[Federal Register Volume 63, Number 13 (Wednesday, January 21, 1998)]
[Proposed Rules]
[Pages 3075-3077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1393]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 101

[ET Docket No. 95-183; PP Docket No. 93-253; FCC 97-391]


Use of the 38.6-40.0 GHz Band for Fixed Microwave Service

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission adopts a Second Notice of Proposed Rule Making 
regarding the use of the 38.6-40.0 GHz Band for fixed microwave 
services. Specifically, the Commission seeks comment on the appropriate 
unjust enrichment requirements for approving partitioning and 
disaggregation arrangements involving a complete or partial transfer of 
a license owned by a qualified small business to a non-small business 
or a small business eligible for a smaller bidding credit.

DATES: Comments are due on or before February 20, 1998, and reply 
comments are due on or before March 9, 1998.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., Room 
222, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Susan Magnotti, Public Safety and 
Private Wireless Division, (202) 418-0871, or Christina Eads 
Clearwater, Auctions Division, (202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Second Notice of Proposed Rule Making in the Report and Order and 
Second Notice of Proposed Rule Making, ET Docket No. 95-183, PP Docket 
No. 93-253, FCC 97-391, adopted October 24, 1997, and released November 
3, 1997. The complete text of this Report and Order and Second Notice 
of Proposed Rule Making is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room 239), 1919 M 
Street, NW., Washington, DC, and also may be purchased from the 
Commission's copy contractor, International Transcription Service, 
(202) 857-3800, 1231 20th Street, N.W., Washington, DC 20036.

Synopsis of the Second Notice of Proposed Rule Making in the Report and 
Order and Second Notice of Proposed Rule Making

    1. The Commission has concluded in the Report and Order that any 39 
GHz licensee will be permitted to partition or disaggregate portions of 
its authorization. In the Second Notice of Proposed Rule Making, the 
Commission seeks comment regarding what restrictions to impose on 
partitioning and/or disaggregation by licensees that have received 
bidding credits when the buyer is a small business subject to less 
favorable bidding credits or a non-small business not eligible for 
bidding credits.
    2. The Commission seeks comment on the type of unjust enrichment 
requirements that should be placed as a condition for approval of 
partitioning and disaggregation arrangements, e.g., an application for 
a partial transfer of a license owned by a qualified small business to 
a non-small business. The Commission tentatively concludes that these 
unjust enrichment provisions would include payment of any bidding 
credit that it may adopt for small business and would be applied on a 
proportional basis. The Commission seeks comment on how such unjust 
enrichment amounts should be calculated, especially in light of the 
difficulty of devising a methodology or

[[Page 3076]]

formula that will differentiate the relative market value of the 
opportunities to provide service to various partitioned areas within a 
geographic or market area. The Commission seeks comment on whether it 
should consider the price paid by the partitionee in determining the 
percentage of the outstanding principal balance to be repaid.
    3. The Commission tentatively concludes that if it permits a small 
business licensee to disaggregate to another qualified small business 
that would not qualify for the same level of bidding credit as the 
disaggregating licensee, the disaggregating licensee will be required 
to repay a portion of the benefit it received. The Commission seeks 
comment on how that amount should be calculated. The Commission seeks 
comment on what provisions, if any, it should adopt to address the 
situation of a small business licensee's disaggregation followed by 
default in payment of a winning bid at auction.

Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis

    4. As required by section 603 of the Regulatory Flexibility Act, 5 
U.S.C. 603, the Commission has prepared an Initial Regulatory 
Flexibility Analysis (IRFA) of the expected impact on small entities of 
the proposals suggested in the Second Notice of Proposed Rule Making. 
Written public comments are requested on the IRFA. These comments must 
be filed in accordance with the same filing deadlines as comments on 
this Second Notice of Proposed Rule Making, but they must have a 
separate and distinct heading designating them as responses to the 
IRFA. The Secretary shall send a copy of this Second Notice of Proposed 
Rule Making, including the IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration in accordance with paragraph 603(a) 
of the Regulatory Flexibility Act. Public Law 96-354, 94 Stat. 1164, 5 
U.S.C. 601 et seq. (1981).
    5. Need for and Objectives of the Action. In the companion Report 
and Order, the Commission expanded the Commission's geographic 
partitioning provisions to all 39 GHz licensees and permitted spectrum 
disaggregation. The Commission seeks further comment on the use of 
partitioning and disaggregation by parties taking advantage of bidding 
credits under the Commission's competitive bidding licensing rules, and 
certain technical rules. The expansion of the partitioning and 
disaggregation rules in the Report and Order to include all 39 GHz 
licensees implements, in part, the requirements of section 257 of the 
Telecommunications Act of 1996, which requires that the Commission 
eliminate entry barriers into the telecommunications market for small 
businesses. In the Second Notice of Proposed Rule Making, the 
Commission tentatively concludes that unjust enrichment provisions 
should apply when a licensee has benefitted from the small business 
provisions (i.e., installment plans and bidding credits) in the auction 
rules and then partitions a portion of the license area to another 
entity that would not qualify for such benefits or would not qualify 
for the same level of benefits. The Commission seeks comment on how 
such unjust enrichment should be calculated under each scenario. The 
Commission further seeks comments on what the respective obligations of 
the participants in partitioning transfer should be.
    6. Legal Basis. The proposed action is authorized under sections 
4(i), 257, 303(r), and 309(j) of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 257, 303(r), and 309(j).
    7. Description and Number of Small Entities Involved. The unjust 
enrichment proposals with respect to partitioning and disaggregation 
will affect all small businesses that avail themselves of partitioning 
and/or disaggregation, including small businesses currently holding 39 
GHz licenses who choose to partition and/or disaggregate and small 
businesses who may acquire licenses through partitioning and/or 
disaggregation. The Commission is required to estimate in its Final 
Regulatory Flexibility Analysis the number of small entities to which a 
rule will apply, provide a description of such entities, and assess the 
impact of the rule on such entities.
    8. To assist the Commission in this analysis, commenters are 
requested to provide information regarding how many total entities, 
existing and potential, would be affected by the proposed rules in the 
Second Notice of Proposed Rule Making. In particular, the Commission 
seeks estimates of how many such entities will be considered small 
businesses. As explained in the Final Regulatory Flexibility Analysis 
in the Report and Order, the Commission is utilizing the SBA definition 
applicable to radiotelephone companies, i.e., an entity employing less 
than 1,500 persons. The Commission seeks comment on whether this 
definition is appropriate for 39 GHz licensees in this context. 
Additionally, the Commission requests each commenter to identify 
whether it is a ``small business'' under this definition. If a 
commenter is a subsidiary of another entity, this information should be 
provided for both the subsidiary and the parent corporation or entity.
    9. Reporting, Recordkeeping, and Other Compliance Requirements. The 
proposals in the Second Notice of Proposed Rule Making include the 
possibility of imposing additional reporting and/or recordkeeping 
requirements in connection with businesses obtaining licenses through 
the partitioning and disaggregation rules. The information requirements 
placed on businesses seeking to obtain licenses through partitioning or 
disaggregation will be used to determine if the licensee is a 
qualifying entity to obtain a partitioned license or disaggregated 
spectrum. Those reporting requirements are stated in the companion 
Final Regulatory Flexibility Act. Those reporting requirements also 
will likely be used to ensure that a licensee is not unjustly enriched 
by a partitioning or disaggregation arrangement.
    10. Federal Rules that Overlap, Duplicate, or Conflict with These 
Proposals. None.
    11. Significant Alternatives Minimizing the Impact on Small 
Entities Consistent with the Stated Objectives. In the Second Notice of 
Proposed Rule Making, the Commission tentatively concludes that unjust 
enrichment provisions should apply when a licensee has benefitted from 
the small business provisions in the auctions rules and partitions a 
portion of the license area to another entity that would not qualify 
for such benefits. The alternative to applying the unjust enrichment 
provisions would be to allow an entity who had benefitted from the 
special bidding provisions for small businesses to become unjustly 
enriched by partitioning a portion of their license area to parties 
that do not qualify for such benefits.
    12. Paperwork Reduction Act. This Second Notice of Proposed Rule 
Making contains either a proposed or modified information collection. 
As part of its continuing effort to reduce paperwork burdens, the 
Commission invites the general public and the Office of Management and 
Budget (OMB) to take this opportunity to comment on the information 
collections contained in this Second Notice of Proposed Rule Making, as 
required by the Paperwork Reduction Act of 1995, Pub. L. 104-13. Public 
and agency comments are due at the same time as other comments on this 
Second Notice of Proposed Rule Making; OMB comments are due March 23, 
1998. Comments should address: (a) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the

[[Page 3077]]

Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    13. Ex Parte Rules. This is a non-restricted notice and comment 
rulemaking proceeding. Ex parte presentations are permitted except 
during the Sunshine Agenda period, provided they are disclosed as 
provided in the Commission's rules. See generally 47 CFR 1.1201, 
1.1203, 1.1206(a).
    14. Comment Filing Procedures. Pursuant to applicable procedures 
set forth in Secs. 1.415 and 1.419 of the Commission's Rules, 47 CFR 
1.415 and 1.419, interested parties may file comments on or before 
February 20, 1998, and reply comments on or before March 9, 1998. To 
file formally in this proceeding, interested parties must file an 
original plus four copies of all comments, reply comments, and 
supporting comments. If commenters want each Commissioner to receive a 
personal copy of their comments, they must file an original plus nine 
copies. Comments and reply comments should be sent to: the Office of 
the Secretary, Federal Communications Commission, Washington, D.C. 
20554. Comments and reply comments will be available for public 
inspection during regular business hours in the FCC Reference Center 
(Room 239), 1919 M Street, N.W., Washington, D.C. 20554.
    15. Authority for issuance of this Report and Order and Second 
Notice of Proposed Rule Making, is contained in Secs. 4(i), 257, 
303(r), and 309(j) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 257, 303(r), and 309(j).

List of Subjects in 47 CFR 101

    Communications common carriers, Radio, Reporting and recordkeeping 
requirements.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-1393 Filed 1-20-98; 8:45 am]
BILLING CODE 6712-01-P