1618 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

EPA-APPROVED IOWA REGULATIONS—Continued 

Iowa citation Title State effective 

date EPA approval date Explanation 

*******

Chapter 22—Controlling Pollution 

567–22.1 ........................ Permits Required for 

New or Stationary 

Sources.

4/18/2018 2/5/2019, [Insert Federal Register citation].In 22.1(3) the following sentence regarding 

electronic submission is not SIP approved. 

The sentence is: ‘‘Alternatively, the owner or 

operator may apply for a construction permit 

for a new or modified stationary source 

through the electronic submittal format specified by the department.’’ 

* * * * * * * 

567–22.8 ........................ Permit by Rule ............. 4/18/2018 2/5/2019, [Insert Federal Register citation].

* * * * * * * 

Chapter 25—Measurement of Emissions 

567–25.1 ........................ Testing and Sampling 

of New and Existing 

Equipment.

4/18/2018 2/5/2019, [Insert Federal Register citation].

* * * * * * * 

Chapter 33—Special Regulations and Construction Permit Requirements for Major Stationary Sources—Prevention of Significant 

Deterioration (PSD) of Air Quality 

567–33.1 ........................ Purpose ........................ 4/18/2018 2/5/2019, [Insert Federal Register citation].

567–33.3 ........................ Special Construction 

Permit Requirements 

for Major Stationary 

Sources in Areas 

Designated Attainment or Unclassified 

(PSD).

4/18/2018 2/5/2019, [Insert Federal Register citation].Provisions of the 2010 PM2.5 PSD—Increments, SILs and SMCs rule (75 FR 64865, 

October 20, 2010) relating to SILs and SMCs 

that were affected by the January 22, 2013, 

U.S. Court of Appeals decision are not SIP 

approved. Iowa’s rule incorporating EPA’s 

2007 revision of the definition of ‘‘chemical 

processing plants’’ (the ‘‘Ethanol Rule,’’ published May 1, 2007) or EPA’s 2008 ‘‘fugitive 

emissions rule,’’ (published December 19, 

2008) are not SIP-approved. 

* * * * * * * 

* * * * * 

PART 70—STATE OPERATING PERMIT 

PROGRAMS 

■ 3. The authority citation for part 70 

continues to read as follows: 

Authority: 42 U.S.C. 7401 et seq. 

■ 4. Amend appendix A to part 70 by 

adding paragraph (t) under Iowa to read 

as follows: 

Appendix A to Part 70—Approval 

Status of State and Local Operating 

Permits Programs 

* * * * * 

Iowa 

* * * * * 

(t) The Iowa Department of Natural 

Resources submitted for program approval 

revisions to rules 567–22.100, 567–22.103, 

567–22.106, 567–22.107, and 567–30.4. The 

state effective date is April 18, 2018. This 

revision is effective April 8, 2019. 

* * * * * 

[FR Doc. 2019–00793 Filed 2–4–19; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 1 and 30 

[GN Docket No. 14–177; FCC 18–180] 

Use of Spectrum Bands Above 24 GHz 

for Mobile Radio Services 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, the Federal 

Communications Commission 

(Commission or FCC) adopts rules for 

specific millimeter wave bands above 24 

GHz in the Fourth Report and Order. 

This Order establishes an incentive 

auction that promotes the flexible-use 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1619 

wireless service rules that the 

Commission has adopted for services in 

the Upper 37 GHz (37.6–38.6 GHz), 39 

GHz (38.6–40 GHz), and 47 GHz (47.2– 

48.2 GHz) bands by making spectrum 

available for fifth-generation (5G) 

wireless, Internet of Things, and other 

advanced services in these bands. 

DATES: Effective March 7, 2019. 

FOR FURTHER INFORMATION CONTACT: Erik 

Salovaara of the Office of Economics 

and Analytics, Auctions Division, at 

(202) 418–7582 or Erik.Salovaara@

fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Fourth 

Report and Order (Fourth R&O), GN 

Docket No. 14–177, FCC 18–180, 

adopted on December 12, 2018, and 

released on December 12, 2018. The 

complete text of this document is 

available for public inspection and 

copying from 8 a.m. to 4:30 p.m. Eastern 

Time (ET) Monday through Thursday or 

from 8 a.m. to 11:30 a.m. ET on Fridays 

in the FCC Reference Information 

Center, 445 12th Street SW, Room CY– 

A257, Washington, DC 20554. The 

complete text is available on the 

Commission’s website at http://

wireless.fcc.gov, or by using the search 

function on the ECFS web page at 

http://www.fcc.gov/cgb/ecfs/. 

Alternative formats are available to 

persons with disabilities by sending an 

email to fcc504@fcc.gov or by calling the 

Consumer & Governmental Affairs 

Bureau at (202) 418–0530 (voice), (202) 

418–0432 (tty). 

Final Regulatory Flexibility Analysis 

As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), an Initial Regulatory Flexibility 

Analysis (IRFA) was incorporated in the 

Fourth Further Notice of Proposed 

Rulemaking (4th FNPRM) released in 

August 2018 in this proceeding. The 

Commission sought written public 

comment on the proposals in the 4th 

FNPRM, including comments on the 

IRFA. No comments were filed 

addressing the IRFA. This present Final 

Regulatory Flexibility Analysis (FRFA) 

conforms to the RFA. 

Paperwork Reduction Act 

This document does not contain new 

or modified information collection 

requirements subject to the Paperwork 

Reduction Act of 1995 (PRA), Public 

Law 104–13. In addition, therefore, it 

does not contain any new or modified 

information collection burden for small 

business concerns with fewer than 25 

employees, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4). 

Congressional Review Act 

The Commission will send a copy of 

this Fourth R&O in a report to be sent 

to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act (CRA), see 5 

U.S.C. 801(a)(1)(A). 

Synopsis 

I. Introduction 

1. The Commission takes significant 

steps to make spectrum available for 

fifth-generation (5G) wireless, Internet 

of Things (IoT), and other advanced 

services in the Upper 37 GHz (37.6–38.6 

GHz), 39 GHz (38.6–40 GHz), and 47 

GHz (47.2–48.2 GHz) bands. The 

Commission establishes an incentive 

auction that promotes the flexible-use 

wireless service rules that the 

Commission has adopted for these 

bands. Under the incentive auction 

approach and consistent with the 

Commission’s statutory authority to 

conduct incentive auctions, an 

incumbent 39 GHz licensee may choose 

to relinquish the spectrum usage rights 

provided by its existing licenses in 

exchange for a share of the proceeds 

from the auction of new licenses. 

Alternatively, the incumbent may 

choose to receive modified licenses after 

the auction that are consistent with the 

new band plan and service rules and 

equivalent to its existing authorizations 

to operate in the 39 GHz band. 

Ultimately, the incentive auction 

approach that the Commission adopts 

will enhance the opportunity for 

incumbents and new licensees in the 

Upper 37 GHz and 39 GHz bands to 

provide valuable next-generation 

services. 

2. The Commission’s decisions, along 

with specific procedures to be adopted 

in the forthcoming Auction Comment 

and Auction Procedures Public Notices, 

will enable the Commission to move 

forward with an auction of the Upper 37 

GHz, 39 GHz, and 47 GHz bands by the 

end of 2019. In combination, the Upper 

37 GHz and the 39 GHz bands offer the 

largest amount of contiguous spectrum 

in the millimeter wave bands for 

flexible-use wireless services—a total of 

2,400 megahertz—and the 47 GHz band 

will provide an additional 1,000 

megahertz of millimeter wave spectrum 

for such services. Together with the 

pending auctions of licenses in the 28 

GHz (27.5–28.35 GHz) and 24 GHz 

(24.25–24.45 GHz, 24.75–25.25 GHz) 

bands, the Commission is making 

substantial progress in assigning highband spectrum for innovative services, 

and the Commission will continue to 

work towards assigning additional 

spectrum in the mid-band range for the 

benefit of American consumers. 

II. Background 

3. In 2016, the Commission adopted 

Upper Microwave Flexible Use Service 

(UMFUS) rules for the 28 GHz, Upper 

37 GHz, and 39 GHz bands, to make 

available millimeter wave spectrum for 

5G. In 2017, the Commission expanded 

the UMFUS rules to cover the 24 GHz 

and 47 GHz bands. In addition to the 

licensed use opportunities in these 

bands, the Commission made the Lower 

37 GHz (37–37.6 GHz) band available 

for non-Federal users through a 

coordination mechanism with Federal 

users, which the Commission will 

develop more fully with government 

and industry collaboration. Earlier this 

year, the Commission sought further 

comment on a proposed coordination 

mechanism and alternatives. The 

Commission recognizes the importance 

of the Lower 37 GHz band and commits 

to working with the National 

Telecommunications and Information 

Administration and other federal 

agencies to develop a sharing approach 

in 2019. 

4. Existing licenses in the 39 GHz 

band consist of unpaired 50 megahertz 

blocks licensed by Partial Economic 

Area (PEA) or by Rectangular Service 

Area (RSA), which can cross PEA 

boundaries or be enveloped by them. 

Commission records show 11 unique 

incumbent licensees hold about 5,880 

active licenses in the 39 GHz band 

(5,590 PEA licenses and 290 RSA 

licenses). Measured in terms of ‘‘MHzpops’’—the product of spectrum 

bandwidth and covered population, 

only approximately one-third of the 39 

GHz band is held in Commission 

inventory and is not authorized for use 

by any existing license. Currently, a 

number of licenses do not fit 

geographically into the proposed 39 

GHz band plan of 100 megahertz 

licenses by PEA, which results in 

‘‘encumbered’’ licenses. There are two 

types of encumbered licenses: (1) RSA 

licenses that do not conform to PEA 

boundaries; and (2) PEA licenses that 

are not authorized to provide service in 

the entire PEA due to an overlapping 

RSA license, i.e., PEA licenses that 

overlap geographically with pre-existing 

RSA licenses whose frequency 

assignment they must protect. The 

Upper 37 GHz and 47 GHz bands 

currently have no commercial terrestrial 

wireless incumbent licensees. 

5. The Commission has recognized 

that, with respect to the 39 GHz band, 

‘‘[h]olding any auction based on this 

1620 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

1 In this Fourth R&O, the Commission addresses 

suggestions and requests raised in response to the 

4th FNPRM that are relevant to its decisions in this 

Fourth R&O. The Commission leaves for later 

discussion details that are more appropriately 

addressed later in the pre-auction process, such as 

opening bids. The Commission commits to moving 

forward expeditiously at the Commission level with 

public notices seeking comment and adopting 

detailed procedures to implement the incentive 

auction, i.e., the ‘‘pre-auction process.’’ 

fragmented band would likely be 

inefficient, as bidders would reasonably 

expect to incur significant transaction 

costs in assembling contiguous 

spectrum post-auction.’’ To address this 

issue, the 2016 Spectrum Frontiers R&O 

adopted a voluntary rebanding 

framework to allow incumbent licenses 

to be reconfigured to the new band plan 

and service areas in an effort to clear the 

band of encumbrances and enable 

licensees to aggregate licenses for 

contiguous frequencies. In June 2018, 

the Wireless Telecommunications 

Bureau (Bureau) issued a Public Notice 

announcing that it was accepting license 

modification applications pursuant to 

this voluntary rebanding process. Since 

that time, however, no applications to 

authorize such swaps have been 

received. Moreover, conforming existing 

licenses to the new band plan and 

service areas may be infeasible for 

incumbent licensees with only one pair 

of 50 megahertz licenses in a particular 

area, one 50 megahertz block in a 

particular area, or an RSA license. 

6. Earlier this year, in the 4th FNPRM, 

the Commission proposed an incentive 

auction that potentially could clear all 

existing 39 GHz licenses. In addition, 

the Commission proposed a ‘‘voucher 

exchange’’ that would allow incumbents 

to modify existing spectrum usage 

rights, without increasing them in 

aggregate. The Commission indicated 

that this framework would make it 

easier for incumbents with partial 

license holdings to retain existing 

spectrum usage rights without 

additional license payments. Further, 

the Commission proposed provisions for 

a mandatory reconfiguration of 

incumbents’ existing spectrum usage 

rights, which an incumbent may choose 

to accept instead of participating in the 

voluntary incentive auction. 

III. Discussion 

A. The Need for an Incentive Auction 

7. The Commission will conduct an 

incentive auction that can clear existing 

39 GHz licenses and offer new spectrum 

licenses in the Upper 37 GHz, 39 GHz, 

and 47 GHz bands. The incentive 

auction process that the Commission 

adopts will resolve the persistent 

difficulties presented by the need for 

existing 39 GHz licenses to be 

transitioned efficiently to the new band 

plan and possibly to new service areas. 

Absent this process, existing 39 GHz 

licenses break up blocks of spectrum 

and fragment frequencies across the 39 

GHz band, creating barriers to the 

deployment of next-generation services 

in the band. The incentive auction will 

solve this challenge by offering 

incumbent licensees the opportunity to 

participate in the auction to relinquish 

their existing licensed spectrum usage 

rights in exchange for a payment 

determined by the auction and/or to 

replace existing licenses with new 

licenses for whole blocks that will be 

assigned contiguous frequencies within 

license areas. Further, for each 

incumbent that does not wish to 

participate in the auction, the 

Commission will provide the incumbent 

with modified licenses for contiguous 

100 megahertz blocks covering full 

PEAs (with possibly up to one partial 

PEA), leaving these incumbents better 

able to provide next-generation services. 

Providing these opportunities is 

necessary to resolve the difficulties 

presented by the existing encumbered 

and unpaired licenses and to clear the 

way for assignment of a significant 

number of new licenses for whole 

blocks with contiguous frequencies 

within PEAs. The incentive auction 

thereby substantially furthers the public 

interest in making available spectrum 

for the provision of next-generation 

services. 

8. The Commission’s action 

implements its proposal in the 4th 

FNPRM for an incentive auction that 

potentially could clear all existing 39 

GHz licenses, assign new licenses under 

a band plan providing 100 megahertz 

blocks by PEA, and provide modified 

100 megahertz licenses to any 

incumbents that choose not to 

participate in the auction. Commenters 

respond favorably to the proposed 

incentive auction to resolve the 

difficulties presented by existing 39 

GHz licenses. Consistent with the 

overall support, commenters also offer 

suggestions about specific details or 

request clarifications on particular 

points. 

9. The Commission affirms its 

conclusion that the Commission has 

authority under the Communications 

Act to modify existing licenses in a 

manner that will allow for a more 

efficient auction and to conduct the 

proposed incentive auction for these 

bands. Commenters agree that the 

proposed auction is ‘‘well within [the 

Commission’s incentive auction] 

authority.’’ The statute authorizes the 

Commission to use an incentive auction 

to encourage licensees to relinquish 

their holdings voluntarily provided that 

at least two bidders compete to 

relinquish spectrum usage rights. The 

incentive auction, both as proposed in 

the 4th FNPRM and adopted, is 

voluntary. Furthermore, the clock phase 

of the incentive auction format the 

Commission plans to use serves as both 

a reverse auction that will determine the 

amount of incentive payments as well as 

a forward auction to assign new flexible 

use licenses. As such, the Commission 

will conduct the auction only if there 

are two competing incumbent 

participants. As the Commission 

concluded in the 4th FNPRM, and no 

commenter disputes, as long as more 

than one incumbent licensee commits to 

relinquish its spectrum usage rights, 

there will be two licensees competing in 

the reverse auction portion of the 

incentive auction. 

10. The Commission also decides the 

defining characteristics of the incentive 

auction and the related license 

modification process that will enable 

deployment of licenses for nextgeneration services in these bands. 

Because the clock phase of the incentive 

auction the Commission adopts serves 

as both the reverse and forward 

auctions, the incentive amounts offered 

to relinquish existing licenses will be 

based on the final clock phase prices in 

each PEA. As a result, incumbents will 

have the opportunity to replace at no 

additional cost all existing spectrum 

usage rights equivalent to a full 100 

megahertz block with new licenses that 

are offered in the auction and provide 

equivalent rights. Further, the 

Commission concludes that it is 

necessary that incumbents that choose 

not to participate in the incentive 

auction will have their licenses 

modified based on a reconfiguration of 

their existing spectrum usage rights that 

is more consistent with the current band 

plan. As in the prior broadcast 

television spectrum incentive auction, 

and in all Commission auctions, the 

Commission will develop and detail all 

the procedures necessary to implement 

its decisions in a pre-auction process 

framed by an Auction Comment Public 

Notice and Auction Procedures Public 

Notice.1

B. Band Plan 

11. In the 4th FNPRM, the 

Commission proposed to modify the 39 

GHz band plan from seven 200 

megahertz channels to fourteen 100 

megahertz channels, in order to 

facilitate the repacking of incumbents 

without compromising the band’s 

potential for supporting 5G services. 

The Commission also proposed to 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1621 

2Existing licensees that choose to accept 

modified licenses remain subject to FCC Rule 

30.104(f), which states that existing 39 GHz 

licensees are required to make a buildout showing 

by June 1, 2024. See 47 CFR 30.104(f). If a licensee 

with a modified license is unable to make that 

showing by the deadline because of an expansion 

in the boundaries of its service area pursuant to 

these license modifications, that licensee may 

request relief from the rule, which the FCC will 

consider given the specific facts and circumstances 

of each licensee. The Commission reminds 

licensees that the FCC will grant waiver requests 

only if the petitioner can demonstrate special 

circumstances that warrant a deviation from the 

general rule and that such a deviation will serve the 

public interest. Northeast Cellular Co. v. FCC, 897 

F.2d 1164, 1166 (D.C. Cir. 1990); WAIT Radio v. 

FCC, 459 F.2d 1203 (D.C. Cir. 1972). See also 47 

CFR 1.925; Wireless Telecommunications Bureau 

Reminds Licensees of Construction Obligations, 32 

FCC Rcd 4802 (WTB 2017). 

3The Commission notes that, ultimately, the 

Internal Revenue Service can determine the tax 

consequences resulting from direct license 

modifications or participation in an incentive 

auction. 

modify the band plan in the Upper 37 

GHz band and the UMFUS portion of 

the 47 GHz band from 200 megahertz to 

100 megahertz channels. Maintaining 

the same channel width across these 

bands would avoid creating 

complexities for bidders should the 

Commission auction these bands 

together, and would allow the 

contiguous Upper 37 GHz and 39 GHz 

bands to function effectively as one 

2,400 megahertz band of spectrum. 

12. The Commission adopts its 

proposal, which is supported by nearly 

all commenters, to modify the band 

plans of the Upper 37 GHz, 39 GHz, and 

47 GHz bands from 200 megahertz 

channels to 100 megahertz channels. 

The Upper 37 GHz band and the 47 GHz 

band will now consist of ten 100 

megahertz channels each, and the 39 

GHz band will consist of fourteen 

channels. Modifying the band plan to 

100 megahertz blocks offers multiple 

benefits for these bands, including 

facilitation of the repacking of 

incumbents, consistency with emerging 

industry and international standards, 

and the potential for uniform channel 

sizes across multiple millimeter wave 

bands to facilitate secondary market 

transactions and the standardization of 

equipment. Further, as noted by 

commenters, there are potential positive 

auction effects that would result from 

standardizing the channel width across 

the Upper 37 GHz, 39 GHz, and 47 GHz 

bands, which will be auctioned 

together. Further, the Commission 

agrees with the commenters that suggest 

that adopting a uniform channel size for 

as many millimeter wave bands as 

possible will promote more efficient use 

of the spectrum. 

13. This new band plan, which is 

heavily supported by the record, will 

facilitate the rationalization of existing 

licenses in the 39 GHz band and enable 

greater flexibility for licensees while 

remaining consistent with emerging 

standards for 5G. Only one commenter, 

TIA, opposes the proposed change to 

100 megahertz channels. TIA argues that 

wider channels will better support 5G 

services and that the previously-adopted 

200 megahertz channels are sufficient to 

ensure adequate opportunities for 

participation by new entrants, due to 

the large number of channels available. 

It also offers an alternative to the 4th 

FNPRM’s proposal concerning the size 

of channels. While the Commission 

agrees with TIA that access to wide 

swathes of spectrum is an important 

goal in support of 5G and other 

bandwidth-intensive services, as other 

commenters note, licensees would still 

be able to achieve greater bandwidth 

through aggregation, particularly if the 

Commission facilitates aggregation of 

contiguous spectrum blocks in its 

auction design. 

14. For the 39 GHz band in particular, 

using 100 megahertz channels will 

simplify the rationalization process for 

incumbents and reduce the number of 

existing licenses that are less than a 

whole channel block under the new 

licensing scheme, given that incumbents 

generally hold non-contiguous paired 50 

megahertz blocks (100 megahertz), as 

opposed to the original band plan 

consisting of 200 megahertz channels. 

Further, adopting a band plan using 100 

megahertz building blocks does not 

prevent licensees that prefer channels 

wider than 100 megahertz from bidding 

on multiple blocks and aggregating 

spectrum to achieve that goal. The 100 

megahertz channels the Commission 

adopts in this Fourth R&O will not 

impede carrier aggregation to achieve 

greater bandwidths, but merely provide 

additional flexibility, both for licensees 

for whom 100 megahertz is sufficient 

and for incumbents who currently hold 

licenses in multiples of 100 megahertz. 

The Commission is mindful of the need 

for multiple 100 megahertz blocks 

assigned to the same carrier to be 

contiguous and the Commission 

considers this factor in its auction 

design. 

C. Preparing for an Incentive Auction 

1. Modifying 39 GHz Licenses Based on 

Reconfigured Spectrum Usage Rights 

15. As the Commission noted in the 

4th FNPRM, the Commission has 

authority to modify the holdings of 

existing licensees ‘‘if in the judgment of 

the Commission such action will 

promote the public interest, 

convenience, and necessity.’’ No 

commenters dispute the Commission’s 

authority generally or with respect to 

any aspect of modifications proposed in 

the 4th FNPRM. 

16. Prior to the incentive auction, 

each incumbent will be offered a 

reconfiguration of its existing spectrum 

usage rights that will conform more 

closely with the new band plan and 

service areas. Given that some 

incumbent licenses may cover 

geographic areas that do not match the 

PEA service areas established for the 39 

GHz band, the reconfiguration may need 

to combine an incumbent’s spectrum 

rights in multiple license areas to create 

full spectrum blocks where possible, 

retaining at most one partial PEA block. 

Where such changes are unavoidable, 

the reconfiguration will maintain the 

overall value of spectrum usage rights 

by quantifying those rights by weighted 

MHz-Pops, as measured pursuant to the 

procedures established by this Fourth 

R&O. 

17. In addition, each incumbent will 

be given an option to choose an 

alternate reconfiguration, subject to 

certain constraints, in order to more 

closely align the reconfiguration with 

the incumbent’s interests, such as 

current operations. These modifications 

should leave each incumbent licensee 

better able to offer advanced services by 

providing contiguous frequencies 

within each PEA, while leaving the 

value of the incumbent’s spectrum 

usage rights unchanged as measured in 

weighted MHz-Pops.2 Each incumbent 

will decide whether to accept the 

modifications (which will take effect 

after the close of the auction), either as 

proposed by the Commission or an 

acceptable alternate, or to participate in 

the incentive auction to relinquish their 

existing spectrum usage rights in 

exchange for a share of the auction 

proceeds. The Commission directs the 

Wireless Telecommunications Bureau to 

provide each incumbent with a 

proposed modification implementing its 

decisions and to do so well in advance 

of the application window for the 

auction. 

18. AT&T and Verizon both ask that 

the Commission clarify that all existing 

licenses are subject to modification, 

regardless of whether or not an 

incumbent participates in the incentive 

auction. All existing licenses are subject 

to change, regardless of the licensee’s 

participation in the incentive auction, in 

order to implement the Commission’s 

transition to a new band plan and 

service rules for the 39 GHz band.3

Though affected by an incumbent’s 

decision whether to participate in the 

incentive auction, the exact form each 

license will take by the end of the 

1622 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

4The incumbent’s total spectrum usage rights in 

a PEA divided by the MHz-pops for a full 100 

megahertz block (the bandwidth of a new block) 

will indicate the equivalent number of blocks 

(whole and partial) held in the PEA under the new 

band plan. For RSA licenses, the Commission will 

consider the portion of the RSA license that falls 

within each PEA such that an RSA license that 

crosses a PEA boundary will have the relevant 

portion of population counted in each PEA. 

5For example, when the FCC finalizes the 

procedures for calculating aggregate holdings, it 

may be necessary to preclude subsequent 

assignments that might disaggregate those holdings. 

incentive auction will be determined by 

the process discussed herein. Such 

modifications will include both 

frequency reassignments and, in many 

cases, geographical reassignments. 

19. Quantifying Existing Spectrum 

Usage Rights with Weighted MHz-Pops. 

As a preliminary matter, an incumbent’s 

total licensed spectrum usage rights in 

each PEA will be measured by adding 

up the MHz-Pops (bandwidth times 

covered population) for each of an 

incumbent’s licenses in each PEA.4 To 

compare MHz-Pops across PEAs, the 

MHz-Pops in each PEA will be weighted 

using an index calculated using the 

relative prices for spectrum licenses in 

each PEA in other auctions. The 

Commission proposed a weighting 

process in the 4th FNPRM. While not 

opposing weighting, commenters 

disagreed on the best data to use to set 

the relative weights. T-Mobile advocates 

using price data in imminent auctions of 

licenses for millimeter wave spectrum, 

in particular the auction of 24 GHz 

spectrum licenses. Verizon objects that 

any data from that auction may be too 

particular and uncertain to rely upon 

here, and instead it suggests using price 

data from Auction 1002, the auction for 

600 MHz licenses. AT&T notes the 

difficulty of arriving at ‘‘correct’’ 

weights but does not suggest looking 

toward any auction in particular. 

20. Data currently available for 

determining the weights for this 

incentive auction all pertain to licenses 

for flexible use in spectrum below 3 

GHz. For instance, when preparing for 

the incentive auction of broadcast 

television spectrum, the Commission 

used price data from prior auctions to 

estimate relative price differences across 

PEAs for the television spectrum in 600 

MHz. The subsequent prices for new 

600 MHz licenses in that auction 

provide further data about relative 

differences across PEAs. As noted in the 

4th FNPRM, relative spectrum license 

prices among geographic areas can be 

substantially more similar across 

auctions than the spectrum license 

prices themselves. The Commission 

notes that the Commission’s first 

auction of flexible use licenses for 

millimeter wave spectrum is currently 

ongoing and a second will follow after 

the first closes. Additional data 

regarding the prices for licenses in those 

auctions may be helpful, if available. 

Accordingly, for this incentive auction, 

the Commission directs the Wireless 

Telecommunications Bureau to set the 

weights considering the relative PEA 

price data prepared for and resulting 

from the broadcast television spectrum 

incentive auction, while also taking into 

account any additional Commission 

data regarding prices for millimeter 

wave spectrum licenses to the extent 

practicable. 

21. As supported by commenters, 

2010 Census data will be used to 

determine the population covered by 

each license. The two-by-two kilometer 

cell grid methodology employed to 

determine population in particular areas 

in the broadcast incentive auction will 

be used to calculate the population for 

licenses for RSAs and for licenses 

covering a full or partial PEA. 

22. To further the Commission’s goal 

of transitioning to the new band plan, 

separate licenses that are held by 

entities that control or are controlled by 

each other and/or have controlling 

ownership interests in common will be 

treated as held by one incumbent. For 

this purpose, the Commission will use 

the definition of ‘‘controlling interest’’ 

as an entity with de jure or de facto 

control that the Commission uses with 

respect to auction applications, 

specifically the rule prohibiting an 

individual or entity from having a 

controlling interest in more than one 

application to participate in the auction. 

Further, it may be appropriate to freeze 

assignments of these licenses at a future 

point.5 The Commission directs the 

Bureau to address whether or when it is 

necessary to freeze assignments of 39 

GHz licenses prior to calculations of 

aggregate holdings. 

23. In response to the 4th FNPRM, 

PVT Networks, Inc. (PVT) presents 

concerns regarding potentially 

significant consequences of de minimis 

encumbrances to its licenses. PVT holds 

several licenses, two of which are 

encumbered to an extremely small 

extent. PVT argues that if an RSA 

encumbrance of a PEA license is so 

small as to constitute a ‘‘flyspeck’’ or de 

minimis encumbrance (as calculated by 

percentage of population in a PEA), the 

encumbered PEA license should be 

treated as unencumbered. 

24. The Commission agrees that it 

should not permit de minimis 

encumbrances, including PVT’s, to 

present unnecessary challenges to 

incumbents that seek to preserve 

spectrum usage rights. Where an 

incumbent holds a license that covers 

virtually the entire population in a PEA, 

the Commission concludes it would be 

in the public interest to allow the 

licensee to serve the entire license area 

rather than considering it an 

encumbered block. Consistent with 

Commission precedent that has 

permitted de minimis modifications to 

licenses that further the public interest, 

the Commission concludes that 

incumbent licensees with existing 

licenses that cover at least 99 percent of 

the MHz-Pops in a PEA will be 

considered as having the equivalent of 

an unencumbered whole block prior to 

the Commission’s reconfiguration. 

25. Optimization to Reconfigure 

Existing Spectrum Usage Rights. The 

Commission will propose a 

reconfiguration of each incumbent’s 

holdings that will reduce the total 

number of partial PEA block holdings 

without reducing the incumbent’s total 

weighted MHz-pops across all PEAs, a 

process the Commission referred to as 

‘‘mandatory repacking’’ in the 4th 

FNPRM. As suggested in the 4th 

FNPRM, once the weighted MHz-pops 

have been calculated for each 

incumbent’s licenses, each incumbent’s 

spectrum holdings will be reconfigured 

using an optimization procedure to 

reduce the number of holdings that are 

equivalent to less than a full 100 

megahertz block in a full PEA (i.e., one 

that covers the entire geographic area of 

the PEA). The Commission anticipates 

that the objective of the optimization 

process will be to minimize the number 

of weighted MHz-Pops that are left over 

as unassigned spectrum usage rights 

(‘‘white space’’). This will enable the 

Commission to offer more contiguous 

spectrum in the incentive auction. The 

optimization would ensure that each 

incumbent’s total weighted MHz-pops 

across all the PEAs in which it has 

holdings would remain unchanged. In 

addition, each incumbent would hold at 

most one partial PEA block, which 

would be in a PEA in which it has 

existing holdings. Further, aggregate 

holdings in a PEA only would be 

reduced down to the greatest integer 

less than or equal to the incumbent’s 

aggregate initial holdings or increased 

up to the least integer greater than or 

equal to the incumbent’s aggregate 

initial holdings. This last constraint 

implies that only holdings for a partial 

PEA block would be moved across PEAs 

and that the optimization would not 

modify any license to require service in 

any PEA in which the licensee does not 

have existing holdings. The Commission 

directs the Bureau to determine the best 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1623 

methodology for implementing this 

optimization process. 

26. The Commission concludes that a 

licensee’s remaining holdings for a 

partial PEA block in one PEA following 

reconfiguration could cover a significant 

enough percentage of the population 

such that the remaining uncovered 

portion would qualify as de minimis, 

entitling the licensee to be considered as 

holding the entire license. That is, 

where after reconfiguration, an 

incumbent would cover nearly all of the 

population in a PEA, it would be 

unlikely that any other provider would 

seek to serve the remaining area in that 

PEA. Under these circumstances, the 

Commission concludes that it is 

reasonable to adopt a five percent de 

minimis standard for an incumbent’s 

remaining partial PEA block following 

reconfiguration. The Commission finds 

it is in the public interest to adopt this 

higher standard for the partial PEA 

blocks to ensure that the incumbent 

licensee has the opportunity to serve the 

entire PEA, rather than leaving the small 

percentage of the population most likely 

unserved. As all of the details of the 

methodology for reconfiguring holdings 

are not yet final, the Commission directs 

the Bureau to consider increasing this 

threshold as appropriate when it 

finalizes the optimization methodology, 

to no more than a total of ten percent. 

27. Configuring Partial PEA Blocks. 

The Commission intends that the 

license for an incumbent’s one partial 

PEA block will be configured by 

adjusting the incumbent’s currently 

licensed area in the PEA so that it 

corresponds to the incumbent’s 

reconfigured holding in that PEA. For 

example, if an incumbent’s partial PEA 

block covers one-half of the MHz-pops 

in the PEA, and the reconfigured 

holding in that PEA is one-quarter the 

MHz-pops, the partial PEA block will 

consist of 100 megahertz covering an 

area of the PEA fully contained within 

its current license that encompasses 25 

percent of the population in that PEA. 

Similarly, if the reconfigured fractional 

holdings are greater than the current 

MHz-Pops in the PEA, the geographic 

coverage will be adjusted in a manner 

that fully contains the currently 

licensed area but remains within the 

boundaries of the PEA. The geography 

of a current encumbered license will be 

adjusted to conform to an incumbent’s 

new fractional holdings, rather than 

adjusting the bandwidth, because the 

Commission recognizes that licensees of 

millimeter wave spectrum prefer 100 

megahertz blocks at a minimum for 

advanced services, and incumbent 

licensees may better be able to provide 

service in an area closer to the footprints 

of their original licenses. The proposed 

geographic boundaries for the partial 

PEA block will be as similar as possible 

to the incumbent’s original holdings in 

that PEA, recognizing that the remaining 

partial PEA block may cover a larger or 

smaller percentage of pops than the 

existing license. 

28. In addition, a whole PEA block 

will be removed from the auction 

inventory when providing for licensing 

partial blocks based on reconfigured 

holdings. As a consequence, licenses for 

partial PEA blocks will be accompanied 

by unassigned white space in the 

remainder of the block. Licenses for 

partial PEA blocks will be needed only 

for an incumbent that both chooses to 

receive modified licenses and that 

chooses not to relinquish its rights to a 

partial PEA block in exchange for an 

incentive payment. Leaving the rest of 

the block unassigned will help to 

preserve the structure of the new band 

plan going forward. Although this 

approach potentially will result in 

unassigned white space, the total white 

space that will result is extremely low 

relative to the total 39 GHz band. The 

Commission will seek comment in the 

Auction Comment Public Notice 

regarding assignment of the remaining 

unassigned white space. 

2. Incumbent Options Following 

Reconfiguration 

29. After the results of the 

reconfiguration process are announced, 

an incumbent 39 GHz licensee will have 

three options. It can choose to: (1) Have 

its licenses modified based on the 

Commission’s proposed reconfiguration 

of its holdings; or (2) have its licenses 

modified based on its proposed 

alternative reconfiguration that yields 

the same or fewer weighted MHz-pops 

and satisfies certain specified 

conditions; or (3) commit to relinquish 

its licenses in exchange for an incentive 

payment and/or the ability to bid for 

new licenses. 

30. Incumbents Not Participating in 

the Incentive Auction. The Commission 

recognizes that an incumbent licensee 

may wish not to participate in the 

incentive auction to relinquish its 

existing spectrum usage rights, but may 

have existing holdings that do not 

correspond to full new blocks; in such 

cases the licensee may benefit from an 

alternative reconfiguration of its existing 

licenses. The Commission will allow 

each incumbent, once it reviews the 

results of the Commission’s 

reconfiguration, to propose 

modifications to its existing licenses 

before it decides whether it will 

participate in the auction. If the 

incumbent ultimately decides to 

participate in the auction, however, any 

proposed modifications to its existing 

licenses will not have any effect. 

31. To be an acceptable alternative 

reconfiguration, the Commission 

anticipates that the incumbent’s 

proposal must satisfy the same 

requirements as the Commission’s 

modification proposal, except that, in 

contrast to the Commission’s proposed 

reconfiguration, an incumbent’s 

proposal need not minimize the 

weighted MHz-Pops remaining as white 

space in the one PEA in which the 

incumbent is left with the equivalent of 

a partial PEA block. That is, in a 

proposed reconfiguration, an incumbent 

can hold at most one partial PEA block, 

which would be in a PEA in which it 

has existing holdings. In addition, 

proposed 100 megahertz full PEA 

licenses must be in PEAs in which it has 

existing holdings. Finally, aggregate 

holdings in a PEA can only be reduced 

down to the greatest integer less than or 

equal to the incumbent’s aggregate 

initial holdings or increased up to the 

least integer greater than or equal to the 

incumbent’s aggregate initial holdings. 

If a licensee chooses an acceptable 

alternate reconfiguration proposal, the 

incumbent can indicate that it will not 

participate in the incentive auction and 

instead opt to have its licenses modified 

after the auction based on its 

reconfiguration proposal. The 

Commission directs the Bureau to 

announce the methodology and process 

for each incumbent to propose alternate 

reconfigurations and to elect how to 

proceed, and to educate incumbents 

about the process. 

32. Even though an incumbent 

choosing to have its licenses modified, 

either as configured by the Commission 

or under an acceptable alternative 

proposal, cannot bid on new licenses in 

the incentive auction, it will be allowed 

to relinquish the licensed spectrum 

usage rights associated with its single 

partial PEA block holding in exchange 

for an incentive payment. The payment 

amount will be determined in the 

auction and will be equivalent to the 

incumbent’s fractional share of the 

block times the final clock phase price 

of a generic spectrum block in that PEA. 

For example, an incumbent that 

relinquishes a reconfigured partial PEA 

holding of .6 may receive 60% of the 

final clock phase price for generic 

blocks in that PEA. If an incumbent 

relinquishes holdings for a partial PEA 

block, the incentive auction can offer an 

additional full block of spectrum in the 

auction inventory. An incumbent that 

accepts reconfigured holdings and 

therefore does not fully participate in 

the incentive auction will not have the 

1624 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

6For ease of discussion, the Commission 

describes incentive payments for incumbents 

relinquishing spectrum usage rights as ‘‘vouchers.’’ 

See 4th FNPRM at para. 20. Notwithstanding shorthand descriptions of the process, incumbents do 

not ‘‘exchange’’ licenses for vouchers or at any 

point receive a ‘‘voucher’’ that has any independent 

substance. 

7The Commission does not make any decision 

regarding suggestions to auction licenses for 

additional bands of spectrum with the three bands 

already identified. Though licenses for the Upper 

37 GHz, 39 GHz, and 47 GHz bands in one auction 

will provide up to 3,400 megahertz in every PEA 

for advanced services, various commenters 

encourage the Commission to consider adding other 

bands. For example, commenters argue that because 

the 42 GHz band is in the same tuning range as the 

Upper 37 GHz and 39 GHz bands, the Commission 

should auction all of these bands together, which 

would generate economies of scale and reduce 

equipment costs. The Commission may consider 

whether other bands are in fact ready and suitable 

for inclusion in the auction of licenses for these 

three bands, after notice and comment, in the 

Auction Procedures Public Notice. 

8The Commission clarifies, as AT&T requests, 

that an incumbent may adjust its spectrum usage 

rights without necessarily creating an amount 

equivalent to a whole number of blocks. The 

Commission also proposed limiting the ability of an 

incumbent to make adjustments in a PEA in which 

all incumbents could not do so. 4th FNPRM at para. 

34. In response, AT&T proposes prioritizing the 

rights of incumbents to make adjustments in such 

option of relinquishing any full block 

licenses in exchange for incentive 

payments however, nor will it be able to 

bid on new licenses in the auction. 

33. An incumbent that chooses not to 

participate in the auction and instead 

chooses to accept reconfigured holdings, 

either corresponding to the results of the 

FCC optimization or to an acceptable 

alternative reconfiguration, will have 

frequency-specific licenses assigned for 

its reconfigured holdings after the 

incentive auction has concluded. New 

frequencies for the modified licenses 

will be determined in the assignment 

phase of the incentive auction. 

Incumbent licensees that accept 

reconfigured holdings will not be 

permitted to place bids for specific 

frequencies in the assignment phase, 

however. As described as part of the 

assignment phase, all licensees should 

be issued licenses with contiguous 

frequencies within a category of a PEA 

regardless of whether they participate in 

the auction or bid in the assignment 

phase. 

34. Incumbents Participating in the 

Incentive Auction. Incumbents that 

commit to relinquishing all of their 

existing licenses will receive 

‘‘vouchers’’ sufficient to win blocks in 

the auction equivalent to their existing 

PEA holdings.6 Such incumbents do not 

need to rebid on spectrum blocks 

equivalent to their existing holdings, 

however, unless they want to continue 

to hold licenses in those areas. 

Participating incumbents can apply the 

vouchers toward payments for blocks in 

other PEAs and receive a cash incentive 

payment if the value of their vouchers 

exceeds their net auction obligations. 

Auction participants can also simply 

relinquish their holdings and choose not 

to bid on any new licenses, in which 

case they will receive a cash incentive 

payment for their vouchers. 

35. Vouchers for existing holdings in 

a PEA will be valued at the final clock 

phase price of a generic spectrum block 

in the PEA. As a result, a participating 

incumbent with holdings equivalent to 

a full block in a PEA can retain the 

block without making any additional 

payment or can receive an incentive 

payment equal to the final clock phase 

price of a block in that PEA if it no 

longer wishes to hold the block. The 

incumbent then will have the option of 

bidding an additional amount in the 

assignment phase to obtain a particular 

frequency for its new license, but it will 

receive contiguous frequency blocks 

within a category regardless of whether 

it makes an additional assignment phase 

bid. 

36. In addition to having the 

opportunity to modify its existing 

spectrum holdings through participation 

in the incentive auction, an incumbent 

that chooses to participate in the 

auction also will be able to make prebidding exchanges in its existing 

holdings of partial PEA blocks, subject 

to constraints (described below as 

‘‘Round Zero’’ of the auction). As 

described below, this will encourage 

auction participation by enabling an 

incumbent to manage uncertain costs 

associated with retaining spectrum 

holdings in the incentive auction. 

D. Incentive Auction Structure 

1. Spectrum Available for New Licenses 

37. Following the choices made by 

incumbent 39 GHz licensees to accept 

modified licenses based on reconfigured 

holdings or to relinquish their existing 

spectrum usage rights, the Commission 

will offer new licenses in the incentive 

auction for all available spectrum in the 

Upper 37 GHz, 39 GHz, and 47 GHz 

bands.7 The available spectrum will 

consist of spectrum throughout these 

bands, less any quantity of spectrum 

that must be retained to provide nonparticipating incumbents with modified 

licenses. If all incumbent licensees 

choose to participate, that quantity will 

be zero and the Commission will offer 

new licenses for 3,400 megahertz of 

spectrum, or 34 licenses in every PEA. 

New licenses in the auction, whether 

won by incumbents relinquishing 

existing licenses or by new applicants, 

will authorize only the use of whole 

spectrum blocks in 100 megahertz 

blocks. 

2. Eligibility 

38. Any party eligible to hold a 

license in these bands will be eligible, 

subject to meeting the Commission’s 

application requirements, to participate 

in the auction for new licenses, except 

for incumbent 39 GHz licensees that 

accept modified licenses as reconfigured 

and decline to relinquish all existing 

licenses. The Commission proposed this 

qualification in the 4th FNPRM. The 

Commission noted that the contrary 

approach of allowing an incumbent to 

retain existing licenses that might 

encumber the band while also bidding 

for whole blocks would appear to give 

incumbents an unfair advantage. 

Requiring incumbents to relinquish all 

existing licenses as a prerequisite to 

bidding on new licenses will facilitate 

the assignment of licenses to the entities 

that value them most highly, thus 

serving the public interest. All 

commenters addressing this issue 

support this requirement. 

3. Round Zero Adjustments to 

Incumbent Spectrum Usage Rights— 

Voucher Exchange 

39. Prior to round one of the incentive 

auction clock phase, the Commission 

will offer incumbent licensees that 

decide to participate in the auction a 

limited opportunity to redistribute their 

initial voucher holdings across the PEAs 

in which they hold rights for a partial 

PEA block (Round Zero). In the 4th 

FNPRM, the Commission proposed such 

a ‘‘voucher exchange’’ to address 

concerns that an incumbent with 

existing licenses covering RSAs or 

partial PEAs may face significant 

uncertainty about the cost of obtaining 

full licenses in the incentive auction 

that cover its current partial PEA block 

holdings. 

40. More specifically, after the FCC 

quantifies and aggregates existing usage 

rights in each PEA, an auction 

participant can exchange any vouchers 

equivalent to a partial PEA block among 

the PEAs where it has such vouchers, 

subject to two restrictions. First, the 

total value of its holdings, in weighted 

MHz-Pops using the FCC weights, 

following the exchange must be less 

than or equal the total weighted MHzPops of its initial holdings. Second, 

aggregate holdings in a PEA can only be 

reduced down to the greatest integer 

less than or equal to its aggregate initial 

holdings or increased up to the least 

integer greater than or equal to its 

aggregate initial holdings.8 As a result, 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1625 

situations. Initial analysis of the data indicates that 

there are no PEAs in which each incumbent could 

not make adjustments that otherwise comply to the 

limitations the Commission proposes. Accordingly, 

the Commission need not adopt any limitation or 

prioritization for such a scenario. 

9The Commission also offers a bidding credit 

when a winning bidder provides service to 

qualifying tribal land with a license won at auction. 

47 CFR 1.2110(f)(3). Commission rules already 

address the possibility that auction proceeds net of 

both other designated entity bidding credits and 

other commitments reflected in an auction reserve 

price may not be sufficient to pay all tribal land 

bidding credits that winning bidders seek after the 

auction. 47 CFR 1.2110(f)(3)(v). In this case, the 

Commission adopts a net revenue requirement for 

this auction to assure that auction proceeds will be 

sufficient to make all incentive payments owed. 

Accordingly, the Commission specifies that this 

provision shall apply to the incentive auction. Id. 

(‘‘in any auction with reserve price(s) in which the 

Commission specifies that this provision shall 

apply’’). The Commission’s action allows tribal land 

bidding credits to be paid in full so long as 

aggregate auction proceeds net of all applicable 

bidding credits and aggregate incentive payments 

are greater than the total amount of tribal bidding 

credits sought. If not, however, the Commission’s 

action applies established procedures for reducing 

a tribal land bidding credit sought by any incentive 

auction winning bidder in proportion to the ratio 

of available proceeds and the total amount of tribal 

land bidding credits sought. 

an incumbent thus can increase or 

decrease its vouchers in a PEA by 

strictly less than one, i.e., it may 

increase a partial holding of 0.5 to 0.75 

or to 1, but cannot increase it to 1.2. No 

adjustments may be made in a PEA in 

which an incumbent has no existing 

licenses or has spectrum usage rights 

equivalent to a whole number of whole 

blocks. 

41. These restrictions are similar to 

the constraints that the Commission 

contemplates using in the FCC 

reconfiguration optimization, except 

that in this case incumbents could hold 

vouchers equivalent to partial PEA 

blocks in more than one of its PEAs. 

Allowing an incumbent in the auction 

to hold vouchers equivalent to partial 

PEA blocks enables the incumbent to 

better hedge against uncertainty about 

auction prices relative to the FCC 

weights. An incumbent in the auction 

already has committed to relinquish its 

current licenses, so there is no need to 

limit vouchers that are equivalent to 

partial PEA blocks, in contrast to the 

need to limit reconfigured holdings 

equivalent to partial PEA blocks when 

the holdings may become the basis for 

modified licenses. 

42. Commenters differ on the question 

of permitting incumbents to redistribute 

their existing spectrum usage rights 

prior to bidding for new licenses. CCA 

cautions against the risk of creating 

unwarranted advantages for incumbent 

licensees. T-Mobile is concerned that 

establishing the process to allow 

incumbents to adjust their holdings 

prior to the auction will delay the 

determination of actual auction 

procedures. T-Mobile also raises 

concerns over the risk that the 

Commission may err in setting the 

relative weights of incumbent holdings 

in different PEAs. This could 

inadvertently create windfalls for 

incumbents that incumbents might 

further amplify through any pre-auction 

adjustments. T-Mobile further argues 

that there is no need to allow 

incumbents to modify their holdings if 

all the holdings will be relinquished in 

exchange for incentive payments. The 

Commission finds, however, that the 

limitations the Commission imposes on 

potential modifications will minimize 

any potentially unfair advantages to 

incumbents in the voluntary exchange. 

4. Other Structural Issues 

43. Incumbent Bidding Credits for 

New Licenses. Incumbents, like any 

other applicant in the Commission’s 

auctions for spectrum licenses, may 

seek designated entity bidding credits as 

small businesses or rural service 

providers.9 In the 4th FNPRM, the 

Commission noted the potential for a 

scenario in which an incumbent 

licensee entitled to bidding credits for 

new licenses might participate in the 

incentive auction, win licenses that 

replace its existing spectrum holdings 

for which it would owe no additional 

payment, and be entitled to a bidding 

credit. This scenario effectively would 

leave a surplus payment that this 

incumbent might receive as a cash 

incentive payment, despite also 

receiving new licenses that replicate its 

prior holdings. The Commission 

proposed to address this anomaly by 

crediting such incumbents with a 

bidding credit only with respect to any 

outstanding cash payments for new 

licenses that offer spectrum usage rights 

beyond its aggregate spectrum usage 

rights prior to the auction. All 

commenters addressing this issue agree 

with the Commission’s proposal. 

Accordingly, bidding credits for 

participating incumbent licensees will 

apply only to cash payments for new 

licenses. 

44. Incumbents Bidding Up Incentive 

Payments. The Commission noted in the 

4th FNPRM that the structure of the 

proposed incentive auction appeared to 

allow incumbents to bid up new 

licenses in order to increase the 

amounts of corresponding incentive 

payments. The Commission sought 

comment on this scenario. The 

Commission agrees with commenters 

that the concern is largely theoretical 

and that no action is needed to address 

it. Incumbent licensees that bid up new 

licenses will risk winning the new 

license rather than receiving the 

corresponding incentive payment. That 

risk should deter insincere bidding to 

increase incentive payments. 

45. Assuring Full Incentive Payments. 

The Commission sought comment in the 

4th FNPRM about whether incumbents 

may relinquish spectrum if the demand 

for new licenses in a PEA may be met 

without relinquished spectrum. The 

Commission discussed several 

alternatives for prioritizing among 

incumbent relinquished spectrum 

blocks, either relinquished rights to full 

100 megahertz PEA blocks or partial 

PEA blocks, as well as prioritizing 

Commission-held spectrum blocks. The 

Commission noted that satisfying 

limited demand with Commission 

spectrum could minimize payments to 

incumbents. The Commission also 

observed, however, that regardless of 

‘‘the proceeds or relinquishments in a 

particular PEA’’ the incentive auction 

could proceed ‘‘[p]rovided that the total 

auction proceeds exceed the total 

incentive payments[.]’’ That is, the level 

of demand in a single PEA need not 

determine whether the Commission can 

make incentive payments for spectrum 

relinquished in that PEA. Commenters 

favor the Commission making all 

incentive payments even where 

incumbent spectrum is not needed for 

new licenses in a particular PEA, i.e., if 

there is a shortfall in demand in that 

PEA relative to the supply of spectrum 

made available in the auction. The 

Commission agrees that, so long as the 

total auction proceeds are sufficient, 

making all incentive payments 

irrespective of the level of demand in 

each PEA will serve the public interest. 

Accordingly, the Commission will adopt 

a net revenue requirement for this 

auction that, if met, will ensure that the 

auction proceeds are sufficient to cover 

all incentive payments. 

46. Making all incentive payments 

even when demand in a PEA falls short 

of the supply of available blocks serves 

the public interest in several ways. 

Assuring incumbents that all incentive 

payments will be made, irrespective of 

the demand in any given PEA, will 

encourage incumbents to relinquish 

their licenses and participate in the 

auction, which will facilitate the smooth 

transition of the 39 GHz band. 

Moreover, incumbent auction 

participants will have greater certainty 

about their respective auction budgets, 

including incentive payments, if they 

know they will receive a payment for 

usage rights they wish to relinquish, 

1626 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

10 Incentive payments will be determined by 

prices set in the auction. Winning bidders eligible 

for bidding credits, however, will pay less than the 

full auction price. Any such reductions will reduce 

the auction proceeds regardless of the 

Commission’s decision to apply bidding credits for 

incumbent winning bidders only to net cash 

payments. 

rather than being required to retain such 

rights. Incumbents then will be able to 

bid with more certainty for the licenses 

they value most highly. As a result, the 

auction will be more likely to assign 

new licenses to bidders that will use the 

licenses most effectively, enhancing 

benefits to consumers. 

47. Separately, there is an additional 

public interest benefit to ensuring that 

an incumbent that otherwise chooses to 

accept modified licenses will receive an 

incentive payment if it also chooses to 

relinquish its spectrum usage rights in 

its one partial PEA block. Providing this 

assurance makes it more likely that the 

incumbent will relinquish its partial 

PEA rights, thereby allowing a new 

license to be issued for a full 100 

megahertz block covering the entire PEA 

and facilitating the transition to the new 

39 GHz band plan. Accordingly, the 

Commission concludes that it will make 

all incentive payments, so long as there 

are sufficient auction proceeds 

available. 

48. Incentive payments for 

relinquished spectrum usage rights in a 

PEA where there is insufficient demand 

will be low. As the Commission noted 

in the 4th FNPRM, the final clock phase 

price for a whole block, and the 

corresponding incentive payment, will 

equal the minimum opening bid when 

demand does not exist for all the 

available blocks in a PEA. Absent 

demand for all available blocks in a 

PEA, the price for a whole block in the 

PEA cannot rise above the minimum 

opening bid. Consequently, auction 

proceeds as low as the sum of all 

minimum opening bids would assure 

that any shortfall in demand would not 

prevent making all incentive payments 

in full. 

49. A net revenue requirement to 

address much higher incentive 

payments could be necessary, however, 

due to another reason. Specifically, 

auction proceeds otherwise may not be 

sufficient to make all incentive 

payments in full. In the 4th FNPRM, the 

Commission sought comment on the 

possibility that bidding credits might 

reduce auction proceeds to less than the 

amount needed to pay all incentive 

payments owed incumbents.10 In 

response, commenters propose that in 

such a case all incentive payments 

should be proportionally reduced. The 

Commission concludes, however, that it 

should instead adopt procedures to help 

assure incumbent auction participants 

that all incentive payments will be paid 

in full. 

50. In the broadcast incentive auction, 

the Commission adopted a ‘‘final stage 

rule’’ to assure that auction proceeds 

would be sufficient to satisfy specified 

conditions. In part, that rule 

implemented a net revenue requirement 

for the auction based on the incentive 

payments set in the auction and that 

took into account bidding credits 

available to bidders for new licenses. 

Under such a net revenue requirement, 

the auction will not close unless auction 

proceeds are sufficient to cover all 

incentive payments owed. The 

Commission will establish procedures 

in this auction implementing a net 

revenue requirement based on auction 

bids that will assure that auction 

proceeds are sufficient to cover all 

incentive payments owed, including 

potential discounts to new licensees 

that qualify for bidding credits. The 

Commission will specify the procedures 

through the Auction Comment Public 

Notice and Auction Procedures Public 

Notice. 

51. Incumbent Upfront Payments. 

Verizon advocates for crediting 

participating incumbent licensees with 

upfront payments for existing licenses 

that they agree to relinquish. Verizon 

appears to suggest that an incumbent 

that might win licenses without making 

additional cash payments for winning 

bids should be credited with an upfront 

payment sufficient to obtain the bidding 

eligibility needed to make such bid(s). 

Verizon observes that payment defaults 

cannot occur if an incumbent can cover 

the auction price with its incentive 

payment. While Verizon is correct about 

one typical purpose of upfront 

payments—to mitigate against defaults 

for lack of payment—the Commission 

notes that a winning bidder may default 

for reasons other than failing to make a 

winning bid payment. Accordingly, the 

Commission does not grant Verizon’s 

request at this time, and it will address 

upfront payments through the Auction 

Comment Public Notice and the Auction 

Procedures Public Notice. 

E. Incentive Auction Bidding 

52. As proposed in the 4th FNPRM, 

the Commission will use a two-phase 

auction procedure. Commenters 

generally support the proposal for how 

bidding will be conducted. Accordingly, 

in the first phase, participants will bid 

for generic spectrum blocks by PEA in 

the Upper 37, 39, and 47 GHz Bands 

using an ascending clock auction. The 

second phase will assign frequencyspecific licenses to the winners of 

generic blocks in the bands. 

1. Auction Clock Phase 

53. In the clock phase of the incentive 

auction, bidders will indicate their 

demand for quantities of spectrum 

blocks in two generic bidding categories 

in each PEA. The clock phase will set 

a uniform price for generic blocks in 

each category in each PEA. Bidding for 

generic spectrum blocks by category 

will facilitate a speedier auction than if 

bidding were conducted for large 

numbers of unique licenses that 

nonetheless are reasonably 

substitutable. Where blocks are 

sufficiently similar, bidders can bid for 

a quantity of blocks rather than bidding 

separately for unique licenses, enabling 

the auction to reach a clearing price for 

all available blocks in a shorter time. 

54. Categories of Spectrum Blocks. 

The Commission will offer 100 

megahertz blocks of spectrum in two 

bidding categories. The first category 

will consist of generic blocks in the 

Upper 37 GHz and 39 GHz bands. The 

Commission effectively has treated the 

Upper 37 GHz and 39 GHz bands as one 

contiguous 2,400 megahertz band of 

spectrum. The bands are adjacent. In 

addition, both are subject to the same 

service rules and operability 

requirement. Accordingly, it is 

appropriate to consider blocks in these 

two bands as interchangeable and offer 

them as one category in the auction. 

55. The Commission will offer 100 

megahertz blocks of 47 GHz spectrum as 

a second generic bidding category. In 

contrast to the Upper 37 GHz and 39 

GHz bands, the 47 GHz band is not 

contiguous with the other two and does 

not share the same operability 

requirement with respect to equipment 

for using the band. Consequently, the 

Commission will treat 47 GHz blocks 

distinctly from Upper 37 GHz and 39 

GHz blocks and offer 47 GHz blocks as 

a separate category in the auction. 

56. Bidding Process. The rules for 

bidding in the first phase of the forward 

auction will be similar to those used in 

the clock portion of the forward auction 

in the broadcast incentive auction and 

in the auction of licenses for 24 GHz 

spectrum blocks. The clock price for a 

category of blocks in a PEA will increase 

as long as the demand for blocks 

exceeds the supply of blocks. 

57. Bidding will continue until the 

number of blocks demanded by bidders 

in each category of generic blocks in 

each PEA does not exceed the number 

of such blocks available. At that point, 

bidders demanding blocks in a category 

at the current price will be deemed 

clock phase winning bidders. The 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1627 

Commission will determine the exact 

procedures for clock phase bidding in 

the Auction Comment and Auction 

Procedures Public Notices. 

2. Auction Assignment Phase 

58. As proposed in the 4th FNPRM, 

the incentive auction will include a 

second phase that will determine the 

frequencies for licenses to be assigned to 

the winners of generic spectrum blocks. 

The Commission anticipates being able 

to assign contiguous frequencies within 

a category and a PEA to winners of 

multiple blocks in a category and a PEA. 

In the assignment phase, winning 

bidders for generic blocks will have an 

opportunity to submit sealed bids by 

PEA specifying additional amounts, if 

any, that they would be willing to pay 

for licenses on particular frequencies. 

Winning clock phase bidders would not 

be required to bid in the assignment 

phase or otherwise pay more than the 

price for generic blocks in the clock 

phase and would still be assured to have 

contiguous frequencies assigned to all of 

their licenses in the same category in a 

PEA. Incumbents that elect to receive 

modified licenses instead of bidding for 

new licenses in the auction will be 

assigned frequencies in the assignment 

phase but cannot bid for particular 

frequencies in the assignment phase. 

The Commission will detail the exact 

procedures for bidding in the 

assignment phase in the Auction 

Comment Public Notice and Auction 

Procedures Public Notice. The 

Commission expects that the final 

procedures will be similar to those used 

in the assignment portion of the auction 

of licenses for 24 GHz spectrum blocks. 

F. Post-Auction Transition 

59. Incumbents will retain their 

existing licenses until after the auction, 

when either the existing licenses are 

modified or relinquished, and new 

licenses are issued. New licenses will be 

assigned based on the results of bidding 

in the incentive auction. 

60. Existing Secondary Licenses. 

Diversified Communications, Inc. (DCI) 

asks the Commission to include 

secondary local television transmission 

service (LTTS) licensees in any 

transition plan and reimbursement 

program it creates for primary licensees 

in the band. DCI argues that in 

analogous situations in the past, the 

Commission has made accommodations 

for secondary services. 

61. It is a well-established principle 

under Commission precedent and its 

rules that secondary operations cannot 

cause harmful interference to primary 

operations nor claim protection from 

harmful interference from primary 

operations. As such, secondary users are 

not entitled to relocation or 

reimbursement from new entrants. 

Indeed, as T-Mobile points out, in the 

broadcast incentive auction, the 

Commission specifically considered 

LPTV and TV translator stations 

television stations ineligible to 

participate in the reverse auction or to 

receive compensation because they had 

not been granted primary status. These 

secondary users were later granted 

compensation rights only by 

Congressional directive. Accordingly, TMobile, Verizon, and AT&T argue the 

Commission need not utilize the 

incentive auction structure to reclaim 

DCI’s spectrum rights, pay for DCI’s 

repacking, or reimburse its investment 

in equipment purchased for 39 GHz 

operations. In consideration of the 

above, the Commission declines to 

create any specific transition plan or 

reimbursement program for secondary 

operations as part of the 39 GHz 

auction. Such users were fully aware of 

their secondary status at the time of 

establishing these secondary operations 

with the knowledge that they would be 

required to modify their operations at 

any time to protect licensees. 

IV. Final Regulatory Flexibility 

Analysis 

62. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), an Initial Regulatory Flexibility 

Analysis (IRFA) was incorporated in the 

Fourth Further Notice of Proposed 

Rulemaking (4th FNPRM) released in 

August 2018 in this proceeding. The 

Commission sought written public 

comment on the proposals in the 4th 

FNPRM, including comments on the 

IRFA. No comments were filed 

addressing the IRFA. This present Final 

Regulatory Flexibility Analysis (FRFA) 

conforms to the RFA. 

A. Need for, and Objectives of, the 

Fourth R&O 

63. In the Fourth R&O, the 

Commission takes major steps to make 

spectrum available for 5G, IoT, and 

other advanced services in the Upper 37 

GHz (37.6–38.6 GHz), 39 GHz (38.6–40 

GHz), and 47 GHz (47.2–48.2 GHz) 

bands. The Commission adopts the 

proposal set forth in the 4th FNPRM to 

conduct an incentive auction that can 

clear existing 39 GHz licenses and offer 

new spectrum licenses in the Upper 37 

GHz, 39 GHz, and 47 GHz bands. 

64. The Fourth R&O also modifies the 

band plans for the 39 GHz, Upper 37 

GHz, and 47 GHz bands from 200 

megahertz to 100 megahertz channels 

for the part 30 UMFUS. The incentive 

auction that the Commission adopts will 

promote the flexible-use wireless 

services rules that the Commission has 

adopted for these bands. Moreover, the 

incentive auction process will resolve 

the persistent difficulties presented by 

the need for existing 39 GHz licenses to 

be transitioned efficiently to the new 

band plan and possibly new service 

areas. 

65. In the Fourth R&O the 

Commission decides that it will make 

all existing licenses conform more 

closely with the new band plan and 

service rules by proposing modifications 

based on reconfigurations to each 

incumbent’s spectrum usage rights 

under existing licenses. The 

reconfiguration will preserve the 

existing spectrum rights of incumbents 

as much as possible, and where 

variations are unavoidable, maintain 

overall spectrum usage rights. An 

incumbent can choose to accept the 

reconfiguration, propose an alternative 

reconfiguration, or instead elect to 

participate in the auction. An 

incumbent that chooses not to 

participate in the incentive auction will 

have frequencies assigned for modified 

licenses based on reconfigured spectrum 

usage rights after the incentive auction 

has concluded. 

66. The Fourth R&O sets forth details 

about incumbents that choose to 

participate in the incentive auction. 

Incumbents that choose to participate in 

the incentive auction will relinquish 

existing spectrum licenses and receive 

‘‘vouchers’’ sufficient to win blocks in 

the auction equivalent to their existing 

Partial Economic Area (PEA) holdings. 

A participating incumbent will be able 

to make pre-bidding exchanges in its 

existing holdings of partial PEA blocks, 

subject to constraints. 

67. The Fourth R&O emphasizes that 

auction participants do not need to 

rebid on spectrum blocks equivalent to 

their existing holdings, however, but 

can apply the vouchers toward 

payments for blocks in other PEAs, 

receiving a cash incentive payment if 

the value of their vouchers exceeds their 

net auction obligations. Auction 

participants can also simply relinquish 

their holdings and choose not to bid on 

any new licenses, in which case they 

will receive a cash incentive payment 

for their vouchers. 

68. The Fourth R&O also adopts the 

proposal to implement a two-phase 

incentive auction that will offer new 

licenses. In the first phase, participants 

would bid to win generic spectrum 

blocks using an ascending clock auction 

that would determine a uniform price in 

each category in each PEA. Any party 

eligible to hold a license in these bands 

will be eligible to participate in the 

1628 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

auction for new licenses, except for 

incumbent 39 GHz licensees that 

decline to relinquish existing licenses. 

The second phase would assign 

specific-frequency licenses by PEA that 

would aim to ensure contiguity within 

each PEA. Because the spectrum blocks 

in the Upper 37 GHz and 39 GHz bands 

can be treated as largely interchangeable 

within a PEA, they will be offered as 

one category of generic blocks in a clock 

auction. The Commission will treat 47 

GHz blocks distinctly from Upper 37 

GHz and 39 GHz blocks and offer 47 

GHz blocks as a separate category in the 

auction. Winning bidders for generic 

blocks in the clock phase would have an 

opportunity to submit sealed bids by 

PEA specifying additional amounts, if 

any, that they would be willing to pay 

for licenses in the PEA on particular 

frequencies in the assignment phase. 

Winning clock phase bidders would 

participate in the assignment phase only 

if they so choose. Consequently, they 

would not be required to bid in the 

assignment phase or otherwise pay more 

than the price for generic blocks in the 

clock phase. Regardless of participation 

in the assignment phase, the assignment 

phase would aim to assign contiguous 

frequency blocks within a category in a 

PEA to a bidder that wins multiple 

blocks. Incumbents that elect to receive 

modified licenses instead of bidding for 

new licenses in the auction will be 

assigned frequencies in the assignment 

phase but cannot bid. 

69. Overall, the decisions in the 

Fourth R&O are designed to facilitate 

broadband deployment, including 5G 

services, by providing opportunities to 

make it easier for licensees in the band 

to rationalize their existing holdings 

into contiguous swathes of spectrum, 

and by offering new licenses of 

contiguous spectrum at auction while 

protecting incumbents’ existing 

spectrum usage rights. This will ensure 

that this spectrum is used efficiently 

and will foster the development of new 

and innovative technologies and 

services, as well as encourage the 

growth and development of a wide 

variety of services, ultimately leading to 

greater benefits to consumers. 

B. Summary of Significant Issues Raised 

by Public Comments in Response to the 

IRFA 

70. There were no comments filed 

that specifically addressed the proposed 

rules and policies presented in the 

IRFA. 

C. Response to Comments by the Chief 

Counsel for Advocacy of the Small 

Business Administration 

71. Pursuant to the Small Business 

Jobs Act of 2010, which amended the 

RFA, the Commission is required to 

respond to any comments filed by the 

Chief Counsel for Advocacy of the Small 

Business Administration (SBA), and to 

provide a detailed statement of any 

change made to the proposed rules as a 

result of those comments. 

72. The Chief Counsel did not file any 

comments in response to the proposed 

rules in this proceeding. 

D. Description and Estimate of the 

Number of Small Entities to Which the 

Rules Will Apply 

73. The RFA directs agencies to 

provide a description of and, where 

feasible, an estimate of the number of 

small entities that may be affected by 

the rules adopted herein. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’ 

under the Small Business Act.’’ A 

‘‘small business concern’’ is one which: 

(1) Is independently owned and 

operated; (2) is not dominant in its field 

of operation; and (3) satisfies any 

additional criteria established by the 

SBA. 

74. Small Businesses, Small 

Organizations, Small Governmental 

Jurisdictions. The Commission’s actions, 

over time, may affect small entities that 

are not easily categorized at present. 

The Commission therefore describes 

here, at the outset, three broad groups of 

small entities that could be directly 

affected herein. First, while there are 

industry specific size standards for 

small businesses that are used in the 

regulatory flexibility analysis, according 

to data from the SBA’s Office of 

Advocacy, in general a small business is 

an independent business having fewer 

than 500 employees. These types of 

small businesses represent 99.9% of all 

businesses in the United States which 

translates to 28.8 million businesses. 

75. Next, the type of small entity 

described as a ‘‘small organization’’ is 

generally ‘‘any not-for-profit enterprise 

which is independently owned and 

operated and is not dominant in its 

field.’’ Nationwide, as of August 2016, 

there were approximately 356,494 small 

organizations based on registration and 

tax data filed by nonprofits with the 

Internal Revenue Service (IRS). 

76. Finally, the small entity described 

as a ‘‘small governmental jurisdiction’’ 

is defined generally as ‘‘governments of 

cities, counties, towns, townships, 

villages, school districts, or special 

districts, with a population of less than 

fifty thousand.’’ U.S. Census Bureau 

data from the 2012 Census of 

Governments indicate that there were 

90,056 local governmental jurisdictions 

consisting of general purpose 

governments and special purpose 

governments in the United States. Of 

this number there were 37,132 general 

purpose governments (county, 

municipal and town or township) with 

populations of less than 50,000 and 

12,184 special purpose governments 

(independent school districts and 

special districts) with populations of 

less than 50,000. The 2012 U.S. Census 

Bureau data for most types of 

governments in the local government 

category show that the majority of these 

governments have populations of less 

than 50,000. Based on this data, the 

Commission estimates that at least 

49,316 local government jurisdictions 

fall in the category of ‘‘small 

governmental jurisdictions.’’ 

77. Wireless Telecommunications 

Carriers (except Satellite). This industry 

comprises establishments engaged in 

operating and maintaining switching 

and transmission facilities to provide 

communications via the airwaves. 

Establishments in this industry have 

spectrum licenses and provide services 

using that spectrum, such as cellular 

services, paging services, wireless 

internet access, and wireless video 

services. The appropriate size standard 

under SBA rules is that such a business 

is small if it has 1,500 or fewer 

employees. For this industry, U.S. 

Census Bureau data for 2012 show that 

there were 967 firms that operated for 

the entire year. Of this total, 955 firms 

had employment of 999 or fewer 

employees and 12 had employment of 

1,000 employees or more. Thus under 

this category and the associated size 

standard, the Commission estimates that 

the majority of wireless 

telecommunications carriers (except 

satellite) are small entities. 

78. Fixed Microwave Services. 

Microwave services include common 

carrier, private-operational fixed, and 

broadcast auxiliary radio services. They 

also include the Upper Microwave 

Flexible Use Service, the Millimeter 

Wave Service, Local Multipoint 

Distribution Service (LMDS), the Digital 

Electronic Message Service (DEMS), and 

the 24 GHz Service, where licensees can 

choose between common carrier and 

non-common carrier status. At present, 

there are approximately 66,680 common 

carrier fixed licensees, 69,360 private 

and public safety operational-fixed 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1629 

licensees, 20,150 broadcast auxiliary 

radio licensees, 411 LMDS licenses, 33 

24 GHz DEMS licenses, 777 39 GHz 

licenses, and five 24 GHz licensees, and 

467 Millimeter Wave licenses in the 

microwave services. The Commission 

has not yet defined a small business 

with respect to microwave services. The 

closest applicable SBA category is 

Wireless Telecommunications Carriers 

(except Satellite) and the appropriate 

size standard for this category under 

SBA rules is that such a business is 

small if it has 1,500 or fewer employees. 

For this industry, U.S. Census Bureau 

data for 2012 shows that there were 967 

firms that operated for the entire year. 

Of this total, 955 had employment of 

999 or fewer, and 12 firms had 

employment of 1,000 employees or 

more. Thus under this SBA category and 

the associated standard, the 

Commission estimates that the majority 

of fixed microwave service licensees can 

be considered small. 

79. The Commission does not have 

data specifying the number of these 

licensees that have more than 1,500 

employees, and thus is unable at this 

time to estimate with greater precision 

the number of fixed microwave service 

licensees that would qualify as small 

business concerns under the SBA’s 

small business size standard. 

Consequently, the Commission 

estimates that there are up to 36,708 

common carrier fixed licensees and up 

to 59,291 private operational-fixed 

licensees and broadcast auxiliary radio 

licensees in the microwave services that 

may be small and may be affected by the 

rules and policies proposed herein. The 

Commission notes, however, that both 

the common carrier microwave fixed 

and the private operational microwave 

fixed licensee categories includes some 

large entities. 

80. All Other Telecommunications. 

The ‘‘All Other Telecommunications’’ 

category is comprised of establishments 

primarily engaged in providing 

specialized telecommunications 

services, such as satellite tracking, 

communications telemetry, and radar 

station operation. This industry also 

includes establishments primarily 

engaged in providing satellite terminal 

stations and associated facilities 

connected with one or more terrestrial 

systems and capable of transmitting 

telecommunications to, and receiving 

telecommunications from, satellite 

systems. Establishments providing 

internet services or voice over internet 

protocol (VoIP) services via clientsupplied telecommunications 

connections are also included in this 

industry.’’ The SBA has developed a 

small business size standard for ‘‘All 

Other Telecommunications,’’ which 

consists of all such firms with gross 

annual receipts of $32.5 million or less. 

For this category, U.S. Census Bureau 

data for 2012 shows that there were a 

total of 1,442 firms that operated for the 

entire year. Of these firms, a total of 

1,400 firms had gross annual receipts of 

under $25 million and 42 firms had 

gross annual receipts of $25 million to 

$49, 999,999. Thus, the Commission 

estimates that a majority of ‘‘All Other 

Telecommunications’’ firms potentially 

affected by the Commission’s actions 

can be considered small. 

81. Radio and Television 

Broadcasting and Wireless 

Communications Equipment 

Manufacturing. This industry comprises 

establishments primarily engaged in 

manufacturing radio and television 

broadcast and wireless communications 

equipment. Examples of products made 

by these establishments are: 

Transmitting and receiving antennas, 

cable television equipment, GPS 

equipment, pagers, cellular phones, 

mobile communications equipment, and 

radio and television studio and 

broadcasting equipment.’’ The SBA has 

established a size standard for this 

industry of 1,250 employees or less. 

U.S. Census Bureau data for 2012 shows 

that 841 establishments operated in this 

industry in that year. Of that number, 

828 establishments operated with fewer 

than 1,000 employees, 7 establishments 

operated with between 1,000 and 2,499 

employees and 6 establishments 

operated with 2,500 or more employees. 

Based on this data, the Commission 

concludes that a majority of 

manufacturers in this industry is small. 

E. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

82. The Commission expects the rules 

adopted in the Fourth R&O will impose 

new or additional reporting or 

recordkeeping and/or other compliance 

obligations on small entities as well as 

other applicants and licensees. The 

projected reporting, recordkeeping, and 

other compliance requirements in the 

Fourth R&O will apply to entities 

slightly differently depending on 

whether they accept modified licenses, 

relinquish spectrum usage rights 

entirely, relinquish spectrum rights and 

seek new licenses to continue to operate 

in the band, or are new entrants seeking 

new licenses. The requirements the 

Commission adopts should benefit 

small entities by giving them more 

information, more flexibility, and more 

options for gaining access to wireless 

spectrum. 

83. The Commission has designed the 

process of applying to participate in 

auctions involving spectrum license 

auctions generally, including the 

incentive auction, to minimize reporting 

and compliance requirements for 

applicants, including small business 

applicants. The Commission expects 

that the filing, recordkeeping and 

reporting requirements associated with 

the demands described below will 

require small businesses as well as other 

entities that intend to utilize these new 

UMFUS licenses to use professional, 

accounting, engineering or survey 

services in order to meet these 

requirements. Incumbent licensees that 

volunteer to relinquish spectrum usage 

rights will make a binding commitment 

to do so in a submission to the 

Commission. Parties desiring to 

participate in an auction for new 

licenses, including incumbents and new 

entrants, either of which may be small 

entities, will begin by filing streamlined, 

short-form applications in which they 

certify under penalty of perjury as to 

their qualifications. The Commission 

will provide detailed instructions for 

each auction applicant to maintain the 

accuracy of its respective short-form 

application electronically using the FCC 

Auction Application System and/or by 

direct communication with the 

Auctions Division. The Commission 

also will provide detailed instructions 

for any incumbent eligible to be paid an 

incentive payment regarding financial 

information that must be provided to 

the Commission, as well as instructions 

for any winning bidder for new licenses 

regarding the license application 

process. As with other winning bidders, 

any small entity that is a winning bidder 

will be required to comply with paying 

the net amount of its winning bids and 

electronically submitting a properly 

completed long-form application (FCC 

Form 601) and required exhibits for 

each license won. A winning bidder 

claiming eligibility for a bidding credit 

must demonstrate its eligibility in its 

FCC Form 601 post-auction application 

for the bidding credit sought. 

84. Small entities and other 

applicants for UMFUS licenses will be 

required to file license applications 

using the Commission’s automated 

Universal Licensing System (ULS). ULS 

is an online electronic filing system that 

also serves as a powerful information 

tool, one that enables potential licensees 

to research applications, licenses, and 

antenna structures. It also keeps the 

public informed with weekly public 

notices, FCC rulemakings, processing 

utilities, and a telecommunications 

glossary. Small entities, like all other 

1630 Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 

entities who are UMFUS applicants, 

must submit long-form license 

applications through ULS using Form 

601, FCC Ownership Disclosure 

Information for the Wireless 

Telecommunications Services using 

FCC Form 602, and other appropriate 

forms. 

F. Steps Taken To Minimize the 

Significant Economic Impact on Small 

Entities, and Significant Alternatives 

Considered 

85. The RFA requires an agency to 

describe any significant alternatives for 

small businesses that it has considered 

in reaching its approach, which may 

include the following four alternatives 

(among others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance and reporting requirements 

under the rule for such small entities; 

(3) the use of performance rather than 

design standards; and (4) an exemption 

from coverage of the rule, or any part 

thereof, for such small entities. 

86. The Commission believes that the 

incentive auction mechanism adopted 

in the Fourth R&O will result in both 

operational and administrative cost 

savings for small entities, as well as 

other participants. At the outset, 

because participating in the auction is 

voluntary, the Commission allows 

incumbent licensees, including small 

entities, to have their existing licenses 

modified instead of having to 

participate in an auction if they so 

choose. The incentive auction will give 

incumbent licensees, including small 

entities, an opportunity to receive 

incentive payments for their spectrum 

licenses that are based on a market 

price, while providing opportunities to 

obtain additional licenses. Moreover, 

should new licenses match the 

spectrum usage rights of an incumbent’s 

current licenses, the incentive payments 

will be enough so that the incumbents 

can win new licenses without making 

additional payments, regardless of how 

high bids for those new licenses may go 

in the auction. Furthermore, adopting a 

two-phase auction procedure will 

benefit all participants by resulting in a 

quick auction, due to the first clock 

phase, followed by an assignment 

phase. This benefits small entities, as 

they may not have the same flexibility 

as larger entities to devote time to 

participating in the auction. In addition, 

winning bidders do not have to bid in 

the assignment phase. Furthermore, the 

Commission anticipates being able to 

assign contiguous frequencies within a 

PEA category, even where a clock phase 

winning bidder does not bid in the 

assignment phase. This benefits smaller 

entities that otherwise might have 

difficulty aggregating contiguous 

licenses through transactions in the 

secondary market. In addition, the 

Commission has adopted bidding 

credits for applicants for new licenses 

who qualify as small businesses. An 

entity with average annual gross 

revenues for the preceding three years 

not exceeding $55 million will qualify 

as a ‘‘small business’’ and be eligible to 

receive a 15 percent discount on its 

winning bid. An entity with average 

annual gross revenues for the preceding 

three years not exceeding $20 million 

will qualify as a ‘‘very small business’’ 

and be eligible to receive a 25 percent 

discount on its winning bid. 

87. The Commission also believes that 

its actions modifying the band plan 

from 200 megahertz to 100 megahertz 

channels in the 39 GHz, Upper 37 GHz, 

and 47 GHz bands will help small 

entities by making spectrum available in 

smaller license sizes that may be more 

attractive to small entities. Similarly, 

the Commission believes the proposed 

mechanism for auctioning the 39 GHz 

and Upper 37 GHz bands will facilitate 

access to spectrum by small businesses. 

Accordingly, the Commission does not 

believe that its adopted changes will 

have a significant economic impact on 

small entities. Nevertheless, to the 

extent applying the rules equally to all 

entities results in the cost of complying 

with these burdens being relatively 

greater for smaller businesses than for 

large ones, this approach is necessary to 

effectuate the purpose of the 

Communications Act, namely to further 

the efficient use of spectrum and to 

prevent spectrum warehousing. 

V. Ordering Clauses 

88. Accordingly, it is ordered that, 

pursuant to Sections 4(i), 201(b), 303, 

308, 309, 316, 324, 332, and 337 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 201(b), 303, 

308, 309, 316, 324, 332, 337, this Fourth 

Report and Order is hereby adopted. 

89. It is further ordered that the 

amendments of the Commission’s rules 

as set forth below are adopted, effective 

thirty days from the date of publication 

in the Federal Register. 

90. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Fourth Report and Order, including 

the Final Regulatory Flexibility 

Analysis, to the Chief Counsel for 

Advocacy of the Small Business 

Administration. 

91. It is further ordered that the 

Commission shall send a copy of this 

Fourth Report and Order in a report to 

be sent to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

List of Subjects in 47 CFR Parts 1 and 

30 

Administrative practice and 

procedures, Communications common 

carriers. 

Federal Communications Commission. 

Cecilia Sigmund, 

Federal Register Liaison Officer, Office of the 

Secretary. 

Final Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR parts 1 and 

30 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(i) and (j), 

155, 157, 160, 201, 224, 225, 227, 303, 309, 

310, 332, 1403, 1404, 1451, 1452, and 1455. 

■ 2. Revise § 1.2101 to read as follows: 

§ 1.2101 Purpose. 

The provisions of §§ 1.2101 through 

1.2115 implement section 309(j) of the 

Communications Act of 1934, as added 

by the Omnibus Budget Reconciliation 

Act of 1993 (Pub. L. 103–66) and 

subsequent amendments. 

■ 3. Add § 1.2115 to read as follows: 

§ 1.2115 Public notice of incentive auction 

related procedures. 

The provisions of this subpart may be 

used to conduct an incentive auction 

pursuant to 47 U.S.C. 309(j)(8)(G), 

including either or both a reverse 

auction to determine the incentive 

payment a licensee would be willing to 

accept in exchange for relinquishing 

spectrum usage rights and a forward 

auction to assign flexible use licenses 

for any spectrum made available as the 

result of such relinquishments. The 

Commission shall provide public notice 

of any procedures necessary for the 

implementation of an incentive auction 

that are not otherwise provided for 

pursuant to the rules of this Subpart. 

The Commission may do so in one or 

more such public notices. The 

Commission’s procedures may include, 

without limitation: 

(a) Spectrum usage rights 

relinquishment procedures. The 

procedures pursuant to which a licensee 

may make an unconditional, irrevocable 

Federal Register / Vol. 84, No. 24 / Tuesday, February 5, 2019 / Rules and Regulations 1631 

offer to relinquish spectrum usage rights 

in exchange for an incentive payment, 

including any terms the offer must 

include and procedures pursuant to 

which the Commission may accept such 

an offer. 

(b) Information required from a 

licensee. (1) The procedures for a 

licensee to provide any identifying 

information and or certifications that 

the Commission may require from any 

licensee that seeks to relinquish 

spectrum usage rights in the incentive 

auction. 

(2) The procedures for a licensee that 

is relinquishing spectrum usage rights to 

provide any financial information that 

the Commission may require to facilitate 

the disbursement of any incentive 

payment. 

PART 30—UPPER MICROWAVE 

FLEXIBLE USE SERVICE 

■ 4. The authority citation for part 30 

continues to read as follows: 

Authority: 47 U.S.C. 151, 152, 153, 154, 

301, 303, 304, 307, 309, 310, 316, 332, 1302. 

■ 5. Amend § 30.4 by redesignating 

paragraphs (b), (c), (d), and (e) as 

paragraphs (c), (d), (f), and (g) 

respectively, adding and reserving new 

paragraphs (b) and (e), and revising 

redesignated paragraphs (d)(1), (f), and 

(g) to read as follows: 

§ 30.4 Frequencies. 

* * * * * 

(b) [Reserved] 

* * * * * 

(d) * * * 

(1) New channel plan: 

Channel No. 

Frequency band 

limits 

(MHz) 

1 ........................................ 38,600–38,700 

2 ........................................ 38,700–38,800 

3 ........................................ 38,800–38,900 

4 ........................................ 38,900–39,000 

5 ........................................ 39,000–39,100 

6 ........................................ 39,100–39,200 

7 ........................................ 39,200–39,300 

8 ........................................ 39,300–39,400 

9 ........................................ 39,400–39,500 

10 ...................................... 39,500–39,600 

11 ...................................... 39,600–39,700 

12 ...................................... 39,700–39,800 

13 ...................................... 39,800–39,900 

14 ...................................... 39,900–40,000 

* * * * * 

(e) [Reserved] 

(f) 37–38.6 GHz band: 37,600–37,700; 

37,700–37,800 MHz; 37,800–37,900 

MHz; 37,900–38,000 MHz; 38,000– 

38,100 MHz; 38,100–38,200 MHz; 

38,200–38,300 MHz; 38,300–38,400 

MHz; 38,400–38,500 MHz, and 38,500– 

38,600 MHz. The 37,000–37,600 MHz 

band segment shall be available on a 

site-specific, coordinated shared basis 

with eligible Federal entities. 

(g) 47.2–48.2 GHz band—47.2–47.3 

GHz; 47.3–47.4 GHz; 47.4–47.5 GHz; 

47.5–47.6 GHz; 47.6–47.7 GHz; 47.7– 

47.8 GHz; 47.8–47.9 GHz; 47.9–48.0 

GHz; 48.0–48.1 GHz; and 48.1–48.2 

GHz. 

[FR Doc. 2018–27975 Filed 2–4–19; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[Docket No. 140722613–4908–02] 

RIN 0648–XG734 

Fisheries of the Caribbean, Gulf of 

Mexico, and South Atlantic; Coastal 

Migratory Pelagic Resources of the 

Gulf of Mexico and Atlantic Region; 

Commercial Closure for Spanish 

Mackerel 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS implements an 

accountability measure (AM) for 

commercial Spanish mackerel in the 

Atlantic southern zone of the exclusive 

economic zone (EEZ) through this 

temporary rule. NMFS has determined 

that the commercial quota for Spanish 

mackerel in the Atlantic southern zone 

will be reached by February 5, 2019. 

Therefore, NMFS closes the Atlantic 

southern zone of the EEZ to commercial 

harvest of Spanish mackerel on 

February 5, 2019. This closure is 

necessary to protect the Spanish 

mackerel resource in the Atlantic. 

DATES: The closure is effective at 6:00 

a.m., local time, on February 5, 2019, 

until 12:01 a.m., local time, on March 1, 

2019. 

FOR FURTHER INFORMATION CONTACT: 

Mary Vara, NMFS Southeast Regional 

Office, telephone: 727–824–5305, or 

email: mary.vara@noaa.gov. 

SUPPLEMENTARY INFORMATION: The 

fishery for coastal migratory pelagic fish 

includes king mackerel, Spanish 

mackerel, and cobia, and is managed 

under the Fishery Management Plan for 

the Coastal Migratory Pelagic Resources 

of the Gulf of Mexico and Atlantic 

Region (FMP). The FMP was prepared 

by the Gulf of Mexico and South 

Atlantic Fishery Management Councils 

and is implemented by NMFS under the 

authority of the Magnuson-Stevens 

Fishery Conservation and Management 

Act (Magnuson-Stevens Act) by 

regulations at 50 CFR part 622. All 

weights described for Spanish mackerel 

in the Atlantic EEZ apply as either 

round or gutted weight. The fishing year 

for the Atlantic migratory group of 

Spanish mackerel (Atlantic Spanish 

mackerel) is March through the end of 

February each year. 

Framework Amendment 1 to the FMP 

(79 FR 69058; November 20, 2014) 

implemented a commercial annual 

catch limit (equal to the commercial 

quota) of 3.33 million lb (1.51 million 

kg) for Atlantic Spanish mackerel. 

Atlantic Spanish mackerel are divided 

into a northern and southern zone for 

management purposes. The southern 

zone consists of Federal waters off 

South Carolina, Georgia, and the east 

coast of Florida. The northern boundary 

for the southern zone for Atlantic 

Spanish mackerel extends from the state 

border of North Carolina and South 

Carolina along a line beginning at 

33°51′07.9′′ N lat. and 78°32′32.6′′ W 

long. and extending in a direction of 

135°34′55′′ from true north to the 

intersection point with the outward 

boundary of the EEZ. The southern 

boundary for the southern zone is 

25°20′24′′ N lat., which is the boundary 

between Miami-Dade and Monroe 

Counties, Florida. 

The southern zone commercial quota 

for Atlantic Spanish mackerel is 

2,667,330 lb (1,209,881 kg). Seasonally 

variable commercial trip limits are 

based on an adjusted commercial quota 

of 2,417,330 lb (1,096,482 kg), with the 

adjusted commercial quota calculated to 

allow continued harvest in the southern 

zone at a set rate for the remainder of 

the current fishing year, in accordance 

with 50 CFR 622.385(b)(2). Regulations 

at 50 CFR 622.385(b)(1)(ii) require 

NMFS to reduce the commercial trip 

limit for Atlantic Spanish mackerel in 

the southern zone when specified 

percentages of the adjusted commercial 

quota are reached or are projected to be 

reached. Accordingly, on December 27, 

2018, NMFS published a temporary rule 

in the Federal Register to reduce the 

commercial trip limit from 3,500 lb 

(1,588 kg) to 1,500 lb (680 kg) for 

Atlantic Spanish mackerel in the 

southern zone (83 FR 66635). On 

January 28, 2019, NMFS published a 

subsequent temporary rule in the 

Federal Register that further reduced 

the commercial trip limit for Atlantic 

Spanish mackerel in the southern zone 

to 500 lb (227 kg) (84 FR 407).