Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 42089 

For each . . . For the following . . . You must demonstrate continuous compliance 

by . . . Or by . .

12. Sanitaryware shuttle 

kiln.

a. Minimize HAP emissions.i. Maintaining records documenting your use of natural gas, or an equivalent fuel, as the kiln fuel at 

all times except during periods of natural gas curtailment or supply interruption; and 

ii. If you intend to use an alternative fuel, submitting 

a notification of alternative fuel use within 48 

hours of the declaration of a period of natural gas 

curtailment or supply interruption, as defined in 

§ 63.8665; and 

iii. Submitting a report of alternative fuel use within 

10 working days after terminating the use of the 

alternative fuel, as specified in § 63.8635(g); and 

iv. Using a designed firing time and temperature 

cycle for each sanitaryware shuttle kiln; and 

v. For each firing load, documenting the total tonnage of greenware placed in the kiln to ensure 

that it is not greater than the maximum load identified in Item 1.a.iii of Table 3 to this subpart; and 

vi. Following maintenance procedures for each kiln 

that, at a minimum, specify the frequency of inspection and maintenance of temperature monitoring devices, controls that regulate air-to-fuel ratios, and controls that regulate firing cycles; and 

vii. Developing and maintaining records for each 

sanitaryware shuttle kiln, as specified in 

§ 63.8640. 

[FR Doc. 2018–17933 Filed 8–17–18; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 30 

[GN Docket No. 14–177; FCC 18–110] 

Use of Spectrum Bands Above 24 GHz 

for Mobile Radio Services 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, a Fourth 

Notice of Proposed Rulemaking (4th 

FNPRM) invites members of the public 

to comment on how best to transition 

existing spectrum holdings in the 39 

GHz band to the new flexible-use band 

plan, and on using an incentive auction 

mechanism. The Federal 

Communications Commission 

(Commission or FCC) proposes to 

modify the 39 GHz, Upper 37 GHz, and 

47 GHz band plans from 200 megahertz 

to 100 megahertz channels to facilitate 

the auctioning of all three bands at the 

same time. The Commission also 

proposes an incentive auction to reduce 

encumbrances and create contiguous 

blocks of spectrum through the 39 GHz 

and Upper 37 GHz bands. These 

proposals will promote the efficient use 

of this spectrum by incumbents and 

new licensees. 

DATES: Comments are due on or before 

September 17, 2018, and reply 

comments are due on or before October 

8, 2018. 

ADDRESSES: You may submit comments, 

identified by GN Docket No. 14–177, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s website: https://

www.fcc.gov/ecfs/. Follow the 

instructions for submitting comments. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by email: FCC504@fcc.gov, 

phone: 202–418–0530 or TTY: 202–418– 

0432. 

For detailed instructions for 

submitting comments and additional 

information on the rulemaking process, 

see the SUPPLEMENTARY INFORMATION

section of this document. 

FOR FURTHER INFORMATION CONTACT: Erik 

Salovaara, Wireless 

Telecommunications Bureau, Auctions 

and Spectrum Access Division, (202) 

418–0660, Erik.Salovaara@fcc.gov or 

Simon Banyai, Wireless 

Telecommunications Bureau, 

Broadband Division, (202) 418–1443, 

Simon.Banyai@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s 4th 

Further Notice of Proposed Rulemaking 

(4th FNPRM), GN Docket No. 14–177, 

FCC 18–110, adopted on August 2, 

2018, and released on August 3, 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 also 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). 

Comment Filing Procedures 

Pursuant to §§ 1.415 and 1.419 of the 

Commission’s rules, 47 CFR 1.415, 

1.419, interested parties may file 

comments and reply comments on or 

before the dates indicated on the first 

page of this document. Comments may 

be filed using the Commission’s 

Electronic Comment Filing System 

(ECFS). See Electronic Filing of 

Documents in Rulemaking Proceedings, 

63 FR 24121 (1998). 

• Electronic Filers: Comments may be 

filed electronically using the internet by 

accessing the ECFS: https://

www.fcc.gov/ecfs/filings. Filers should 

follow the instructions provided on the 

website for submitting comments. In 

completing the transmittal screen, filers 

should include their full name, U.S. 

Postal Service mailing address, and the 

applicable docket number, GN Docket 

No. 14–177. 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

one copy of each filing. If more than one 

docket or rulemaking number appears in 

the caption of this proceeding, filers 

must submit two additional copies for 


daltland on DSKBBV9HB2PROD with PROPOSALS
42090 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 

1With respect to auctioning the Upper 37 GHz 

band, we note that the Spectrum Frontiers 3rd 

FNPRM is seeking comment on how best to 

each additional docket or rulemaking 

number. 

Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail. All 

filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

• All hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary must be 

delivered to FCC Headquarters at 445 

12th St. SW, Room TW–A325, 

Washington, DC 20554. The filing hours 

are 8:00 a.m. to 7:00 p.m. All hand 

deliveries must be held together with 

rubber bands or fasteners. Any 

envelopes and boxes must be disposed 

of before entering the building. 

• Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 9050 

Junction Dr., Annapolis Junction, 

Annapolis, MD 20701. 

• U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 445 12th Street SW, 

Washington, DC 20554. 

People with Disabilities: To request 

materials in accessible formats for 

people with disabilities (braille, large 

print, electronic files, audio format), 

send an email to fcc504@fcc.gov or call 

the Consumer & Governmental Affairs 

Bureau at 202–418–0530 (voice), 888– 

835–5322 (tty). 

Ex Parte Rules—Permit-But-Disclose 

Pursuant to § 1.1200(a) of the 

Commission’s rules, this 4th FNPRM 

shall be treated as a ‘‘permit-butdisclose’’ proceeding in accordance 

with the Commission’s ex parte rules. 

Persons making ex parte presentations 

must file a copy of any written 

presentation or a memorandum 

summarizing any oral presentation 

within two business days after the 

presentation (unless a different deadline 

applicable to the Sunshine period 

applies). Persons making oral ex parte 

presentations are reminded that 

memoranda summarizing the 

presentation must (1) list all persons 

attending or otherwise participating in 

the meeting at which the ex parte 

presentation was made, and (2) 

summarize all data presented and 

arguments made during the 

presentation. If the presentation 

consisted in whole or in part of the 

presentation of data or arguments 

already reflected in the presenter’s 

written comments, memoranda or other 

filings in the proceeding, the presenter 

may provide citations to such data or 

arguments in his or her prior comments, 

memoranda, or other filings (specifying 

the relevant page and/or paragraph 

numbers where such data or arguments 

can be found) in lieu of summarizing 

them in the memorandum. Documents 

shown or given to Commission staff 

during ex parte meetings are deemed to 

be written ex parte presentations and 

must be filed consistent with 

§ 1.1206(b). In proceedings governed by 

§ 1.49(f) or for which the Commission 

has made available a method of 

electronic filing, written ex parte 

presentations and memoranda 

summarizing oral ex parte 

presentations, and all attachments 

thereto, must be filed through the 

electronic comment filing system 

available for that proceeding, and must 

be filed in their native format (e.g., .doc, 

.xml, .ppt, searchable .pdf). Participants 

in this proceeding should familiarize 

themselves with the Commission’s ex 

parte rules. 

Initial Regulatory Flexibility Analysis 

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 the 

attached 4th 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 for comments as 

specified in the 4th FNPRM. The 

Commission will send a copy of this 4th 

FNPRM, including this IRFA, to the 

Chief Counsel for Advocacy of the Small 

Business Administration (SBA). In 

addition, the 4th FNPRM and IRFA (or 

summaries thereof) will be published in 

the Federal Register. 

Paperwork Reduction Act 

The 4th FNPRM seeks comment on 

potential new or revised information 

collection requirements. If the 

Commission adopts any new or revised 

information collection requirements, the 

Commission will publish a notice in the 

Federal Register inviting the public to 

comment on the requirements, as 

required by the Paperwork Reduction 

Act of 1995, Public Law 104–13 (44 

U.S.C. 3501–3520). In addition, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506(c)(4), 

the Commission seeks specific comment 

on how it might ‘‘further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees.’’ 

Synopsis 

I. Band Plan 

1. We propose to modify the 39 GHz 

band plan from seven 200 megahertz 

channels to fourteen 100 megahertz 

channels. This change should better 

accommodate the repacking of 

incumbents, which in the vast majority 

of cases, hold two non-contiguous 50 

megahertz license blocks for each 

original paired license (now unpaired). 

Given the natural fit between 

incumbents’ existing 100 megahertz 

holdings and the proposed 100 

megahertz channels, the resulting 

realignment process for incumbents 

would be less complex than using 200 

megahertz channels, because it would 

result in far fewer partially-filled 

channels. This change therefore would 

further our goals of maximizing efficient 

use of this band and allowing this 

spectrum to be put to use as soon as 

possible. 

2. Further, changing the band plan 

from 200 megahertz channels to 100 

megahertz channels should not limit 

this spectrum’s potential use for 5G 

services. The 100 megahertz channels 

are consistent with 3GPP standards, and 

licensees can aggregate to larger channel 

sizes (such as 200 megahertz, 300 

megahertz, etc.), should they prefer to 

do so. Given that 100 megahertz is the 

baseline to provide 5G services, the 

Commission has adopted 100 megahertz 

channels for other UMFUS bands, 

including the 24 GHz band and Lower 

37 GHz (37.0–37.6) band, and we have 

proposed to adopt 100 megahertz 

channels for the 42 GHz band. Adopting 

100 megahertz channels in the 39 GHz 

band is consistent with our approach in 

other mmW spectrum bands to support 

5G services. 

3. We similarly propose to modify the 

band plan in the Upper 37 GHz band 

(37.6–38.6 GHz) from 200 megahertz to 

100 megahertz channels. The Upper 37 

GHz band is adjacent to the 39 GHz 

band, and both bands are under the 

same licensing framework. In aligning 

the regulatory regimes of these bands— 

including implementing the same 

service rules and an operability 

requirement—the Commission has 

effectively treated the two bands as one 

contiguous 2,400 megahertz band of 

spectrum. We further note that a 

difference in channel size between the 

two bands could create strategic 

challenges and impede bidding 

flexibility should the Commission 

auction the two bands together.1


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Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 42091 

accommodate coordination zones in the 37 GHz 

band for future Federal operations at a limited 

number of additional sites, and whether the 

coordination zones previously established in 

Section 30.205 might be reduced to better 

accommodate nearby non-Federal operations 

without adversely impacting Federal operations at 

those sites. See Spectrum Frontiers 3rd FNPRM at 

30, para. 74; Spectrum Frontiers R&O, 31 FCC Rcd 

at 8070–71, para. 149. 

4. We also propose to modify the band 

plan for the portion of the 47 GHz band 

licensed under the UMFUS rules, 47.2– 

48.2 GHz (47 GHz band), from 200 to 

100 megahertz channels. Modifying the 

band plan for the 47 GHz band to 100 

megahertz blocks would provide 

consistency across the remaining 

UMFUS bands not yet designated for 

auction, and licensees can aggregate 

spectrum licenses, should they desire 

larger bandwidth. If we auction the 47 

GHz band at the same time as we 

auction the 39 GHz and Upper 37 GHz 

bands, should all band plans be 

consistent 100 megahertz blocks? 

5. We seek comment on these 

proposals. Commenters proposing 

alternative band plans, including 

retaining the current 200 megahertz 

channels, should specify the benefits of 

such a plan, particularly with respect to 

how it would further our goal of making 

contiguous spectrum blocks available 

for both incumbents and new entrants. 

II. Reducing Encumbrances in the 39 

GHz Band 

A. An Incentive Auction 

6. We propose to reconfigure and 

auction together licenses for all the 

available spectrum in the Upper 37 GHz 

and 39 GHz bands using an incentive 

auction. We propose to run a clock 

auction, in which incumbents and 

others may participate, to set both the 

price of new licenses and the amounts 

for which incumbents will relinquish 

their spectrum usage rights. This clock 

auction would simultaneously serve as 

the reverse and forward components of 

the incentive auction. At the end of the 

auction, participating incumbent 

licensees would receive an incentive 

payment based on their cancelled 

incumbent licenses. The amount of the 

incentive payment could be used as a 

credit toward the licensees’ winning 

bids for any new licenses in any of the 

bands offered in the auction. Because 

the Commission has not previously 

conducted an incentive auction in this 

way, we walk through each step in turn. 

7. As an initial matter, we propose to 

use a two-phase auction procedure. 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 

PEA—this encompasses the 

simultaneous forward-and-reverse 

auction. The second phase would assign 

specific-frequency licenses by PEA that 

would aim to ensure contiguity within 

each PEA. Because unencumbered 

spectrum blocks in the Upper 37 GHz 

and 39 GHz bands can be treated as 

largely interchangeable within a PEA, 

we propose to offer these blocks as one 

category of generic blocks in a clock 

auction. We expect that using a clock 

auction format with bidding for generic 

blocks followed by an assignment phase 

will speed up the auction considerably 

relative to a typical FCC simultaneous 

multiple-round auction. 

8. Specifically, we propose to use a 

clock auction design with rules similar 

to those used for the forward auction in 

the broadcast incentive auction and the 

planned 24 GHz auction. Our proposed 

clock auction format would proceed in 

a series of rounds, with bidding being 

conducted simultaneously for all 

generic spectrum blocks available in the 

auction. During the clock phase, the 

auction would announce prices for 

generic blocks in each PEA, and 

qualified bidders would submit quantity 

bids for the number of blocks they seek 

in the PEA at that clock price. Bidding 

rounds would be open for 

predetermined periods of time, during 

which bidders would indicate their 

demands for blocks at the clock prices 

associated with the current round. 

Bidders would be subject to activity and 

eligibility rules that govern the pace at 

which they participate in the auction. In 

each PEA, the clock price for licenses 

would increase from round to round if 

bidders indicate total demand that 

exceeds the number of blocks available 

in the category. Bidders would be held 

to their bids, as in the forward phase of 

the broadcast incentive auction, with 

the system only allowing a bidder to 

reduce demand if aggregate demand 

would not fall below the available 

supply of blocks in that PEA. The clock 

rounds would continue until, for all 

generic blocks in all geographic areas, 

the number of blocks demanded does 

not exceed the supply of available 

blocks. At that point, those bidders 

indicating demand for a block in a 

category at the final clock phase price 

would be deemed winning bidders. 

9. Next, winning bidders from the 

clock phase would have an opportunity 

to submit sealed bids by PEA for 

particular frequency blocks in a separate 

assignment phase. We propose that this 

assignment phase be voluntary: 

Winning bidders need not bid in the 

assignment phase. Regardless of its 

participation in the assignment phase, 

the assignment phase would aim to 

assign contiguous frequency blocks 

within a PEA to a bidder that wins 

multiple blocks. 

10. To encourage participation in the 

reverse auction, we propose to offer 

incumbents an incentive payment— 

using what we term here a ‘‘voucher’’— 

in exchange for the cancellation of 

certain incumbent licenses at the end of 

the auction. Each voucher would have 

a dollar value equal to the final clock 

phase price (for a single generic block 

under the new band plan) in the PEA 

times the ratio of the incumbent’s MHzpops to the MHz-pops in a full generic 

block. We note that, by this definition, 

a participating incumbent licensee with 

a license for 100 megahertz of 

unencumbered spectrum in a PEA could 

receive a voucher precisely equal to the 

cost of paying a winning bid for a 

license for the same spectrum in the 

forward auction. Accordingly, 

participation in the clock auction by 

incumbent licensees will 

simultaneously be participation in the 

forward and reverse auction: The bids 

for new blocks in the forward auction 

automatically set the price of vouchers 

that participating incumbent licensees 

may receive as vouchers in the reverse 

auction. As the auction proceeds, the 

incumbent licensee can elect whether to 

pursue new licenses by placing new 

bids in the forward auction or to accept 

the voucher by requesting a reduction in 

its demand. Thus, the auction to 

determine the amount of the winning 

bid for the new blocks also serves as the 

reverse auction that determines the 

incentive payment a licensee would 

receive for voluntarily relinquishing 

spectrum usage rights. 

11. Although incumbent licensees 

bidding in the auction would be free to 

request a reduction in their demand at 

any time during the auction based on 

their expectations regarding the value of 

their vouchers, the Commission itself 

would not process vouchers until after 

the clock auction is over. Provided that 

the total auction proceeds exceed the 

total incentive payments to be shared 

with licensees relinquishing spectrum 

usage rights, we can close the incentive 

auction regardless of the proceeds or 

relinquishments in a particular PEA. 

Then, the Commission would process 

vouchers for each incumbent licensee in 

each PEA in two steps, depending on 

whether all the spectrum made available 

in the reverse auction was needed for 

the forward auction. First, the 

Commission would determine whether 

demand at the end of the forward 

auction equaled supply in any given 

PEA; in those PEAs, the Commission 

would cancel the participating 


daltland on DSKBBV9HB2PROD with PROPOSALS
42092 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 

2For example, if an incumbent licensee had 150 

megahertz of pre-auction spectrum throughout a 

PEA before the clock auction and won bids for two 

100-megahertz blocks at $10,000 a block in a PEA 

where demand equaled supply at the end of the 

clock auction, that licensee’s pre-auction spectrum 

licenses would be cancelled, it would receive a 

voucher of $15,000 (1.5 × $10,000) and it would 

owe $20,000 for the two winning bids (i.e., it would 

be required to pay $5,000 net). 

3For example, if a small business incumbent with 

one 100 megahertz PEA license before the auction 

won a single license in that same PEA for $10,000, 

its voucher would be $10,000 while its required 

payment on the one purchased license would be 

$7,500 ($10,000 times 75 percent). 

incumbents’ licenses and make 

payments based on the vouchers.2

12. In the event that demand by 

bidders in the forward auction in a PEA 

is less than the total supply of blocks 

offered, we need to address how to 

prioritize the blocks supplied by 

incumbent licensees relative to the 

supply of blocks that are held by the 

FCC in order to determine whether all 

incumbent-supplied blocks can be 

relinquished. That is, if bidders are 

interested in obtaining fewer new 

licenses than the total number of 

available blocks, which block or blocks 

will remain unsold—those partial or full 

blocks that an incumbent wishes to 

relinquish or those held by the FCC? For 

example, we could attempt to minimize 

payments to incumbent licensees by 

first satisfying demand with FCC-held 

blocks, and then, to the extent possible, 

with incumbent-offered blocks. If only 

some incumbent-held blocks can be 

used to satisfy demand, how should we 

prioritize among incumbent-held 

blocks? Should we use a pseudorandom number to break such ties, or 

should we prioritize blocks offered by 

incumbents in a different manner, such 

as allowing any incumbents with 

partial-PEA spectrum usage rights to 

relinquish before holders of full-PEA 

rights, so as to result in a repacked 

spectrum blocks that are more 

consistent with the new band plan? 

Alternatively, if we prioritized the 

reconfiguration of the band by first 

satisfying demand with incumbent-held 

supply, how should we prioritize which 

incumbent-held blocks to supply first? 

We note that, in situations where the 

demand for blocks does not exceed the 

total supply of blocks, the final clock 

phase price, at which incentive 

payments will be calculated, is likely to 

be equal to the minimum opening bid. 

13. As a further encouragement for 

participation in the auction, we propose 

to condition bidding for new licenses in 

the auction on incumbents’ offering 

their existing spectrum usage rights in 

the auction. In other words, an 

incumbent licensee seeking new 

licenses in the forward auction must be 

a participant in the simultaneous 

reverse auction. Such a requirement 

would ensure that incumbent licensees 

are not given a one-way option— 

purchasing new unencumbered 

spectrum at auction while keeping a 

different set of blocks encumbered and 

thus unavailable for an efficient auction. 

14. One advantage of this approach is 

it maximizes the ability of incumbent 

licensees to maintain and consolidate 

their holdings (or to rationalize their 

holdings by relinquishing spectrum 

usage rights in some areas to acquire 

rights in other areas) while jointly 

maximizing the amount of clear, 

unencumbered spectrum for auction. 

Such an incentive auction appears to be 

the most efficient path forward to 

rationalize the Upper 37 GHz and 39 

GHz bands for mobile 5G and highspeed fixed wireless service. It promotes 

a rapid transition of the currently 

fragmented band while at the same time 

respecting incumbent spectrum rights 

and providing opportunities for entry 

into the band by other wireless 

providers. We seek comment on these 

proposals and on alternative approaches 

to conducting, in a timely manner, an 

auction of licenses in the Upper 37 GHz 

and 39 GHz bands. We also seek 

comment on additional incentives we 

could provide for incumbent licensees 

to participate in the reverse auction. 

15. A potential concern with the 

proposed auction is that incumbents 

with vouchers may have an incentive to 

engage in insincere bidding in markets 

where they want to be net suppliers of 

spectrum to inflate the value of their 

voucher payments. We seek comment 

on the validity of such concerns. We 

also note that these concerns should be 

mitigated by our no withdrawal rule, 

which we used in the forward phase of 

the broadcast incentive auction. We 

seek comment on any other potential 

safeguards that could be implemented 

against insincere bidding incentives or 

other strategic behavior in the proposed 

incentive auction. 

16. Another potential concern is the 

interaction of vouchers and bidding 

credits. For example, given existing 

rural and small business bidding 

credits, bidders for new licenses may be 

eligible to receive up to a 25 percent 

credit toward their winning bid if they 

qualify. If that bidding credit were 

applied across their gross winning bids, 

an incumbent licensee could feasibly 

retain its existing holdings in the 

auction while simultaneously receiving 

an incentive payment.3 To avoid that 

result, we propose to limit the 

application of bidding credits to cash 

payments for winning bids in the 

auction, after the winning bidder has 

used any vouchers it has to satisfy 

winning bids. We seek comment on this 

proposal and any other scenarios where 

the use of an incentive auction with 

vouchers may create arbitrage 

opportunities given our normal bidding 

rules. For example, should we address 

winning bidders that default on their 

payments differently here? 

17. Given that non-incumbent 

licensees also may qualify for bidding 

credits, how should we address the 

theoretical possibility that auction 

proceeds could total less than the 

incentive payments owed to 

incumbents? Should we adopt a rule 

that would preclude the auction from 

closing in the event proceeds from 

winning bids will be insufficient, 

analogous to the final stage rule we 

adopted in the broadcast television 

spectrum incentive auction? 

Alternatively, should we adopt a rule to 

recalculate the amount of incentive 

payments, so that the payments do not 

exceed the available auction proceeds? 

We seek comment on these potential 

possibilities and how to address them. 

Are there other particular scenarios in 

which the auction proceeds might fall 

short of the amount needed to pay the 

face value of vouchers? Or other 

methods of addressing such 

possibilities? 

18. We also seek comment on two 

alternative proposals. First, incumbents 

would receive license(s) for all vouchers 

that are equivalent to a whole number 

of new license(s) without bidding at all 

in the clock phase. The specific 

frequencies for these licenses would be 

assigned in the assignment round. 

Under this alternative, incumbent 

licenses that are not encumbered would 

not be able to relinquish spectrum, and 

in those PEAs, the total number of 

blocks offered in the clock phase would 

be reduced by the number of 100 

megahertz licenses held by incumbents. 

In the assignment phase, all blocks won 

by winning bidders and all incumbent 

licenses would be assigned (or in the 

case of incumbent licenses, reassigned) 

frequencies. 

19. A second, more narrowly tailored 

alternative would be to exchange 

automatically for vouchers only 

encumbered PEA and RSA licenses. 

Unencumbered PEA licenses would 

have the option of converting their 

unencumbered generic PEA blocks to 

vouchers if they so choose. All 

encumbered licenses would still be 

required to be converted to vouchers, 

since, were these licensees to hold out, 

this would leave spectrum that could 

not fit into the new band plan and 


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4For encumbered PEA licenses (i.e., licenses that 

are co-channel with an RSA license), the licensee’s 

voucher would cover only the population where it 

is authorized to operate prior to the start of the 

exchange—that is, the area outside of the 

overlapping RSA license. 

5 If all of an incumbent’s licenses within PEA #1 

in the aggregate cover 20% of the MHz-pops of an 

unencumbered 100 megahertz block in PEA #1, the 

license(s) are represented by a voucher 

denominated as 0.2. If all of an incumbent’s 

licenses within a PEA #2 in the aggregate cover 40 

percent of the MHz-pops of an unencumbered 100 

megahertz block in PEA #2, that incumbent’s 

voucher in PEA #2 would be 0.4. Note that the 

incumbent’s license(s) in PEA #2 might cover 80 

percent of the population in the PEA with only 50 

megahertz of bandwidth, or 40 percent of the 

population with 100 megahertz, or 20 percent of the 

population with 200 megahertz. A voucher 

representing any of these combinations in PEA #2 

would be denominated 0.4. If the exchange rate 

between PEA #1 and #2 was such that a voucher 

in PEA #2 can be exchanged for a voucher of two 

times its amount in PEA #1, then the incumbent 

could exchange its 0.4 voucher in PEA #2 for a PEA 

#1 voucher for 0.8 (0.4 times two). The incumbent 

would then combine its original 0.2 voucher in PEA 

#1 with the 0.8 voucher received in the exchange 

and have a 1.0 voucher in PEA #1. The incumbent’s 

voucher in PEA #2 would then be 0.0. 

6Using our prior example, the limitation that 

incumbents cannot increase vouchers to more than 

the nearest integer above its initial holdings means 

that an incumbent with 0.2 in PEA #1 and 0.9 in 

PEA #2 cannot exchange its PEA #2 voucher for a 

PEA #1 voucher of 1.8 (0.9 times the exchange rate 

of two) because the result would increase the 

incumbent’s holdings in PEA #1 from 0.2 to 2.0, 

which is more than the nearest integer above, or 1.0. 

thereby reduce the efficiency of the 

auction. 

20. Under all these approaches, 

unencumbered PEA licensees can obtain 

new licenses without additional license 

payments. Under our proposed 

approach, however, licensees would 

have to bid to obtain a new license, 

making more licenses available for 

bidding and increasing the number of 

bidders. Making unencumbered PEA 

licensees bid may increase the 

efficiency of the assignment of licenses 

by having incumbents face the market 

price of holding onto their licenses. At 

a high enough price, some may 

relinquish their spectrum to other 

bidders who value it more highly. We 

seek comment on these proposals, 

particularly from any current licensee 

that would choose not to participate in 

the incentive auction using one of these 

three approaches described above or any 

other similar approach. 

B. A Pre-Auction Voucher Exchange 

21. To address concerns raised with 

respect to incumbent licensees whose 

licenses involve RSAs or encumbered 

PEAs, and thus do not cover the entire 

population of a PEA, we propose a preauction voucher exchange.4 Much as 

vouchers in the incentive auction allow 

incumbent licensees to consolidate and 

rationalize their holdings during the 

auction, a voucher exchange could 

allow incumbents to consolidate and 

rationalize their holdings before the 

auction—although in a somewhat more 

limited manner. Specifically, it could 

aid incumbent licensees in minimizing 

the number of PEAs going into the 

auction in which they would have only 

fractional vouchers—and thus no ability 

to assure themselves that they could exit 

the auction with a whole number of new 

licenses without making net payments 

to secure their spectrum holdings. 

22. The design of the voucher 

exchange should allow incumbents to 

exchange their fractional vouchers in 

one or more PEAs, caused by holding an 

RSA or encumbered PEA license, to 

create full vouchers in another PEA 

subject to certain restrictions. The first 

step in a voucher exchange is to 

aggregate the vouchers for all 

encumbered blocks within a PEA, 

which is likely to leave a fractional 

voucher in each PEA. 

23. Next, the Commission would 

specify exchange rates (expressed on a 

per MHz-pop basis) that would allow 

incumbent licensees to exchange these 

fractional vouchers with the 

Commission. We seek comment on how 

to establish the relative exchange rates 

needed for a voucher exchange. Should 

we calculate those exchange rates based 

on the relative value of PEA licenses 

estimated from previous auctions? If so, 

which prior FCC auctions should be 

used to calculate the exchange rates 

between PEAs? 

24. Incumbents would then be 

allowed to exchange their vouchers 

subject to the condition that net trades 

for each incumbent over all PEAs be 

revenue neutral, i.e., aggregate trades up 

and down will balance given the FCCspecified exchange rates.5 Vouchers 

could only be exchanged up or down to 

no more than the nearest integer above 

or no less than the nearest integer below 

their current fractional voucher 

holdings.6 If there exists a PEA in which 

it is not feasible for all incumbent 

licensees to ‘‘trade up’’ within the 39 

GHz band, we propose that incumbent 

licensees would only be permitted to 

‘‘trade down.’’ All voucher trades with 

the Commission would be completed 

prior to the clock auction phase of the 

incentive auction. We propose that, 

before initiating the voucher exchange, 

we would educate all potential 

participants so that they can understand 

the process and consequences of 

participating in the exchange. We find 

that this should promote an efficient 

process for both the Commission and 

participants. 

25. We seek comment on this 

framework for implementing a preauction voucher exchange to serve the 

public interest, including how best to 

address concerns raised in the record 

with respect to prior proposals. To 

establish the framework, we seek 

comment on the best methods for 

achieving our goals. How could a 

voucher exchange best facilitate a low 

cost rapid rationalization of spectrum 

holdings by allowing incumbent 

licensees to aggregate fractional 

holdings across PEAs and to retain all 

their equivalent spectrum usage rights 

in PEAs of their choosing to the extent 

permitted by their fractional holdings 

and the exchange rates? Are there any 

other limits or restrictions that should 

be imposed on exchanges that 

incumbents can make? Separate from 

the voucher exchange and building on 

the Voluntary Rebanding PN, should we 

expand the process by which incumbent 

licensees can modify their licenses prior 

to the auction, for example, by allowing 

for inter-market swaps using the same 

exchange rates as the voucher exchange? 

26. One restriction we may impose on 

any exchange that will result in 

modified licenses (rather than cancelled 

licenses and vouchers for the auction) is 

to require that any such exchange result 

in less geographically encumbered 

spectrum. Would that serve the public 

interest? How should encumbrances be 

measured? Furthermore, after 

exchanging across a number of markets, 

it is likely that a licensee will not be 

able to have full PEA licenses in all 

markets. One approach to this 

remainder would be to set it to zero in 

that market. Would this be appropriate, 

given the opportunity afforded by the 

exchanges to minimize such holdings? 

What other approaches could be taken 

regarding such remainders? For 

example, should an incumbent be 

permitted to maintain one fractional 

license in one PEA? 

27. We also seek comment on how the 

voucher exchange should interact with 

existing licenses and the incentive 

auction. For example, should we cancel 

or modify the affected licenses of 

exchange participants before the auction 

in exchange for vouchers? Should we 

leave such licenses untouched until 

after the auction? Should only incentive 

auction participants be allowed to 

participate in the voucher exchange? 

Further, should we consider holding 

this type of voucher exchange 

independent of whether we hold an 

incentive auction to allow incumbent 

licensees to combine their fractional 

licenses into whole licenses under the 

new band plan? 


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C. Mandatory Repacking 

28. We propose to repack incumbent 

licensees that choose not to participate 

in the incentive auction. Just as the 

Commission repacked television 

broadcasters that chose not to 

participate in the broadcast incentive 

auction, the Commission has the 

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.’’ Repacking 

the holdings of non-participating 

incumbent licensees will ensure that we 

can minimize encumbrances in the band 

and maximize the amount of clean 

spectrum available for auction, while 

preserving existing usage rights for 

incumbents. 

29. We seek comment on all aspects 

of this proposal. We also seek comment 

on what criteria to apply when 

repacking encumbered licenses. How 

can the Commission best make modified 

frequency assignments to maximize the 

contiguous spectrum for auction 

participants while preserving to the 

greatest extent possible each incumbent 

license’s bandwidth, previous 

geography, and existing contiguity? 

30. For example, must or should we 

maintain frequency contiguity for RSA 

licenses that overlap PEAs? Given the 

requirement of operability throughout 

the band, how significant is such 

contiguity? We note that partitioning 

RSAs that overlap multiple PEAs into 

their respective PEAs might make it 

possible to repack more efficiently and 

even enable repacked frequencies to be 

assigned in the auction’s assignment 

phase. 

31. One approach to repacking nonparticipating incumbents would involve 

a two-step calculation. The first step 

would entail reconfiguring those 

incumbent licenses that do not align 

with PEA boundaries (e.g., RSA licenses 

or partial PEA licenses) into full PEA 

licenses with an equivalent amount of 

spectrum in each PEA, as measured in 

MHz-pop. The second step would be to 

restate the incumbent’s fractional 

holdings of 100 MHz PEA blocks as 

mostly integer numbers of 100 MHz 

PEA blocks, in a way that the repacked 

spectrum maintains the same value as 

evaluated with respect to FCC-specified 

exchange rates (i.e., those set for the 

voucher exchange). In all but one of 

their PEAs, the fractional holdings of a 

repacked incumbent would be replaced 

by either the nearest integer above or the 

nearest integer below the fractional 

holdings. The one PEA left with 

fractional holdings would be the PEA 

with the smallest possible value. We 

note that an incumbent could avoid the 

effects of such repacking by entering 

into the incentive auction. 

32. Other efficiencies might be 

realized by other means. For example, 

converting MHz-pops in a geographic 

area that is less than a full PEA (i.e., an 

RSA license or an encumbered PEA 

license) into the same MHz-pops in a 

portion of a 100 megahertz block across 

the whole PEA could facilitate more 

efficient repacking. We note that, 

depending on how many and which 

current licensees choose not to 

participate in the incentive auction, 

there may be some left-over segments, 

i.e., when less than a whole 100 

megahertz PEA block remains. We seek 

comment on whether we should attempt 

to consolidate such holdout segments in 

this manner, and if so whether to 

auction overlay licenses on them or 

otherwise maximize their value for the 

American public. 

33. We seek comment on the options 

presented above, including possible 

variations, and on the costs and benefits 

of mandatory repacking for nonparticipants. Should there be a de 

minimis spectrum holdings threshold to 

qualify for repacking and how should 

this level be set? How and when should 

the frequency reassignment be done in 

order to minimize the spectrum 

required to repack holdout licenses? 

How should the adjacent spectrum 

blocks to the holdout segment be 

auctioned, given that they may be less 

than 100 megahertz? 

D. Incentive Auction Legal Authority 

34. Congress expressly authorized the 

Commission to conduct incentive 

auctions beyond the broadcast 

television spectrum incentive auction. 

Using this authority, the Commission 

can offer incentive payments to 

licensees that choose to relinquish 

existing spectrum usage rights provided 

by incumbent licenses instead of 

retaining such rights pursuant to new 

licenses. More specifically, the 

‘‘Commission may encourage a licensee 

to relinquish voluntarily some or all of 

its licensed spectrum usage rights in 

order to permit the assignment of new 

initial licenses subject to flexible-use 

service rules by sharing with such 

licensee a portion . . . of the proceeds 

(including deposits and upfront 

payments from successful bidders) from 

the use of a competitive bidding system 

under this subsection.’’ To do so, the 

Commission must determine ‘‘the value 

of the relinquished rights . . . in the 

reverse auction’’ and that reverse 

auction must have ‘‘at least two 

competing licensees participate.’’ 

35. As explained above, we propose to 

use the clock phase winning bids for 

new licenses to determine the incentive 

payment that participating incumbent 

licensees may receive. A participating 

incumbent licensee will have a choice 

between competing in bidding for new 

licenses and offering spectrum usage 

rights or relinquishing spectrum usage 

rights under existing licenses in 

exchange for an incentive payment. 

36. Under the auction design 

proposed above, any relinquishment of 

spectrum usage rights for an incentive 

payment would be ‘‘voluntary’’ within 

the meaning of the statute. All 

incumbent licensees may decline to 

participate in the incentive auction and 

instead receive new licenses that 

provide spectrum usage rights 

equivalent to their existing licenses. 

Modifying existing licenses in this way 

does not, however, require the use of 

our incentive auction authority. Rather, 

we rely on our clear authority to modify 

license frequencies pursuant to the 

public interest. Given that incumbent 

licensees will participate in the 

incentive auction by choice, we 

conclude that any subsequent decision 

an incumbent doing so makes to 

relinquish spectrum usage rights should 

be considered voluntary. We seek 

comment on our conclusion. 

37. We propose above that incumbent 

licensees that choose not to participate 

in the reverse auction may not 

participate in the auction of new 

licenses. Could that additional 

consequence of choosing not to 

participate affect whether a subsequent 

relinquishment is voluntary? An 

incumbent licensee that chooses 

between relinquishing spectrum usage 

rights for an incentive payment or 

instead receiving new licenses for 

equivalent spectrum usage rights at no 

additional cost presumably does so 

voluntarily, regardless of whether it 

chose to participate because of some 

collateral consequence of nonparticipation. Nothing compels such a 

licensee to make the relinquishment 

instead of retaining its spectrum usage 

rights under new licenses. 

38. We also conclude that our 

proposal that incumbent licensees that 

choose not to participate in the reverse 

auction may not participate in the 

forward auction of new licenses is 

consistent with our authority to 

determine qualifications that auction 

participants must satisfy. More 

specifically, we conclude that the 

proposed consequence of an 

incumbent’s choice would constitute a 

rule of general applicability regarding 

auction participation. We seek comment 

on these conclusions. 


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7See Incentive Auction Report and Order, 29 FCC 

Rcd at 6742, para. 413. The Commission took care 

to note that it might ‘‘apply [the two competing 

participants] requirement differently in other 

reverse auctions, depending upon the particular 

eligibility criteria, auction design and other 

circumstances.’’ Id. at 6743, para. 414 n.1224. 

Accordingly, while we find the discussion 

regarding this requirement helpful, it is not 

controlling. 

39. Our proposal satisfies additional 

statutory requirements for our incentive 

auction authority. The ‘‘reverse’’ nature 

of the auction required by the statute is 

one in which those rights are 

relinquished by licensees to the 

Commission, reversing the typical flow 

of rights assigned based on spectrum 

license auctions. Although auctions in 

other contexts—such as the Connect 

America Fund Phase II Auction to 

distribute universal service support for 

high-speed broadband deployment in 

rural America—are sometimes called 

reverse auctions because the price 

declines over the course of bidding, 

nothing in the statute requires that a 

reverse auction to relinquish spectrum 

usage rights use descending bidding. We 

note that in the broadcast television 

spectrum incentive auction, the 

Commission chose to use a descending 

clock price auction for the reverse 

auction component because a 

descending clock auction design 

involved several features that were 

particularly helpful in that context, not 

because it was statutorily required. 

40. We also conclude that, so long as 

at least two incumbent licensees with 

licenses in the same PEA choose to 

participate in the incentive auction, the 

reverse auction will meet the statutory 

requirement to have at least ‘‘two 

competing licensees participat[ing]’’ in 

the reverse auction.7 In the broadcast 

television spectrum incentive auction, 

the Commission concluded that at least 

two licensees participate in the reverse 

auction so long as more than one noncommonly controlled party qualifies as 

an applicant to participate in the 

auction. This is so because any qualified 

applicant that bids in the auction must 

take into account the presence of 

another qualified applicant that has the 

opportunity to bid, regardless of 

whether the second applicant in fact 

bids. We find that same conclusion 

should apply here, too. Incumbents 

seeking to relinquish spectrum usage 

rights in the proposed auction must take 

into account the demand for new 

licenses by other qualified applicants, as 

they only will be able to relinquish 

rights so long as demand for new 

licenses exceeds supply. We seek 

comment on this analysis. 

41. Further, we seek comment 

generally on whether our proposal to 

conduct an auction with the elements 

described above or any of our 

alternative scenarios for conducting an 

incentive auction would be consistent 

with our statutory authority to conduct 

an incentive auction. To the extent that 

commenters assert that these scenarios 

are not consistent with our incentive 

auction authority, commenters should 

discuss any changes that could more 

fully satisfy that authority. 

42. As noted above in our proposal, 

we have authority to modify the 

holdings of existing licensees based on 

our judgment of the public interest. We 

conclude that the potential 

modifications considered above are 

within our authority. We ask that 

commenters proposing further 

modifications to address whether their 

proposals are within our authority. 

43. Legal Authority for Alternative 

Auction Mechanisms. We seek comment 

on alternative legal authority should we 

decide not to conduct an incentive 

auction. For example, we seek comment 

on whether we might conduct an 

auction as described above while 

providing current licensees with 

bidding offset credits in place of 

vouchers and incentive payments. We 

seek comment on whether issuing 

bidding offset credits in order to protect 

existing spectrum uses—and past 

Commission public interest judgments 

reflected in prior licensing decisions— 

while clearing existing spectrum 

assignments is necessary to the 

management of spectrum in the public 

interest and not inconsistent with the 

Communications Act. Effectively 

clearing prior spectrum assignments so 

that new licenses for this spectrum may 

be assigned by competitive bidding will 

promote statutory objectives. Issuing 

bidding offset credits is within the 

Commission’s statutory authority 

regarding the design of competitive 

bidding systems. Section 309(j)(4) of the 

Communications Act grants the 

Commission authority to consider a 

variety of methods of helping entities 

pay for licenses that are offered at 

auction, including alternative payment 

schedules, tax credits, and bidding 

preferences. 

44. We ask commenters to address the 

differences, if any, in incentives 

provided to current licensees by 

providing them with a bidding offset 

credit without an opportunity to receive 

an incentive payment. Commenters 

should address the likely differences in 

the outcome of the auction resulting 

from such different incentives, and 

whether providing incentive payments 

would better serve the public interest, 

notwithstanding the need to share a 

portion of the auction proceeds. Would 

the amount of repurposed spectrum be 

affected? We also seek comment on any 

other approaches that might achieve the 

purposes of the proposal without 

sharing proceeds from the auction of 

new licenses with existing licensees. 

III. Initial Regulatory Flexibility 

Analysis 

45. 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 the 

attached 4th 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 for comments as 

specified in the 4th FNPRM. The 

Commission will send a copy of this 4th 

FNPRM, including this IRFA, to the 

Chief Counsel for Advocacy of the Small 

Business Administration (SBA). In 

addition, the 4th FNPRM and IRFA (or 

summaries thereof) will be published in 

the Federal Register. 

A. Need for, and Objectives of, the 

Proposed Rules 

46. In the 4th FNPRM, we propose to 

modify the band plan for the 38.6–40 

GHz (39 GHz) band to 100 megahertz 

channels for the Part 30 Upper 

Microwave Flexible Use Service 

(UMFUS), and propose to similarly 

modify the 37.6–38.6 GHz (Upper 37 

GHz) and 47.2–48.2 GHz (47 GHz) bands 

to 100 megahertz channels if we adopt 

the 100 megahertz channel plan for the 

39 GHz band. The 4th FNPRM also 

seeks comment on which auction 

mechanism to use to realign existing 39 

GHz licenses. 

47. First, we propose to modify the 39 

GHz band plan from seven 200 

megahertz to fourteen 100 megahertz 

channels to allow for better 

consolidation of existing license 

holdings. We propose modifying the 

Upper 37 GHz band plan from 200 

megahertz to 100 megahertz channels, 

given that the two bands are adjacent 

and have the same service rules and an 

operability requirement. Further, in the 

4th FNPRM we propose to auction the 

39 GHz and Upper 37 bands together. In 

addition we propose to modify the 47 

GHz band plan from 200 to 100 

megahertz channels if we auction all 

three bands at the same time and seek 

comment on that proposal. 

48. Second, we propose to use a twophase incentive auction. In the first 

phase, participants would bid to win 

generic spectrum blocks using an 


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42096 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 

ascending clock auction that would 

determine a uniform price in each 

PEA—this encompasses the 

simultaneous forward-and-reverse 

auction. 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, we propose to offer 

unencumbered blocks as one category of 

generic blocks in a clock auction. 

Specifically, we propose to use a clock 

auction design with rules similar to 

those used for the forward auction in 

the broadcast incentive auction and the 

planned 24 GHz auction. Next, winning 

bidders from the clock phase would 

have an opportunity to submit sealed 

bids by PEA for particular frequency 

blocks in a separate assignment phase. 

We propose that this assignment phase 

be voluntary: Winning bidders need not 

bid in the assignment phase. Regardless 

of its participation in the assignment 

phase, the assignment phase would aim 

to assign contiguous frequency blocks 

within a PEA to a bidder that wins 

multiple blocks. 

49. We propose to encourage 

incumbent licensees to participate in 

the reverse auction by offering them an 

incentive payment—using what we term 

here a ‘‘voucher’’—in exchange for the 

cancellation of certain incumbent 

licenses at the end of the auction. Each 

voucher would have a dollar value 

equal to the final clock phase price (for 

a single generic block under the new 

band plan) in the PEA in which the 

incumbent license is located times the 

ratio of bandwidth provided by the 

incumbent’s license and the population 

that can be reached using that license 

within a given PEA (expressed in MHzpops) divided by the bandwidth and 

population reached by a generic block 

(expressed in MHz-pops). We propose to 

further encourage incumbent licensees 

to participate in the reverse auction by 

requiring such participation if the 

incumbent licensee seeks to participate 

in the accompanying forward auction. 

In addition, we seek comment on two 

alternative auction proposals. First, 

incumbents would receive license(s) for 

all vouchers that are equivalent to a 

whole number of new license(s) without 

bidding at all in the clock phase. In the 

assignment phase, all blocks won by 

winning bidders and all incumbent 

licenses would be assigned (or in the 

case of incumbent licenses, reassigned) 

frequencies. We seek comment on a 

second alternative in which we would 

exchange automatically for vouchers 

only encumbered PEA and RSA 

licenses. 

50. Third, we propose a pre-auction 

voucher exchange process in which 

incumbents can trade fractional license 

holdings for full license holdings— 

including across markets in some 

circumstances—under the new band 

plan, with these trades reflected as full 

vouchers in the auction. The exchange 

would allow incumbents to aggregate 

fractional holdings across PEAs and to 

retain all their equivalent spectrum 

usage rights in PEAs of their choosing 

to the extent permitted by their 

fractional holdings and the exchange 

rates. We seek comment on establishing 

the relative exchange rates needed for a 

voucher exchange. We seek comment on 

a framework for implementing a preauction voucher exchange to serve the 

public interest, including how best to 

address concerns raised in the record 

with respect to prior proposals. 

51. Fourth, we propose to repack 

incumbent licensees that choose not to 

participate in reverse auction portion of 

the incentive auction. Repacking the 

holdings of non-participating incumbent 

licensees will ensure that we can 

minimize encumbrances in the band, 

maximizing the amount of clean 

spectrum available for auction, while 

preserving existing usage rights for 

incumbents. We propose that licensees 

that choose to repack encumbered 

licenses in lieu of exchanging for 

vouchers should not be allowed to bid 

on new licenses in either the clock 

phase of the auction or be allowed to 

bid on frequency assignments during 

the assignment round. Prohibiting 

auction participation for such licensees 

would create a strong incentive for 

incumbents to choose to exchange all of 

their licenses for vouchers. 

52. Lastly, we propose to auction 

together all licenses in the Upper 37 

GHz and 39 GHz, using the 

Commission’s incentive auction 

authority, where existing 39 GHz license 

holders could relinquish their spectrum 

usage rights in return for an incentive 

payment, and/or acquire new rights. We 

conclude that the auction design we 

propose would satisfy the requirement 

to conduct a reverse auction to 

determine the amount of compensation 

licensees would accept for voluntarily 

relinquishing spectrum usage rights. All 

incumbent licensees may decline to 

participate in the incentive auction and 

instead receive new licenses that 

provide spectrum usage rights 

equivalent to their existing licenses. We 

seek comment on our proposal to 

condition bidding for new licenses in 

the auction on incumbents’ offering 

their existing spectrum usage rights in 

the auction. Such a requirement would 

ensure that incumbent licensees are not 

given a one-way option—purchasing 

new unencumbered spectrum at auction 

while keeping a different set of blocks 

encumbered and thus unavailable for an 

efficient auction. Furthermore, in case 

we were to conclude that the auction 

design proposed above would not 

satisfy the statutory requirements for an 

incentive auction, we seek comment on 

alternatives in which auction proceeds 

are not shared with incumbents, such as 

providing current licensees with 

bidding offset credits in place of 

vouchers 

53. Overall, the proposals in the 4th 

FNPRM 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 efficiently used 

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. Legal Basis 

54. The proposed action is authorized 

pursuant to Sections 1, 2, 3, 4, 5, 7, 301, 

302, 302a, 303, 304, 307, 309, and 310 

of the Communications Act of 1934, as 

amended, 47 U.S.C. 151, 152, 153, 154, 

155, 157, 301, 302, 302a, 303, 304, 307, 

309, and 310, Section 706 of the 

Telecommunications Act of 1996, as 

amended, 47 U.S.C. 1302. 

C. Description and Estimate of the 

Number of Small Entities to Which the 

Proposed Rules Will Apply 

55. 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, if adopted. 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. 


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56. Small Businesses, Small 

Organizations, Small Governmental 

Jurisdictions. Our actions, over time, 

may affect small entities that are not 

easily categorized at present. We 

therefore describe 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. 

57. 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). 

58. 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 we 

estimate that at least 49,316 local 

government jurisdictions fall in the 

category of ‘‘small governmental 

jurisdictions.’’ 

59. 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. 

60. 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 

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. 

61. 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. We 

note, however, that both the common 

carrier microwave fixed and the private 

operational microwave fixed licensee 

categories includes some large entities. 

62. 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 

1400 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 our actions can be 

considered small. 

63. 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 


daltland on DSKBBV9HB2PROD with PROPOSALS
42098 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 

operated with 2,500 or more employees. 

Based on this data, we conclude that a 

majority of manufacturers in this 

industry is small. 

D. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

64. We expect the rules and 

procedures proposed in the 4th FNPRM 

will impose new or additional reporting 

or recordkeeping and/or other 

compliance obligations on small entities 

as well as other licensees with licenses 

in the 39 GHz band issued prior to the 

auction of new licenses proposed in the 

4th FNPRM. The proposed rules and 

procedures would require parties with 

licenses in the 39 GHz band issued prior 

to the auction of new licenses proposed 

in the 4th FNPRM to provide certain 

information following the auction of the 

new licenses. Depending upon the 

licensee’s individual circumstances, the 

information required may include 

directions regarding the cancellation of 

pre-existing licenses, directions 

regarding a choice between satisfying 

winning bids for new licenses and 

receiving incentive payments, and 

directions regarding how any incentive 

payments are to be made. 

65. The projected reporting, 

recordkeeping, and other compliance 

requirements resulting from this 

proceeding would apply to all such 

licensees in the same manner. The 

Commission believes that applying the 

same rules equally to all entities in this 

context would promote fairness. We 

note that eight of the existing fourteen 

such licensees may be considered small 

entities. The Commission does not 

believe that the costs and/or 

administrative burdens associated with 

the rules would unduly burden small 

entities. Moreover, the proposed reverse 

auction would benefit any affected 

small entities by providing an 

opportunity to receive an incentive 

payment in exchange for spectrum 

usage rights. 

E. Steps Taken To Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

66. The RFA requires an agency to 

describe any significant alternatives for 

small businesses that it has considered 

in reaching its proposed approach, 

which may include the following four 

alternatives (among others): (1) The 

establishment of differing compliance or 

reporting requirements or timetables 

that take into account the resources 

available to small entities; (2) the 

clarification, consolidation, or 

simplification of compliance 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. 

67. The Commission does not believe 

that its proposed changes will have a 

significant economic impact on small 

entities. We believe that 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. 

We also believe the proposed 

mechanism for auctioning the 39 GHz 

and Upper 37 GHz bands would 

facilitate access to spectrum by small 

businesses and a wide variety of other 

entities, while preserving incumbent 

licensees’ spectrum rights. However, to 

get a better understanding of costs and 

any burdens, we seek comment on 

whether any of the burdens associated 

with the proposed rules and policies 

can be minimized for small businesses. 

The Commission expects to more fully 

consider the economic impact and 

alternatives for small entities following 

the review of comments filed in 

response to the 4th FNPRM. 

F. Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

68. None. 

IV. Ordering Clauses 

69. It is ordered, pursuant to the 

authority found in Sections 1, 2, 3, 4, 5, 

7, 301, 302, 303, 304, 307, 309, 310, and 

316 of the Communications Act of 1934, 

47 U.S.C. 151, 152, 153, 154, 155, 157, 

301, 302, 303, 304, 307, 309, 310, and 

316, and § 1.411 of the Commission’s 

Rules, 47 CFR 1.411, that this 4th 

FNPRM is hereby adopted. 

70. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this 4th FNPRM, including the Initial 

Regulatory Flexibility Analysis, to the 

Chief Counsel for Advocacy of the Small 

Business Administration. 

List of Subjects in 47 CFR Part 30 

Communications common carriers, 

Reporting and recordkeeping 

requirements, Communications 

equipment. 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer, Office of the 

Secretary. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 30 as follows: 

PART 30—UPPER MICROWAVE 

FLEXIBLE USE SERVICE 

■ 1. 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. 

■ 2. Amend § 30.4 by: 

■ a. Redesignating paragraphs (b) 

through (e) as paragraphs (c), (d), (f), 

and (g); 

■ b. Adding and reserving new 

paragraphs (b) and (e); and 

■ c. Revising redesignated paragraphs 

(d)(1), (f), and (g). 

The revisions and addition 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 

* * * * * 


daltland on DSKBBV9HB2PROD with PROPOSALS
Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Proposed Rules 42099 

(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. 2018–17820 Filed 8–17–18; 8:45 am] 

BILLING CODE 6712–01–P 


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