock, TX
 138   Amarillo, TX
 139   Santa Fe, NM
 140   Pueblo, CO
 141   Denver-Boulder-Greeley, CO
 142   Scottsbluff, NE
 143   Casper, WY
 144   Billings, MT
 145   Great Falls, MT
 146   Missoula, MT
 147   Spokane, WA
 148   Idaho Falls, ID
 149   Twin Falls, ID
 150   Boise City, ID
 151   Reno, NV
 152   Salt Lake City-Ogden, UT
 153   Las Vegas, NV-AZ
 154   Flagstaff, AZ
 155   Farmington, NM
 156   Albuquerque, NM
 157   El Paso, TX
 158   Phoenix-Mesa, AZ
 159   Tucson, AZ
 EA
Code   Name
 160   Los Angeles-Riverside-
     Orange County, CA
 161   San Diego, CA
 162   Fresno, CA
 163   San Francisco-Oakland-
     San Jose, CA
 164   Sacramento-Yolo, CA
 165   Redding, CA
 166   Eugene-Springfield, OR
 167   Portland-Salem, OR-WA
 168   Pendleton, OR
 169   Richland-Kennewick-Pasco, WA
 170   Seattle-Tacoma-Bremerton, WA
 171   Anchorage, AK
 172   Honolulu, HI

APPENDIX D
Part 1 of Title 47 of the Code of Federal Regulations is amended as follows:
                    PART 1 -- PRACTICE AND PROCEDURE
1.  The authority citation for Part 1 continues to read as follows:
     Authority:  47 U.S.C.  151, 154, 303, and 309(j) unless otherwise noted.
2.  New paragraph (a)(8) is added to Section 1.2102 to read as follows:
 1.2102 Eligibility of applications for competitive bidding.
(a) ***
(8)   General Wireless Communications Service (GWCS) (see Part 26 of this chapter).
*  *  *  *  *
PART 26 -- GENERAL WIRELESS COMMUNICATIONS SERVICE
1.  Authority:  47 U.S.C. Sections 154, 301, 302, 303, 309 and 332, unless otherwise noted.
2.  Part 26 of Chapter 1 of Title 47 of the Code of Federal Regulations is added to read as
follows:
           PART 26 -- GENERAL WIRELESS COMMUNICATIONS SERVICE
                    Subpart A -- General Information
Sec.
26.1  Basis and purpose.
26.2  Other applicable rule parts.
26.3  Permissible communications.
26.4  Terms and definitions.
                 Subpart B -- Applications and Licenses
26.11  Initial authorization.
26.12  Eligibility.
26.13  License period.
26.14  Criteria for comparative renewal proceedings.
                    Subpart C -- Technical Standards
26.51  Equipment authorization.
26.52  RF hazards.
26.53  Emission limits.
26.54  Frequency stability.
26.55  Field strength limits.
                        Subpart D -- Miscellaneous
26.101  Multiple ownership restrictions.
26.102  Service areas.
26.103  Frequencies.
26.104  Construction requirements.
          Subpart E -- Competitive Bidding Procedures for GWCS
26.201  GWCS subject to competitive bidding.
26.202  Competitive bidding design for GWCS licensing.
26.203  Competitive bidding mechanisms.
26.204  Withdrawal, default and disqualification penalties.
26.205  Bidding application (FCC Form 175 and 175-S Short-Form).
26.206  Submission of upfront payments and down payments.
26.207  Long form applications.
26.208  License grant, denial, default, and disqualification.
26.209  Eligibility for partitioned licenses.
26.210  Provisions for small businesses.
   Subpart F --  Application, Licensing, and Processing Rules for GWCS
26.301  Authorization required.
26.302  Eligibility.
26.303  Formal and informal applications.
26.304  Filing of GWCS applications, fees, and numbers of copies.
26.305  Standard application forms and permissive changes or minor modifications for the
       General Wireless Communications Service.
26.306  Miscellaneous forms.
26.307  General application requirements.
26.308  Technical content of applications; maintenance of list of station locations.
26.309  Station antenna structures.
26.310  Waiver of rules.
26.311  Defective applications.
26.312  Inconsistent or conflicting applications.
26.313  Amendment of  application for General Wireless Communications
       Service filed on FCC Form 175.
26.314  Amendment of applications for General Wireless Communications
       Service (other than applications filed on FCC Form 175).
26.315  Application for temporary authorizations.
26.316  Receipt of application; applications in the General Wireless Communications Service
filed on FCC Form 175 and other applications in the GWCS.
26.317  Public notice period.
26.318  Dismissal and return of applications.
26.319  Ownership changes and agreements to amend or to dismiss applications or pleadings.
26.320  Opposition to applications.
26.321  Mutually exclusive applications.
26.322  Consideration of applications.
26.323  Post-auction divestures.
26.324  Transfer of control or assignment of station authorization.
26.325  Extension of time to complete construction.
26.326  Termination of authorization.
                    Subpart A -- General Information
 26.1  Basis and purpose.
  This section contains the statutory basis for this part of the rules and provides the purpose
for which this part is issued.
  (a) Basis. The rules for the general wireless communications service (GWCS) in this part are
promulgated under the provisions of the Communications Act of 1934, as amended, that vests
authority in the Federal Communications Commission to regulate radio transmission and to
issue licenses for radio stations.
  (b) Purpose.  This part states the conditions under which portions of the radio spectrum are
made available and licensed for GWCS.
  (c) Scope. The rules in this part apply only to stations authorized under this part.
 26.2  Other applicable rule parts.
  Other FCC rule parts applicable to licensees in the general wireless communications service
include the following:
  (a) Part 0. This part describes the Commission's organization and delegations of authority.
Part 0 of this chapter also lists available Commission publications, standards and procedures
for access to Commission records, and location of Commission Field Offices.
  (b) Part 1. This part includes rules of practice and procedure for license applications,
adjudicatory proceedings, procedures for reconsideration and review of the Commission's
actions; provisions concerning violation notices and forfeiture proceedings; and the
environmental requirements that, if applicable, must be complied with prior to the initiation of
construction.
  (c) Part 2. This part contains the Table of Frequency Allocations and special requirements
in international regulations, recommendations, agreements, and treaties. This part also contains
standards and procedures concerning the marketing and importation of radio frequency
devices, and for obtaining equipment authorization.
  (d) Part 5. This part contains rules prescribing the manner in which parts of the radio
frequency spectrum may be made available for experimentation.
  (e) Part 17. This part contains requirements for construction, marking and lighting of
antenna towers.
  (f) Part 68. This part contains technical standards for connection of terminal equipment to
the telephone network.
 26.3  Permissible communications.
  GWCS licensees may provide any fixed or mobile communications service on their assigned
spectrum.  Broadcasting services, Radiolocation services and satellite services, as defined in
2.1 of this Chapter, are prohibited.
 26.4  Terms and definitions.
   Assigned Frequency. The center of the frequency band assigned to a station.
  Authorized Bandwidth. The maximum width of the band of frequencies permitted to be used
by a station. This is normally considered to be the necessary or occupied bandwidth,
whichever is greater.
  Average Terrain. The average elevation of terrain between 3 and 16 kilometers from the
antenna site.
  Effective Radiated Power (e.r.p.) (in a given direction). The product of the power supplied
to the antenna and its gain relative to a half-wave dipole in a given direction.
  Equivalent Isotropically Radiated Power (e.i.r.p.). The product of the power supplied to the
antenna and the antenna gain in a given direction relative to an isotropic antenna.
  Fixed Service. A radio communication service between specified fixed points.
  Fixed Station. A station in the fixed service.
  Gross Revenues.  Gross revenues shall mean all income received by an entity, whether
earned or passive, before any deductions are made for costs of doing business (e.g.  cost of
goods sold), as evidenced by audited financial statements for the relevant number of calendar
years preceding January 1, 1994, or, if audited financial statements were not prepared on a
calendar-year basis,  for the most recently completed fiscal years preceding the filing of the
applicant's short-form application (Form 175).  For applications filed after December 31,
1995, gross revenues shall be evidenced by audited financial statements for the preceding
relevant number of calendar or fiscal years.  If an entity was not in existence for all or part of
the relevant period, gross revenues shall be evidenced by the audited financial statements
of the entity's predecessor-in-interest or, if there is no identifiable predecessor-in-interest,
unaudited financial statements certified by the applicant as accurate.
  Land Mobile Service. A mobile service between base stations and land mobile stations, or
between land mobile stations.
  Land Mobile Station. A mobile station in the land mobile service capable of surface
movement within the geographic limits of a country or continent.
  Land Station. A station in the mobile service not intended to be used while in motion.
  Mobile Service. A radio communication service between mobile and land stations, or
between mobile stations.
  Mobile Station. A station in the mobile service intended to be used while in motion or
during halts at unspecified points.
  National Geodetic Reference System (NGRS): The name given to all geodetic control data
contained in the National Geodetic Survey (NGS) data base. (Source: National Geodetic
Survey, U.S. Department of Commerce)
  Rural Telephone Company.  A rural telephone company is a local exchange carrier having
100,000 or fewer access lines, including all affiliates.
  Small Business: Consortium of Small Businesses.
  (1) A small business is an entity that, together with its affiliates and persons or entities that
hold interest in such entity and their affiliates, has average annual gross revenues that are not
more than $40 million for the preceding three years.
  (2) A small business consortium is conglomerate organization formed as a joint venture
between or among mutually-independent business firms, each of which individually satisfies
the definition of a small business.
  Total assets.  Total assets shall mean the book value (except where generally accepted
accounting principles (GAAP) require market valuation) of all property owned by an entity,
whether real or personal, tangible or intangible, as evidenced by the most recent audited
financial statements.
                  Subpart B -- Applications and Licenses
 26.11  Initial authorization.
  (a) An applicant must file an application for an initial authorization in each market and
frequency block desired.
  (b) Blanket licenses are granted for each market and frequency block.  Applications for
individual sites are not required and will not be accepted.
 26.12  Eligibility.
  Any entity, other than those precluded by section 310 of the Communications Act of 1934,
as amended, 47 U.S.C.  310, is eligible to hold a license under this part.
 26.13  License period.
  Licenses for service areas will be granted for ten year terms from the date of original
issuance or renewal.
 26.14  Criteria for comparative renewal proceedings.
  A renewal applicant involved in a comparative renewal proceeding shall receive a
preference, commonly referred to as a renewal expectancy, which is the most important
comparative factor to be considered in the proceeding, if its past record for the relevant
license period demonstrates that the renewal applicant:
  (a) Has provided "substantial" service during its past license term. "Substantial" service is
defined as service which is sound, favorable, and substantially above a level of mediocre
service which might just minimally warrant renewal; and
  (b) Has substantially complied with applicable Commission rules, policies and the
Communications Act.
                    Subpart C -- Technical Standards
 26.51  Equipment authorization.
  (a) Each transmitter utilized for operation under this part and each transmitter marketed, as
set forth in  2.803 of this chapter, must be of a type that has been authorized by the
Commission under its type acceptance procedure.
  (b) The Commission periodically publishes a list of type accepted equipment, entitled "Radio
Equipment List, Equipment Accepted for Licensing." Copies of this list are available for
public reference at the Commission's offices in Washington, D.C., at each of its field offices,
and may be ordered from its copy contractor.
  (c) Any manufacturer of radio transmitting equipment to be used in these services may
request equipment authorization following the procedures set forth in Subpart J of part 2 of
this chapter. Equipment authorization for an individual transmitter may be requested by an
applicant for a station authorization by following the procedures set forth in part 2 of this
chapter. Such equipment if approved or accepted will not normally be included in the
Commission's Radio Equipment List but will be individually enumerated on the station
authorization.
  (d) Applicants for type acceptance of transmitters that operate in these services must
determine that the equipment complies with IEEE C95.1-1991, "IEEE Standards for Safety
Levels with Respect to Human Exposure to Radio Frequency Electromagnetic Fields,
3 kHz to 300 GHz" as measured using methods specified in IEEE C95.3-1991,
"Recommended Practice for the Measurement of Potentially Hazardous Electromagnetic Fields
- RF and Microwave." The applicant for type acceptance is required to submit a statement
affirming that the equipment complies with these standards as measured by an approved
method and to maintain a record showing the basis for the statement of compliance with IEEE
C.95.1-1991.
 26.52  RF hazards.
  (a) Licensees and manufacturers are required to ensure that their facilities and equipment
comply with IEEE C95.1-1991 (ANSI/IEEE C95.1-1992), "Safety Levels with Respect to
Human Exposure to Radio Frequency Electromagnetic Fields, 3 kHz to 300 GHz."
Measurement methods are specified in IEEE C95.3-1991, "Recommended Practice for the
Measurement of Potentially Hazardous Electromagnetic Fields - RF and Microwave."  Copies
of these standards are available from IEEE Standards Board, 445 Hoes Lane, P.O. Box 1331,
Piscataway, NJ  08855-1331.  Telephone: 1-800-678-4333.  The limits for both "controlled"
and "uncontrolled" environments, as defined by IEEE C95.1-1991, will apply to all GWCS
base and mobile stations, as appropriate.  The application for equipment authorization must
contain a statement confirming compliance with IEEE C95.1-1991.  Technical information
showing the basis for this statement must be submitted to the Commission upon request.
  (b) GWCS hand-held devices whose maximum radiated power is 100 milliwatts or less are
not required to be evaluated for compliance with ANSI/IEEE SAR (specific absorption rate)
requirements, as long as a 2.5 cm separation distance is maintained between the radiating
structure and the body of the user.  (The ANSI/IEEE standard uses the term "radiated power,"
meaning input power to the antenna.)
  (c) For further information on the Commission's environmental rules see  1.1301 through
1.1319 of this chapter.
 26.53  Emission limits.
   (a) The power of any emission at the edges of the 4660-4685 MHz band shall be attenuated
below the transmitter power (P) by at least 43 + 10 log10(P) or 80 decibels, whichever is less.
  (b)  Compliance with these provisions is based on the use of measurement instrumentation
employing a resolution bandwidth of 1 MHz or greater.  However, 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.  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 emission are attenuated at least 26 dB below the transmitter power.
  (c)  When measuring the emission limits, the nominal carrier frequency shall be adjusted as
close the license's frequency block edges, both upper and lower, as the design permits.
  (d)  The measurements of emission power can be expressed in peak or average values,
provided that they are expressed in the same parameters as the transmission power.
  (e) When an emission outside of the authorized bandwidth causes harmful interference, the
Commission may, at its discretion, require greater attenuation than specified in this section.
 26.54  Frequency stability.
  The frequency stability shall be sufficient to ensure that the fundamental emission stays
within the authorized frequency block.
 26.55  Field strength limits.
  The predicted or measured median field strength at any location on the border of the GWCS
service area shall not exceed 55 dBu unless licensees operating in adjacent areas agree to a
higher field strengths along their mutual borders.
                       Subpart D -- Miscellaneous
 26.101  Multiple ownership restrictions.
  (a) GWCS licensees shall not have an ownership interest in more than three of the five, 5
megahertz wide channels available in any geographic area.  For  purposes of this restriction, a
GWCS licensee is:
  (1) Any institutional investor, as defined in  26.4, with an ownership  interest of ten or
more percent in a GWCS license; and
  (2) Any other person or entity with an ownership interest of five or  more percent in a
GWCS license.
  (b) In cases where a party had indirect ownership, through an interest in an  intervening
entity (or entities) that has ownership in the GWCS license,  that indirect ownership shall be
attributable if the percentages of ownership at each level, multiplied together, equal five or
more percent ownership of the GWCS license, except that if the ownership percentage for an
interest  in any link in the chain exceeds 50 percent or represents actual control, it  shall be
treated as if it were a 100 percent interest.
  Example: Party X has a non-controlling ownership interest of 25 percent in  Company Y,
which in turn has a non-controlling ownership interest of 10 percent  in Company Z, the
GWCS licensee. Party X's effective ownership  interest in Company Z is Party X's ownership
interest in Company Y (25 percent)  times Company Y's ownership interest in Company Z
(10 percent).  Therefore,  Party X's effective ownership interest in Company Z is 2.5 percent,
and is not attributable.
  (c) Notwithstanding paragraph (b) of this section, the following interests shall not constitute
attributable ownership interests for purposes of  paragraph (a) of this section:
  (1) A limited partnership interest held by an institutional investor (as defined  26.4) where
the limited partner is not materially involved,  directly or indirectly, in the management or
operation of the GWCS holdings of  the partnership, and the licensee so certifies.  The criteria
which would  assure adequate insulation for the purposes of this certification require:     (i)
Prohibiting limited partners from acting as employees of the limited  partnership if
responsibilities relate to the carrier activities of the  licensee;
  (ii) Barring the limited partners from serving as independent contractors;
  (iii) Restricting communication among limited partners and the general partner  regarding
day-to-day activities of the licensee;
  (iv) Empowering the general partner to veto admissions of new general  partners;
  (v) Restricting the circumstances in which the limited partners can remove the  general
partner;
  (vi) Prohibiting the limited partners from providing services to the  partnership relating to
the GWCS holdings of the licensee; and
  (vii) Stating that the limited partners may not become involved in the management or
operation of the licensee.
 26.102  Service areas.
  GWCS service areas are based on Economic Areas developed by the Bureau of Economic
Analysis, Department of Commerce, referred to as "EAs" and three additional EA-like service
areas:  Guam and the Northern Mariana Islands (combined as one service area), Puerto Rico
and the United States Virgin Islands (combined as one service area), and American Samoa.
  (a) Economic Areas.  Codes from 001 to 172 are assigned to the EAs in approximate
geographic order, beginning with 001 in northern Maine, continuing south to Florida, then
north to the Great Lakes, and continuing in a serpentine pattern to the West Coast.  Except
for the Western Oklahoma EA (126), the Northern Michigan EA (058), and the 17 EAs that
mainly correspond to consolidated metropolitan statistical areas (CMSAs), each EA is named
for the metropolitan area or city that is the node of its largest component economic area
(CEA)and that is usually, but not always, the largest metropolitan area or city in the EA.
Each CEA consists of a single economic node and the surrounding counties that are
economically related to the node.  The following list provides EA codes and names.
 EA
Code   Name
 001   Bangor, ME
 002   Portland, ME
 003   Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH
 004   Burlington, VT
 005   Albany-Schenectady-Troy, NY
 006   Syracuse, NY
 007   Rochester, NY
 008   Buffalo-Niagara Falls, NY
 009   State College, PA
 010   New York-No. New Jersey-Long Island, NY-NJ-CT-PA
 011   Harrisburg-Lebanon-Carlisle, PA
 012   Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD
 013   Washington-Baltimore, DC-MD-VA-WV
 014   Salisbury, MD
 015   Richmond-Petersburg, VA
 016   Staunton, VA
 017   Roanoke, VA
 018   Greensboro-Winston-Salem-High Point, NC
 019   Raleigh-Durham-Chapel Hill, NC
 020   Norfolk-Virginia Beach-Newport News, VA-NC
 021   Greenville, NC
 022   Fayetteville, NC
 023   Charlotte-Gastonia-Rock Hill, NC-SC
 024   Columbia, SC
 025   Wilmington, NC
 026   Charleston-North Charleston, SC
 027   Augusta-Aiken, GA-SC
 028   Savannah, GA
 029   Jacksonville, FL
 030   Orlando, FL
 031   Miami-Fort Lauderdale, FL
 032   Fort Myers-Cape Coral, FL
 033   Sarasota-Bradenton, FL
 034   Tampa-St. Petersburg-Clearwater, FL
 035   Tallahassee, FL
 036   Dothan, AL
 037   Albany, GA
 038   Macon, GA
 039   Columbus, GA-AL
 040   Atlanta, GA
 041   Greenville-Spartanburg-Anderson, SC
 042   Asheville, NC
 043   Chattanooga, TN-GA
 044   Knoxville, TN
 045   Johnson City-Kingsport-Bristol, TN-VA
 046   Hickory-Morganton, NC
 047   Lexington, KY
 048   Charleston, WV
 049   Cincinnati-Hamilton, OH-KY-IN
 050   Dayton-Springfield, OH
 051   Columbus, OH
 052   Wheeling, WV-OH
 053   Pittsburgh, PA
 054   Erie, PA
 055   Cleveland-Akron, OH
 056   Toledo, OH
 057   Detroit-Ann Arbor-Flint, MI
 058   Northern Michigan, MI
 059   Green Bay, WI
 060   Appleton-Oshkosh-Neenah, WI
 061   Traverse City, MI
 062   Grand Rapids-Muskegon-Holland, MI
 063   Milwaukee-Racine, WI
 064   Chicago-Gary-Kenosha, IL-IN-WI
 065   Elkhart-Goshen, IN
 066   Fort Wayne, IN
 067   Indianapolis, IN
 068   Champaign-Urbana, IL
 069   Evansville-Henderson, IN-KY
 070   Louisville, KY-IN
 071   Nashville, TN
 072   Paducah, KY
 073   Memphis, TN-AR-MS
 074   Huntsville, AL
 075   Tupelo, MS
 076   Greenville, MS
 077   Jackson, MS
 078   Birmingham, AL
 079   Montgomery, AL
 080   Mobile, AL
 081   Pensacola, FL
 082   Biloxi-Gulfport-Pascagoula, MS
 083   New Orleans, LA
 084   Baton Rouge, LA
 085   Lafayette, LA
 086   Lake Charles, LA
 087   Beaumont-Port Arthur, TX
 088   Shreveport-Bossier City, LA
 089   Monroe, LA
 090   Little Rock-North Little Rock, AR
 091   Fort Smith, AR-OK
 092   Fayetteville-Springdale-Rogers, AR
 093   Joplin, MO
 094   Springfield, MO
 095   Jonesboro, AR
 096   St. Louis, MO-IL
 097   Springfield, IL
 098   Columbia, MO
 099   Kansas City, MO-KS
 100   Des Moines, IA
 101   Peoria-Pekin, IL
 102   Davenport-Moline-Rock Island, IA-IL
 103   Cedar Rapids, IA
 104   Madison, WI
 105   La Crosse, WI-MN
 106   Rochester, MN
 107   Minneapolis-St. Paul, MN-WI
 108   Wausau, WI
 109   Duluth-Superior, MN-WI
 110   Grand Forks, ND-MN
 111   Minot, ND
 112   Bismarck, ND
 113   Fargo-Moorhead, ND-MN
 114   Aberdeen, SD
 115   Rapid City, SD
 116   Sioux Falls, SD
 117   Sioux City, IA-NE
 118   Omaha, NE-IA
 119   Lincoln, NE
 120   Grand Island, NE
 121   North Platte, NE
 122   Wichita, KS
 123   Topeka, KS
 124   Tulsa, OK
 125   Oklahoma City, OK
 126   Western Oklahoma, OK
 127   Dallas-Fort Worth, TX
 128   Abilene, TX
 129   San Angelo, TX
 130   Austin-San Marcos, TX
 131   Houston-Galveston-Brazoria, TX
 132   Corpus Christi, TX
 133   McAllen-Edinburg-Mission, TX
 134   San Antonio, TX
 135   Odessa-Midland, TX
 136   Hobbs, NM
 137   Lubbock, TX
 138   Amarillo, TX
 139   Santa Fe, NM
 140   Pueblo, CO
 141   Denver-Boulder-Greeley, CO
 142   Scottsbluff, NE
 143   Casper, WY
 144   Billings, MT
 145   Great Falls, MT
 146   Missoula, MT
 147   Spokane, WA
 148   Idaho Falls, ID
 149   Twin Falls, ID
 150   Boise City, ID
 151   Reno, NV
 152   Salt Lake City-Ogden, UT
 153   Las Vegas, NV-AZ
 154   Flagstaff, AZ
 155   Farmington, NM
 156   Albuquerque, NM
 157   El Paso, TX
 158   Phoenix-Mesa, AZ
 159   Tucson, AZ
 160   Los Angeles-Riverside-Orange County, CA
 161   San Diego, CA
 162   Fresno, CA
 163   San Francisco-Oakland-San Jose, CA
 164   Sacramento-Yolo, CA
 165   Redding, CA
 166   Eugene-Springfield, OR
 167   Portland-Salem, OR-WA
 168   Pendleton, OR
 169   Richland-Kennewick-Pasco, WA
 170   Seattle-Tacoma-Bremerton, WA
 171   Anchorage, AK
 172   Honolulu, HI
  (b)  Other eligible areas not included in the Bureau of Economic Analysis's list of EAs
include:  Guam and the Northern Mariana Islands, Puerto Rico and United States Virgin
Islands, and American Samoa.
 26.103  Frequencies
    The following frequencies are available for GWCS in the Economic Areas and other areas
described in  26.102 as shown below.
     Channel Block  Frequency Band
            Block  A:              4660-4665 MHz
            Block  B:              4665-4670 MHz
     Block  C:             4670-4675 MHz
            Block  D:              4675-4680 MHz
            Block  E:              4680-4685 MHz
 26.104  Construction requirements.
  (a) GWCS licensees shall within five years of initial license grant date offer service to one-
third of the population in the area in which they are licensed.  Licensees shall serve two-thirds
of the population in the area in which they are licensed within ten years of initial license grant
date.
  (b) In demonstrating compliance with the above construction requirements, licensees must
base their calculations on signal field strengths that ensure reliable service for the technology
utilized.  Licensees may use any service radius contour formula developed or generally used
by industry, provided that such formula is based on the technical characteristics of their
system.
  (c) Upon meeting the five and ten year benchmarks in paragraph (a) of this section,
licensees shall file a map and other supporting documentation that demonstrates compliance
with the geographic area or population coverage requirement.  Licensees shall file a statement
indicating commencement of service.  The filing must be received at the Commission on or
before expiration of the relevant period.
  (d) If the sale of a license is approved, the new licensee is held to the original build-out
requirement.
  (e) Failure by a licensee to meet the above construction requirements may result in forfeiture
of the license and ineligibility to regain it.
  Note:  Population-based construction requirements contained in this section shall be based
on the 1990 census.
Subpart E - Competitive Bidding Procedures for GWCS
 26.201   GWCS subject to competitive bidding.
  Mutually exclusive initial applications to provide GWCS service are subject to competitive
bidding procedures.  The general competitive bidding procedures found in 47 CFR Part 1,
Subpart Q, will apply unless otherwise provided in this part.
 26.202  Competitive bidding design for GWCS licensing.
  (a) The Commission will employ the following competitive bidding designs when choosing
from among  mutually exclusive initial applications to provide GWCS service:
  (1) Simultaneous multiple round auctions
  (2) Sequential oral auctions
  (b) The Commission may design and test alternative procedures.  The Commission will
announce by Public Notice before each auction the competitive bidding design to be
employed in a particular auction.
  (c) The Commission may use single combined auctions, which combine bidding for two or
more substitutable licenses and award licenses to the highest bidders until the available
licenses are exhausted.  This technique may be used in conjunction with any type of auction.
 26.203  Competitive bidding mechanisms.
  (a)  Sequencing.  The Commission will establish and may vary the sequence in which
GWCS  licenses will be auctioned.
  (b)  Reservation Price.  The Commission may establish a reservation price, either disclosed
or undisclosed, below which a license subject to auction will not be awarded.
  (c)  Minimum Bid Increments.  The Commission may, by announcement before or during
an auction, require minimum bid increments in dollar or percentage terms.  The Commission
may also establish by Public Notice a suggested opening bid or a minimum opening bid on
each license.
  (d)  Stopping Rules.  The Commission may establish stopping rules before or during
multiple round auctions in order to terminate an auction within a reasonable time.
  (e)  Activity Rules.  The Commission may establish activity rules which require a minimum
amount of bidding activity.  In the event that the Commission establishes an activity rule in
connection with a simultaneous multiple round auction, each bidder will be entitled to request
and will be automatically granted one activity rule waiver during each stage of an auction, or
one automatic waiver during a specified number of bidding rounds.  The Commission may
change by Public Notice the number and frequency of such automatic activity rule waivers
for a specific auction.
  (f)  Bidder Identification During Auctions.  The Commission may choose, on an auction-by-
auction basis, to release the identity of the bidders associated with bidder identification
numbers.  The Commission will announce by Public Notice before each auction whether
bidder identities will be revealed.
 (g)  Nationwide Bidders.  Bidders seeking to aggregate EA-based GWCS licenses into
nationwide licenses are required to declare the number of nationwide aggregations for which
they will bid and to be active in every round of bidding on sufficient licenses to create the
number of declared aggregations.
 26.204  Withdrawal, default and disqualification penalties.
  (a) When the Commission conducts a simultaneous multiple round auction pursuant to
 26.202 (a)(1), the Commission will impose penalties on bidders who withdraw high bids
during the course of an auction, or who default on payments due after an auction closes or
who are disqualified.
  (1) Bid withdrawal prior to close of auction.  A bidder who withdraws a high bid during
the course of an auction will be subject to a penalty equal to the difference between the
amount bid and the amount of the winning bid the next time the license is offered by the
Commission.  No withdrawal penalty would be assessed if the subsequent winning bid
exceeds the withdrawn bid.  This penalty amount will be deducted from any upfront
payments or down payments that the withdrawing bidder has deposited with the Commission.
The withdrawal penalty for a nationwide bidder for each aggregation is limited to 5 percent
of the aggregate withdrawn bids.  The withdrawal penalty for a nationwide bidder is
calculated between the sum of the withdrawn bids and the sum of the subsequent high bids on
the withdrawn licenses.
  (2) Default or disqualification after close of auction.  If a high bidder defaults or is
disqualified after the close of such an auction, the defaulting bidder will be subject to the
penalty in paragraph (a)(1) of this section plus an additional penalty equal to three (3) percent
of the subsequent winning bid.  If the subsequent winning bid exceeds the defaulting bidder's
bid amount, the 3 percent penalty will be calculated based on the defaulting bidder's bid
amount.  These amounts will be deducted from any upfront payments or down payments that
the defaulting or disqualified bidder has deposited with the Commission.
  (b) When the Commission conducts sequential oral auctions, the Commission may modify
the penalties to be paid in the event of bid withdrawal, default or disqualification; provided,
however, that such penalties shall not exceed the penalties specified above.
  (c) In the case of single round bidding for GWCS licenses:
  (1) If a bid is withdrawn before the Commission releases the initial Public Notice
announcing the winning bidder(s), no bid withdrawal penalty will be assessed.
  (2) If a bid is withdrawn after the Commission releases the initial Public Notice announcing
the winning bidder(s), the bid withdrawal penalty will be equal to the difference between the
high bid amount and the amount of the next highest valid bid.  A bid will be considered valid
for this purpose if the bidder has not already been designated the winning bidder on more
licenses than it is permitted to be awarded.  Losing bidders will only be subject to this bid
withdrawal penalty for a period of 30 days after the Commission releases the initial Public
Notice announcing the winning bidders.
  (d) In the case of oral sequential bidding for GWCS licenses:
  (1) If a bid is withdrawn before the Commission has declared the bidding to be closed for
the license bid on, no bid withdrawal penalty will be assessed.
  (2) If a bid is withdrawn after the Commission has declared the bidding to be closed for the
license bid on, the bid withdrawal penalty of  1.2104(g) of this chapter and paragraphs
(a)(1) and (a)(2) of this section will apply.
 26.205  Bidding application (FCC Form 175 and 175-S Short-Form).
  All applicants for initial provision of GWCS service must submit applications on FCC
Forms 175 and 175-S pursuant to the procedures set forth in  1.2105 of part 1 of this
chapter.  The Commission will issue a Public Notice announcing the date of a GWCS
auction, the licenses which are to be auctioned, and the date on or before which applicants
intending to participate in an upcoming GWCS auction must file their applications in order to
be eligible for that auction.  The Public Notice will also contain information necessary for
completion of the application as well as other important information such as the materials
which must accompany the Forms, any filing fee that must accompany the application or any
upfront payment that will need to be submitted, and the location where the application must
be filed.
 26.206  Submission of upfront payments and down payments.
  (a) Where the Commission uses simultaneous multiple round auctions or oral sequential
auctions bidders will be required to submit an upfront payment pursuant to the procedures set
forth in  1.2106 of this chapter.
  (b) Winning bidders in an auction must submit a down payment to the Commission in
accordance with the procedures set forth in  1.2107 (a) and (b) of this chapter.
 (c) Notwithstanding paragraphs (a) and (b) of this section, eligible small businesses may
submit a down payment of 5 percent of the winning bid five days after the auction closes and
5 percent five days after public notice that the license is ready for grant.
 26.207  Long form applications.
  Winning bidders will be required to submit long form applications on FCC form XXX, as
modified, within ten (10) business days after being notified that they are the winning bidder.
Applications on FCC Form XXX shall be submitted  pursuant to the procedures set forth in
subpart G of this part and  1.2107 (c) and (d) of this chapter and any associated Public
Notices.  Only auction winners will be eligible to file applications on FCC Form XXX for
initial GWCS licenses in the event of mutual exclusivity between applicants filing Form 175.
Winning bidders need not complete Schedule B to Form XXX.
 26.208  License grant, denial, default, and disqualification.
  (a)  Unless eligible for installment payments and/or a bidding credit, each winning bidder is
required to pay the balance of its winning bid in a lump sum payment within five (5)
business days following the award of the license. Grant of the license will be conditioned
upon full and timely payment of the winning bid amount.
  (b)  A bidder who withdraws its bid, defaults on a payment or is disqualified will be
subject to the penalties specified in  1.2109 of this Chapter.
  (c) An eligible small business may elect to pay its winning bid, less up-front payments,
over the term of the license.  Interest charges are fixed at the time of licensing at the rate
equal to U.S. Treasury obligation plus 2.5 percent.  Installment payments are due quarterly
on the anniversary of the day the license was granted, except that interest-only installment
payments  are permitted during the first two years of the license.
 26.209  Eligibility for partitioned licenses.
  (a) Notwithstanding  26.102, an applicant that is a rural telephone company, as defined in
 26.4, may be granted a GWCS license that is geographically partitioned from a separately
licensed EA, so long as the EA applicant or licensee has voluntarily agreed (in writing) to
partition a portion of the license to the rural telephone company.
  (b) If partitioned licenses are being applied for in conjunction with a license(s) to be
awarded through competitive bidding procedures --
  (1) The applicable procedures for filing short-form applications and for submitting upfront
payments and down payments contained in this part and Part 1 of this chapter shall be
followed by the applicant, who must disclose as part of its short-form application all parties
to agreement(s) with or among rural telephone companies to partition the license pursuant to
this section, if won at auction (see 1.2105(a)(2)(viii));
  (2) Each rural telephone company that is a party to an agreement to partition the license
shall file a long-form application for its respective, mutually agreed-upon geographic area
together with the application for the remainder of the EA filed by the auction winner.
  (c) If the partitioned license is being applied for as a partial assignment of the EA license
following grant of the initial license, request for authorization for partial assignment of a
license shall be made pursuant to  26.324.
  (d) Each application for a partitioned area (long-form initial application or partial
assignment application) shall contain a partitioning plan that must propose to establish a
partitioned area to be licensed that meets the following criteria:
  (1) Conforms to established geopolitical boundaries (such as county lines);
  (2) Includes the wireline service area of the rural telephone company applicant; and
  (3) Is reasonably related to the rural telephone company's wireline service area.
  Note to paragraph (d)(3) of this section:  A partitioned service area will be presumed to be
reasonably related to the rural telephone company's wireline service area if the partitioned
service area contains no more than twice the population overlap between the rural telephone
company's wireline service area and the partitioned area.
  (e) Each licensee in each partitioned area will be responsible for meeting the construction
requirements in its area (see  26.104).
  26.210  Provisions for small businesses.
  (a) Bidding Credits.  A winning bidder that qualifies as a small business or a consortium of
small businesses may use a bidding credit of ten percent to lower the cost of its winning bid.
  (b) Installment Payments.  A winning bidder that qualifies as a small business may pay its
winning bid amount (less upfront payments) in installments over the ten year term of the
license, with interest charges to be fixed at the time of licensing at a rate equal to the rate for
ten year U.S. Treasury obligations plus 2.5 percent.  Installment payments are due quarterly
on the anniversary of the day the license is granted.  Failure to make timely installment
payments may result in revocation of the license.  Small businesses are permitted to make
interest-only installment payments during the first two years of the license.
 (c)  Down Payments.  A winning bidder that qualifies as a small business is permitted to
make a down payment equal to 5 percent of the winning bid due five days after the auction
closes with the remaining 5 percent down payment dues five days after Public Notice that the
license is ready for grant.
 (d) Unjust Enrichment.  If a licensee that utilizes a bidding credit under this section seeks to
assign or transfer control of its license to an entity not meeting the eligibility standards for
bidding credits or seeks to make any other change in ownership that would result in the
licensee no longer qualifying for bidding credits under this section, the licensee must seek
Commission approval and reimburse the government for the amount of the bidding credit,
plus interest at the rate imposed for installment financing at the time the license was awarded
as a condition of the approval of such assignment, transfer or other ownership change.  The
amount of the payment would be reduced over time so that a transfer in the first two years of
the license would result in a payment of 100 percent of the value of the bidding credit; in
year three of the license term the payment would be 75 percent; in year four the payment
would be 50 percent and in year five the payment would be 25 percent, after which there
would be no payment.  Transfer of control or assignment of station license is also subject to
provisions of  1.2111 of this chapter.
Subpart F -- Application, Licensing, and Processing Rules for GWCS
 26.301  Authorization required.
  No person shall use or operate any device for the transmission of energy or
communications by radio in the services authorized by this part except as provided in this
part.
 26.302  Eligibility.
  (a) General. Authorizations will be granted upon proper application if:
  (1) The applicant is qualified under the applicable laws and the regulations, policies and
decisions issued under those laws, including  26.101 and 26.12;
  (2) There are frequencies available to provide satisfactory service; and
  (3) The public interest, convenience or necessity would be served by a grant.
  (b) Alien ownership. A GWCS authorization to provide Commercial Mobile Radio Service
may not be granted to or held by:
  (1) Any alien or the representative of any alien.
  (2) Any corporation organized under the laws of any foreign government.
  (3) Any corporation of which any officer or director is an alien or of which more than
one-fifth of the capital stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof or any corporation organized under the
laws of a foreign country.
  (4) Any corporation directly or indirectly controlled by any other corporation of which any
officer or more than one-fourth of the directors are aliens, or of which more than one-fourth
of the capital stock is owned of record or voted by aliens, their representatives, or by a
foreign government or representative thereof, or by any corporation organized under the laws
of a foreign country, if the Commission finds that the public interest will be served by the
refusal or revocation of such license.
  (c) A GWCS authorization to provide Private Mobile Radio Service may not be granted to
or held by a foreign government or a representative thereof.
 26.303  Formal and informal applications.
  (a) Except for an authorization under any of the conditions stated in section 308(a) of the
Communications Act of 1934 (47 U.S.C. 308(a)), the Commission may grant only upon
written application received by it, the following authorization: station licenses; modifications
of licenses; renewals of licenses; transfers and assignments of station licenses, or any right
thereunder.
  (b) Except as may be otherwise permitted by this part, a separate written application shall
be filed for each instrument of authorization requested.  Applications may be:
  (1) "Formal applications" where the Commission has prescribed in this Part a standard
form; or
  (2) "Informal applications" (normally in letter form) where the Commission has not
prescribed a standard form.
  (c) An informal application will be accepted for filing only if:
  (1) A standard form is not prescribed or clearly applicable to the authorization requested;
  (2) It is a document submitted, in duplicate, with a caption which indicates clearly the
nature of the request, radio service involved, location of the station, and the application file
number (if known); and
  (3) It contains all the technical details and informational showings required by the rules and
states clearly and completely the facts involved and authorization desired.
 26.304  Filing of GWCS applications, fees, and numbers of copies.
  (a) As prescribed by  26.305 and 26.307, standard formal application forms applicable to
the GWCS may be obtained from either:
  (1) Federal Communications Commission, Washington, DC 20554; or
  (2) By calling the Commission's Forms Distribution Center, (202) 418-3676.
  (b) Applications for the initial provision of GWCS service must be filed on FCC Form 175
in accordance with the rules in  26.305 and Part 1, Subpart Q of this chapter.  In the event
of mutual exclusivity between applicants filing FCC Form 175, only auction winners will be
eligible to file subsequent long form applications on FCC Form XXX for initial GWCS
licenses. Mutually exclusive applications filed on Form 175 are subject to competitive
bidding under those rules.  GWCS applicants filing Form XXX need not complete Schedule
B.
  (c) All applications for GWCS radio station authorizations (other than applications for
initial provision of GWCS service filed on FCC Form 175) shall be submitted for filing to:
Federal Communications Commission, Washington, DC 20554, Attention:  GWCS
Processing Section. Applications requiring fees as set forth at Part 1, Subpart G of this
chapter must be filed in accordance with  0.401(b) of this chapter.
  (d) All correspondence or amendments concerning a submitted application shall clearly
identify the name of the applicant, applicant identification number or Commission file
number (if known) or station call sign of the application involved, and may be sent directly
to the Wireless Telecommunications Bureau, Washington, DC 20554, GWCS Processing
Section.
  (e) Except as otherwise specified, all applications, amendments, correspondence, pleadings
and forms (including FCC Form 175) shall be submitted on one original paper copy and with
three microfiche copies, including exhibits and attachments thereto, and shall be signed as
prescribed by  1.743 of this chapter.  Unless otherwise provided by the FCC, filings of five
pages or less are exempt from the requirement to submit on microfiche, as well as
emergency filings like letters requesting special temporary authority.  Those filing any
amendments, correspondence, pleadings, and forms must simultaneously submit the original
hard copy which must be stamped "original".  In addition to the original hard copy, those
filing pleadings, including pleadings under  1.2108 of this chapter shall also submit 2 paper
copies as provided in  1.51 of this chapter.
  (1) Microfiche copies.  Each microfiche copy must be a copy of the signed original.  Each
microfiche copy shall be a 148mm 0A 105mm negative (clear transparent characters
appearing on an opaque background) at 240A to 270A reduction for microfiche or microfiche
jackets.  One of the microfiche sets must be a silver halide camera master or a copy made on
silver halide film such as Kodak Direct Duplicatory Film.  The microfiche must be placed in
paper microfiche envelopes and submitted in a B6 (125 mm 0A 176 mm) or 5 0A 7.5 inch
envelope.  All applicants must leave Row "A" (the first row for page images) of the first
fiche blank for in-house identification purposes.
  (2) All applications and all amendments must have the following information printed on the
mailing envelope, the microfiche envelope, and on the title area at the top of the microfiche:
   (i) The name of the applicant;
  (ii) The type of application (e.g. nationwide, or EA);
  (iii) The month and year of the document;
  (iv) Name of the document;
  (v) File number, applicant identification number, and call sign, if assigned; and
  (vi) The identification number and date of the Public Notice announcing the auction in
response to which the application was filed (if applicable).  Each microfiche copy of
pleadings shall include:
  (A) The month and year of the document;
  (B) Name of the document;
  (C) Name of the filing party;
  (D) File number, applicant identification number, and call sign, if assigned;
  (E) The identification number and date of the Public Notice announcing the auction in
response to which the application was filed (if applicable).  Abbreviations may be used if
they are easily understood.
 26.305  Standard application forms and permissive changes or minor modifications for
         the General Wireless Communications Service.
  (a) Applications for the initial provision of GWCS service must be filed on FCC Forms 175
and 175-S.
  (b) Subsequent application by auction winners or non-mutually exclusive applicants for
GWCS radio station(s) under Part 26.  FCC Form XXX ("Application for New or Modified
General Wireless Communications Service Under Part 26") shall be submitted by each
auction winner for each GWCS license applied for on FCC Form 175.  In the event that
mutual exclusivity does not exist between applicants filing FCC Form 175, the Commission
will so inform the applicant and the applicant will also file FCC Form XXX.  Blanket
licenses are granted for each market frequency block.  Applications for individual sites are
not needed and will not be accepted.  See  26.11.  GWCS applicants filing Form XXX need
not complete Schedule B.
  (c) Extensions of time and reinstatement. When a licensee cannot complete construction in
accordance with the provisions of  26.104, a timely application for extension of time (FCC
Form 489) must be filed.
 26.306  Miscellaneous forms.
  (a) Licensee qualifications. FCC Form 430 ("Common Carrier and Satellite Radio Licensee
Qualifications Report") shall be filed by  General Wireless Communications Service licensees
only as required by Form 490 (Application for Assignment or Transfer of Control Under part
22).
  (b) Renewal of station license. Except for renewal of special temporary authorizations,
FCC Form 405 ("Application for Renewal of Station License") must be filed in duplicate by
the licensee between thirty (30) and sixty (60) days prior to the expiration date of the license
sought to be renewed.
 26.307  General application requirements.
  (a) Each application (including applications filed on Forms 175 and XXX) for a radio
station authorization or for consent to assignment or transfer of control in the GWCS shall
disclose fully the real party or parties in interest and must include the following information:
  (1) A list of its subsidiaries, if any. Subsidiary means any business five per cent or more
whose stock, warrants, options or debt securities are owned by the applicant or an officer,
director, stockholder or key management personnel of the applicant. This list must include a
description of each subsidiary's principal business and a description of each subsidiary's
relationship to the applicant.
  (2) A list of its affiliates, if any.  Affiliates means any business which holds a five per cent
or more interest in the applicant, or any business in which a five per cent or more interest is
held by another company which holds a five per cent interest in the applicant (e.g. Company
A owns 5% of Company B and 5% of Company C; Companies B and C are affiliates).
  (3) A list of the names, addresses, citizenship and principal business of any person holding
five per cent or more of each class of stock, warrants, options or debt securities together
with the amount and percentage held, and the name, address, citizenship and principal place
of business of any person on whose account, if other than the holder, such interest is held. If
any of these persons are related by blood or marriage, include such relationship in the
statement.
  (4) In the case of partnerships, the name and address of each partner, each partner's
citizenship and the share or interest participation in the partnership. This information must be
provided for all partners, regardless of their respective ownership interests in the partnership.
A signed and dated copy of the partnership agreement must be included in the application.
This information must be included in Exhibit V of the application.
  (b) Each application for a radio station authorization in the GWCS must:
  (1) Submit the information required by the Commission's rules, requests, and application
forms;
  (2) Be maintained by the applicant substantially accurate and complete in all significant
respects in accordance with the provisions of  1.65 of this chapter; and
  (3) Show compliance with and make all special showings that may be applicable.
  (c) Where documents, exhibits, or other lengthy showings already on file with the
Commission contain information which is required by an application form, the application
may specifically refer to such information, if:
  (1) The information previously filed is over one A4 (21 cm x 29.7 cm) or 8.5 x 11 inch
(21.6 cm x 27.9 cm) page in length, and all information referenced therein is current and
accurate in all significant respects under  1.65 of this chapter; and
  (2) The reference states specifically where the previously filed information can actually be
found, including mention of:
  (i) The station call sign or application file number whenever the reference is to station files
or previously filed applications;
  (ii) The title of the proceeding, the docket number, and any legal citations, whenever the
reference is to a docketed proceeding. However, questions on an application form which call
for specific technical data, or which can be answered by a "yes" or "no" or other short
answer shall be answered as appropriate and shall not be cross-referenced to a previous
filing.
  (d) In addition to the general application requirements of Subpart F of this part and 
1.2105 of this chapter, applicants shall submit any additional documents, exhibits, or signed
written statements of fact:
  (1) As may be required by these rules; and
  (2) As the Commission, at any time after the filing of an application and during the term of
any authorization, may require from any applicant, permittee, or licensee to enable it to
determine whether a radio authorization should be granted, denied, or revoked.
  (e) Except when the Commission has declared explicitly to the contrary, an informational
requirement does not in itself imply the processing treatment of decisional weight to be
accorded the response.
  (f) All applicants (except applicants filing FCC Form 175) are required to indicate at the
time their application is filed whether or not a Commission grant of the application may have
a significant environmental impact as defined by  1.1307 of this chapter.  If answered
affirmatively, the requisite environmental assessment as prescribed in  1.1311 of this
chapter must be filed with the application and Commission environmental review must be
completed prior to construction.  See  1.1312 of this chapter.  All GWCS licensees are
subject to a continuing obligation to determine whether subsequent construction may have a
significant environmental impact prior to undertaking such construction and to otherwise
comply with  1.1301 through 1.1319 of this chapter.  See  1.1312 of this chapter.
 26.308  Technical content of applications; maintenance of list of station locations.
  All applications required by this part shall contain all technical information required by the
application forms or associated Public Notice(s).  Applications other than initial applications
for a GWCS license must also comply with all technical requirements of the rules governing
the GWCS (see Subparts C and D as appropriate).
  26.309 Station antenna structures.
  (a) Unless the GWCS licensee has received prior approval from the FCC, no antenna
structure, including radiating elements, tower, supports and all appurtenances, may be higher
than 61 m (200 feet) above ground level at its site.
  (b) Unless the GWCS licensee has received prior approval from the FCC, no antenna
structure at an airport or heliport that is available for public use and is listed in the Airport
Directory of the current Airman's Information Manual or in either the Alaska or Pacific
Airman's Guide and Chart Supplement; or at an airport or heliport under construction that is
the subject of a notice or proposal on file with the FAA, and except for military airports, it
is clearly indicated that the airport will be available for public use; or at an airport or
heliport that is operated by the armed forces of the United States; or at a place near any of
these airports or heliports, may be higher than:
  (1) 1 m above the airport elevation for each 100 m from the airport runway longer than 1
km within 6.1 km of the antenna structure.
  (2) 2 m above the airport elevation for each 100 m from the nearest runway shorter than 1
km within 3.1 km of the antenna structure.
  (3) 4 m above the airport elevation for each 100 m from the nearest landing pad within 1.5
km of the antenna structure.
  (c) A GWCS station antenna structure no higher than 6.1 m (10 feet) above ground level at
its site or no higher than 6.1 m above any natural object or existing manmade structure,
other than an antenna structure, is exempt from the requirements of paragraphs (a) and (b) of
this section.
  (d) Further details as to whether an aeronautical study and/or obstruction marking and
lighting may be required, and specifications for obstruction marking and lighting are
contained in Part 17 of this chapter, Construction, Marking and Lighting of Antenna
Structures.  To request approval to place an antenna structure higher than the limits specified
in paragraphs (a), (b), and (c) of this section, the licensee must notify the Federal Aviation
Administration (FAA) on FAA Form 7460-1 and the FCC on FCC Form 854.
 26.310  Waiver of rules.
  (a) Request for waivers. (1) Waivers of these rules may be granted upon application or by
the Commission on its own motion. Requests for waivers shall contain a statement of reasons
sufficient to justify a waiver. Waivers will not be granted except upon an affirmative
showing:
  (i) That the underlying purpose of the rule will not be served, or would be frustrated, by its
application in a particular case, and that grant of the waiver is otherwise in the public
interest; or
  (ii) That the unique facts and circumstances of a particular case render application of the
rule inequitable, unduly burdensome or otherwise contrary to the public interest. Applicants
must also show the lack of a reasonable alternative.
  (2) If the information necessary to support a waiver request is already on file, the applicant
may cross-reference to the specific filing where it may be found.
  (b) Denial of waiver, alternate showing required.  If a waiver is not granted, the application
will be dismissed as defective unless the applicant has also provided an alternative proposal
which complies with the Commission's rules (including any required showings).
 26.311  Defective applications.
  (a) Unless the Commission shall otherwise permit, an application will be unacceptable for
filing and will be returned to the applicant with a brief statement as to the omissions or
discrepancies if:
  (1) The application is defective with respect to completeness of answers to questions,
informational showings, execution, or other matters of a formal character; or
  (2) The application does not comply with the Commission's rules, regulations, specific
requirements for additional information or other requirements.  See also  1.2105 of this
chapter.
  (b) Some examples of common deficiencies which result in defective applications under
paragraph (a) of this section are:
  (1) The application is not filled out completely and signed;
  (2) The application (other an application filed on FCC Form 175) does not include an
environmental assessment as required for an action that may have a significant impact upon
the environment, as defined in  1.1307 of this chapter.
  (3) The application is filed prior to the Public Notice issued under  26.317 announcing the
application filing date for the relevant auction or after the cutoff date prescribed in that
Public Notice;
 (c) If an applicant is requested by the Commission to file any documents or any
supplementary or explanatory information not specifically required in the prescribed
application form, a failure to comply with such request within a specified time period will be
deemed to render the application defective and  will subject it to dismissal.
 26.312  Inconsistent or conflicting applications.
  While an application is pending and undecided, no subsequent inconsistent or conflicting
application may be filed by the same applicant, his successor or assignee, or on behalf or for
the benefit of the same applicant, his successor or assignee.
 26.313  Amendment of application for General Wireless Communications Service
         filed on FCC Form 175.
  (a)  The Commission will provide bidders a limited opportunity to cure defects in FCC
Form 175 specified herein except for failure to sign the application and to make
certifications. These are defects which may not be cured.  See also  1.2105 of this chapter.
  (b)  For GWCS, applicants will be permitted to amend their Form 175 applications to make
minor amendments to correct minor errors or defects such as typographical errors.
Applicants will also be permitted to amend FCC Form 175, to make ownership changes or
changes in the identification of parties to bidding consortia, provided such changes do not
result in a change in control of the applicant and do not involve another applicant (or parties
in interest to an applicant) who has applied for any of the same licenses as the applicant.
Amendments which change control of the applicant will be considered major amendments.
An FCC Form 175 which is amended by a major amendment will be considered to be newly
filed and cannot be resubmitted after applicable filing deadlines.  See also  1.2105 of this
chapter.
 26.314  Amendment of applications for General Wireless Communications Service
         (other than applications filed on FCC Form 175).
  This section applies to all applications for  General Wireless Communications Service other
than applications filed on FCC Form 175.
  (a) Amendments as of right. A pending application may be amended as a matter of right if
the application has not been designated for hearing.
  (1) Amendments shall comply with  26.319, as applicable; and
  (2) Amendments which resolve interference conflicts or amendments under  26.319 may
be filed at any time.
  (b) The Commission or the presiding officer may grant requests to amend an application
designated for hearing only if a written petition demonstrating good cause is submitted and
properly served upon the parties of record.
  (c) Major amendments, minor amendments. The Commission will classify all amendments
as minor except in the cases listed below. An amendment shall be deemed to be a major
amendment subject to  26.317 under any of the following circumstances:
  (1) Change in technical proposal. If the amendment results in a substantial change in the
engineering proposal such as (but not necessarily limited to) a change in, or an addition of, a
radio frequency; or
  (2) Amendment to proposed service area.  If the amendment extends the reliable service
area of the proposed facilities outside its EA or other applicable market area as defined in 
26.102; or
  (3) A substantial change in ownership or control.
  (d) If a petition to deny (or other formal objection) has been filed, any amendment,
requests for waiver, (or other written communications) shall be served on the petitioner,
unless waiver of this requirement is granted pursuant to paragraph (e) of this section.  See
also  1.2108 of this chapter.
  (e) The Commission may waive the service requirements of paragraph (d) of this section
and prescribe such alternative procedures as may be appropriate under the circumstances to
protect petitioners' interests and to avoid undue delay in a proceeding, if an applicant submits
a request for waiver which demonstrates that the service requirement is unreasonably
burdensome.
  (f) Any amendment to an application shall be signed and shall be submitted in the same
manner, and with the same number of copies, as was the original application. Amendments
may be made in letter form if they comply in all other respects with the requirements of this
chapter.
  (g) An application will be considered to be a newly filed application if it is amended by a
major amendment (as defined in this section), except in the following circumstances:
  (1) The amendment reflects only a change in ownership or control found by the
Commission to be in the public interest;
  (2) The amendment corrects typographical transcription, or similar clerical errors which are
clearly demonstrated to be mistakes by reference to other parts of the application, and whose
discovery does not create new or increased frequency conflicts;
  (3) The amendment does not create new or increased frequency conflicts, and is
demonstrably necessitated by events which the applicant could not have reasonably foreseen
at the time of filing, such as, for example:
  (i) The loss of a transmitter or receiver site by condemnation, natural causes, or loss of
lease or option; or
  (ii) Obstruction of a proposed transmission path caused by the erection of a new building or
other structure.
 26.315  Application for temporary authorizations.
  (a) In circumstances requiring immediate or temporary use of facilities, request may be
made for special temporary authority to install and/or operate new or modified equipment.
Any such request may be submitted as an informal application in the manner set forth in 
26.303 and must contain full particulars as to the proposed operation including all facts
sufficient to justify the temporary authority sought and the public interest therein. No such
request will be considered unless the request is received by the Commission at least 10 days
prior to the date of proposed construction or operation or, where an extension is sought,
expiration date of the existing temporary authorization.  A request received within less than
10 days may be accepted upon due showing of sufficient reasons for the delay in submitting
such request.
  (b) Special temporary authorizations may be granted without regard to the 30-day public
notice requirements of  26.317 when:
  (1) The authorization is for a period not to exceed 30 days and no application for regular
operation is contemplated to be filed;
  (2) The authorization is for a period not to exceed 60 days pending the filing of an
application for such regular operation;
  (3) The authorization is to permit interim operation to facilitate completion of authorized
construction or to provide substantially the same service as previously authorized; or
  (4) The authorization is made upon a finding that there are extraordinary circumstances
requiring operation in the public interest and that delay in the institution of such service
would seriously prejudice the public interest.
  (c) Temporary authorizations of operation not to exceed 180 days may be granted under the
standards of section 309(f) of the Communications Act where extraordinary circumstances so
require. Extensions of the temporary authorization for a period of 180 days each may also be
granted, but the renewal applicant bears a heavy burden to show that extraordinary
circumstances warrant such an extension.
  (d) In cases of emergency found by the Commission, involving danger to life or property or
due to damage of equipment, or during a national emergency proclaimed by the president or
declared by the Congress or during the continuance of any war in which the United States is
engaged and when such action is necessary for the national defense or safety or otherwise in
furtherance of the war effort, or in cases of emergency where the Commission finds that it
would not be feasible to secure renewal applications from existing licensees or otherwise to
follow normal licensing procedure, the Commission will grant radio station authorizations
and station licenses, or modifications or renewals thereof, during the emergency found by the
Commission or during the continuance of any such national emergency or war, as special
temporary licenses, only for the period of emergency or war requiring such action, without
the filing of formal applications.
 26.316  Receipt of application; applications in the General Wireless
         Communications Service filed on FCC Form 175 and other applications in
         the GWCS Service.
  (a) All applications for the initial provision of GWCS service must be submitted on FCC
Forms 175 and 175-S.  Mutually exclusive initial applications in the  General Wireless
Communications Services are subject to competitive bidding.  FCC Form XXX ("Application
for New or Modified General Wireless Communications Service Radio Station Under Part
26") must be submitted by each winning bidder for each GWCS license applied for on FCC
Form 175.  In the event that mutual exclusivity does not exist between applicants filing FCC
Form 175, the applicant will also file FCC Form 401.  The aforementioned Forms 175, 175-
S, and XXX are subject to the provisions of Part 1, Subpart Q ("Competitive Bidding
Proceedings") and subpart E of this part.  Blanket licenses are granted for each market
frequency block.  Applications for individual sites are not needed and will not be accepted.
See  26.11.
  (b) Applications received for filing are given a file number. The assignment of a file
number to an application is merely for administrative convenience and does not indicate the
acceptance of the application for filing and processing.  Such assignment of a file number
will not preclude the subsequent return or dismissal of the application if it is found to be not
in accordance with the Commission's rules.
  (c) Acceptance of an application for filing merely means that it has been the subject of a
preliminary review as to completeness. Such acceptance will not preclude the subsequent
return or dismissal of the application if it is found to be defective or not in accordance with
the Commission's rules.
 26.317  Public notice period.
  (a) At regular intervals, the Commission will issue a public notice listing:
  (1) The acceptance for filing of all applications and major amendments thereto;
  (2) Significant Commission actions concerning applications listed as acceptable for filing;
  (3) Information which the Commission in its discretion believes of public significance. Such
notices are solely for the purpose of informing the public and do not create any rights in an
applicant or any other person.
  (4) Special environmental considerations as required by part 1 of this chapter.
  (b) The Commission will not grant any application until expiration of a period of thirty (30)
days following the issuance date of a public notice listing the application, or any major
amendments thereto, as acceptable for filing.  Provided, that the Commission will not grant
an application filed on Form XXX filed either by a winning bidder or by an applicant whose
Form 175 application is not mutually exclusive with other applicants, until the expiration of a
period of forty (40) days following the issuance of a public notice listing the application, or
any major amendments thereto, as acceptable for filing.  See also  1.2108 of this chapter.
  (c) As an exception to paragraphs (a)(1), (a)(2) and (b) of this section, the public notice
provisions are not applicable to applications:
  (1) For authorization of a minor technical change in the facilities of an authorized station
where such a change would not be classified as a major amendment (as defined by  26.314)
were such a change to be submitted as an amendment to a pending application;
  (2) For issuance of a license subsequent to a radio station authorization or, pending
application for a grant of such license, any special or temporary authorization to permit
interim operation to facilitate completion of authorized construction or to provide
substantially the same service as would be authorized by such license;
  (3) For extension of time to complete construction of authorized facilities, see  26.104;
  (4) For temporary authorization pursuant to  26.315;
  (5) For an authorization under any of the proviso clauses of section 308(a) of the
Communications Act of 1934 (47 U.S.C. 308(a));
  (6) For consent to an involuntary assignment or transfer of control of a radio authorization;
or
  (7) For consent to a voluntary assignment or transfer of control of a radio authorization,
where the assignment or transfer does not involve a substantial change in ownership or
control.
 26.318  Dismissal and return of applications.
  (a) Any application may be dismissed without prejudice as a matter of right if the applicant
requests its dismissal prior to designation for hearing or, in the case of applications filed on
Forms 175 and 175-S, prior to auction.  An applicant's request for the return of his
application after it has been accepted for filing will be considered to be a request for
dismissal without prejudice.  Applicants requesting dismissal of their applications are also
subject to  1.2104 of this chapter.
  (b) A request to dismiss an application without prejudice will be considered after
designation for hearing only if:
  (1) A written petition is submitted to the Commission and is properly served upon all
parties of record, and
  (2) The petition complies with the provisions of this Section and demonstrates good cause.
  (c) The Commission will dismiss an application for failure to prosecute or for failure to
respond substantially within a specified time period to official correspondence or requests for
additional information.  Dismissal shall be without prejudice if made prior to designation for
hearing or prior to auction, but dismissal may be made with prejudice for unsatisfactory
compliance or after designation for hearing or after the applicant is notified that it is the
winning bidder under the auction process.
 26.319  Ownership changes and agreements to amend or to dismiss applications or
          pleadings.
 (a) Applicability. Subject to the provisions of  1.2105 of this chapter (Bidding Application
and Certification Procedures; Prohibition of Collusion), this section applies to applicants and
all other parties interested in pending applications who wish to resolve contested matters
among themselves with a formal or an informal agreement or understanding.  This section
applies only when the agreement or understanding will result in:
 (1) A major change in the ownership of an applicant to which  26.323 and 26.324 would
apply, or
 (2) The individual or mutual withdrawal, amendment or dismissal of any pending
application, amendment, petitioner or other pleading.
 (b)  Parties that have filed an application in the GWCS that is mutually exclusive with one
or more other applications, and then enter into an agreement to resolve the mutual exclusivity
by withdrawing or requesting dismissal of the application or an amendment thereto, must
obtain the approval of the FCC.  Parties that have filed a petition to deny, informal objection
or other pleading against a pending application, and then seek to withdraw or request
dismissal of the petition, either unilaterally or in exchange for a financial consideration, must
obtain the approval of the FCC.
 (1)  The party withdrawing or requesting dismissal of its application, petition to deny,
informal objection or other pleading must submit to the FCC a request for approval of the
withdrawal or dismissal, a copy of any written agreement related to the withdrawal or
dismissal, and an affidavit setting forth:
 (i)  A certification that neither the party nor its principals has received or will receive any
money or other consideration in excess of the legitimate and prudent expenses incurred in
prosecuting the application, petition to deny, informal objection or other pleading in
exchange for the withdrawal or dismissal of the application, petition to deny, informal
objection or other pleading, except that this provision does not apply to dismissal or
withdrawal of applications pursuant to bona fide merger agreements;
 (ii)  The exact nature and amount of any consideration received or promised;
 (iii)  An itemized accounting of the expenses for which it seeks reimbursement; and
 (iv)  The terms of any oral agreement related to the withdrawal or dismissal of the
application, petition to deny, informal objection or other pleading.
  (2)  In addition, within 5 days of the filing date of the applicant's or petitioner's request for
approval, each remaining party to any written or oral agreement must submit an affidavit
setting forth:
 (i)  A certification that neither the applicant nor its principals has paid or will pay money or
other consideration in excess of the legitimate and prudent expenses of the petitioner in
exchange for withdrawing or dismissing the application, petition to deny, informal objection
or other pleading; and
 (ii)  The terms of any oral agreement relating to the withdrawal or dismissal of the
application, petition to deny, informal objection or other pleading.
 (3)  For the purposes of this section:
 (i)  Affidavits filed pursuant to this section must be executed by the filing party, if an
individual,  a partner having personal knowledge of the facts, if a partnership, or an officer
having personal knowledge of the facts, if a corporation or association.
 (ii)  Applications, petitions to deny, informal objections and other pleadings are deemed to
be pending before the FCC from the time the application or petition to deny is filed with the
FCC until such time as an order of the FCC granting, denying or dismissing the application,
petition to deny, informal objection or other pleading is no longer subject to reconsideration
by the FCC or to review by any court.
 (iii)  "Legitimate and prudent expenses" are those expenses reasonably incurred by a party
in preparing to file, filing, prosecuting and/or settling its application, petition to deny,
informal objection or other pleading for which reimbursement is sought.
 (iv)  "Other consideration" consists of financial concessions, including, but not limited to,
the transfer of assets or the provision of tangible pecuniary benefit, as well as non-financial
concessions that confer any type of benefit on the recipient.
 (v)  Reimbursement by an applicant of the legitimate and prudent expenses of a potential
petitioner or objector, incurred reasonably and directly in preparing to file a petition to deny,
will not be considered to be payment for refraining from filing a petition to deny or an
informal objection.  Payments made directly to a potential petitioner or objector, or a person
related to a potential petitioner or objector, to implement non-financial promises are
prohibited unless specifically approved by the FCC.
   26.320  Opposition to applications.
  (a) Petitions to deny (including petitions for other forms of relief) and responsive pleadings
for Commission consideration must comply with  1.2108 of this chapter and must:
  (1) Identify the application or applications (including applicant's name, station location,
Commission file numbers and radio service involved) with which it is concerned;
  (2) Be filed in accordance with the pleading limitations, filing periods, and other applicable
provisions of  1.41 through 1.52 of this chapter except where otherwise provided in 
1.2108 of this chapter;
  (3) Contain specific allegations of fact which, except for facts of which official notice may
be taken, shall be supported by affidavit of a person or persons with personal knowledge
thereof, and which shall be sufficient to demonstrate that the petitioner (or respondent) is a
party in interest and that a grant of, or other Commission action regarding, the application
would be prima facie inconsistent with the public interest;
  (4) Be filed within thirty (30) days after the date of public notice announcing the acceptance
for filing of any such application or major amendment thereto (unless the Commission
otherwise extends the filing deadline); and
  (5) Contain a certificate of service showing that it has been mailed to the applicant no later
than the date of filing thereof with the Commission.
  (b) A petition to deny a major amendment to a previously filed application may only raise
matters directly related to the amendment which could not have been raised in connection
with the underlying, previously filed application.  This does not apply to petitioners who gain
standing because of the major amendment.
  (c) parties who file frivolous petitions to deny may be subject to sanctions including
monetary forfeitures, license revocation, if they are FCC licensees, and may be prohibited
from participating in future auctions.
 26.321  Mutually exclusive applications.
  (a) The Commission will consider applications to be mutually exclusive if their conflicts are
such that the grant of one application would effectively preclude by reason of harmful
electrical interference, or other practical reason, the grant of one or more of the other
applications. The Commission will presume "harmful electrical interference" to mean
interference which would result in a material impairment to service rendered to the public
despite full cooperation in good faith by all applicants or parties to achieve reasonable
technical adjustments which would avoid electrical conflict.
  (b) Mutually exclusive applications filed on Form 175 for the initial provision of GWCS
service are subject to competitive bidding in accordance with the procedures in Subpart F of
this part and in Part 1, Subpart Q of this chapter.
  (c) An application will be entitled to comparative consideration with one or more
conflicting applications only if the Commission determines that such comparative
consideration will serve the public interest.
 26.322  Consideration of applications.
  (a) Applications for an instrument of authorization will be granted if, upon examination of
the application and upon consideration of such other matters as it may officially notice, the
Commission finds that the grant will serve the public interest, convenience, and necessity.
See also  1.2108 of this chapter.
  (b) The grant shall be without a formal hearing if, upon consideration of the application,
any pleadings or objections filed, or other matters which may be officially noticed, the
Commission finds that:
  (1) The application is acceptable for filing, and is in accordance with the Commission's
rules, regulations, and other requirements;
  (2) The application is not subject to a post-auction hearing or to comparative consideration
pursuant to  26.321 with another application(s);
  (3) A grant of the application would not cause harmful electrical interference to an
authorized station;
  (4) There are no substantial and material questions of fact presented; and
  (5) The applicant is qualified under current FCC regulations and policies.
  (c) If the Commission should grant without a formal hearing an application for an
instrument of authorization which is subject to a petition to deny filed in accordance with 
26.320, the Commission will deny the petition by the issuance of a Memorandum Opinion
and Order which will concisely report the reasons for the denial and dispose of all substantial
issues raised by the petition.
  (d) Whenever the Commission, without a formal hearing, grants any application in part, or
subject to any terms or conditions other than those normally applied to applications of the
same type, it shall inform the applicant of the reasons therefor, and the grant shall be
considered final unless the Commission should revise its action (either by granting the
application as originally requested, or by designating the application for a  formal evidentiary
hearing) in response to a petition for reconsideration which:
  (1) Is filed by the applicant within thirty (30) days from the date of the letter or order
giving the reasons for the partial or conditioned grant;
  (2) Rejects the grant as made and explains the reasons why the application should be
granted as originally requested; and,
  (3) Returns the instrument of authorization.
  (e) The Commission will designate an application for a formal hearing, specifying with
particularity the matters and things in issue, if, upon consideration of the application, any
pleadings or objections filed, or other matters which may be officially noticed, the
Commission determines that:
  (1) A substantial and material question of fact is presented (see also  1.2108 of this
chapter);
  (2) The Commission is unable for any reason to make the findings specified in paragraph
(a) of this section and the application is acceptable for filing, complete, and in accordance
with the Commission's rules, regulations, and other requirements; or
  (3) The application is entitled to comparative consideration (under  26.321) with another
application (or applications).
  (f) The Commission may grant, deny or take other action with respect to an application
designated for a formal hearing pursuant to paragraph (e) of this section or Part 1 of this
chapter.
  (g) Reconsideration or review of any final action taken by the Commission will be in
accordance with Part 1, Subpart A of this chapter.
 26.323  Post-auction divestitures.
  Any parties sharing a common non-controlling ownership interest who aggregate more
GWCS spectrum among them than a single entity is entitled to hold will be permitted to
divest sufficient properties within 90 days of the license grant to come into compliance with
the spectrum aggregation limits as follows:
  (a) The GWCS applicant shall submit a signed statement with its long-form application
stating that sufficient properties will be divested within 90 days of the license grant. If the
licensee is otherwise qualified, the Commission will grant the applications subject to a
condition that the licensee come into compliance with the GWCS spectrum aggregation limits
within 90 days of grant.
  (b)  Within 90 days of license grant, the licensee must certify that the applicant and all
parties to the application have come into compliance with the GWCS spectrum aggregation
limits. If the licensee fails to submit the certification within 90 days, the Commission will
immediately cancel all broadband GWCS licenses won by the applicant, impose the default
payment and, based on the facts presented, take any other action it may deem appropriate.
Divestiture may be to an interim trustee if a buyer has not been secured in the required time
frame, as long as the applicant has no interest in or control of the trustee, and the trustee
may dispose of the property as it sees fit.  In no event may the trustee retain the property for
longer than six months from grant of license.
 26.324  Transfer of control or assignment of station authorization.
  (a)  Authorizations shall be transferred or assigned to another party, voluntarily (for
example, by contract) or involuntarily (for example, by death, bankruptcy, or legal
disability), directly or indirectly or by transfer of control of any corporation holding such
authorization, only upon application and approval by the Commission.  A transfer of control
or assignment of station authorization in the General Wireless Communications Service is
also subject to  1.2111 of this chapter (Assignment or transfer of control: unjust
enrichment)
  (1) A change from less than 50% ownership to 50% or more ownership shall always be
considered a transfer of control.
  (2) In other situations a controlling interest shall be determined on a case-by-case basis
considering the distribution of ownership, and the relationships of the owners, including
family relationships.
  (b)  Form required:
  (1) Assignment.
  (i) FCC Form 490 shall be filed to assign a license or permit.
  (ii) In the case of involuntary assignment, FCC Form 490 shall be filed within 30 days of
the event causing the assignment.
  (2) Transfer of control.
  (i) FCC Form 490 shall be submitted in order to transfer control of a corporation holding a
license or permit.
  (ii) In the case of involuntary transfer of control, FCC Form 490 shall be filed within 30
days of the event causing the transfer.
  (3) Form 430. Whenever an application must be filed under paragraphs (a) (1) or (a)(2) of
this section, the assignee or transferee shall file FCC Form 430 ("Common Carrier Radio
License Qualification Report") unless an accurate report is on file with the Commission.
  (4) Notification of completion. The Commission shall be notified by letter of the date of
completion of the assignment or transfer of control.
  (5) If the transfer of control of a license is approved, the new licensee is held to the
original build-out requirement of  26.104.
  (c) In acting upon applications for transfer of control or assignment, the Commission will
not consider whether the public interest, convenience, and necessity might be served by the
transfer or assignment of the authorization to a person other than the proposed transferee or
assignee.
 (d)  Applicants seeking to transfer their licenses within three years after the initial license
grant date are required to file, together with their transfer application, the associated
contracts for sale, option agreements, management agreements, and all other documents
disclosing the total consideration to be received in return for the transfer of the license.
 26.325  Extension of time to complete construction.
  (a) If construction is not completed within the time period set forth in  26.104, the
authorization will automatically expire.  Before the period for construction expires an
application for an extension of time to complete construction (FCC Form 489) may be filed.
See subsection (b) of this section.  Within 30 days after the authorization expires an
application for reinstatement may be filed on FCC Form 489.
  (b) An application for extension of time to complete construction may be made on FCC
Form 489. Extension of time requests must be filed prior to the expiration of the construction
period. Extensions will be granted only if the licensee shows that the failure to complete
construction is due to causes beyond his control.  An application for modification of an
authorization (under construction) does not extend the initial construction period. If additional
time to construct is required, an FCC Form 489 must be submitted.
 26.326  Termination of authorization.
  (a)(1) All authorizations shall terminate on the date specified on the authorization or on the
date specified by these rules, unless a timely application for renewal has been filed.
  (2) If no application for renewal has been made before the authorization's expiration date, a
late application for renewal will only be considered if it is filed within 30 days of the
expiration date and shows that the failure to file a timely application was due to causes
beyond the applicant's control.  During this 30 day period reinstatement applications must be
filed on FCC Form 489. Service to subscribers need not be suspended while a late filed
renewal application is pending, but such service shall be without prejudice to Commission
action on the renewal application and any related sanctions.  See also  26.14 (Criteria for
Comparative Renewal Proceedings).
  (b) Special Temporary Authority. A special temporary authorization shall automatically
terminate upon failure to comply with the conditions in the authorization.
APPENDIX  E
Bidders would be required to state the number of  nationwide aggregations on which they
wish to bid prior to the auction. A nationwide aggregation must have one license in each EA
but all licenses need not be on the same frequency block. Since the spectrum aggregation rule
limits bidders to acquiring no more than three GWCS licenses in any EA, a bidder could
specify that it seeks up to three nationwide aggregations as a Nationwide Bidder. If it
specifies that it seeks one or two nationwide aggregations it would also be permitted to bid
on additional individual licenses subject to the standard activity and bid withdrawal rules, as
a Hybrid bidder.
   	    Hybrid bidders would be required to specify in each round which licenses are
        to be counted as part of their nationwide aggregations (and subject to different
        bid withdrawal and activity rules).
   	    A nationwide or hybrid bidder that wishes to withdraw subject to the
        nationwide bid withdrawal rules must withdraw all its high bids on each
        nationwide aggregation it wishes to withdraw. For example, if a nation wide
        bidder were bidding on three nationwide aggregations and chose to withdraw
        on one, after withdrawal it must have no more than two high bids subject to
        nationwide bidding rules in each BEA. The standard bid withdrawal payment
        will be limited in two ways for bidders that withdraw all their high bids in one
        or more nationwide aggregations:
  -  The bid withdrawal payment will be limited to five (5) percent of the
     withdrawn bids.
  -  The withdrawal payment will be calculated as the difference between the sum
     of the withdrawn bids and the sum of the subsequent high bids on the
     withdrawn licenses. (The standard payment is calculated on a license by
     license basis.)  Calculating the payment in this way will reduce the expected
     payment because bidders will "get credit" for the amounts by which
     subsequent high bids exceed the prices at which bids are withdrawn.
  	  A nationwide or hybrid bidder has the option of declaring during the auction that
     is reducing the number of nationwide aggregations on which it is bidding. It will
     then be subject to the same activity rule requirements and bid withdrawal
     payments as other bidders on the licenses that are not part of its remaining
     nationwide aggregations. Thus if a nationwide bidder wished to withdraw only
     some of its bids it could do so by declaring that it is reducing its nationwide
     aggregations by one, and be subject to the standard bid withdrawal payments on
     the licenses that are no longer part of a nationwide aggregation. Bidders cannot
     declare during the auction that they are increasing the number of nationwide
     aggregations on which they are bidding.
  	  Nationwide and hybrid bidders would be required to be active in every round of
     bidding on sufficient licenses to create the number of  nationwide aggregations for
     which they have declared they are bidding. For example, if they have declared
     that they are bidding for two nationwide aggregations, they must be active on two
     licenses in each EA in each round of the auction for which the declaration is in
     effect. Bidding on licenses in excess of the activity needed to meet this
     requirement would be subject to the standard activity rules. For example, a hybrid
     bidder who has declared interest in two nationwide aggregations could be active
     on a third license in various EAs and subject to the standard activity rule for these
     licenses. If a nationwide or hybrid bidder fails to meet the activity rule for a
     nationwide aggregation, after the end of the bid withdrawal period it will be
     treated as if it had declared that it is reducing the number of nationwide
     aggregations on which it is bidding and its remaining bids not sufficient to meet
     the activity requirement for a nationwide aggregation will be subject to the
     standard activity and bid withdrawal rules. For example, if it declared that it is
     bidding on two nationwide aggregations and its activity were sufficient to form
     only one nationwide aggregation, it would be eligible for nationwide bid
     withdrawal payments on only one nationwide aggregation, if it does not withdraw
     under the nationwide withdrawal rules in the withdrawal period at the end of the
     round in which its activity is insufficient.
  	  If any bidder withdraws a bid, the eligibility of all other bidders will be increased
     by the amount of the withdrawn bid up to each bidder's initial maximum
     eligibility. Without this provision few bidders may be eligible to bid on licenses
     withdrawn late in an auction and thus the licenses may go unsold. This problem
     could be especially serious if there is a nationwide withdrawal.