[Federal Register Volume 77, Number 63 (Monday, April 2, 2012)]
[Proposed Rules]
[Pages 19575-19589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7760]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 27

[WT Docket No. 12-69; FCC 12-31]


Promoting Interoperability in the 700 MHz Commercial Spectrum; 
Interoperability of Mobile User Equipment Across Paired Commercial 
Spectrum Blocks in the 700 MHz Band

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Commission seeks comment on whether the 
customers of Lower 700 MHz B and C Block licensees would experience 
harmful interference--and if so, to what degree--if the Lower 700 MHz 
band were interoperable. The Commission also explores the next steps 
should it find that interoperability would cause

[[Page 19576]]

limited or no harmful interference to Lower 700 MHz B and C Block 
licensees, or that such interference can reasonably be mitigated 
through industry efforts and/or through modifications to the 
Commission's technical rules or other regulatory measures. The 
Commission initiates this proceeding to promote interoperability in the 
Lower 700 MHz band and to encourage the efficient use of spectrum.

DATES: Interested parties may file comments on or before June 1, 2012, 
and reply comments on or before July 16, 2012.

ADDRESSES: You may submit comments, identified by WT Docket No. 12-69, 
by any of the following methods:
    [ssquf] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    [ssquf] Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: Filings can be sent by hand or messenger delivery, by 
commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although the Commission continues to experience 
delays in receiving U.S. Postal Service mail). All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: <a href="/cdn-cgi/l/email-protection#8ccacfcfb9bcb8cceaefefa2ebe3fa"><span class="__cf_email__" data-cfemail="d89e9b9bede8ec98bebbbbf6bfb7ae">[email protected]</span></a> or 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: Brenda Boykin, Wireless 
Telecommunications Bureau, (202) 418-2062, email <a href="/cdn-cgi/l/email-protection#3b79495e555f5a157954425052557b5d5858155c544d"><span class="__cf_email__" data-cfemail="93d1e1f6fdf7f2bdd1fceaf8fafdd3f5f0f0bdf4fce5">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WT Docket No. 12-69, adopted March 21, 
2012, and released March 21, 2012. The full text of the NPRM is 
available for inspection and copying during business hours in the FCC 
Reference Information Center, Portals II, 445 12th Street SW., Room CY-
A257, Washington, DC 20554. Also, it may be purchased from the 
Commission's duplicating contractor at Portals II, 445 12th Street SW., 
Room CY-B402, Washington, DC 20554; the contractor's Web site, http://www.bcpiweb.com; or by calling (800) 378-3160, facsimile (202) 488-
5563, or email <a href="/cdn-cgi/l/email-protection#aceaefefeceeeffce5fbe9ee82cfc3c1"><span class="__cf_email__" data-cfemail="77313434373534273e2032355914181a">[email protected]</span></a>. Copies of the NPRM also may be obtained 
via the Commission's Electronic Comment Filing System (ECFS) by 
entering the docket number WT Docket No. 12-69. Additionally, the 
complete item is available on the Federal Communications Commission's 
Web site at http://www.fcc.gov.

I. Introduction

    1. The Communications Act directs the Commission to, among other 
things, promote the widest possible deployment of communications 
services, ensure the most efficient use of spectrum, and protect and 
promote vibrant competition in the marketplace. On each occasion where 
the Commission has made available new spectrum for mobile telephony 
and/or broadband, it has strived to meet these important goals. This 
was the case when the Commission launched its proceeding to free up the 
700 MHz band for commercial mobile services, as it expressly recognized 
the need to ``balance several competing goals, including facilitating 
access to spectrum by both small and large providers, providing for the 
efficient use of the spectrum, and better enabling the delivery of 
broadband services in the 700 MHz Band.''
    2. Since the completion of the 700 MHz auction and the subsequent 
clearing of the spectrum, however, certain Lower 700 MHz A Block 
licensees have asserted that the development of two distinct band 
classes within the Lower 700 MHz band has hampered their ability to 
have meaningful access to a wide range of advanced devices. The result, 
they argue, is that this spectrum is being built out less quickly than 
anticipated (and in some cases not at all), so that a large number of 
Lower 700 MHz A Block licensees are unable to provide the level of 
service and degree of competition envisioned at the close of the 
auction and as contemplated by the Communications Act. The 700 MHz 
band, at 70 megahertz, one of the largest commercial mobile service 
bands, is the only non-interoperable commercial mobile service band.
    3. The record to date in response to the underlying Petition for 
Rulemaking reveals disagreement over the rationale for the distinct 
band classes, and the wisdom of maintaining both. At its core, the 
dispute is whether a unified band class would result in harmful 
interference to Lower 700 MHz licensees in the B and C Blocks and 
whether, if harmful interference exists, it reasonably can be 
mitigated.
    4. There is express agreement, however, that a unified band class 
across the Lower 700 MHz band has the potential to yield significant 
benefits for all licensees. Indeed, as AT&T, the primary holder of 
Lower B and C Block licenses, affirmed in a recent letter to the 
Commission, ``[AT&T] indeed anticipate[s] that there would be increased 
opportunity [if interference concerns were addressed] for commercial 
relationships with A Block licensees.'' Unfortunately, no industry-led 
solution to the lack of interoperability has yet emerged.
    5. Therefore, the Commission initiates this rulemaking proceeding 
to promote interoperability in the Lower 700 MHz band and to encourage 
the efficient use of spectrum.\1\ The Commission will evaluate whether 
the customers of Lower 700 MHz B and C Block licensees would experience 
harmful interference--and if so, to what degree--if the Lower 700 MHz 
band were interoperable. The Commission also explores the next steps 
should it find that interoperability would cause limited or no harmful 
interference to Lower 700 MHz B and C Block licensees, or that such 
interference can reasonably be mitigated through industry efforts and/
or through modifications to the Commission's technical rules or other 
regulatory measures.
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    \1\ The Commission has a longstanding interest in promoting the 
interoperability of mobile user equipment in a variety of contexts 
as a means to promote the widest possible deployment of mobile 
services, ensure the most efficient use of spectrum, and protect and 
promote competition.
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II. Background

    6. 700 MHz Band. The 700 MHz band (698-806 MHz), illustrated in the 
following figure, is comprised of 70 megahertz of commercial, non-guard 
band spectrum, 4 megahertz of guard band spectrum, 24 megahertz of 
public safety: Spectrum, and 10 megahertz of spectrum that will be 
reallocated for public safety use pursuant to recent Congressional 
mandate.

[[Page 19577]]

[GRAPHIC] [TIFF OMITTED] TP02AP12.004

    7. As shown above, the Lower 700 MHz band spectrum (698-746 MHz) 
consists of 48 megahertz of commercial spectrum, with three blocks of 
12 megahertz each of paired spectrum (Lower A, B, and C Blocks), and 
two blocks of 6 megahertz each of unpaired spectrum (Lower D and E 
Blocks). The Lower A Block spectrum is adjacent to Channel 51 (692-698 
MHz), which has been allocated for TV broadcast operations at power 
levels of up to 1000 kW.\2\ The Lower A Block is also adjacent to the 
unpaired Lower 700 MHz E Block, where licensees (along with Lower 700 
MHz D Block licensees) may operate at power levels up to 50 kW.\3\ The 
Upper 700 MHz band (746-806 MHz) consists of the C Block, which is 
comprised of 22 megahertz of paired spectrum for commercial use, two 
guard bands, the public safety allocation, and the D Block, which 
consists of 10 megahertz of paired spectrum that will be reallocated 
for use by public safety entities, in accordance with the Middle Class 
Tax Relief and Job Creation Act of 2012.
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    \2\ 47 CFR 73.622(f)(8). Maximum ERP of 1000 kW is allowed if 
antenna HAAT is at or below 365 meters. For higher HAAT levels, 
lower maximum ERP is allowed according to the ``Maximum Allowable 
ERP and Antenna Height for DTV Stations on Channels 14-59, All 
Zones'' table.
    \3\ 47 CFR 27.50(c)(7). Lower 700 MHz C, D, and E Block fixed 
and base stations may operate at total power levels up to 50 kW ERP 
in their authorized 6 megahertz spectrum blocks. In the recent ATT-
Qualcomm transaction, in which AT&T acquired all of the Lower 700 
MHz D Block licenses and Lower 700 MHz E Block licenses covering 70 
million people, the Commission conditioned the assignment of these 
licenses on AT&T's compliance with the requirements that: (1) It 
operates on the associated spectrum under the same power limits and 
antenna height restrictions that apply to the Lower 700 MHz A, B, 
and C Block licensees; (2) it does not use the acquired licenses for 
uplink transmission; and (3) its operations on the associated 
spectrum avoid undue interference to operations of other Lower 700 
MHz A, B, and C Block licensees, as specified therein. Application 
of AT&T Inc. and Qualcomm Incorporated For Consent To Assign 
Licenses and Authorizations, Order, WT Docket No. 11-18, 26 FCC Rcd 
17589, 17616-18 paras. 61-68 (2011) (AT&T/Qualcomm Order).
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    8. Assignment of Licenses in the 700 MHz Band. The Commission has 
assigned licenses for the 700 MHz band through several auction 
proceedings. The Commission auctioned licenses for the guard bands in 
the Upper 700 MHz band in 2000, and it initially auctioned licenses in 
the Lower C and D Blocks in 2002. In 2008, the Commission auctioned 
licenses in the Lower 700 MHz band A, B, and E Blocks, as well as the 
Upper 700 MHz band C Block.
    9. Performance Requirements. In adopting rules for the 700 MHz 
band, the Commission's goals included promoting commercial access to 
700 MHz band spectrum, as well as providing licensees with flexibility 
in the services to be offered and the technologies to be deployed. For 
the Lower 700 MHz C and D Block licenses that were auctioned in 2002, 
the Commission required licensees to provide ``substantial service'' to 
their license service areas no later than the end of the license term. 
In 2007, the Commission adopted performance requirements for licenses 
in the 700 MHz band that subsequently were auctioned in 2008, including 
Lower 700 MHz A Block. Specifically, Cellular Market Area (CMA)-based 
and Economic Area (EA)-based licensees are required to provide service 
sufficient to cover 35 percent of the geographic area of their licenses 
within four years and 70 percent of this area within ten years (the 
license term), and Regional Economic Area Grouping (REAG) licensees 
must provide service sufficient to cover 40 percent of the population 
of their license areas within four years and 75 percent of the 
population within ten years. For licensees that fail to meet the 
applicable interim benchmark, the license term is reduced by two years, 
which would require that the end-of-term benchmark be met within eight 
years, and the Commission may take other enforcement action. At the end 
of the license term, licensees that fail to meet the end-of-term 
benchmark are subject to a ``keep what you use'' rule, which will make 
unused spectrum available to other potential users.
    10. Development of 3GPP Technical Standards. Industry standards for 
Long-Term Evolution (LTE) wireless broadband technology are developed 
by the 3rd Generation Partnership Project (3GPP), a consensus-driven 
international partnership of industry-based telecommunications 
standards bodies. 3GPP, established in 1998, is an industry-based group 
and it is not associated with any governmental agency.\4\ In the Lower 
700 MHz band, there are two different 3GPP operating bands: \5\ Band 
Class 12, which covers operations in the Lower A, B, and C Blocks, and 
Band Class 17, which covers operations in the Lower B and C Blocks 
only. The spectrum to which Band Class 17 applies is a subset of the 
spectrum covered by Band Class 12. Entities involved in the creation of 
Band

[[Page 19578]]

Class 17 during 3GPP proceedings assert that it was necessary to create 
a separate band class for Lower 700 MHz B and C Block licenses in order 
to avoid interference issues from DTV in Channel 51 and high power 
operations in the E Block. In the Upper 700 MHz band, the Band Class 13 
specification provides for operations in the Upper C Block, and Band 
Class 14 provides for operations in the public safety spectrum 
(including the Upper 700 MHz D Block). 3GPP has adopted certain 
technical specifications for user equipment operating in different 700 
MHz bands. Output power and the OOBE specifications for LTE equipment 
are the same for all commercial paired frequencies in the Lower 700 MHz 
band.\6\ The 3GPP specifications differ for receiver blocking 
requirements. The 3GPP specified requirements for receiver blocking are 
the same for Band Class 13 and Band Class 14 equipment, but Band Class 
12 and Band Class 17 each have different and distinct blocking 
requirements, due to differences in each band's relative proximity to 
neighboring high-powered operations in the E block.\7\
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    \4\ Its world-wide partners come from Asia, Europe, and North 
America. 3GPP's many technical specification groups meet in various 
countries throughout the year to carry out the organization's 
mission. See 3GPP--About 3GPP, http://www.3gpp.org/-About-3GPP (last 
visited Mar. 12, 2012). For the schedules of the meetings, see 
3GPP--3GPP Calendar, http://www.3gpp.org/3GPP-Calendar (last visited 
Mar. 12, 2012).
    \5\ Hereinafter, the Commission refers to each 3GPP LTE 
Operating Band as a ``Band Class.'' For example, the Commission 
refers to 3GPP LTE Operating Band 12 as ``Band Class 12.''
    \6\ See Sec. Sec.  6.2.2, 6.6.2, and 6.6.2.2.3 of 3GPP TS 36.101 
V9.9.0 (2011-09). The class 3 devices (UE) maximum transmit power is 
23dBm for all bands with <plus-minus>2dB tolerance, and Table 
6.6.2.2.3-1 specifies the spectrum emission limits for available 
channel bandwidths.
    \7\ Receiver blocking requirements address a receiver's ability 
to receive at least 95% of the maximum throughput at its assigned 
channel in the presence of an unwanted interfering signal falling 
into the device receive band or into the first adjacent 15 
megahertz. See Table 7.6.1.1-2, Section 7.6.1 of 3GPP TS 36.104 
V9.9.0 (2011-09). Unlike Band Class 17, 3GPP determined that Band 
Class 12 cannot achieve the typical minimum specification for 
blocking interference from the Lower 700 MHz E Block, so this 
requirement was omitted from the Band 12 technical specification.
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    11. 700 MHz Interoperability Petition for Rulemaking. In late 2009, 
an alliance comprised of four Lower 700 MHz A Block licensees 
(Petitioners) filed a petition for rulemaking, asking the Commission to 
``assure that consumers will have access to all paired 700 MHz spectrum 
that the Commission licenses, to act so that the entire 700 MHz Band 
will develop in a competitive fashion, and to adopt rules that prohibit 
restrictive equipment arrangements that are contrary to the public 
interest.'' Petitioners request the Commission to require that all 
mobile units for the 700 MHz band be capable of operating over all 
frequencies in the band. Petitioners further request ``an immediate 
freeze on the authorization of mobile equipment that is not capable of 
operation on all paired commercial 700 MHz frequencies.'' The Wireless 
Telecommunications Bureau sought comment on the Petition in 2010. See 
75 FR 9210. All future filings concerning RM-11592 should be made in 
this docket, WT Docket No. 12-69.
    12. The Commission received 18 comments and 13 reply comments in 
response to the Petition. Commenters are divided on the merits of the 
relief sought in the Petition. Commenters in support of the Petition 
include smaller, regional 700 MHz licensees, a coalition including 
Sprint Nextel and T-Mobile, trade associations representing rural and 
smaller providers, a coalition of public interest groups, and public 
safety associations. These supporters assert that the mobile devices 
currently being developed for AT&T and Verizon Wireless preclude 
supporting operation on Lower A Block spectrum and that this is 
contrary to the public interest and anti-competitive. They argue that 
small providers that acquired Lower band 700 MHz Block A spectrum are 
left without viable and widely usable equipment options. Thus, they 
contend that unless Verizon Wireless and AT&T are required to support 
Band Class 12 in their devices, Lower A Block licensees will not be 
able to obtain devices with competitive economies of scale. They also 
argue that requiring full 700 MHz support will maximize roaming 
opportunities. Specifically, Petitioners assert that a prerequisite for 
negotiating roaming agreements is the availability of capable devices 
and that there is no basis for negotiation if there are no mobile 
devices that work across 700 MHz frequency blocks. While the Petition 
requests interoperability across the entire 700 MHz band, subsequent 
filings from some of the proponents of an interoperability requirement, 
including parties to the Petition, have asked the Commission to first 
focus on establishing an interoperability requirement for the Lower 700 
MHz band.
    13. In their initial comments, parties such as AT&T and Verizon 
Wireless, device manufacturers Motorola and Qualcomm, and TIA, a 
manufacturer trade association, opposed the Petition. They argued that 
without Band Class 17 filtering, Lower 700 MHz B and C licensees will 
face greater levels of harmful interference. Further, they suggested 
that an interoperability requirement at that time, spring 2010, would 
have unnecessarily delayed the deployment of 700 MHz mobile broadband 
devices. They contended that the existing 3GPP band classes were 
crafted through an open process and are responsive to the realities of 
the engineering and manufacturing constraints of the Commission-defined 
spectrum blocks. Further, AT&T asserted that nothing prevents 700 MHz A 
Block licensees from negotiating roaming deals with any provider 
offering services on other 700 MHz blocks. AT&T also argued that even 
if A Block licensees will have greater difficulty or face higher costs 
in developing handsets for use on the A Block, those disadvantages are 
fully reflected in the lower prices A Block licensees paid to obtain A 
Block spectrum.
    14. Workshop on Interoperability. Last year, to update the record 
and gather additional information, the Wireless Telecommunications 
Bureau held a workshop on the status and availability of interoperable 
mobile user equipment across commercial spectrum blocks in the 700 MHz 
band. Panelists included a range of industry experts, including 
licensees holding spectrum in different portions of the 700 MHz band, 
as well as public interest advocates and equipment manufacturers. In 
addition to exploring solutions for promoting the development and 
availability of equipment for the 700 MHz band, the workshop discussed 
providers' technology choices, such as the planned deployment of LTE, 
and how these technology choices affect equipment availability, 
competition, and roaming. Panelists discussed the technical feasibility 
of an interoperability condition, as well as how an interoperability 
requirement might affect such factors as device cost and performance, 
and the need for additional development and testing.
    15. Other Developments Regarding the 700 MHz Band. On March 15, 
2011, CTIA and RCA filed a petition for rulemaking and request for 
licensing freezes on Channel 51, urging the Commission to facilitate 
the deployment of wireless broadband services in the Lower 700 MHz A 
Block by providing a stable interference environment that allows 
licensees to plan network deployments. The petition noted the potential 
for interference between Channel 51 broadcast and Lower 700 MHz A Block 
licensees. On March 28, 2011, the Media Bureau requested comment on the 
petition, and in August 2011, the Media Bureau adopted a freeze on the 
filing of certain applications with respect to operations on Channel 
51. The freeze covers (1) applications for low power television, TV 
translator, replacement translators, and Class A television facilities 
on Channel 51, and displacement applications on this channel; and (2) 
applications for minor change for low power and full power television 
stations on Channel 51.

[[Page 19579]]

    16. AT&T/Qualcomm Transaction. On January 13, 2011, AT&T and 
Qualcomm filed an application for Commission consent to the assignment 
or transfer of control of all eleven of Qualcomm's D and E Block 
licenses in the Lower 700 MHz band to AT&T. The Commission sought 
comment on the proposed transaction. Several parties asked the 
Commission to impose requirements relating to device interoperability 
as a condition of approving the transaction. After examination of the 
record, the Commission approved the assignment on December 22, 2011, 
but declined to adopt an interoperability condition. The Commission 
observed that even assuming that the lack of Lower 700 MHz 
interoperability causes significant competitive harm, such harm already 
existed independent of the license transfer applications. The 
Commission concluded that the better course would be to consider the 
numerous technical issues raised by the lack of interoperability 
through a rulemaking proceeding, which the Commission undertakes in 
this NPRM.

III. Discussion

A. Challenges To Achieving Interoperability

    17. The Commission historically has been interested in promoting 
interoperability. Beginning with the licensing of cellular spectrum, 
the Commission has opined that consumer equipment should be capable of 
operating over the entire range of cellular spectrum as a means to 
``insure full coverage in all markets and compatibility on a nationwide 
basis.'' Although the Commission did not adopt a rule to require band-
wide interoperability for PCS, it again stressed the importance of 
interoperability by acknowledging industry efforts to establish 
voluntary interoperability standards and asserted that ``[t]he 
availability of interoperability standards will deliver important 
benefits to consumers and help achieve the Commission's objectives of 
universality, competitive delivery of PCS, that includes the ability of 
consumers to switch between PCS systems at low cost, and competitive 
markets for PCS equipment.'' The Commission also stated that if PCS 
technology did not develop in a manner to accommodate roaming and 
interoperability, it might consider ``what actions the Commission may 
take to facilitate the more rapid development of appropriate 
standards.''
    18. Availability of End-User Equipment. According to the 
Petitioners, a lack of interoperability in the Lower 700 MHz band has 
cut off meaningful access for many Lower A Block licensees to cutting-
edge devices, and even those that do have access are able to acquire 
only a fraction of what other 700 MHz licensees are able to procure. 
Petitioners and proponents of a near-term interoperability requirement 
make essentially two arguments. Specifically, Vulcan argues that 
equipment vendors currently first serve the needs of ``the unique band 
class that is dominated by AT&T'' and that this slows the time to 
market for Lower A Block licensees because they experience a lack of 
access to new devices and face delays in the development of standards, 
chipsets, and equipment. Similarly, RTG asserts that equipment 
manufacturers have little incentive to innovate and provide compatible 
devices for smaller markets, particularly when providing interoperable 
devices would run contrary to their largest customers' desires.
    19. Petitioners and other proponents also claim that an 
interoperability requirement should enable Lower A Block licensees and 
other Lower 700 MHz licensees to benefit from economies of scale with 
respect to mobile devices, which in turn would promote greater 
affordability that can be passed along to consumers. RCA argues that 
even where Band Class 12 equipment can be made available, the costs are 
unnecessarily inflated by the limited scale resulting from the lack of 
interoperability across the 700 MHz spectrum. According to the record, 
Cellular South was able to find a manufacturer willing to supply it 
with devices that included, at a minimum, Band Class 12 frequencies, 
but ``the cost of obtaining such devices without the economies of scale 
available based upon demand for similar devices by a nationwide carrier 
made pursuing the opportunity not economically feasible.'' Cellular 
South asserts that the necessary ``scale'' to obtain pricing that would 
allow it to bring devices to market would be expected to involve more 
than one million devices and in any case no less than a half million 
devices.
    20. Nationwide providers AT&T and Verizon Wireless respond that 
Lower 700 MHz A Block licensees are free to negotiate with device 
manufacturers. Verizon Wireless claims that ``those decisions have to 
be made by those carriers to meet their own individual business plans. 
Verizon Wireless has nothing to do with those decisions.'' Verizon 
Wireless also asserts that there are at least 33 companies that 
manufacture devices for the U.S. market and that Petitioners ``provide 
no evidence about their efforts (or the apparent lack thereof) to 
obtain the devices they want, either individually or through a 
consortium, from any of these potential suppliers.''
    21. The Commission seeks comment on Petitioners' and other 
proponents' argument that an interoperability requirement in the 700 
MHz band is necessary to obtain affordable, advanced mobile devices to 
deploy service to consumers in smaller, regional, and rural service 
areas. To what extent have any Lower A Block licensees successfully 
negotiated with equipment vendors to date? What efforts have other 
Lower A Block licensees undertaken to negotiate with equipment vendors? 
Would an interoperability requirement help enable Lower A Block 
licensees to benefit from economies of scale with respect to mobile 
devices, and what would be the benefits to consumers? Do manufacturers 
require a provider to purchase a minimum number of devices? If so, what 
is that number and is it prohibitive for a smaller provider to achieve 
such a scale? The Commission seeks data and evidence in support of all 
of these claims.
    22. Effect on the Deployment of Advanced Broadband Services. The 
record to date suggests that, unless mobile user equipment is capable 
of operating on all paired commercial Lower 700 MHz spectrum, the 
deployment of facilities-based mobile broadband networks could be 
hampered, particularly in rural and unserved areas. The Commission 
notes that a significant number of Lower A Block licenses are held by 
smaller, rural, and regional licensees. Petitioners and proponents 
argue that requiring all Lower 700 MHz licensees to use interoperable 
equipment would increase the likelihood that these Lower A Block 
licensees can obtain the necessary financing to deploy networks and 
devices. They add that the inability of small and regional providers to 
obtain interoperable devices impedes their ability to compete in the 
provision of 4G services, makes it difficult to maintain current 
customers and acquire new ones, results in equipment costs that are 
higher than for other bands, and creates uncertainty for spectrum 
holders that could have adverse effects on investment in deployment of 
networks and devices. RCA and Triad argue that Lower A Block licensees' 
inability to obtain affordable end user devices could cause the A Block 
spectrum to remain fallow for an extended period of time.
    23. AT&T responds that an interoperability requirement in the Lower 
700 MHz spectrum would impose unreasonable burdens on

[[Page 19580]]

AT&T's ability to build out its Lower 700 MHz spectrum. Specifically, 
AT&T claims that such a requirement would create ``substantial 
disruption and delay to [its] current LTE deployment plans and 
significant additional costs.'' AT&T claims that if it were required to 
abandon plans to use Band Class 17 and deploy a network around Band 
Class 12, it would need to upgrade its LTE base stations and develop 
and obtain ``new chipsets, devices and radio equipment, a process that 
usually takes years to complete.'' It also asserts that adding Band 
Class 12 capabilities into its mobile devices along with Band Class 17 
capabilities would make the devices substantially larger, likely 
shorten battery life, and potentially require the tradeoff of other 
uses, such as bands used for international roaming. In addition, as 
discussed below, AT&T's objections also stem from issues associated 
with potential interference concerns from Channel 51 operations and 
high power Lower E Block broadcasts.
    24. The Commission asks commenters to submit additional detailed 
metrics to evaluate the effects of an interoperability requirement on 
competition. Specifically, would the use of interoperable equipment 
promote consumer choice by facilitating the portability of mobile 
devices between service providers, thereby allowing consumers to switch 
more easily between providers? At the same time, would deployment of 
Lower 700 MHz B and C Block service be delayed by a move towards 
interoperability, either by rule or industry agreement? What would be 
the relevant costs associated with possible Commission action? What 
costs would Lower 700 MHz B and C licensees who have already committed 
to Band Class 17, or who plan to do so, incur if the Commission adopts 
an interoperability rule in the Lower 700 MHz spectrum?
    25. Would a requirement that mobile user equipment be capable of 
operating on all paired commercial Lower 700 MHz spectrum facilitate 
deployment of facilities-based mobile broadband networks in rural and 
unserved areas? Are Lower A Block licensees just as likely to obtain 
funding and obtain affordable mobile equipment without Commission 
action? The Commission also seeks specific data and anecdotal evidence 
to support claims that an interoperability obligation would require 
complete redesign and upgrade of devices and base stations. The 
Commission seeks additional information on the necessary changes to 
chipsets and the timeframes these changes will impose.
    26. U.S. Cellular recently announced the planned launch of a 4G LTE 
network that will cover 25 percent of U.S. Cellular's customers and 
will use the 700 MHz licenses of its partner, King Street Wireless. C-
Spire, in contrast, reportedly has delayed its previously announced 
launch of its 4G LTE network. The Commission asks Lower A Block 
licensees to provide detailed information on the effect that a lack of 
interoperability has had, if any, on their efforts to deploy service. 
Commenters should be as specific as possible and should, where 
possible, include data or affidavits.
    27. Roaming. A number of commenters argue that an interoperability 
requirement would promote roaming among 700 MHz licensees. These 
proponents argue that requiring the use of interoperable equipment in 
the Lower 700 MHz band would promote the commercial availability of 
mobile device equipment for all Lower 700 MHz licensees. Without that 
equipment, Lower 700 MHz A Block licensees maintain they cannot build 
out their networks, which they claim is a prerequisite for the 
negotiation of roaming agreements. Petitioners also claim that they 
have no reason to expect such mobile devices to be available on a 
widespread, affordable basis in the 700 MHz band and without such 
devices, there is nothing to negotiate. Petitioners contend that small 
rural and regional carriers are in no position to place bulk orders for 
mobile devices that work in the Lower 700 MHz A Block and also work in 
other 700 MHz frequency blocks. They claim that AT&T and Verizon 
Wireless are the only ones who hold the market power with the device 
manufacturers and the two carriers currently are developing mobile 
devices that work exclusively on their bands. Without interoperable 
devices, Petitioners state that there will be no roaming in the 700 MHz 
band.
    28. NTCA states that mobile customers rely on and expect a 
``seamless experience'' that is made possible by roaming arrangements. 
Without roaming, NTCA explains that customers will experience 
``isolated islands of service.'' Further, Petitioners and other 
supporters assert that even if Band Class 12 equipment were available, 
from a technical perspective, Band Class 17 device users would be 
unable to roam on Band Class 12 networks operating on Block A. They 
argue that a lack of interoperability leaves customers of small 
carriers ``without an option for a nationwide service, perpetually 
unable to roam on the networks of the large carriers.''
    29. AT&T and Verizon Wireless respond that the Lower A Block 
licensees are not prevented from negotiating roaming arrangements with 
providers offering services on the other 700 MHz blocks. AT&T also 
responds that A Block licensees are free to negotiate with handset 
manufacturers to design, manufacture and deploy wireless handsets and 
other devices that operate within the spectrum bands that are needed 
based upon their spectrum holdings and business plans, including Band 
Class 12 or other commercial spectrum.'' AT&T argues that ``[t]he 
Commission should not take action to force carriers to utilize a 
certain spectrum band for roaming,'' but that carriers should be able 
``to choose their roaming partners based on factors like network 
compatibility, price, coverage, and call quality.'' The Commission 
seeks comment on whether interoperability would promote reasonable 
roaming arrangements among 700 MHz providers and would increase the 
number of providers that are technologically compatible for roaming 
partnership.

B. Potential for Harmful Interference

    30. Even if the record demonstrates that the existence of two 
distinct band classes in the Lower 700 MHz band is creating a device 
and network deployment problem, the Commission must ultimately resolve 
the central question as to whether a single band class would cause 
widespread harmful interference to Lower 700 MHz B and C Block 
licensees, who would otherwise use Band Class 17 devices rather than 
Band Class 12.
    31. Interoperability issues are particularly relevant at this time, 
as licensees are in the process of deploying LTE in the Lower 700 MHz 
band. As of December 2011, AT&T has launched LTE service using its 
Lower 700 MHz B and C Block licenses in 15 markets. In addition, as 
noted above, U.S. Cellular recently announced the planned launch of an 
LTE network that will cover 25 percent of its customers and will use 
the 700 MHz licenses of its partner, King Street Wireless. As discussed 
earlier, there are two Lower 700 MHz band LTE standards for the Lower 
700 MHz band, with 3GPP Band Class 17 spanning the B and C Blocks, and 
Band Class 12 spanning the A, B, and C Blocks. Some commenters have 
argued that this, in turn, fragments the device ecosystem for LTE 
devices that operate in the Lower 700 MHz band and prevents 
interoperability.
    32. Commenters argue that there would be two primary interference 
concerns for providers operating in the

[[Page 19581]]

Lower 700 MHz B and C Blocks if these providers were to substitute Band 
Class 12 for Band Class 17 in newly-offered devices (as opposed to 
adding Band Class 12 capabilities into devices along with Band Class 
17): (1) Reverse intermodulation interference from adjacent DTV Channel 
51 operations; and (2) blocking interference from neighboring high-
powered operations in the Lower 700 MHz E Block. The Commission focuses 
its technical analysis on these two primary issues. The Commission 
notes that some commenters also express concern regarding the need to 
deploy wider filters in order to migrate to Band Class 12. The 
Commission observes, however, that a transition from Band Class 17 to 
Band Class 12 does not necessitate a change to base station filtering. 
Operators deploying networks in the Lower 700 MHz B and C Blocks can 
continue to filter base station receivers as they would for Band Class 
17, and thus interference from Channel 51 to B and C Block base 
stations is the same regardless of whether Band Class 12 devices or 
Band Class 17 devices are used. Commenters also raise other potential 
interference concerns, including interference from Band Class 12 
devices into Channel 51 television receivers, and other interference 
issues that are specific to operations in the A Block. The Commission 
does not address those issues herein. The Commission focuses the scope 
of this proceeding to interference to Lower 700 MHz B and C Block 
operations that may result from the adoption of Band Class 12 devices 
by Lower 700 MHz B and C licensees, whether voluntarily or by 
regulatory mandate.
    33. AT&T asserts that both reverse intermodulation and blocking 
interference are significant issues. It expects that managing and 
mitigating the interference from Channel 51 and any high power Lower E 
Block broadcasts to its network would account for the greatest 
expenses, and that its customers would not, on balance, benefit from 
AT&T migrating to Band Class 12. AT&T argues that if it were required 
to use Band Class 12 devices as opposed to Band Class 17 devices, its 
customers would be forced to use devices that would expose them to 
interference risks (from Channel 51 and the E Block) they otherwise 
would not face. Notwithstanding the foregoing, AT&T affirms that it 
does not object to supporting interoperability in the Lower 700 MHz 
band, assuming supply chain availability, if interference challenges 
from Channel 51 and the Lower 700 MHz E Block licensees are addressed 
to its satisfaction.
    34. With regard to the Channel 51 interference concerns, Motorola's 
view in its original 3GPP proposal to create Band Class 17 was that 
reverse intermodulation interference could happen when Band Class 12 
devices are close to high-powered Channel 51 transmission towers, which 
it believes could result in in-band interference because of the limited 
radio frequency (RF) filtering capability of Band Class 12 filters. 
According to Motorola's paper, ``the key issue'' in determining the 
possibility of such interference is ``the level of the DTV Channel 51 
wideband signal that would be present at the UE antenna port based on a 
reasonable deployment scenario,'' but Motorola does not provide 
evidence showing the circumstances that could produce conditions 
suitable to create reverse intermodulation interference from Channel 
51.
    35. Proponents of an interoperability requirement argue that no 
reverse intermodulation interference would occur, and that if an 
operator does experience any such interference, solutions exist to 
mitigate Channel 51 interference concerns to Band Class 12 devices 
operating in the B and/or C Blocks. According to Cellular South and 
King Street Wireless, ``With [less than five megahertz] Tx bandwidth, 
any Channel 51-700 intermodulation products would not fall within the 
device receive blocks (no self-interference issue).'' They represent 
that this is because a strong signal from Channel 51 must mix with a 
full-power Lower 700 MHz B and C Block device transmission, but ``LTE 
base stations do not allow devices to transmit at full power with 
[greater than five megahertz] bandwidth due to a self-desense issue.'' 
Essentially, Cellular South and King Street Wireless argue that power 
amplifier linearity in a mobile device improves considerably when it is 
not transmitting at full power and that if the device transmitted 
bandwidth is less than five megahertz, then intermodulation products 
resulting from the combination of Channel 51 and Lower 700 MHz band C 
Block transmit frequencies would not cause intermodulation 
interference. Finally, they point out that if intermodulation 
interference is experienced, the wireless operator ``may deploy an LTE 
base station several hundred meters away from the Channel 51 station to 
control device transmit power and provide a stronger downlink desired 
signal.''
    36. Vulcan performed lab and field tests to test the assertion that 
``reverse intermodulation distortion caused by Channel 51 using a Band 
Class 12 device would create an interfering signal in the B Block 
receiver.'' Based on the results of lab tests, Vulcan concludes that a 
minimum signal level of 0 dBm from Channel 51 would be necessary to 
create an interference signal at the noise floor of the B Block 
receiver, and field measurements showed that Channel 51 transmissions 
were no stronger than -21 dBm. The report indicates that the strongest 
signal strength in the field measurements of DTV Channel 51 is 
typically much lower than necessary to generate noticeable reverse 
intermodulation interference. AT&T responds that the tests referenced 
by Vulcan do not represent real-world situations, because the tests 
occurred only within a two kilometer radius of the Channel 51 tower, 
whereas stronger signals from Channel 51 can occur at closer distances.
    37. With regard to interference from Lower E Block operations, 
Motorola asserts that receiver blocking performance may be degraded 
when Band Class 12 devices are close to high-powered Lower E Block 
transmission towers, due to limited Band Class 12 device out-of-band 
blocking rejection. According to AT&T, Band Class 17, with an extra six 
megahertz of separation from the Lower E Block, was created to 
alleviate this concern, so that the device filter can provide 
sufficient attenuation of the E Block transmissions. It further asserts 
that Band Class 12 has sub-optimal filtering because of the lack of 
sufficient frequency separation between the Lower E Block and the 
starting frequencies of Band Class 12.
    38. The Coalition for 4G asserts that network operators can 
eliminate potential interference from Lower E Block operations by 
deploying the A, B, or C Block base stations near the E Block 
transmitters. In support of its position that interference from Lower 
700 MHz E Block transmitters is manageable for Band Class 12 devices 
operating in Lower 700 MHz B and C blocks, Vulcan's lab and field tests 
assess the severity of interference issues to Band Class 12 devices 
from high power 50 kW transmissions in the Lower 700 MHz E Block. The 
tests indicate that the Atlanta field measurements of the highest 
signal power ratios between the 50 kW Lower E Block and B Block are 
typically 15 to 30 dB lower than necessary to produce Lower B Block 
receiver blocking. The tests conclude that real-world tests found the 
anticipated interference circumstances are manageable and Band Class 17 
is redundant. Vulcan also asserts that the test results confirm Band 
Class 12

[[Page 19582]]

devices performance would not be worse than Band Class 17 devices, and 
that Band Class 17 already has greater levels of internal interference 
from within the Lower B and C Blocks.
    39. In response, AT&T disagrees generally with the effectiveness of 
these potential mitigation techniques, stating that (1) increasing the 
number of cell sites near E Block transmitters or Channel 51 towers 
would increase the cost of providing 4G service, which would eventually 
be passed on to consumers, and (2) given the limited number of 
available site locations, coordination alone is insufficient to solve 
Band Class 12 interference issues. AT&T also asserts that adequate 
coverage of a 50 kW mobile broadcast service in the market in which 
Vulcan conducted its testing would require at least thirteen Lower 700 
MHz E Block transmitters, which would lead to higher signal levels 
compared to the four transmitters that were active when testing was 
conducted by Vulcan. It is unclear, however, how much higher the signal 
levels may be close to a Lower E Block transmitter that is surrounded 
by twelve additional E Block transmitters versus one that is surrounded 
by only three. Whereas more base stations will improve overall signal 
levels and coverage, basic engineering calculations would suggest that 
any increase to the signal levels close to each base station, where 
signals may be strong enough to cause in-band receiver blocking 
interference to neighboring bands, would be negligible.
    40. The Commission seeks comment on these and any additional 
technical and operational factors that should be taken into 
consideration in any transition to an interoperable Lower 700 MHz band. 
The Commission asks interested parties to submit measurements and 
quantitative analyses regarding the magnitude and extent of the 
interference risk from adjacent Channel 51 and Lower Block E 
transmissions for Band Class 12 devices operating in the Lower B and C 
Blocks. How effective are existing mitigation measures, such as 
coordination between Lower 700 MHz and DTV Channel 51 licensees? 
Further, what innovative technical measures might be introduced in the 
near future, such as better performing RF duplexers and filters? What 
additional interoperability solutions exist or are being developed to 
address these interference concerns? The Commission also seeks comment 
on the performance of Band Class 12 devices compared to Band Class 17 
devices, as well as on other factors relating to the operations in the 
Lower B and C Blocks. Furthermore, in the event unwanted harmful 
interference cannot be mitigated in some areas, the Commission seeks 
comment on whether the potential harm resulting from interference in 
those areas is outweighed by the public interest benefits that would 
result from interoperability in the Lower 700 MHz band, and what 
factors should be considered in balancing these concerns.
    41. As noted above, should Band Class 12 be substituted in devices 
for Band Class 17, operational issues may arise to the extent that a 
single network must be capable of supporting more than one device band 
class. That is, if a licensee chooses to continue supporting its 
existing grandfathered Band Class 17 devices, the wireless network will 
need to support both Band Class 17 devices and Band Class 12 devices. 
The Commission seeks comment on possible ways to address this issue. 
Since the two Band Classes overlap in frequencies, the Commission 
thinks it is likely that there are relatively simple, cost effective 
solutions that will allow a single network to accommodate devices from 
both band classes. For example, would the Equivalent Home Public Land 
Mobile Network file (EHPLMN) update in devices allow the LTE network to 
support both Band Class 12 and Band Class 17 devices?
    42. The Commission seeks comment on whether there are measures it 
should take to address Lower 700 MHz interference concerns that may be 
preventing the voluntary adoption of Band Class 12 by Lower B and C 
Block licensees. The Commission notes that AT&T asks it to ``modify the 
rules governing service in Channel 51 and in the 700 MHz Lower E Block 
to permit power levels, out of band emissions and antenna heights that 
are no greater than those currently permitted in the 700 MHz Lower A 
and B blocks, to allow downlink only in the Lower E Block and uplink 
only in Channel 51, and to relocate any incumbent high power broadcast 
operations out of Channel 51 and the Lower E Block.'' In approving 
AT&T's acquisition of Qualcomm's Lower 700 MHz licenses (comprising all 
of the Lower 700 MHz D Block licenses and five of the Lower E Block 
licenses), the Commission included a condition that AT&T operate under 
the same power limits and height restrictions applicable to Lower 700 
MHz A and B Block licensees, which will reduce the instances of high-
powered operations in the Lower D and E Blocks. Specifically, the 
Commission stated that ``AT&T must operate on the Lower D and E Block 
licenses consistent with the limits set forth in Section 27.50(c), 
excluding Subsection 27.50(c)(7).'' The Commission also conditioned the 
transaction on AT&T's use of this spectrum only for downlink 
transmissions. In addition, it conditioned the transaction on AT&T 
taking certain steps to mitigate possible interference caused by AT&T's 
use of the Lower D and E Blocks to the uplink operations of licensees 
operating in the Lower 700 MHz A, B, and C Blocks, including mitigating 
interference within 30 days after receiving written notice from the A, 
B, or C Block licensee.\8\
---------------------------------------------------------------------------

    \8\ AT&T/Qualcomm Order, 26 FCC Rcd at 17617 para. 67. 
Specifically, the condition requires AT&T to ``(1) coordinate with 
the A, B, or C Block licensee to mitigate potential interference; 
(2) mitigate interference to A, B, or C Block operations within 30 
days after receiving written notice from the A, B, or C Block 
licensee; and (3) ensure that D/E Block transmissions in areas where 
another licensee holds the A, B, or C Block license are filtered at 
least to the extent that D/E Block transmissions are filtered in 
markets where AT&T holds the A, B, or C Block license, as 
applicable.'' Id. U.S. Cellular urges the Commission to seek comment 
on and adopt a rule that imposes conditions on Lower E Block 
licensees consistent with the power limit restrictions, requirement 
for downlink-only transmissions, and interference mitigation 
requirements in the conditions adopted in the AT&T/Qualcomm Order. 
U.S. Cellular asserts that ``[i]mposition of such conditions will 
serve the public interest by helping to accelerate the further 
development of the Lower 700 MHz ecosystem.'' Letter from Grant B. 
Spellmeyer, Executive Director, Federal Affairs and Public Policy, 
U.S. Cellular, to Marlene H. Dortch, FCC, filed March 15, 2012, at 
1.
---------------------------------------------------------------------------

    43. The Commission seeks comment on whether it should modify its 
rules for Lower 700 MHz D and E Block operations, using the technical 
conditions set forth in the AT&T/Qualcomm decision as a template. 
Modifying the Commission's rules in this manner would lead to 
consistency in the technical requirements for the Lower D and E Blocks 
and would help to address potential harmful interference from 
operations on the Lower E Block licenses that are not held by AT&T. 
Would these modifications adequately address concerns that Lower B and 
C Block licensees may experience harmful interference from Lower D and 
E Block operations if they transition to Band Class 12? As a practical 
matter, would modifying the Commission's rules in this manner encourage 
Lower B and C Block licensees to voluntarily adopt interoperable 
devices? The Commission also seeks comment on how such modifications 
would affect the operations and plans of Lower E Block licensees, other 
than AT&T. What other modifications to the Lower 700 MHz D and E Block 
technical operational rules should the Commission consider and what are 
the costs and public interest benefits of these alternative rules?

[[Page 19583]]

    44. With respect to potential interference as a result of Channel 
51 operations, are there steps the Commission could take to reduce the 
threat of such potential interference that would balance the needs and 
rights of Channel 51 incumbents with Lower 700 MHz licensees? What 
role, if any, should the passage of the Middle Class Tax Relief and Job 
Creation Act of 2012, which gives the Commission authority to conduct 
incentive auctions, including in the television broadcast bands, have 
in the Commission's approach to potential interference from Channel 51 
to the Lower 700 MHz band licensees? Could any measures be implemented 
without causing an undue burden on existing licensees? What is the 
likelihood that Channel 51 licensees will experience interference from 
operations in the Lower 700 MHz band? Vulcan asserts that ``Band Class 
12 device interference into TV receivers is a claim that has never been 
substantiated,'' and that the potential for Channel 51 licensees to 
cause interference to A Block base stations ``is a deployment issue to 
be managed by the Lower A Block licensees.'' Aside from regulatory 
measures, what steps should the Commission take to encourage voluntary 
industry efforts to find solutions to interference concerns?
    45. Other Issues. Commenters are concerned that if a provider adds 
Band Class 12 capabilities into mobile devices along with Band Class 17 
(as opposed to substituting Band Class 12 for Band Class 17 in newly 
offered devices), the devices will be adversely affected with respect 
to form factor, cost, and battery life. The Commission seeks comment on 
these assertions. What network-specific issues would arise, and how 
could licensees address those issues? How difficult or costly would it 
be for licensees to address any network-specific issues? Are there 
interim as well as long-term solutions that might be employed, and what 
is their timing? Are there any roaming or legacy device support issues 
that one solution may address that another may not? Given the highly 
technical and complex nature of this proceeding, the Commission seeks 
qualitative and quantitative data and engineering analyses to support 
commenters' claims.
    46. Finally, the Commission seeks comment on whether its efforts 
should be focused exclusively--as they are now--on interoperability in 
the Lower 700 MHz band, as opposed to the entire band. As the 
Commission noted above, although the Petition initially requests an 
interoperability requirement that requires mobile equipment to be 
capable of operating on all paired commercial frequency blocks in both 
the Upper and Lower 700 MHz bands, subsequent filings from some of the 
proponents of an interoperability requirement focus on requiring the 
use of Band Class 12 devices in the Lower 700 MHz band.\9\ The 
Commission notes that there are unique interference environments and 
different technology-related issues, including the ability of equipment 
to accommodate multi-band interoperability, that are specific to the 
Lower versus Upper 700 MHz bands, as well as additional issues 
pertaining to consideration of requiring equipment to accommodate 
multi-band interoperability.\10\
---------------------------------------------------------------------------

    \9\ The Commission notes that certain recent ex parte filings 
urge it to consider interoperability across the entire 700 MHz band 
in light of the recent passage of the Spectrum Act, either now or in 
a future proceeding. See, e.g., Letter from Harold Feld, Legal 
Director, Public Knowledge, to Marlene H. Dortch, FCC, filed March 
13, 2012 at 2; Letter from Kathleen O'Brien Ham, Vice President, 
Federal Regulatory Affairs, T-Mobile USA, Inc., to Marlene H. 
Dortch, FCC, filed March 13, 2012 at 1, 4. The Commission's focus on 
the Lower 700 MHz band in this NPRM does not preclude the Commission 
from considering broader interoperability issues, including 
interoperability across the entire 700 MHz band, in the future.
    \10\ The recent technical study submitted by a consortium of 
several Lower 700 MHz A Block licensees focuses on interference 
issues associated with the use of Band Class 17 versus Band Class 12 
in the Lower 700 MHz Band. See Letter from Mark W. Brennan, Hogan 
Lovells, Counsel to Vulcan, to Marlene H. Dortch, FCC, filed Nov. 
25, 2011, Attachment, ``Study to Review Interference Claims that 
have Thwarted Interoperability in the Lower 700 MHz Band.'' The 
Commission notes that requiring interoperability in the Upper 700 
MHz Band would introduce additional and unique interference 
scenarios, particularly technical issues related to implementing 
both Band Class 13 and Band Class 14 in a single device, as well as 
the use of such a device while also protecting GPS receivers and 
Public Safety Narrowband operations.
---------------------------------------------------------------------------

C. Promoting Interoperability

    47. Assuming the Commission concludes that concerns regarding 
harmful interference to Lower 700 MHz B and C Block licensees are not a 
reasonable obstacle to interoperability or can be mitigated through 
industry efforts and/or Commission action, the Commission seeks comment 
on whether there is likely to be a timely industry solution to 
interoperability in the Lower 700 MHz band, or whether additional 
regulatory measures will be necessary to promote interoperability 
across the Lower 700 MHz band. Commenters currently supporting Band 
Class 17 suggest that resolving interference concerns would encourage 
the use of Band Class 12. For example, Verizon asserts that it ``fully 
supports commercial development of Band Class 12 devices,'' and that 
``actions addressing interference issues would spur evolution of the 
device market toward full Lower 700 MHz interoperability.'' AT&T 
asserts that, if interference challenges from high power broadcasts in 
Channel 51 and in the Lower 700 MHz E Block are addressed 
satisfactorily, it will not object to supporting interoperability in 
the Lower 700 MHz band. Further, AT&T contends that ``these challenges 
can and should be addressed.'' Absent a regulatory mandate to implement 
interoperability, will Lower 700 MHz licensees voluntarily ensure that 
all of the Lower 700 MHz spectrum used for mobile transmit is included 
in their mobile equipment?
    48. In what timeframe would a voluntary migration to interoperable 
devices reasonably take place? The Commission notes that while U.S. 
Cellular recently announced that it has impending plans to launch 4G 
LTE service, together with its partner King Street Wireless L.P., it 
nevertheless asserts that ``the Commission must still act quickly to 
address issues related to interoperability within the lower 700 MHz 
bands.'' Similarly, proponents of an interoperability requirement argue 
that action must be taken by the end of 2012. Aside from the widespread 
and exclusive adoption of Band Class 12 in devices, which would 
necessitate only a single duplexer solution, what other solutions exist 
that might address interoperability concerns without regulatory 
intervention and within a reasonable timeframe? What would be a 
reasonable timeframe for a path to interoperability, and how will this 
timing affect consumers and competition?
    49. The Commission thinks that an industry solution to the question 
of interoperability in the Lower 700 MHz band would be preferable 
because such a solution allows the market greater flexibility in 
responding to evolving consumer needs and dynamic and fast-paced 
technological developments. At the same time, the Commission recognizes 
that if the industry fails to move timely toward interoperability once 
interference concerns are adequately addressed (by regulatory action or 
otherwise), additional regulatory steps might be appropriate to further 
the public interest. The Commission staff will remain vigilant in 
monitoring the state of interoperability in the Lower 700 MHz band to 
ensure that the industry is making sufficient progress. What metrics 
and quantifiable data can the Commission use to measure whether the 
industry is making adequate progress towards achieving interoperability 
in the Lower 700 MHz band? In the event that such steps are warranted, 
the Commission seeks

[[Page 19584]]

comment on whether it would be necessary to mandate interoperability in 
the Lower 700 MHz band or whether there are other, flexible regulatory 
measures that the Commission should consider.
    50. In the event that interference concerns are reasonably 
addressed and the Commission is left with no other option to maximize 
innovation and investment in the Lower 700 MHz band besides mandating 
mobile device interoperability, one approach would be to require Lower 
700 MHz A, B, or C Block licensees, with respect to their networks 
operating in this spectrum, to use only mobile user equipment that has 
the capability to operate across all of these blocks. For example, 
those licensees deploying LTE in the Lower 700 MHz band would no longer 
be allowed to offer mobile units operating on Band Class 17, which 
provides for operation on only the Lower 700 MHz B and C Blocks. Those 
licensees deploying LTE in the Lower 700 MHz band would substitute Band 
Class 17 with Band Class 12. The Commission notes that this approach 
focuses on mobile user device interoperability and would not require 
modifications to Lower 700 MHz B and C Block licensees' base stations 
beyond those necessary to support Band Class 12 devices operating on 
these licensees' authorized Lower 700 MHz frequencies only. In other 
words, the Commission is not contemplating requiring licensees to 
implement base station operations on frequencies they do not have the 
potential to use, in order to spur production of base station elements 
that can be used only by licensees operating on other frequencies. The 
Commission seeks comment on this approach and how, if adopted, it would 
promote key public interest objectives, including competition and 
consumer choice among mobile broadband service providers, the 
widespread deployment of 4G networks, particularly in rural and 
unserved areas, the availability of additional innovative 4G devices, 
and increased roaming opportunities. In order to facilitate a smooth 
transition to interoperable mobile equipment use in the Lower 700 MHz 
band, the Commission would propose a reasonable transition period of no 
longer than two years after the effective date of an interoperability 
requirement, thereby minimizing the possibility of stranded investments 
in existing equipment. Furthermore, the Commission would propose to 
grandfather the use of devices already in use by consumers as of the 
transition deadline, so that consumers using existing Band Class 17 
equipment would not be adversely affected. The Commission seeks comment 
on this approach--as well as on any alternative approaches, including 
associated costs and benefits--that might equally satisfy the 
Commission's public interest objectives in promoting the widespread 
deployment of broadband service and increased competition and consumer 
choice in the mobile broadband marketplace.
    51. The Commission notes that, in considering whether to adopt 
rules to promote the development of interoperable equipment in the 
Lower 700 MHz band, the Commission will consider a number of factors, 
including the costs or burdens that any such new obligation would 
impose on licensees or others, and whether the costs would be offset by 
benefits to consumers, including those that would result from 
innovation in the marketplace, increased investments in networks, or 
additional competition. The Commission therefore requests comment on 
the costs and the benefits of adopting rules that would promote 
interoperability. The Commission also seeks comment on the costs and 
benefits of an industry-based solution to interoperability in the Lower 
700 MHz band. Are there cost savings to consider, or conversely, are 
there costs that Lower 700 MHz licensees would incur if the industry 
resolved the interoperability issue without a regulatory mandate?
    52. Commenters should quantify the costs of implementing any 
proposed solutions to the interference issues discussed above. The 
Commission seeks comment on costs that Lower 700 MHz B and C licensees 
are likely to incur in order to comply with a device interoperability 
requirement, including quantification of the costs to develop and 
obtain new compatible chipsets or front ends; design and manufacture 
new mobile devices; and develop any hardware or software changes 
necessary to implement an interoperability requirement. How much will 
the costs and prices of devices change as a result of an 
interoperability requirement? The Commission seeks comment on the 
revenue implications an interoperability requirement would have for 
providers and device manufacturers. The Commission also seeks comment 
on quantifiable ways in which licensees may benefit from a sunset of 
devices capable of operating only on a subset of paired Lower 700 MHz 
frequencies. For example, will Lower 700 MHz licensees achieve 
economies of scale in devices? The Commission seeks quantification of 
these economies of scale. What cost savings might result from an 
interoperability rule? The Commission also seeks comment on the 
potential costs associated with interoperability if interference cannot 
be mitigated in some areas. In these areas, will the public interest 
benefits from interoperability outweigh the costs?
    53. The Commission seeks data on consumer benefits that may result 
from interoperability, including greater affordability and availability 
of 4G equipment, increasing consumer choice in equipment, promoting the 
widespread deployment of broadband services, providing greater options 
in selecting a service provider, and facilitating greater roaming 
opportunities. How would a rule requiring interoperability affect 
innovation and investment, both in the near term and in the longer 
term? Would such a requirement foster additional competition, and how 
would any increase in competition be measured?
    54. What are the particular benefits to consumers or others that 
would result from a device interoperability requirement that includes a 
reasonable transition period (e.g., two years) and grandfathers the use 
of existing, non-interoperable devices after the transition deadline? 
The Commission seeks comment on the costs that licensees may incur in 
continuing to offer service for non-interoperable devices. How long 
will such devices need to be supported? Are there any classes of 
customers that will require longer-term support than others? Further, 
the Commission seeks comment on the extent to which the proposed 
transition period minimizes or alleviates any adverse economic impact 
to licensees and device manufacturers. Is there an optimal transition 
period that would reduce costs to the extent practicable while 
maximizing benefits?
    55. In providing responses to these questions, the Commission asks 
commenters to take into account only those costs and benefits that 
directly result from the implementation of particular rules that could 
be adopted. Commenters should identify the various costs and benefits 
associated with a particular requirement. Further, to the extent 
possible, commenters should provide specific data and information, such 
as actual or estimated dollar figures for each specific cost or benefit 
addressed, including a description of how the data or information was 
calculated or obtained, and any supporting documentation or other 
evidentiary support.
    56. Legal authority. Finally, the Commission seeks comment on its 
authority to mandate a device interoperability requirement should

[[Page 19585]]

interference concerns be reasonably addressed and there be no industry 
solution in place. The record is divided on this issue. On the one 
hand, Petitioners argue that the Commission should find the current 
contractual arrangements between wireless providers and equipment 
providers unlawful under Section 201(b), which prohibits unjust or 
unreasonable practices in connection with communications services, and 
Section 202(a), which prohibits unjust or unreasonable discrimination. 
Petitioners also claim that a device interoperability requirement would 
fall within the purview of Section 1 of the Communications Act, which 
directs the Commission to establish policies that promote the provision 
of communications service to all people of the United States, without 
discrimination. Petitioners argue that, at a minimum, ``Section 1 can 
be combined by the Commission with other `express delegations of 
authority' to enable the Commission to exercise ancillary jurisdiction 
over issues that are reasonably related to the policies stated in 
Section 1.'' Commenters also reference additional sections of the 
Communications Act as support for Commission authority, including: 
Section 4(i), which specifies that the Commission ``may * * * make such 
rules and regulations * * * as may be necessary in the execution of its 
functions;'' Section 254(b)(3), which sets forth universal service 
principles; Section 303(g), to ``encourage the larger and more 
effective use of radio in the public interest;'' Section 303(r), which 
directs the Commission to prescribe such restrictions and conditions as 
necessary to carry out the provisions of the Act; Section 307(b), which 
directs the Commission to consider a ``fair, efficient and equitable'' 
distribution of radio services in applications for licenses, 
modifications, and renewals; and Section 706, which encourages the 
reasonable and timely deployment of advanced telecommunications 
capability to all Americans through ``measures that promote competition 
in the local telecommunications market, or other regulating methods 
that remove barriers to infrastructure investment.''
    57. On the other hand, other commenters argue that Petitioners fail 
to cite a valid legal basis to adopt such an interoperability 
requirement. Both Verizon and AT&T argue that Sections 201 and 202 
prohibit providers from unreasonable practices or discrimination among 
consumers. Verizon and AT&T also argue that the other provisions 
referenced by supporters of an interoperability requirement do not 
grant the Commission the authority to regulate equipment, or else are 
not substantive grants of authority for Commission action.
    58. The Commission observes that, under Title III of the 
Communications Act, the Commission has broad and extensive authority to 
manage the use of spectrum.\11\ This authority includes the power and 
obligation to condition the Commission's licensing actions on 
compliance with requirements that the Commission deems consistent with 
the public interest, convenience, and necessity,\12\ including 
operational requirements, if the condition or obligations will further 
the goals of the Communications Act without contradicting any basic 
parameters of the agency's authority.\13\ It also includes the powers 
to ``prescribe the nature of the service to be rendered by each class 
of licensed stations and each station within any class,'' \14\ to 
``generally encourage the larger and more effective use of radio in the 
public interest,'' \15\ and to modify licenses if, in the judgment of 
the Commission, such action will promote the public interest, 
convenience, and necessity.\16\ Furthermore, the Communications Act 
provides the Commission with broad powers under such provisions as 
Section 302(a) to promulgate regulations designed to address radio 
frequency (RF) interference, including the regulation of devices that 
are capable of emitting RF energy,\17\ and Section 303(e) and (f), 
which empower the Commission to regulate licensees and the equipment 
and apparatus they use.\18\
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    \11\ See, e.g., 47 U.S.C. 301 (stating that ``[i]t is the 
purpose of this Act, among other things, to maintain the control of 
the United States over all the channels of radio transmission; and 
to provide for the use of such channels, but not the ownership 
thereof, by persons for limited periods of time, under licenses 
granted by Federal authority, and no such license shall be construed 
to create any right, beyond the terms, conditions, and periods of 
the license'').
    \12\ See, e.g., 47 U.S.C. 301 (authorizing the Commission to 
issue licenses for use of radio spectrum); 47 U.S.C. 304 (stating 
that ``[n]o station license shall be granted by the Commission until 
the applicant therefore shall have waived any claim to the use of 
any particular frequency or of the electromagnetic spectrum as 
against the regulatory power of the United States because of the 
previous use of the same, whether by license or otherwise''); 47 
U.S.C. 307(a) (stating that Commission shall grant licenses ``if 
public convenience, interest, or necessity will be served thereby, 
subject to the limitations of [the Communications Act]''); 47 U.S.C. 
309(j)(3) (requiring the Commission to design and conduct 
competitive bidding systems for issuance of licenses to promote the 
purposes of section 1 of the Act and specified statutory objectives, 
including ``the development and rapid deployment of new 
technologies, products, and services for the benefit of the public, 
including those residing in rural areas'').
    \13\ See, e.g., 47 U.S.C. 303(r) (stating that if ``the public 
convenience, interest, or necessity requires [, the Commission] 
shall * * * prescribe such restrictions and conditions, not 
inconsistent with law, as may be necessary to carry out the 
provisions of this Act''); Schurz Communications, Inc. v. FCC, 982 
F.2d 1043 (7th Cir. 1992) (Communications Act invests Commission 
with ``enormous discretion'' in promulgating licensee obligations 
that the agency determines will serve the public interest).
    \14\ 47 U.S.C. 303(b).
    \15\ 47 U.S.C. 303(g). See also 47 U.S.C. 151 (creating the 
Commission for the purpose of regulating communications in order to 
make available to all people of the United States a rapid, 
efficient, nationwide and world-wide communication service with 
adequate facilities at reasonable prices).
    \16\ See 47 U.S.C. 316(a)(1) (stating that ``[a]ny station 
license or construction permit may be modified by the Commission 
either for a limited time or for the duration of the term thereof, 
if in the judgment of the Commission such action will promote the 
public interest, convenience, and necessity''); see also Committee 
for Effective Cellular Rules v. FCC, 53 F.3d 1309 (DC Cir. 1995).
    \17\ See, e.g., 47 U.S.C. 302a(a) (providing Commission with 
authority, consistent with the public interest, convenience and 
necessity, to make reasonable regulations ``governing the 
interference potential of devices which in their operation are 
capable of emitting radio frequency energy by radiation, conduction, 
or other means in sufficient degree to cause harmful interference to 
radio communications'').
    \18\ See, e.g., 47 U.S.C. 303(e) (providing Commission with 
authority to ``[r]egulate the kind of apparatus to be used with 
respect to its external effects and the purity and sharpness of the 
emissions from each station and from the apparatus therein'') and 47 
U.S.C. 303(f) (providing Commission with authority to ``[m]ake such 
regulations not inconsistent with law as it may deem necessary to 
prevent interference between stations and to carry out the 
provisions of this Act'').
---------------------------------------------------------------------------

    59. The Commission seeks comment on its statutory authority to 
adopt a device interoperability requirement. The Commission notes that 
it has previously required interoperability across licensed spectrum as 
a means to ``insure full coverage in all markets and compatibility on a 
nationwide basis.'' \19\ In addition, by promoting the availability of 
subscriber handsets and network buildout of Lower 700 MHz A Block 
licenses an interoperability requirement of the type discussed here can 
facilitate the provision of roaming services, which is subject to 
Commission rules.\20\ The Commission

[[Page 19586]]

seeks comment on its analysis of these Title III statutory provisions 
as a basis for its authority to take the actions proposed herein.
---------------------------------------------------------------------------

    \19\ Inquiry Into the Use of the Bands 825-845 MHz and 870-890 
MHz for Cellular Communications Systems; and Amendment of Parts 2 
and 22 of the Commission's Rules Relative to Cellular Communications 
Systems, CC Docket No. 79-318, Report and Order, 86 FCC 2d 469, 482 
(1981).
    \20\ See 47 U.S.C. 303(r). The Commission has imposed voice 
roaming requirements for interconnected CMRS providers under, inter 
alia, its Title II authority, and requirements to promote the 
availability of data roaming arrangements under, inter alia, its 
Title III authority. See, e.g., Reexamination of Roaming Obligations 
of Commercial Mobile Radio Service Providers and Other Providers of 
Mobile Data Services, WT Docket No. 05-265, Order on Reconsideration 
and Second Further Notice of Proposed Rulemaking, 25 FCC Rcd 4181, 
4184 para. 5 (2010) (based on Commission's Title II authority); 
Reexamination of Roaming Obligations of Commercial Mobile Radio 
Service Providers and Other Providers of Mobile Data Services, WT 
Docket No. 05-265, Second Report and Order, 26 FCC Rcd 5411, 5439-46 
paras. 61-68 (2011) (based on Commission's Title III authority).
---------------------------------------------------------------------------

IV. Conclusion

    60. In this Notice of Proposed Rulemaking, the Commission is 
focused primarily on resolving a long-running dispute over the threat 
of interference to Lower 700 MHz B and C Block licensees either by 
agreement on the part of these licensees to be interoperable with the 
Lower 700 MHz A Block licensees, or by a regulatory mandate for such 
interoperability. Should the Commission find that interference concerns 
are truly minimal or can be reasonably mitigated, then the Commission, 
along with industry, must determine the next best steps to ensure 
interoperability. The Commission's aim is to explore various options 
through this proceeding that help achieve the ultimate goal of 
interoperability.

V. Procedural Matters

Initial Regulatory Flexibility Analysis

    61. As required by the Regulatory Flexibility Act of 1980, as 
amended (the RFA),\21\ the Commission has prepared this Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact of the policies and rules proposed in the Notice of 
Proposed Rulemaking (NPRM) on a substantial number of small entities. 
Written public comments are requested on the IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadline 
for comments on the NPRM provided in the item. The Commission will send 
a copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA).\22\ In addition, 
the NPRM and IRFA (or summaries thereof) will be published in the 
Federal Register.\23\
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    \21\ The RFA, see 5 U.S.C. 601-612, has been amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(``SBREFA''), Public Law 104-121, Title II, 110 Stat. 857 (1996).
    \22\ See 5 U.S.C. 603(a).
    \23\ Id.
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A. Need for, and Objectives of, the Proposed Rules

    62. Certain Lower 700 MHz A Block licensees have asserted that the 
development of two distinct band classes within the Lower 700 MHz band 
has hampered their ability to have meaningful access to a wide range of 
advanced devices. The Commission initiates this rulemaking proceeding 
to promote interoperability in the Lower 700 MHz band. The Commission 
states that the Communications Act directs it to, among other things, 
promote the widest possible deployment of communications services, 
ensure the most efficient use of spectrum, and protect and promote 
vibrant competition in the marketplace. In this NPRM, the Commission's 
objective is to evaluate whether the customers of Lower 700 MHz B and C 
Block licensees would experience harmful interference, and if so to 
what degree, if the Lower 700 MHz were interoperable. Assuming that 
interoperability would cause limited or no harmful interference to 
Lower 700 MHz B and C Block licensees or that such interference can 
reasonably be mitigated through industry efforts and/or through 
modifications to the Commission's technical rules or other regulatory 
measures, the Commission asks whether there is likely to be a timely 
industry solution to interoperability in the Lower 700 MHz band, or 
whether additional regulatory measures will be necessary to promote 
interoperability across the Lower 700 MHz band, such as requiring Lower 
700 MHz A, B, or C Block licensees, with respect to their networks 
operating in this spectrum, to use only mobile user equipment that has 
the capability to operate across all of these paired commercial 700 MHz 
blocks.
    63. The Commission considers whether a requirement that mobile user 
equipment be capable of operating on all paired commercial Lower 700 
MHz spectrum could foster deployment of facilities-based mobile 
broadband networks, particularly in rural and unserved areas. The 
Commission also considers whether such a requirement would increase the 
likelihood that the Lower A Block licensees can obtain the necessary 
financing to deploy networks and devices, particularly in smaller and 
regional areas. The Commission considers the extent to which Lower A 
Block licensees have successfully negotiated with equipment vendors, 
whether an interoperability requirement will enable the A Block 
licensees to benefit from economies of scale with respect to mobile 
devices and whether manufacturers require a provider to purchase a 
minimum number of devices. The Commission considers whether 
interoperability would promote reasonable roaming arrangements among 
700 MHz providers and would increase the number of providers that are 
technologically compatible for roaming partnership.
    64. With respect to the technical issues, the Commission states 
that it must ultimately resolve the central question as to whether a 
single band class would cause widespread harmful interference to Lower 
700 MHz B and C Block licensees, who would otherwise use Band Class 17 
devices rather than Band Class 12. The Commission's goal is to 
determine the extent of two primary interference concerns for providers 
operating in the Lower 700 MHz B and C Blocks if these providers 
substitute Band Class 12 for Band Class 17 in newly-offered devices: 
(1) Reverse intermodulation interference from adjacent DTV Channel 51 
operations; and (2) blocking interference from neighboring high-powered 
operations in the Lower 700 MHz E Block. The Commission considers and 
seeks comment on the extent of the interference risk from adjacent 
Channel 51 and Lower Block E transmissions for Band Class 12 devices 
operating in the Lower B and C Blocks, the effectiveness of existing 
mitigation measures, and the extent of any innovative technical 
measures in the near future, or that can be developed. The Commission 
also considers how licensees can continue to support its existing 
grandfathered Band Class 17 devices and Band Class 12 devices.
    65. Through the NPRM, the Commission's objective is to develop a 
record to determine whether there are measures it should take to 
address Lower 700 MHz interference concerns that may be preventing a 
voluntary adoption of Band Class 12 by Lower B and C Block licensees. 
For instance, the Commission seeks comment on whether to modify its 
technical rules for Lower 700 MHz D and E Block operations. In 
addition, the Commission considers steps to take to reduce the threat 
of potential interference to balance the needs and rights of Channel 51 
incumbents with Lower 700 MHz licensees.
    66. The Commission thinks that an industry solution to the question 
of interoperability in the Lower 700 MHz band would be preferable to a 
regulatory approach because such a solution allows the market greater 
flexibility in responding to evolving consumer needs and dynamic and 
fast-paced technological developments. The Commission considers what 
would be a reasonable timeframe for a voluntary migration to 
interoperability and how such timing may affect consumers and 
competition.

[[Page 19587]]

    67. However, the Commission recognizes that if the industry fails 
to move timely toward interoperability once interference concerns are 
adequately addressed, by regulation or otherwise, additional regulatory 
steps might be appropriate to further the public interest. If 
interference concerns are reasonable addressed and the Commission is 
left with no other option to maximize innovation and investment in the 
Lower 700 MHz band besides mandating mobile device interoperability, 
one approach to achieve the Commission's goals would be to require 
Lower 700 MHz A, B, or C Block licensees, with respect to their 
networks operating in this spectrum, to use only mobile user equipment 
that has the capability to operate across all of these blocks. For 
example, the Commission considers whether to prohibit those licensees 
deploying LTE in the Lower 700 MHz band from offering mobile units that 
operate on Band Class 17, which provides for operation on only the 
Lower 700 MHz B and C Blocks. In order to facilitate the goal of a 
smooth transition to interoperable mobile equipment use in the Lower 
700 MHz band, the Commission would propose a transition period of no 
longer than two years after the effective date of an interoperability 
requirement. The Commission also would propose to grandfather the use 
of devices already in use by consumers as of the transition deadline, 
so that consumers using existing Band Class 17 equipment would not be 
adversely affected.

B. Legal Basis

    68. The authority for the actions taken in this Notice is contained 
in Sections 1, 2, 4(i), 4(j), 301, 302(a), 303(b), 303(e), 303(f), 
303(g), 303(r), 304, 307(a), 309(j)(3), and 316(a)(1) of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 
154(j), 301, 302a(a), 303(b), 303(e), 303(f), 303(g), 303(r), 304, 
307(a), 309(j)(3), and 316(a)(1), and Sections 1.401 et seq. of the 
Commission's rules. 47 CFR 1.401 et seq.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    69. 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.'' \24\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\25\ A ``small business concern'' is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the Small Business Administration (SBA).\26\
---------------------------------------------------------------------------

    \24\ 5 U.S.C. 601(6).
    \25\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \26\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    70. In the following paragraphs, the Commission further describes 
and estimates the number of small entity licensees that may be affected 
by an interoperability rule. Implementing a mobile user equipment 
interoperability requirement in the Lower 700 MHz band affects 700 MHz 
spectrum licensees.
    71. This IRFA analyzes the number of small entities affected on a 
service-by-service basis. When identifying small entities that could be 
affected by the Commission's new rules, this IRFA provides information 
that describes auction results, including the number of small entities 
that were winning bidders. However, the number of winning bidders that 
qualify as small businesses at the close of an auction does not 
necessarily reflect the total number of small entities currently in a 
particular service. The Commission does not generally require that 
licensees later provide business size information, except in the 
context of an assignment or a transfer of control application that 
involves unjust enrichment issues.
    72. Wireless Telecommunications Carrier (except satellite). The 
appropriate size standard under SBA Rules is for the category Wireless 
Telecommunications Carriers. The size standard for that category is 
that a business is small if it has 1,500 or fewer employees.\27\ Census 
Bureau data for 2007, which now supersede data from the 2002 Census, 
show that there were 3,188 firms in this category that operated for the 
entire year. Of this total, 3,144 had employment of 999 or fewer, and 
44 firms had employment of 1,000 employees or more. Thus, under this 
category and the associated small business size standard, the 
Commission estimates that the majority of wireless telecommunications 
carriers (except satellite) are small entities that may be affected by 
its proposed action.\28\
---------------------------------------------------------------------------

    \27\ 13 CFR 121.201, NAICS code 517110.
    \28\ See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
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    73. Upper 700 MHz Band Licensees. In the 700 MHz Second Report and 
Order, the Commission revised its rules regarding Upper 700 MHz 
licenses.\29\ On January 24, 2008, the Commission commenced Auction 73 
in which several licenses in the Upper 700 MHz band were available for 
licensing: 12 Regional Economic Area Grouping licenses in the C Block, 
and one nationwide license in the D Block.\30\ The auction concluded on 
March 18, 2008, with 3 winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) and winning five 
licenses.
---------------------------------------------------------------------------

    \29\ Service Rules for the 698-746, 747-762 and 777-792 MHz 
Band, WT Docket No. 06-150, Revision of the Commission's Rules to 
Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC 
Docket No. 94-102, Sec.  68.4(a) of the Commission's Rules Governing 
Hearing Aid-Compatible Telephone, WT Docket No. 01-309, Biennial 
Regulatory Review--Amendment of Parts 1, 22, 24, 27, and 90 to 
Streamline and Harmonize Various Rules Affecting Wireless Radio 
Services, WT Docket No. 03-264, Former Nextel Communications, Inc. 
Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the 
Commission's Rules, WT Docket No. 06-169, Implementing a Nationwide, 
Broadband Interoperable Public Safety Network in the 700 MHz Band, 
PS Docket No. 06-229, Development of Operational, Technical and 
Spectrum Requirements for Meeting Federal, State, and Local Public 
Safety Communications Requirements Through the Year 2010, WT Docket 
No. 96-86, Declaratory Ruling on Reporting Requirement Under 
Commission's Part 1 Anti-Collusion Rule, WT Docket No. 07-166, 
Second Report and Order, 22 FCC Rcd 15289 (2007) (700 MHz Second 
Report and Order).
    \30\ See Auction of 700 MHz Band Licenses Closes, Public Notice, 
23 FCC Rcd 4572 (WTB 2008).
---------------------------------------------------------------------------

    74. Lower 700 MHz Band Licensees. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits.\31\ The Commission defined a ``small business'' as an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues not exceeding $40 million for the preceding 
three years.\32\ A ``very small business'' is defined as an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues that are not more than $15 million for the 
preceding three years.\33\

[[Page 19588]]

Additionally, the lower 700 MHz Service had a third category of small 
business status for Metropolitan/Rural Service Area (MSA/RSA) 
licenses--``entrepreneur''--which is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years.\34\ The SBA approved these small size standards.\35\ An 
auction of 740 licenses (one license in each of the 734 MSAs/RSAs and 
one license in each of the six Economic Area Groupings (EAGs)) was 
conducted in 2002. Of the 740 licenses available for auction, 484 
licenses were won by 102 winning bidders. Seventy-two of the winning 
bidders claimed small business, very small business or entrepreneur 
status and won licenses.\36\ A second auction commenced on May 28, 
2003, closed on June 13, 2003, and included 256 licenses.\37\ Seventeen 
winning bidders claimed small or very small business status, and nine 
winning bidders claimed entrepreneur status.\38\ In 2005, the 
Commission completed an auction of 5 licenses in the Lower 700 MHz 
band. All three winning bidders claimed small business status.
---------------------------------------------------------------------------

    \31\ See Reallocation and Service Rules for the 698-746 MHz 
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC 
Rcd 1022 (2002).
    \32\ See id., 17 FCC Rcd at 1087-88 para. 172.
    \33\ See id.
    \34\ See id., 17 FCC Rcd at 1088 para. 173.
    \35\ See Letter from Aida Alvarez, Administrator, SBA, to Thomas 
Sugrue, Chief, Wireless Telecommunications Bureau, FCC (Aug. 10, 
1999).
    \36\ See Lower 700 MHz Band Auction Closes, Public Notice, 17 
FCC Rcd 17272 (2002).
    \37\ See Lower 700 MHz Band Auction Closes, Public Notice, 18 
FCC Rcd 11873 (2003).
    \38\ See id.
---------------------------------------------------------------------------

    75. In 2007, the Commission reexamined its rules governing the 700 
MHz band in the 700 MHz Second Report and Order.\39\ An auction of A, B 
and E Block 700 MHz licenses was held in 2008.\40\ Twenty winning 
bidders claimed small business status (those with attributable average 
annual gross revenues that exceed $15 million and do not exceed $40 
million for the preceding three years). Thirty three winning bidders 
claimed very small business status (those with attributable average 
annual gross revenues that do not exceed $15 million for the preceding 
three years).
---------------------------------------------------------------------------

    \39\ 700 MHz Second Report and Order, 22 FCC Rcd at 15359 n.434.
    \40\ See Auction of 700 MHz Band Licenses Closes, Public Notice, 
23 FCC Rcd 4572 (2008).
---------------------------------------------------------------------------

    76. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. The Census Bureau defines this category as 
follows: ``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.'' \41\ The SBA has developed a small business 
size standard for Radio and Television Broadcasting and Wireless 
Communications Equipment Manufacturing, which is: all such firms having 
750 or fewer employees. According to Census Bureau data for 2007, there 
were a total of 939 establishments in this category that operated for 
part or all of the entire year. According to Census Bureau data for 
2007, there were a total of 919 firms in this category that operated 
for the entire year. Of this total, 771 had less than 100 employees and 
148 had more than 100 employees.\42\ Thus, under that size standard, 
the majority of firms can be considered small.
---------------------------------------------------------------------------

    \41\ The NAICS Code for this service is 334220. See 13 CFR 
121.201. See also http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=300&-ds_name=EC0731SG2&-_lang=en.
    \42\ See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=4500&-ds_name=EC0731SG3&-_lang=en.
---------------------------------------------------------------------------

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    77. This NPRM proposes no new reporting or recording keeping 
requirements.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered

    78. The RFA requires an agency to describe any significant 
alternatives that it has considered in developing its approach, which 
may include the following four alternatives (among others): (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for 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 small 
entities.\43\
---------------------------------------------------------------------------

    \43\ See 5 U.S.C. 603(c).
---------------------------------------------------------------------------

    79. As an alternative to a regulatory approach, the Commission 
considers the impact of a timely voluntary industry solution to 
interoperability in the Lower 700 MHz band. The Commission considers 
how this alternative approach may affect consumers and competition. The 
Commission seeks comment on the economic impact of this approach on 
licensees, including small entities. In addition, the Commission seeks 
comment on other alternative approaches to interoperability in the 
Lower 700 MHz band that would reduce or eliminate economic adversity on 
licensees, including small entities.
    80. Whether the Commission implements an interoperability 
requirement, or an industry solution, it seeks comment on the relevant 
costs and benefits on small entities. The Commission considers the 
potential benefits to consumers, innovation, and investment. In 
addition, it considers the revenue implications, cost savings, or 
adverse economic impact of an interoperability rule or an industry-
based solution for Lower 700 MHz providers and device manufacturers.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    81. None.

VI. Other Procedural Matters

A. Ex Parte Rules

    82. The proceeding initiated by this Notice of Proposed Rulemaking 
shall be treated as a ``permit-but-disclose'' 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 rule 1.1206(b). 
In proceedings governed by rule 1.49(f) or for which the Commission has 
made available a

[[Page 19589]]

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.

B. Filing Requirements

    83. Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's 
rules, 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: (1) The Commission's Electronic Comment Filing 
System (``ECFS''), (2) the Federal Government's eRulemaking Portal, or 
(3) by filing paper copies.
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov.
    <bullet> 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 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.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. All hand deliveries 
must be held together with rubber bands or fasteners. Any envelopes 
must be disposed of before entering the building. The filing hours are 
8 a.m. to 7 p.m.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington DC 20554.
    84. Comments, reply comments, and ex parte submissions will be 
available for public inspection during regular business hours in the 
FCC Reference Center, Federal Communications Commission, 445 12th 
Street SW., CY-A257, Washington, DC, 20554. These documents will also 
be available via ECFS. Documents will be available electronically in 
ASCII, Microsoft Word, and/or Adobe Acrobat.
    85. To request information in accessible formats (Braille, large 
print, electronic files, audio format), send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="b5d3d6d6808581f5d3d6d69bd2dac3">[email protected]</a> 
or call the FCC's Consumer and Governmental Affairs Bureau at (202) 
418-0530 (voice), (202) 418-0432 (TTY). This document can also be 
downloaded in Word and Portable Document Format (PDF) at: http://www.fcc.gov.
    86. For additional information on this proceeding, contact Brenda 
Boykin of the Spectrum and Competition Policy Division, Wireless 
Telecommunications Bureau, at (202) 418-2062.

C. Initial Regulatory Flexibility Act Analysis

    87. As required by the Regulatory Flexibility Act of 1980 
(``RFA''), the Commission has prepared an Initial Regulatory 
Flexibility Analysis (IRFA) relating to this NPRM. The IRFA is attached 
to this NPRM. Written public comments are requested on the IRFA. These 
comments must be filed in accordance with the same filing deadlines as 
comments filed in response to this Notice of Proposed Rulemaking as set 
forth on the first page of this document and have a separate and 
distinct heading designating them as responses to the IRFA.

D. Paperwork Reduction Act

    88. This document does not contain proposed information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified information collection burden for small business concerns 
with fewer than 25 employees, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

VII. Ordering Clauses

    89. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 
4(j), 301, 302(a), 303(b), 303(e), 303(f), 303(g), 303(r), 304, 307(a), 
309(j)(3), and 316(a)(1) of the Communications Act of 1934, as amended, 
47 U.S.C. 151, 152, 154(i), 154(j), 301, 302(a), 303(b), 303(e), 
303(f), 303(g), 303(r), 304, 307(a), 309(j)(3), and 316(a)(1), and 
Sec.  1.401 et seq. of the Commission's rules, 47 CFR 1.401 et seq., 
that this Notice in WT Docket No. 12-69 IS adopted.
    90. It is further ordered that the Petition for Rulemaking of the 
700 MHz Block A Good Faith Purchaser Alliance is granted to the extent 
described herein.
    91. It is further ordered that the proceeding in RM-11592 is hereby 
terminated.
    92. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.
[FR Doc. 2012-7760 Filed 3-30-12; 8:45 am]
BILLING CODE 6712-01-P


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