72048 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 1 and 27 

[WT Docket No. 03–66; RM–10586; FCC 04–

135] 

Facilitating the Provision of Fixed and 

Mobile Broadband Access, 

Educational and Other Advanced 

Services in the 2150–2162 and 2500–

2690 MHz Bands

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rule.

SUMMARY: In this document, a Further 

Notice of Proposed Rulemaking 

(FNPRM), the Federal Communications 

Commission (FCC) proposes rules 

concerning the Broadband Radio 

Service (BRS) and the Educational 

Broadband Service (EBS) in the 2496–

2690 MHz band. The FNPRM further 

proposes rules to govern the transition 

of the 2500–2690 MHz band when the 

transition has not occurred according to 

the timeframes adopted by the FCC. The 

NPRM seeks comment on numerous 

issues concerning these proposals.

DATES: Comments are due on or before 

January 10, 2005. Reply comments are 

due February 8, 2005. Written 

comments on the Paperwork Reduction 

Act proposed information collection 

requirements must be submitted by the 

public, Office of Management and 

Budget (OMB), and other interested 

parties on or before February 8, 2005.

ADDRESSES: In addition to filing 

comments with the Secretary, a copy of 

any comments on the Paperwork 

Reduction Act information collection 

requirements contained herein should 

be submitted to Judith B. Herman, 

Federal Communications Commission, 

Room 1–C804, 445 12th Street, SW., 

Washington, DC 20554, or via the 

Internet to Judith-B.Herman@fcc.gov

and to Kristy L. LaLonde, OMB Desk 

Officer, Room 10234 NEOB, 725 17th 

Street, NW., Washington, DC 20503, or 

via the Internet to 

Kristy_L.LaLonde@omb.eop.gov, or via 

fax at 202–395–5167.

FOR FURTHER INFORMATION CONTACT:

Genevieve Ross or Nancy Zaczek at 

202–418–2487. For additional 

information concerning the Paperwork 

Reduction Act information collection 

requirements contained in this 

document, contact Judith B. Herman at 

202–418–0214, or via the Internet at 

Judith-B.Herman@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s FNPRM, 

released on July 29, 2004, FCC 04–135. 

The full text of the FNRM is available 

for inspection and copying during 

normal business hours in the FCC 

Reference Center, Room CY–A257, 445 

12th Street, SW., Washington, DC 

20554. The complete text may also be 

purchased from the Commission’s 

duplicating contractor, Best Copy and 

Printing, Inc., (BCPI), Portals II, 445 

12th Street, SW., Room CY–B402, 

Washington, DC 20554, 202–488–5300. 

The complete item is also available on 

the Commission’s Web site at http://

hraunfoss.fcc.gov/edocs_public/

attachmatch/FCC–04–135A1.doc. The 

proposed rule was published in the 

Federal Register on June 10, 2003 (68 

FR 34560). 

I. Summary of Further Notice of 

Proposed Rulemaking 

1. We seek comment on the following 

issues in the Further Notice of Proposed 

Rulemaking (FNPRM):

• In markets where proponents file 

transition plans, we propose to assign 

licenses for unassigned spectrum. We 

seek comment on the timing of such 

auctions, the appropriate geographic 

area licensing definitions for new 

licenses, the proper grouping of 

frequency blocks for new licenses, and 

the appropriate bidding credits for such 

licenses. 

• We also seek comment on 

alternative methods to transition 

licensees to the extent that licenseenegotiated transitions do not occur 

within the three-year transition period. 

Specifically, we seek comment on 

utilizing a system whereby existing 

licenses would be exchanged for a 

modified license and a tradable 

instrument. Upon completion of such 

exchange, the entire band will be 

auctioned, and entities can utilize these 

tradable instruments in this or any other 

Commission auction. The tradable 

instruments would be divisible and 

transferable. Existing licensees would be 

able to continue operating until the new 

licensee certifies that it is ready to 

commence service. Those licensees who 

chose to opt-out would receive one six 

megahertz channel in the Middle Band 

Segment, and new licensees would be 

required to pay for the relocation of 

licensees that opt-out. 

• We seek comment on establishing 

performance requirements for BRS and 

EBS licensees. We tentatively conclude 

that any performance requirements 

should be based on a ‘‘substantial 

service’’ standard and seek comment on 

appropriate safe harbors that licensees 

could rely upon to demonstrate that 

they have provided substantial service. 

• We seek comment on modifying the 

respective rights of grandfathered EBS 

stations operating on the E and F 

channel groups and BRS stations 

operating on those channel groups. 

• We seek comment on eliminating, 

in markets that have not yet 

transitioned, the rule that limits EBS 

licensees to four channels, from in the 

same channel group, in a single area of 

operation. We conclude that the rule 

will not apply in markets that have 

transitioned.

• We seek comment on eliminating, 

in markets that have not yet 

transitioned, the rule that allows 

wireless cable operators to be licensed 

on EBS channels under certain 

conditions. We conclude that the rule 

will not apply in markets that have 

transitioned. Existing licenses will be 

grandfathered. 

• We seek comment on revising the 

methodology used to calculate 

regulatory fees for BRS or EBS licensee. 

• We seek comment on issues relating 

to the definition of the Gulf of Mexico 

service area and service rules relating to 

that area. 

• We seek comment on ways to 

streamline our current procedures for 

reviewing transactions in order to 

facilitate more efficient transactions. 

• We also seek comment on future 

trends that licensees, equipment 

manufacturers, and other stakeholders 

expect for BRS and EBS. 

Procedural Matters 

Ex Parte Rules 

2. This is a permit-but-disclose notice 

and comment rulemaking proceeding. 

Ex parte presentations are permitted, 

except during the Sunshine Agenda 

period, provided they are disclosed 

pursuant to the Commission’s rules. 

Comment Period and Procedures 

3. Pursuant to applicable procedures 

set forth in §§ 1.415 and 1.419 of the 

Commission’s rules, interested parties 

may file comments on this Notice on or 

before January 10, 2005, and reply 

comments on or before February 8, 

2005. Comments and reply comments 

should be filed in WT Docket No. 03–

66, and may be filed using the 

Commission’s Electronic Comment 

Filing System (ECFS) or by filing paper 

copies. All relevant and timely 

comments will be considered by the 

Commission before final action is taken 

in this proceeding. 

4. Comments filed through the ECFS 

can be sent as an electronic file via the 

Internet to http://www.fcc.gov/e-file/

ecfs.html. In completing the transmittal 

screen, commenters should include 

their full name, Postal Service mailing 

address, and the applicable docket 

Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 72049

number. Parties may also submit an 

electronic comment by e-mail via the 

Internet. To obtain filing instructions for 

e-mail comments, commenters should 

send an e-mail to ecfs@fcc.gov, and 

should include the following words in 

the body of the message: ‘‘get form 

<your e-mail address>.’’ A sample form 

and directions will be sent in reply. 

5. Parties who choose to file by paper 

must file an original and four copies of 

each filing. If parties want each 

Commissioner to receive a personal 

copy of their comments, they must file 

an original plus nine copies. All filings 

must be sent to the Commission’s 

Secretary, Marlene H. Dortch, Office of 

the Secretary, Federal Communications 

Commission, 445 12th Street, SW., 

Room TW–A325, Washington, DC 

20554. Furthermore, parties are 

requested to provide courtesy copies for 

the following Commission staff: (1) 

Nancy Zaczek, Genevieve Ross, and 

Stephen Zak, Broadband Division, 

Wireless Telecommunications Bureau, 

Federal Communications Commission, 

445 12th Street, SW., Room 3–C124, 

Washington, DC 20554; and (2) William 

Huber and Erik Salovaara, Auctions and 

Spectrum Access Division, Wireless 

Telecommunications Bureau, Federal 

Communications Commission, 445 12th 

Street, SW., Room 4–A760, Washington, 

DC 20554. One copy of each filing 

(together with a diskette copy, as 

indicated below) should also be sent to 

the Commission’s copy contractor, Best 

Copy and Printing, Inc, 445 12th Street, 

SW., Room CY–B402, Washington, DC, 

20554, 1–800–378–3160. 

6. Parties who choose to file by paper 

should also submit their comments on 

diskette. These diskettes should be 

attached to the original paper filing 

submitted to the Office of the Secretary. 

Such a submission should be on a 3.5 

inch diskette formatted in an IBM 

compatible format using Microsoft TM 

Word 97 for Windows or compatible 

software. The diskette should be 

accompanied by a cover letter and 

should be submitted in ‘‘read only’’

mode. The diskette should be clearly 

labeled with the commenter’s name, 

proceeding, type of pleading (comment 

or reply comment), date of submission, 

and the name of the electronic file on 

the diskette. The label should also 

include the following phrase ‘‘Disk 

Copy—Not an Original.’’ Each diskette 

should contain only one party’s 

pleadings, preferably in a single 

electronic file. In addition, commenters 

should send diskette copies to the 

Commission’s copy contractor, Qualex 

International, 445 12th Street, SW., 

Room CY–B402, Washington, DC, 

20554, 202–863–2893. 

7. The public may view the 

documents filed in this proceeding 

during regular business hours in the 

FCC Reference Information Center, 

Federal Communications Commission, 

445 12th Street, SW., Room CY–A257, 

Washington, DC 20554, and on the 

Commission’s Internet Home Page: 

http://www.fcc.gov. Copies of comments 

and reply comments are also available 

through the Commission’s duplicating 

contractor: Best Copy and Printing, Inc., 

445 12th Street, SW., Room CY–B402, 

Washington, DC, 20554, 1–800–378–

3160. Accessible formats (computer 

diskettes, large print, audio recording 

and Braille) are available to persons 

with disabilities by contacting Brian 

Millin, of the Consumer & 

Governmental Affairs Bureau, at (202) 

418–7426, TTY (202) 418–7365, or at 

bmillin@fcc.gov. 

Initial Paperwork Reduction Analysis 

8. This document contains proposed 

information collection requirements. 

The Commission, as part of its 

continuing effort to reduce paperwork 

burdens, invites the general public and 

the Office of Management and Budget 

(OMB) to comment on the information 

collection requirements contained in 

this document, as required by the 

Paperwork Reduction Act of 1995, Pub. 

L. 104–13. Public and agency comments 

are due on or before November 23, 2004. 

Comments should address: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of the Commission, 

including whether the information shall 

have practical utility; (b) the accuracy of 

the Commission’s burden estimates; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on the 

respondents, including the use of 

automated collection techniques or 

other forms of information technology. 

In addition, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Pub. L. 107–198, see 44 U.S.C. 

3506(c)(4), we seek specific comment on 

how we might ‘‘further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees.’’

OMB Control No.: 3060–XXXX. 

Title: Transition of the 2500–2690 

MHz band. 

Form No.: N/A.

Type of Review: New Collection. 

Respondents: Business or other forprofit; State, and local government; Notfor-profit institutions; Individuals or 

household. 

Number of Respondents: 2500. 

Estimated Time Per Response: 1 to 25 

hours. 

Frequency of Response: One time 

reporting requirements. 

Total Annual Burden: 32,000. 

Total Annual Cost: $7,000,000. 

Needs and Uses: The Commission 

adopted on June 10, 2004 and released 

on July 29, 2004, rules to transition 

licensees in the 2500–2690 MHz band. 

Specifically, licensees in the 

Multichannel Multipoint Distribution 

Service (MMDS) (renamed the 

Broadband Radio Service (BRS)) and the 

Instructional Television Fixed Service 

(ITFS) (renamed the Educational 

Broadband Service (EBS)), must 

transition to a new band plan in the 

2500–2690 MHz band. This transition is 

to take place by Major Economic Area 

(MEA). If a transition in a particular 

MEA is not initiated within three years 

of the effective date of the rules adopted 

by the Commission, the transition 

procedure adopted by the Commission 

will not apply and the licensees in that 

MEA will not be required to comply 

with any of the following paperwork 

requirements. 

9. If a transition is initiated in a given 

MEA within three years of the effective 

date of the rules adopted by the 

Commission, the following paperwork 

requirements apply. First, the proponent 

or joint proponents (hereinafter 

proponent) must send a notice to every 

BRS and EBS licensee in the MEA 

seeking information. Second, the BRS 

and EBS licensees must respond to this 

request by submitting a pre-transition 

data request to the proponent. Third, the 

proponent must send a transition notice 

to all BRS and EBS licensees in the 

MEA once the proponent has decided to 

transition a given MEA. Fourth, the 

proponent must provide a transition 

plan to every BRS and EBS licensee in 

the MEA. Fifth, the proponent must 

submit an Initiation Plan to the 

Commission once it has decided to 

transition a given MEA. Sixth, once the 

transition is completed the proponent 

and BRS and EBS licensees in the MEA 

must jointly file a post-transition 

notification with the Commission. The 

purpose of collecting this information is 

to enable a proponent to assess whether 

to transition a particular MEA, to 

provide BRS and EBS licensees with 

information on how they are to be 

transitioned, and to inform the 

Commission of the status of the 

transition. BRS and EBS licensees will 

provide the Commission with technical 

information in the post-transition 

notification on FCC Form 601. The FCC 

Form 601 is a consolidated multi-part 

application or ‘‘long form’’ for marketbased licensing and site-by-site 

72050 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

licensing in the Universal Licensing 

System. 

Initial Regulatory Flexibility Analysis 

10. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), the Commission has prepared 

this present Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

a substantial number of small entities by 

the policies and rules proposed in this 

Further Notice of Proposed Rule Making 

(FNPRM). Written public comments are 

requested on this IRFA. Comments must 

be identified as responses to the IRFA 

and must be filed by the deadlines 

specified in the FNPRM for comments. 

The Commission will send a copy of 

this FNPRM, including this IRFA, to the 

Chief Counsel for Advocacy of the Small 

Business Administration (SBA). In 

addition, the FNPRM and IRFA (or 

summaries thereof) will be published in 

the Federal Register.

Need for, and Objectives of, the 

Proposed Rules 

11. In this FNPRM we seek comments 

on solutions to implement in the event 

that the plan we adopt today for 

transitioning to the new band plan, set 

forth in section IV. A.5, supra does not 

reach a satisfactory stage of 

implementation within three years. A 

quick and efficient transition to a 

segmented, de-interleaved band plan is 

critical to ensuring that the public 

spectrum resource represented by the 

2500–2690 MHz band does not remain 

underutilized. We have adopted a new 

band plan to further the public interest 

in efficient and intensive use of 

spectrum. To prevent undue delay in 

implementing the new band plan, the 

transition process will sunset in each 

major economic area where a proponent 

does not timely file within three years 

of the rules’ effective date a transition 

proposal that has resolved, pursuant to 

the Commission’s rules, any properly 

presented objections. This three year 

time limit will provide an incentive for 

existing users to develop transition 

proposals in a timely manner. Finally, 

recognizing that parties may not be able 

to control the timing of all aspects of the 

transition, we require only that the 

proposal be finalized, with any 

objections addressed, and filed within 

the three-year period. 

12. Irrespective of how well the 

transition process to the new band plan 

is designed, it may not be possible for 

private parties to transition existing uses 

to the new band plan in a way that 

balances the public interest in 

protecting those uses with the public 

interest in the new band plan. There are 

large numbers of existing users in the 

band with varied and disparate 

interests. A proponent therefore must 

coordinate large numbers of 

substantially varying interests in order 

to transition to the new band plan. A 

proponent may not come forward in 

every major economic area and every 

proponent that comes forward may not 

be able to resolve all reasonable 

objections made to its proposal. 

Furthermore, the transition process may 

not perfectly define reasonable 

transition proposals or rapidly and 

accurately determine whether particular 

objections to particular transitions are 

reasonable. Consequently, transitions to 

the new band plan may not occur 

within one or more major economic area 

within the allotted time. 

13. Consequently, we tentatively 

conclude herein that in major economic 

areas that are not transitioned to the 

new band plan pursuant to the 

transition process we have adopted 

herein, the public interest in services 

made possible by the new band plan 

will be best served by clearing existing 

users from the spectrum. The transition 

process we have adopted represents the 

best effort at transitioning existing use 

to facilities compatible with the new 

band plan. While new transition plans, 

including in areas otherwise without 

one, might result from refinements to 

the transition process, we conclude that 

the absence of a timely filed Initiation 

Plan indicates that existing uses cannot 

be reasonably balanced with the new 

band plan in the relevant area. 

Consequently, the public will receive 

the benefits of the new band plan only 

if existing users are cleared from the 

spectrum and the Commission grants 

new licenses to use the spectrum 

consistent with the new band plan. 

Accordingly, we propose to implement 

this transition process in areas where 

the requirements we have instituted 

herein are not met within the required 

time frame. 

14. As stated in the text of the 

FNPRM, we request comment on a 

number of issues relating to competitive 

bidding procedures that could be used 

to assign new licenses in this band by 

auction. We propose to conduct any 

such auction in conformity with the 

general competitive bidding rules set 

forth in part 1, subpart Q, of the 

Commission’s rules, and substantially 

consistent with many of the bidding 

procedures that have been employed in 

previous auctions. Specifically, we 

propose to employ the part 1 rules 

governing, among other things, 

competitive bidding design, designated 

entities, application and payment 

procedures, collusion issues, and unjust 

enrichment. Under this proposal, such 

rules would be subject to any 

modifications that the Commission may 

adopt in our part 1 proceeding. In 

addition, consistent with current 

practice, matters such as the appropriate 

competitive bidding design, as well as 

minimum opening bids and reserve 

prices, would be determined by the 

Wireless Telecommunications Bureau 

pursuant to its delegated authority. We 

seek comment on whether any of our 

part 1 rules or other auction procedures 

would be inappropriate or should be 

modified for an auction of new licenses 

in this band, and on whether alternative 

rules would more effectively serve our 

basic purposes. 

15. We seek comment on the 

appropriate definition(s) of small 

business that should be used to 

determine eligibility for bidding credits 

in the auction. With respect to the 

auction of EBS licenses, we further seek 

comment on any special challenges 

associated with governmental 

educational institutions or nongovernmental non-profit educational 

institutions participating in auctions. 

16. In the part 1 Third Report and 

Order, we adopted a standard schedule 

of bidding credits for certain small 

business definitions, the levels of which 

were developed based on our auction 

experience. The standard schedule 

appears at section 1.2110(f)(2) of the 

Commission’s rules. Are these levels of 

bidding credits appropriate for this 

band? For this proceeding, we would 

propose to define an entity with average 

annual gross revenues not exceeding 

$40 million for the preceding three 

years as a ‘‘small business;’’ an entity 

with average gross revenues not 

exceeding $15 million for the same 

period as a ‘‘very small business;’’ and 

an entity with average gross revenues 

not exceeding $3 million for the same 

period as an ‘‘entrepreneur.’’ In the 

event that we offer bidding credits on 

this basis, we propose to provide 

qualifying ‘‘small businesses’’ with a 

bidding credit of 15%, qualifying ‘‘very 

small businesses’’ with a bidding credit 

of 25%; and qualifying ‘‘entrepreneurs’’

with a bidding credit of 35%, consistent 

with section 1.2110(f)(2). 

17. Finally, we invite comment on the 

effect of potentially having three small 

business sizes, and bidding credits, for 

new licenses in this band while having 

had only one small business size 

(average annual gross revenues for the 

preceding three years not exceeding $40 

million) and one credit (15%) in the 

BRS service. We seek comment on this 

proposal. 

18. We recognize that educational 

institutions and non-profit educational 

Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 72051

organizations eligible to hold EBS 

licenses may have unique 

characteristics. We therefore invite 

comment on whether distinctive 

characteristics of EBS licensees require 

distinct rules for assessing the relative 

size of potential participants in an 

auction. How do our designated entity 

provisions comport with the unique 

challenges and status of educational 

institutions? Should we establish 

special provisions for non-profit 

educational institutions that may want 

to have access to EBS spectrum but do 

not have the financial capability to 

compete in an auction for spectrum 

licenses? We seek comment on whether 

the non-commercial character of EBS 

licensees requires any special 

procedures for determining the average 

annual gross revenues of such entities. 

For example, are our standard gross 

revenue attribution rules an appropriate 

method of evaluating the relative 

resources of universities and 

government entities? We also invite 

comment on whether some other 

criterion besides average annual gross 

revenues should be used for identifying 

small entities among EBS licensees and 

similar applicants.

19. Commenters proposing alternative 

business size standards should give 

careful consideration to the likely 

capital requirements for developing 

services in this spectrum. In this regard, 

we note that new licensees may be 

presented with issues and costs 

involved in transitioning incumbents 

and developing markets, technologies, 

and services. 

20. Commenters also should consider 

whether the band plan and 

characteristics of the band suggest 

adoption of other small business size 

definitions and/or bidding credits in 

this instance. 

21. We believe our proposals will 

encourage utilization of this band and 

the development of new innovative 

services to the public such as providing 

wireless broadband services, including 

high-speed Internet access and mobile 

services. We also believe that our 

proposals will provide licensees 

flexibility of use which will allow them 

to adapt quickly to changing market 

conditions and the marketplace. 

Legal Basis 

22. The proposed action is authorized 

under sections 1, 2, 4(i), 7, 10, 201, 214, 

301, 302, 303, 307, 308, 309, 310, 319, 

324, 332, 333 and 706 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 151, 152, 154(i), 

157, 160, 201, 214, 301, 302, 303, 307, 

308, 309, 310, 319, 324, 332, 333, and 

706. 

Description and Estimate of the Number 

of Small Entities to Which the Proposed 

Rules Will Apply 

23. The RFA directs agencies to 

provide a description of and, where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules. 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: (i) Is 

independently owned and operated; (ii) 

is not dominant in its field of operation; 

and (iii) satisfies any additional criteria 

established by the SBA. 

24. Nationwide, there are 4.44 million 

small business firms, according to SBA 

reporting data. In this section, we 

further describe and estimate the 

number of small entity licensees and 

regulatees that may be affected by rules 

adopted pursuant to this NPRM. The 

most reliable source of information 

regarding the total numbers of certain 

common carrier and related providers 

nationwide, as well as the number of 

commercial wireless entities, appears to 

be the data that the Commission 

publishes in its Trends in Telephone 

Service report. The SBA has developed 

small business size standards for 

wireline and wireless small businesses 

within the three commercial census 

categories of Wired 

Telecommunications Carriers, Paging, 

and Cellular and Other Wireless 

Telecommunications. Under these 

categories, a business is small if it has 

1,500 or fewer employees. Below, using 

the above size standards and others, we 

discuss the total estimated numbers of 

small businesses that might be affected 

by our actions. 

25. Multipoint Distribution Service, 

Multichannel Multipoint Distribution 

Service, and ITFS. Multichannel 

Multipoint Distribution Service (MMDS) 

systems, often referred to as ‘‘wireless 

cable,’’ transmit video programming to 

subscribers using the microwave 

frequencies of the Multipoint 

Distribution Service (MDS) and 

Instructional Television Fixed Service 

(ITFS). In connection with the 1996 

MDS auction, the Commission 

established a small business size 

standard as an entity that had annual 

average gross revenues of less than $40 

million in the previous three calendar 

years. The MDS auctions resulted in 67 

successful bidders obtaining licensing 

opportunities for 493 Basic Trading 

Areas (BTAs). Of the 67 auction 

winners, 61 met the definition of a small 

business. MDS also includes licensees 

of stations authorized prior to the 

auction. In addition, the SBA has 

developed a small business size 

standard for Cable and Other Program 

Distribution, which includes all such 

companies generating $12.5 million or 

less in annual receipts. According to 

Census Bureau data for 1997, there were 

a total of 1,311 firms in this category, 

total, that had operated for the entire 

year. Of this total, 1,180 firms had 

annual receipts of under $10 million 

and an additional 52 firms had receipts 

of $10 million or more but less than $25 

million. Consequently, we estimate that 

the majority of providers in this service 

category are small businesses that may 

be affected by the rules and policies 

adopted herein. This SBA small 

business size standard also appears 

applicable to ITFS. There are presently 

2,032 ITFS licensees. All but 100 of 

these licenses are held by educational 

institutions. Educational institutions are 

included in this analysis as small 

entities. Thus, we tentatively conclude 

that at least 1,932 licensees are small 

businesses. 

26. In connection with the 1996 MDS 

auction, the Commission defined ‘‘small 

business’’ as an entity that, together 

with its affiliates, has average gross 

annual revenues that are not more than 

$40 million for the preceding three 

calendar years. The Commission 

established this small business 

definition in the context of this 

particular service and with the approval 

of SBA. The MDS auction resulted in 67 

successful bidders obtaining licensing 

opportunities for 493 Basic Trading 

Areas (BTAs). Of the 67 auction 

winners, 61 met the definition of a small 

business. At this time, we estimate that 

of the 61 small business MDS auction 

winners, 48 remain small business 

licensees. In addition to the 48 small 

businesses that hold BTA 

authorizations, there are approximately 

392 incumbent MDS licensees that are 

considered small entities. After adding 

the number of small business auction 

licensees to the number of incumbent 

licensees not already counted, we find 

that there are currently approximately 

440 MDS licensees that are defined as 

small businesses under either the SBA 

or the Commission’s rules. Some of 

those 440 small business licensees may 

be affected by the proposals in this 

NPRM & MO&O.

27. Multipoint Distribution Service, 

Multichannel Multipoint Distribution 

Service, and Instructional Television 

Fixed Service. Multichannel Multipoint 

Distribution Service (MMDS) systems, 

72052 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

often referred to as ‘‘wireless cable,’’

transmit video programming to 

subscribers using the microwave 

frequencies of the Multipoint 

Distribution Service (MDS) and 

Instructional Television Fixed Service 

(ITFS). In connection with the 1996 

MDS auction, the Commission defined 

‘‘small business’’ as an entity that, 

together with its affiliates, has average 

gross annual revenues that are not more 

than $40 million for the preceding three 

calendar years. The SBA has approved 

of this standard. The MDS auction 

resulted in 67 successful bidders 

obtaining licensing opportunities for 

493 Basic Trading Areas (BTAs). Of the 

67 auction winners, 61 claimed status as 

a small business. At this time, we 

estimate that of the 61 small business 

MDS auction winners, 48 remain small 

business licensees. In addition to the 48 

small businesses that hold BTA 

authorizations, there are approximately 

392 incumbent MDS licensees that have 

gross revenues that are not more than 

$40 million and are thus considered 

small entities.

28. In addition, the SBA has 

developed a small business size 

standard for Cable and Other Program 

Distribution, which includes all such 

companies generating $12.5 million or 

less in annual receipts. According to 

Census Bureau data for 1997, there were 

a total of 1,311 firms in this category, 

total, that had operated for the entire 

year. Of this total, 1,180 firms had 

annual receipts of under $10 million, 

and an additional 52 firms had receipts 

of $10 million or more but less than $25 

million. Consequently, we estimate that 

the majority of providers in this service 

category are small businesses that may 

be affected by the proposed rules and 

policies. 

29. Finally, while SBA approval for a 

Commission-defined small business size 

standard applicable to ITFS is pending, 

educational institutions are included in 

this analysis as small entities. There are 

currently 2,032 ITFS licensees, and all 

but 100 of these licenses are held by 

educational institutions. Thus, we 

tentatively conclude that at least 1,932 

ITFS licensees are small businesses. 

30. Cable and Other Program 

Distribution. This category includes 

cable systems operators, closed circuit 

television services, direct broadcast 

satellite services, multipoint 

distribution systems, satellite master 

antenna systems, and subscription 

television services. The SBA has 

developed small business size standard 

for this census category, which includes 

all such companies generating $12.5 

million or less in revenue annually. 

According to Census Bureau data for 

1997, there were a total of 1,311 firms 

in this category, total, that had operated 

for the entire year. Of this total, 1,180 

firms had annual receipts of under $10 

million and an additional 52 firms had 

receipts of $10 million or more but less 

than $25 million. Consequently, the 

Commission estimates that the majority 

of providers in this service category are 

small businesses that may be affected by 

the rules and policies proposed herein. 

31. There are presently 2,032 ITFS 

licensees. All but 100 of these licenses 

are held by educational institutions 

(these 100 fall in the MDS category, 

above). Educational institutions may be 

included in the definition of a small 

entity. ITFS is a non-profit nonbroadcast service that, depending on 

SBA categorization, has, as small 

entities, entities generating either $10.5 

million or less, or $11.0 million or less, 

in annual receipts. However, we do not 

collect, nor are we aware of other 

collections of, annual revenue data for 

ITFS licensees. Thus, we find that up to 

[1,932] of these educational institutions 

are small entities, some of which these 

providers, specifically those who have 

not met the requirements for transition 

articulated herein may be affected by 

our spectrum clearing proposal. 

Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

32. There are no new reporting, 

recordkeeping or other compliance 

requirements proposed in the FNPRM.

Steps Taken To Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

33. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives: ‘‘(i) the 

establishment of differing compliance or 

reporting requirements or timetables 

that take into account the resources 

available to small entities; (ii) the 

clarification, consolidation, or 

simplification of compliance or 

reporting requirements under the rule 

for such small entities; (iii) the use of 

performance, rather than design 

standards; and (iv) an exemption from 

coverage of the rule, or any part thereof, 

for small entities.’’

34. In this FNPRM, we seek comment 

on a spectrum clearing proposal to 

ensure that the 2500–2690 MHz band 

does not lie fallow. Inasmuch as this 

proposal provides opportunities for new 

entrants in the band, it opens up 

economic opportunities to a variety of 

spectrum users, including small 

businesses. In the R&O portion of this 

document, we have adopted an 

alternative to this spectrum clearing 

proposal, which consists of 

transitioning current users to the new 

band plan also adopted. Our spectrum 

clearing proposal could be implemented 

in the event that the plan we adopt is 

not satisfactorily implemented within 

three years. Therefore, affected parties 

have been given an alternative to our 

spectrum clearing proposal, and will 

only be subject thereto in the event that 

they do not comply with our new rules 

in a reasonable amount of time. We also 

seek comment on significant 

alternatives commenters believe we 

should adopt. 

Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rule 

35. None 

Ordering Clause 

36. Pursuant to sections 1, 2, 4(i), 7, 

10, 201, 214, 301, 302, 303, 307, 308, 

309, 310, 319, 324, 332, 333 and 706 of 

the Communications Act of 1934, 47 

U.S.C. 151, 152, 154(i), 157, 160, 201, 

214, 301, 302, 303, 307, 308, 309, 310, 

319, 324, 332, 333, and 706, that this 

Further Notice of Proposed Rulemaking

is hereby adopted. 

37. The proposed regulatory changes 

described in this FNPRM, and that 

comment is sought on these proposals. 

38. The Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this R&O & FNPRM, including the 

Initial Regulatory Flexibility Analysis, 

to the Chief Counsel for Advocacy of the 

Small Business Administration.

List of Subjects 

47 CFR Part 1 

Administrative practice and 

procedure, Communications common 

carriers, Radio, Reporting and 

recordkeeping requirements. 

47 CFR Part 27 

Communications common carriers, 

Radio.

Federal Communications Commission. 

William F. Caton, 

Deputy Secretary.

[FR Doc. 04–26831 Filed 12–9–04; 8:45 am] 

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