32580 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

1Licensees granted authorizations from among

applications filed on or before May 24, 1991, are

hereinafter referred to as Phase I licensees. On

August 28, 1995, the Commission released the 220

MHz Third Notice of New Rulemaking (Third

Notice) (60 FR 46564, September 7, 1995), which

proposed market area licensing and more flexible

technical rules for the next phase (Phase II) of

licensing of the 220 MHz band.

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 90

[PR Docket No. 89–552, GN Docket No. 93–

252, and PP Docket No. 92–253; FCC 98–

93]

Reconsideration of the Rules and

Policies for the 220–222 MHz Radio

Service

AGENCY: Federal Communications

Commission.

ACTION: Final rule; petitions for

reconsideration.

SUMMARY: The Federal Communications

Commission has adopted a

Memorandum Opinion and Order on

Reconsideration (MO&O) concerning

rules and policies for the 220–222 MHz

radio service (220 service). The MO&O

responds to petitions for reconsideration

or clarification of the 220 MHz Second

Report and Order (Second R&O) and the

220 MHz Third Report and Order (Third

R&O) in this proceeding. This MO&O

reaffirms the decision in the Second

R&O with one clarification. The MO&O

also generally reaffirms the rules

adopted in the Third R&O, but adopts

some changes and clarifications. The

intended effect of this action is to clarify

and resolve issues pertaining to the 220

service prior to the Commission’s

auction of remaining spectrum within

that service.

EFFECTIVE DATE: August 11, 1998.

Written comments by the public on

the new information collections are due

on or before July 13, 1998.

ADDRESSES: A copy of any comments on

the information collections contained in

the MO&O should be submitted Judy

Boley, Federal Communications

Commission, Room 234, 1919 M Street,

N.W., Washington, D.C. 20503, or via

the internet to jboley@fcc.gov, and to

Timothy Fain, OMB Desk Officer, 10236

NEOB, 725–17th Street, N.W.,

Washington, D.C. 20503, or via the

internet to fainlt@al.eop.gov.

FOR FURTHER INFORMATION CONTACT: For

Non-Auction Information: Marty

Liebman, Mary Woytek, or Jon Reel,

202–418–1310. For Auction

Information: Frank Stilwell, 202–418–

0660.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Memorandum Opinion

and Order on Reconsideration in PR

Docket No. 89–552, GN Docket 93–252,

and PP Docket 93–253, FCC 98–93,

adopted on May 14, 1998, and released

on May 21, 1998. The complete text of

this decision is available for inspection

and copying during normal business

hours in the FCC Reference Center

(Room 239), 1919 M Street, N.W.,

Washington, D.C., and may be

purchased from the Commission’s copy

contractor, International Transcription

Service, (202) 857–3800, 1231 20th

Street, N.W., Washington, DC 20036.

The complete text is also available

under the file name fcc98093.wp on the

Commission’s internet site at http://

www.fcc.gov/Bureaus/Wireless/Orders/

1998/index.html. Written comments

must be submitted by OMB on the new

information collections on or before July

27, 1998.

Paperwork Reduction Act

This MO&O contains new information

collections that have been submitted to

the Office of Management and Budget

(OMB) for Emergency Clearance under

the Paperwork Reduction Act, Public

Law No. 104–13. The Commission, as

part of its continuing effort to reduce

paperwork burdens, invites the general

public and the OMB to comment on

these information collections.

Comments should address: (a) whether

the new collections of information are

necessary for the proper performance of

the functions of the Commission,

including whether the information shall

have practical utility; (b) the accuracy of

the Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

OMB Approval Number: 3060–XXXX.

Title: Private Land Mobile Radio

Services Part 90.

Form No.: N/A.

Type of Review: New collection.

Respondents: Licensees in the 220–

222 MHz band.

Number of Responses: 18,400.

Estimated Time Per Response: 30

minutes to 12 hours. These estimates are

for various burdens including

coordinating actions with other

licensees, submitting certifications with

applications for modifications of

authorizations, and seeking a waiver of

section 90.729(b).

Frequency of Response: On occasion.

Total Annual Burden: Approximately

44,850 hours.

Needs and Uses: The information

collected will be used by the

Commission to verify licensee

compliance with Commission rules and

regulations, to ensure the integrity of the

220 MHz service, and to ensure that

licensees continue to fulfill their

statutory responsibilities in accordance

with the Communications Act of 1934.

Synopsis of Memorandum Opinion and

Order on Reconsideration

1. The Commission adopts a

Memorandum Opinion and Order on

Reconsideration (MO&O) which

responds to petitions for reconsideration

or clarification of two Orders previously

adopted in this proceeding concerning

the 220–222 MHz radio service (220

MHz service). The 220 MHz Second

Report and Order (Second R&O) (61 FR

03841, February 2, 1996) enabled

existing 220 MHz licensees to modify

their licenses to relocate their

authorized base stations within

Commission specified parameters. The

220 MHz Third Report and Order (Third

R&O) (62 FR 16004, April 3, 1997)

established rules to govern the future

operation and licensing of the 220 MHz

service. In response to petitions for

reconsideration or clarification of the

Second R&O, the MO&O reaffirms the

earlier decision with one clarification,

stating the Commission’s continuing

belief that the modification procedures

the Commission has adopted provide

existing 220 MHz licensees flexibility to

complete construction of their systems

and provide service without

unreasonably impairing the opportunity

of potential competitors to obtain

licenses in the 220 MHz service. In

general, the MO&O affirms the rules for

the 220 MHz service adopted in the

Third R&O, but adopts some changes

and clarifications.

2. The MO&O first considers issues

raised on reconsideration of the Third

R&O. The Commission denies the

petitions which seek to modify the

Commission’s rule that specifies the cochannel protection that must be

provided to Phase I licensees by Phase

II licensees.1 In the Third R&O, the

Commission decided that Phase II

Economic Area (EA) and Regional

licensees would be required to locate

their base stations at least 120 km from

the base stations of co-channel Phase I

licensees, except that Phase II licensees

would be permitted to locate their base

stations less than 120 km from the base

stations of co-channel Phase I licensees

if they provide 10 dB protection to the

predicted 38 dBuV/m (dBu) service

contour of the base stations of the Phase

I licensees.

3. Petitioners seek reconsideration of

this decision, arguing that Phase II
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32581

licensees should be required, in locating

their base stations, to afford greater

protection to co-channel Phase I

licensees by providing 10 dB protection

to the predicted 28 dBu service contour

of all co-channel Phase I base stations.

Other petitioners do not oppose

continued protection of the 38 dBu

service contour, but assert that the

Commission should afford greater than

10 dB protection to that contour.

4. Petitioners argue that the decision

made by the Commission in the Third

R&O to provide 10 dB protection to the

38 dBu contour of Phase I stations does

not provide adequate protection

between Phase I and Phase II licensees.

Petitioners contend that 220 MHz

systems significantly outperform the

Commission’s original coverage

estimation, and that 220 MHz customers

operate throughout the 28 dBu areas.

Petitioners add that failure to adopt

protection criteria based on a 28 dBu

contour denies Phase I 220 MHz

licensees a quality of service

comparable to that of competitive

wireless systems.

5. Based on its detailed analysis of the

technical information and arguments

provided by petitioners (see paragraphs

28–67 of the full text of the MO&O), the

Commission concludes that petitioners

failed to adequately support their

claims, and that retention of the rule

that provides for 10 dB protection to the

38 dBu contour of Phase I stations will

not adversely affect operations in the

220 MHz service. The Commission

indicates, too, that it is confident that

the existing 220 MHz protection criteria

will enable Phase I licensees and future

Phase II licensees to operate in

harmony.

6. The Commission denies petitions

requesting a change to the way a Phase

I license service contour is calculated.

In the Third R&O, the Commission

decided that Phase II EA and Regional

licensees could locate their base stations

less than 120 km from the base stations

of co-channel Phase I licensees if they

provide 10 dB protection to the

predicted 38 dBu service contour of the

base stations of such licensees. The

Commission also decided in the Third

R&O that the predicted 38 dBu contour

of Phase I licensees would be calculated

based on the licensee’s authorized

effective radiated power (ERP) and

height above average terrain (HAAT)—

not on the maximum allowable ERP and

HAAT provided in the Commission’s

rules for the 220–222 MHz band. The

Commission further determined that

licensees operating at power levels

lower than their initially authorized

ERP would be required to seek

modification of their authorization to

reflect the lower ERP.

7. Petitioners disagree with the

Commission’s decision to require Phase

I licensees to modify their

authorizations to reflect the system’s

actual ERP, and to define the service

area based upon actual ERP. Petitioners

contend that this is a departure from

previous Commission policy for Part 90,

and argue that these requirements will

result in a significant reduction in the

protection afforded to Phase I licensees.

Several parties contend that a Phase I

licensee’s service area should be defined

based on maximum authorized power

and height levels.

8. The Commission disagrees with

petitioners. It indicates that in

developing rules for authorizing Phase II

licensees to serve a particular

geographic area, it sought to allow them

to serve any portion of that area, except

for portions of the area already being

served by co-channel Phase I licensees.

The Commission states that the area

‘‘already being served’’ by co-channel

Phase I licensees is the area the licensee

was serving at the time the decisions

adopted in the Third R&O became

effective, and must therefore be

calculated based on the licensee’s ERP

and HAAT at that time. The

Commission also indicates that, as

discussed in paragraphs 175–184 of the

full text of the MO&O, the area being

served by a Phase I licensee that

relocated its base station in accordance

with the provisions of the Second R&O

is calculated based on the HAAT and

the ERP of the relocated base station.

9. The Commission states that if it

were to assume that all 220 MHz Phase

I licensees are operating at the

maximum power and antenna height for

the 220 MHz service when many are not

operating at such parameters and may

never operate at such parameters, it

could force Phase II licensees to provide

considerably greater protection to cochannel Phase I licensees than

necessary, and thereby potentially deny

service to the public in areas beyond the

Phase I licensee’s actual 38 dBu service

contour. The Commission also indicates

that to protect a Phase I licensee’s base

station in accordance with a power level

that the licensee might employ at some

time in the future could also deny

service to the public.

10. The Commission therefore denies

requests for the adoption of alternative

methods for calculating a Phase I

licensees service contour made by

petitioners. As indicated in the MO&O,

the Wireless Telecommunications

Bureau will issue a Public Notice

following the adoption of the MO&O

announcing when applications must be

filed by Phase I, non-nationwide

licensees in order to enable such

licensees to comply with the

requirement that they modify their

authorization to reflect the ERP at which

they were operating at the time the

decisions adopted in the Third R&O

became effective.

11. The Commission grants in part the

petitions that request that Phase I

licensees be permitted to modify their

authorizations to the extent that Phase

I licensees will be permitted to make

modifications to their authorizations

which do not expand their 38 dBu

service contour, and also will be

permitted to convert their site-by-site

licenses to a single license. Otherwise

such petitions are denied.

12. The Commission recognizes that

licensed sites may become unusable for

a variety of reasons and agrees with

petitioners arguments that, in order to

maintain the economic and technical

viability of a licensee’s 220 MHz

service, Phase I incumbent licensees

should be permitted to modify their

authorizations (e.g., to relocate their

base station, to change the ERP or

HAAT of their base station) as long as

doing so does not expand their service

contour, as that contour has been

defined in this proceeding. Such

licensees will therefore be permitted to

make those modifications to their

authorizations that do not expand their

38 dBu service contour. Phase I

licensees will also be able to add

additional transmitters within their 38

dBu service contour without prior

authorization from the Commission,

e.g., to fill in ‘‘dead spots’’ in coverage

or to reconfigure their systems to

increase capacity within their service

area, so long as signals from such

transmitters do not expand their 38 dBu

service contour.

13. The MO&O notes that a Phase I

licensee who relocates under the criteria

set forth in the Second R&O (and as

further considered in this MO&O) must

first establish its 38 dBu service contour

at its new base station site in accordance

with the Commission’s rules for

relocation before it can take advantage

of the flexibility provided in this

section. In addition, Phase I licensees

will be required to notify the

Commission of any changes in technical

parameters or additional stations

constructed through a minor

modification of their license. These

modification applications will not be

subject to public notice and petition to

deny provisions in the Commission’s

rules, or mutually exclusive

applications.

14. The Commission’s rules require

geographic separation between Phase I
32582 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

base stations transmitting on the upper

40 channels in the 220–221 MHz band

(i.e., channels 161–200, referred to in

the Commission’s rules as ‘‘Sub-band

B’’) and Phase I base stations receiving

on the lower 40 channels in the 221–222

MHz band (i.e., channels 1–40, referred

to in the Commission’s rules as ‘‘Subband A’’). Also, as indicated in the

Third R&O, the Commission’s rules

require Phase II licensees transmitting

on Sub-band B channels to provide

geographic protection to Phase I

licensees operating on Sub-band A

channels; and require Phase II licensees

operating on Sub-band B and Sub-band

A channels to coordinate the location of

their base stations with one another to

avoid interference. The Commission’s

decision in this MO&O to permit Phase

I, non-nationwide licensees to modify

their authorizations to add additional

transmitter sites or change the operating

parameters or location of their base

station, however, raises interference

concerns if such stations are authorized

to licensees operating in Sub-bands A

and B.

15. First, with respect to potential

interference among Phase I licensees,

the Commission believes that Phase I

licensees authorized on Sub-band A or

Sub-band B channels that may seek to

add additional transmitter sites or

change the operating parameters or

location of their base stations should be

required to coordinate such actions in a

manner similar to the way that Phase II

licensees authorized on Sub-band A and

Sub-band B channels must coordinate

the location of their base stations under

§ 90.723(f) of the Commission’s rules.

Thus, to ensure that appropriate

geographic separations are maintained if

licensees authorized on Sub-band A or

Sub-band B channels seek modifications

to add additional transmitter sites or

change the operating parameters or

location of their base station, the

Commission will require licensees

authorized on Sub-band A or Sub-band

B channels to coordinate such actions

with one another to avoid interference.

These licensees must include with their

application for a minor modification of

their authorization, a certification that

the station has been appropriately

coordinated.

16. Second, § 90.723(e) currently

requires Phase II licensees authorized

on Sub-band B channels, in locating

their base stations, to provide

geographic protection to the base

stations of Phase I licensees authorized

on Sub-band A channels. However, the

Commission does not believe that it

would be appropriate to require a Phase

II licensee authorized on Sub-band B, as

it constructs its EA or Regional system,

to have to protect receivers associated

with additional transmitter sites that a

Phase I licensee authorized on Sub-band

A might add within its service contour

at any time in the future. The

Commission thus concludes, that a

Phase II licensee authorized on Subband B channels should continue to

provide geographic protection to Phase

I licensees authorized on Sub-band A,

but only to the base station of such

licensees, as authorized at the time the

Phase II, Sub-band B licensee seeks to

construct its station.

17. Third, under the Commission’s

existing rules, there are no protection or

coordination requirements among Phase

I licensees authorized on Sub-band B

and Phase II licensees authorized on

Sub-band A. However, if Phase I, Subband B licensees are permitted to add

additional transmitter sites or modify

the operating parameters or location of

their base station at any time in the

future, such actions could cause

unforeseen interference to the base

stations of Phase II, Sub-band A

licensees. The Commission will

therefore require Phase I, Sub-band B

licensees, in adding additional

transmitter sites or modifying the

operating parameters or location of their

base station, to coordinate such actions

with Phase II licensees authorized on

Sub-band A. Phase I, Sub-band B

licensees must include with their

application for a minor modification of

their authorization, a certification that

the station has been appropriately

coordinated.

18. In addition, the Commission will

allow Phase I 220 MHz licensees to

convert their site-by-site licenses to a

single license authorizing operations

throughout the incumbents’ contiguous

and overlapping 38 dBu service

contours of their constructed multiple

sites. Phase I licensees seeking such

reissued licenses must make a one-time

filing of specific information for each of

their external base station sites to assist

the Commission staff in updating the

Commission’s database. The

Commission also will require evidence

that such facilities are constructed and

placed in operation and that, by

operation of the Commission’s rules, no

other licensee would be able to use

these channels within this geographic

area. The Commission notes that

facilities added or modified that do not

extend the 38 dBu service contour will

not require prior approval under this

procedure.

19. The Commission believes this

decision strikes a fair balance between

the interests of incumbents and Phase II

licensees. A Phase I licensee will be free

to maintain full operational flexibility in

providing service within its own service

contour, while ensuring that the

licensee’s use of the spectrum does not

negatively impact other 220 MHz

operations.

20. In response to a petition seeking

clarification of the decision in the Third

R&O that the emission limits provided

in § 90.212(f) of the Commission’s rules

must be met only at the outermost edges

of contiguous channels, the Commission

indicates that such emission limits must

be met only at the outermost edges of

contiguous channels, including those

cases in which licensees combine

multiple authorizations that result in

contiguous channels. The Commission

also clarifies that, so long as licensees

combining multiple authorizations to

create a contiguous channel block

maintain the required co-channel

protection on all of the channels that

comprise the channel block, such

licensees will be permitted to eliminate

the emission mask on all ‘‘inside

channels.’’

21. The Commission grants a petition

to modify § 90.729(b) of its rules to

provide that the antenna height

limitation for stations operating on 221–

222 MHz frequencies be associated with

HAAT of the station’s transmitting

antenna, rather than the antenna’s

height above ground. The Commission

indicates that by requiring licensees

operating on these frequencies to limit

the height of their transmitting antenna

to 7 meters HAAT, it will eliminate

instances of licensees inadvertently

causing interference to adjacent channel

operations by transmitting at an antenna

height of 7 meters above ground at a

particularly high elevation. The

Commission also modifies § 90.729(c) to

indicate that the height restriction of

base stations operating on channels

196–200 must be associated with such

station’s transmitting antenna HAAT,

rather than the antenna’s height above

ground.

22. The Commission denies petitions

requesting that the power limit for fixed

stations operating on mobile channels

(i.e., channels in the 221–222 MHz

band) be raised from 50 watts ERP to

500 watts ERP. The Commission

indicates that if 220 MHz licensees were

to be permitted, as petitioners propose,

to operate fixed stations in the 221–222

MHz band at a power level of 500 watts

ERP—ten times higher than the current

limit—it would be concerned about the

possibility of interference to adjacent

channel 220 MHz land mobile

operations. The Commission therefore

rejects the adoption of a rule that would

allow for such transmissions.

23. The Commission concludes that

the only manner in which a licensee
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32583

could operate a fixed station in the 221–

222 MHz band at a power level of 500

watts ERP without disrupting the

operations of other 220 MHz licensees

would be for that licensee to gain the

consent of all affected 220 MHz

licensees to operate such a station. It

will therefore permit a licensee seeking

to operate fixed stations in the 221–222

MHz band at a power level of 500 watts

ERP to seek a waiver of § 90.729(b) of

the Commission’s rules if the licensee

obtains the consent for such operation

from the following licensees authorized

on channels up to 200 kHz removed

from the channels of the licensee: (1) All

nationwide licensees; (2) all Phase II

non-nationwide licensees that are

authorized in an EA or Region that is

located within 6 km of the licensee’s

proposed fixed station; (3) all

Government nationwide users; and (4)

all Phase I non-nationwide licensees

with a base station that is located within

6 km of the licensee’s proposed fixed

station. As discussed in paragraphs 95–

106 of the full text of the MO&O, Phase

I non-nationwide licensees may modify

their authorizations to add additional

transmitters within their existing service

area, or change the operating parameters

or location of their base station. The

Commission concludes that such a

licensee seeking the consent of a Phase

I non-nationwide licensee to operate at

500 watts ERP will not be required to

obtain the consent of that licensee with

regard to any additional transmitters for

which the licensee obtains

authorization. The licensee will only be

required to obtain the consent with

regard to the licensee’s base station, as

authorized at the time the licensee seeks

the consent.

24. The Commission dismisses on

procedural grounds petitions requesting

that the Commission raise the allowable

power limit for the base stations of

nationwide licensees from 500 watts

ERP to 1400 watts ERP. The

Commission finds that, because in the

Third Notice, the Commission did not

seek comment with regard to the

appropriateness its rule that provides

the height-power restrictions for stations

operating in the 220 MHz band, and

because commenters, in response to the

Third Notice, did not seek modification

of the rule with regard to height-power

limitations for stations operating in the

220–221 MHz band, and because the

Commission did not address or modify

the 220–221 MHz band height-power

limitations in the Third R&O, this

matter is beyond the scope of this

reconsideration proceeding. The

Commission does, however, believe that

an increase in the allowable power for

nationwide licensees would be

acceptable provided that appropriate

technical criteria are established to

ensure that interference does not occur

to adjacent channel systems. The

Commission therefore invites those

parties seeking modification of the

Commission’s rules regarding this

matter to submit a petition for

rulemaking in order to change the

allowable power limit and to develop

such criteria.

25. The MO&O declines requests to

specify the criteria used to determine

whether licensees have provided

substantial service as alternative means

of meeting their construction

requirements. The MO&O instead refers

parties seeking clarification of the

standard beyond the definition in the

Commission’s rules to the Commission’s

stated purpose in applying the standard

to 220 MHz, and to previous examples

the Commission has given of substantial

service. The MO&O maintains that any

further elaboration of the standard at

this time would only limit its flexibility

and usefulness to licensees and their

customers.

26. The MO&O removes the 220 MHz

service spectrum efficiency standard

and thus grants petitions seeking

elimination of the efficiency standard as

applied to paging operations. In the

Third R&O, the Commission concluded

that Phase I and Phase II licensees

combining contiguous 5 kHz channels

in order to operate on channels wider

than 5 kHz would be required to meet

the following spectrum efficiency

standard: for voice communications, a

licensee was required to employ

equipment that provides at least one

voice channel per 5 kHz of channel

bandwidth; for data communications, a

licensee was required to employ

equipment that operates at a data rate of

at least 4,800 bits per second per 5 kHz

of channel bandwidth. The standard

was implemented through the

Commission’s equipment type

acceptance process.

27. The Commission agrees with

petitioners who argue that the goal of

making the 220 MHz service rules more

flexible by permitting paging on a

primary basis, and by permitting the

aggregation of contiguous channels, is

threatened because paging equipment is

not presently capable of meeting the

efficiency standard for the band. The

Commission also believes that, since

adoption of the Third R&O,

circumstances have developed in a

manner that suggests that 220 MHz

spectrum will be used efficiently by

service providers regardless of whether

any spectrum efficiency standard is

imposed.

28. Although the Commission is

convinced by the showings in the record

that carriers seeking to offer one-way

paging services would be impaired in

their ability to take advantage of the

licensing flexibility introduced in the

Third R&O because of the requirements

of the spectrum efficiency standard, the

Commission is not persuaded by the

claim of some petitioners that the best

solution to this problem is to exempt

paging carriers from the standard. The

Commission explains that singling out

paging services for special treatment

while leaving the standard in place

would have the potential effect of

impeding the introduction and

deployment of other services demanded

by consumers that use available

equipment that does not comply with

the strictures of the efficiency standard.

29. The Commission further notes that

elimination of the efficiency standard,

while avoiding the policy deficiencies

that are inherent in an exemption

limited to one class of carriers, grants

the relief sought by the petitioners. The

Commission concludes that there is not

a rational basis for avoiding this

problem for carriers choosing to offer

one type of service while permitting the

problem to stand as a barrier to carriers

offering other services. Although the

Commission notes that no party has

petitioned directly for this result, the

Commission does not believe that any

220 MHz licensee or applicant will be

harmed by this grant of additional

flexibility.

30. Elimination of the standard

preserves the Commission policy of

maximizing flexible use of spectrum.

This policy is particularly important for

220 MHz spectrum because small

businesses may be prominent players in

developing this spectrum, and these

businesses would directly benefit from

a flexible spectrum use policy that

enables them to respond efficiently to

marketplace demand. The Commission

further observes that, in services where

the Commission has used competitive

bidding to award licenses, there is

evidence that licensees are using

spectrally efficient technologies, despite

the decision of the Commission not to

impose spectrum efficiency standards.

31. The Commission states that

eliminating the spectrum efficiency

standard for combined contiguous

channels should not be construed as a

lessening of its commitment to using

this band to stimulate innovative

narrowband technology. Because the

efficiency standard applies only to those

licensees who may combine contiguous

5 kHz channels to form larger channels,

it has only limited effect on the majority

of 220 MHz service licensees whose
32584 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

channels are not contiguous. The

Commission therefore believes the

market for efficient narrowband 5 kHz

equipment will remain strong. The

Commission also notes that, subsequent

to its adoption of the Third R&O, its

decision in the 220 MHz Fourth Report

and Order in this proceeding (62 FR

46211, September 2, 1997) (Fourth R&O)

has stimulated deployment of spectrally

efficient 5 kHz equipment.

32. Although most of the debate in the

record focused on the standard for data,

the Commission also removes the

spectrum efficiency standard for voice

communications. The Commission

discerns no reasonable legal or policy

basis to make a distinction with respect

to the application of a spectrum

efficiency standard. Elimination of the

standard will grant licensees seeking to

provide voice services comparable

flexibility to employ the type of

technology that best meets their needs.

As with 220 MHz licensees that provide

data services, the Commission is

confident that licensees providing voice

services will seek to ensure the success

of their business plans by using the

most spectrally efficient technologies to

serve the maximum number of

customers.

33. The Commission rejects one

petitioner’s suggestion that it adopt a

lenient efficiency standard that would

become stricter over time. The

Commission explains that if a stricter

standard were phased in, and operators

were permitted to continue using

equipment they had acquired under the

early, more lenient standard, the later

standard would probably have little

effect. The Commission also rejects

petitioners’ proposal that the efficiency

standard of the Refarming proceeding be

applied to the 220 MHz band. The

Commission notes that the 220 MHz

band—a small sector of the radio

spectrum, clear of incumbents using

older, inefficient technology, in which

the Commission has attempted to foster

technological innovation—presents

quite different circumstances and

concerns. The Commission is not

persuaded that conformance of the two

standards would significantly promote

the goals of either docket, and notes that

nothing in the Refarming proceeding

would preclude the use of 5 kHz

equipment in refarmed bands.

34. The Commission notes that its

decision renders moot the question of

whether waiver requests regarding the

spectrum efficiency standard should be

subject to public comment, as a

petitioner requested. In the MO&O, the

removal of the spectrum efficiency

standard is discussed in paragraphs

111–149.

35. The MO&O next clarifies

construction requirements contained in

§ 90.769 of the Commission’s rules by

stipulating that § 90.769 applies only to

Phase II nationwide licensees and not to

Phase I nationwide licensees. The title

of § 90.769 is amended accordingly to

avoid confusion.

36. The MO&O grants a petition

requesting that the Commission

reconsider or clarify language regarding

the return of pending nationwide 220

MHz applications, by clarifying that the

language ordering the return of pending

nationwide applications does not apply

to pending, commercial, nationwide 220

MHz applications. The Commission

notes, however, that the applications for

nationwide, commercial 220 MHz

licenses have since been dismissed.

37. Regarding acquisition of multiple

nationwide licenses, the MO&O

dismisses as moot a petition asking that

the Commission amend its rules to

permit entities to obtain more than one

Phase I authorization in a geographic

area. The Fourth R&O in this

proceeding, which was adopted after the

petition for reconsideration was filed,

repealed § 90.739(a) of the

Commission’s rules which restricted the

circumstances under which a Phase I

licensee could obtain an additional

license. Section 90.739 was revised to

provide that there would be no limit on

the number of licenses that may be

authorized to a single 220 MHz service

licensee. Thus, no additional action is

required by the Commission at this

time.

38. Consistent with the conclusions

reached in the Part I Third R&O, (63 FR

2315, January 15, 1998) the Commission

eliminates installment payment plans

for small and very small businesses

participating in the 220 MHz service

auction, and increases the level of

bidding credits for such entities. Small

businesses with gross revenues not to

exceed $15 million will receive a 25

percent bidding credit and very small

businesses with gross revenues not to

exceed $3 million will receive a 35

percent bidding credit. The MO&O also

amends § 90.1015 of the Commission’s

rules to permit auction winners to make

their final payments within ten (10)

business days after the applicable

deadline, provided that they also pay a

late fee of five (5) percent of the amount

due. This change will conform the 220

MHz rules with the generally-applicable

part 1 rules. Applicants that do not

submit the required final payment and

5 percent late fee within the 10-day late

payment period will be declared in

default and will be subject to the default

payment specified in § 1.2104(g) of the

Commission’s rules. The Commission

emphasizes that the decision to permit

late payments is limited to payments

owed by winning bidders that have

submitted timely initial down

payments. Finally, regarding installment

payments, the Commission reiterates

that the procedures set forth in part 1,

Subpart Q of the Commission’s rules

apply to the Phase II 220 MHz service

unless otherwise indicated in part 90 of

the Commission’s rules. The

Commission thus clarifies that

applicants at the short- and long-form

application stages are subject to the

reporting requirements contained in the

newly adopted part 1 ownership

disclosure rule.

39. Finally, regarding the Third R&O,

the MO&O denies on procedural

grounds petitions to reconsider the

construction requirements for Phase I

licensees, particularly the requirement

that nationwide, Phase I licensees

construct all five channels at a

minimum number of base stations at

certain urban sites. The MO&O also

dismisses on procedural grounds

petitions to cease requiring nationwide,

Phase I licensees to obtain specific

licenses for each base station.

40. The MO&O also considers

petitions for reconsideration and

clarification filed in response to the

Second R&O which adopted a one-time

modification procedure that allows

licensees to modify their licenses to

relocate their authorized base stations to

previously unauthorized locations.

Under this procedure, licensees with

base stations authorized inside any

Designated Filing Area (DFA) were

permitted to relocate their base stations

up to one-half the distance over 120 km

toward any authorized co-channel base

station, to a maximum distance of 8 km.

Licensees with base stations authorized

outside the boundaries of any DFA were

permitted to relocate their base stations

up to one-half the distance over 120 km

toward any authorized co-channel base

station, to a maximum distance of 25

km, so long as they did not locate their

base station more than 8 km inside the

boundaries of any DFA.

41. The Commission finds that the

Second R&O set out a clear and

unambiguous framework governing the

maximum distance licensees are

permitted to move under the

modification procedure. Under this

framework, contrary to the assertions of

the petitioners, the defining element of

a proposed modification is not the

ultimate location of the base station—

the defining element is based on the

initially authorized location.

42. The Commission denies petitions

requesting that licensees be permitted

moves up to a maximum distance of 25
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32585

km, rather than the 8 km authorized in

the Second R&O, if the licensees is

moving from a location within a DFA to

a location outside that DFA. In ruling

against the petitions, the MO&O states

that the purpose of the modification

procedure was to enable 220 MHz

licensees to carry out their initial

business plans by finding a useable site

within their planned area of service. It

was not the Commission’s intention for

the modification procedure to serve as

an opportunity for a licensee to abandon

its original plan to serve a particular

area in favor of a more attractive or

different service area. The Commission

maintains that a licensee who is

presently authorized within a DFA,

would have available to it the same

multiplicity of base station sites within

an 8 km radius as a licensee who is

moving from a location within a DFA to

another location within a DFA.

43. The fact that a licensee initially

authorized in a DFA chooses to seek a

new base station site outside its DFA

should not entitle that licensee to be

treated in the same manner as a licensee

that was initially authorized outside a

DFA, and therefore, presumably

requires a larger area, i.e., 25 km, within

which to find a new base station site.

Therefore, the Commission reaffirms its

determination that a licensee with an

authorized base station located in a DFA

will be permitted to relocate its base

station up to one-half the distance over

120 km toward any co-channel

licensee’s initially authorized base

station, to a maximum distance of 8 km,

regardless of whether the relocated base

station site is inside or outside the

boundaries of the DFA. The

Commission also denies a petition

asking for clarification of its position to

indicate that a licensee whose initially

authorized site is located inside a DFA

within 8 km of the perimeter and who

seeks to modify its authorization in

order to move to a location outside the

DFA be permitted to move its site up to

one-half the distance over 120 km

toward any co-channel licensee’s

initially authorized base station, to a

maximum distance of 25 km.

44. The MO&O grants, in part,

petitions requesting that the

Commission accept modifications of

operating parameters other than

relocation modifications to the extent

that the Commission clarifies that

licensees who seek to relocate may

modify their antenna HAAT. Otherwise

these petitions are denied with respect

to this issue. The Commission states

that the Second R&O sought to

accommodate Phase I licensees that for

various unforeseen reasons were unable

to construct at their authorized locations

and so provided such licensees with the

opportunity to seek modification of

their licenses to relocate their base

stations. The Second R&O did not

provide for licensees to modify their

authorizations for any other reason,

such as to change their power or

antenna height.

45. The Commission continues to

believe that the modification procedure

set out in the Second R&O appropriately

accommodates the needs of licensees

who were unable to construct at their

authorized locations. The intention of

the Commission in the Second R&O was

to craft carefully and narrowly drawn

relocation parameters to provide relief

to existing licensees but not to allow

them to enhance their position in the

marketplace. The interest of the

Commission in establishing precise and

narrow criteria was heightened by the

fact that the Commission allowed these

licensees to file modification

applications without providing an

opportunity for other potential

applicants to file competing initial

applications. Thus, the MO&O finds no

basis for any general extension of the

modification parameters to include

changes to antenna height and power at

a licensee’s originally authorized

location. The Commission notes that if

a licensee who did not seek to relocate

believed it was impossible to remain at

the same HAAT at the original location,

there is nothing in the Second R&O that

would prevent such a licensee from

applying for a waiver of the

Commission’s rules. The Commission

also notes, however, that licensees who

decided not to relocate under the

procedures announced in the Second

R&O will be permitted to make changes

to their technical parameters, as

provided elsewhere in the MO&O as

long as such modifications do not

expand their 38 dBu service contour.

46. In addition, because it is highly

unlikely that a licensee who relocates its

base station will be able to install its

antenna at the identical HAAT specified

in its existing authorization, the

Commission clarifies that licensees

seeking to relocate are also permitted to

modify their HAAT. On the other hand,

it would not be necessary for a licensee

who relocates to operate at the new site

at a different power level, and thus the

Second R&O does not allow a licensees

who relocates to change its power level.

47. If, however, as a result of raising

the antenna height, the height and

power combination exceeds the

provisions of the ERP vs. Antenna

Height Table in § 90.729 of the

Commission’s rules, the rules require

that the licensee’s authorized power

shall be reduced accordingly so that the

operations of the licensee remain in

compliance with the provisions of that

section. Any applicant seeking to

relocate and to alter operating power

levels is permitted to relocate (if the

application is in conformance with

applicable rules), but the Second R&O

does not establish any authorization

pursuant to which the applicant may

alter operating power levels. The

Commission notes that after a licensee

relocates in accordance with the

Commission’s modification procedures

and establishes its 38 dBu service

contour, the licensee will be able to

make changes to its authorization,

including its power level, provided that

doing so does not expand its 38 dBu

service contour.

48. As for licensees who were granted

Special Temporary Authority (STA) at

their original locations but at increased

height or power, those STAs were

granted only on a temporary basis, and

they conferred no guarantee that the

licensee would be able to obtain a

permanent authorization in accordance

with those changes. In addition, a

licensee with an STA to operate at

different height or power parameters

would not be precluded from offering

service if the licensee is not granted

permanent authorization at those

parameters. Only the coverage area

would be altered.

49. Finally, the Commission notes

that petitioners base their arguments in

part on the assumption that existing

stations are likely to be protected under

new Phase II rules based on a service

contour. Petitioners further assert that

such protection is likely to be based on

maximum allowable height and power.

In fact, the protection afforded Phase I

licensees by future Phase II licensees

has been addressed by the Commission

in the Third R&O, where the

Commission determined that Phase I

licensees would be protected to their 38

dBu service contour based on actual, as

opposed to maximum, height and

power. This decision was affirmed in

this MO&O.

50. In the Second R&O the

Commission recognized that a number

of licensees had obtained STAs to

operate base stations at alternative

locations and that some of these

locations would not meet the

permissible modification requirements

established in the Second R&O. The

Commission believed that it would not

be appropriate to require licensees to

discontinue operations if they had

obtained STAs to operate at alternate

locations and were currently operating

or planning to operate at such locations.

The Second R&O therefore provided

that a licensee who had been granted an
32586 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

2Wait Radio v. FCC, 418 F.2d 1153, 1158 (D.C.

Cir. 1969).

STA to operate at an alternative site

would be permitted to seek permanent

authorization at the STA site if the

licensee certified that it had (1)

constructed its base station and placed

the base station in operation, or

commenced service at that site; or (2)

taken delivery of its base station

transceiver on or before the adoption

date of the Second R&O. The

Commission provided that such

licensees were permitted to seek

permanent authorization at the STA site

regardless of whether locating at the

STA site would be in strict conformance

with the relocation distance limitations

prescribed in the modification

procedure.

51. The MO&O denies petitions

requesting that the Commission

reconsider or clarify that if a licensee

had taken delivery of its base station

transceiver on or before January 26,

1996, and had filed an application for

STA on or before January 26, 1996, the

licensee need not have been granted an

STA by January 26, 1996, in order to be

allowed to seek permanent

authorizations at its STA site. The

MO&O concludes that it was the

Commission’s intent in the Second R&O

that the relief provided for licensees

operating under STAs be restricted to

those licensees who had been granted

STAs on or before January 26, 1996.

52. The Commission finds no basis to

conclude that the January 26, 1996,

deadline is arbitrary or capricious. The

Commission grants STAs to licensees

upon a showing of need. Prior to

January 26, 1996, the Commission

granted STAs because 220 MHz

licensees would be unable to operate at

base station sites other than their

initially authorized locations, because

the Commission had not yet announced

final modification rules for the 220 MHz

service. As of January 26, 1996, the final

modification and relocation procedures

had been announced and thus there no

longer was any need for an STA. After

that date it would have only been

necessary to issue an STA in order to

meet a licensee’s needs in an emergency

situation.

53. As to those licensees who took

delivery of their equipment and

expended time and resources preparing

their STA site for construction, but who

waited to apply for an STA until late

January, the Commission notes that an

STA does not guarantee any right to

obtain permanent authorization at the

STA site. While pre-grant construction

may not be an uncommon practice, the

Commission’s rules provide that

licensees who construct prior to

receiving an authorization do so at their

own risk. Licensees were able to apply

for STAs at any time during the

planning or construction of their base

stations and had no reason to delay

filing their STA applications. At the

time the Second R&O was released, the

construction deadline was February 2,

1996. The Commission’s regulations

caution applicants to file STA

applications at least 10 days prior to the

date of proposed operation. Therefore, a

licensee who filed an STA application

after January 23, 1996, could not

reasonably have expected to receive an

STA prior to the construction deadline.

54. For these reasons, the Commission

concludes that a licensee who had taken

delivery of its base station transceiver

on or before January 26, 1996, must

have been granted an STA on or before

January 26, 1996, in order to be allowed

to seek permanent authorization at its

STA site. The Commission notes that

licensees who were not granted STAs on

or before January 26, 1996, were

permitted to modify their base station

locations in accordance with the

relocation rules set forth in §§ 90.753(a)

and 90.753(b) of the Commission’s

rules.

55. The MO&O denies petitions

seeking clarification of the Second R&O

to allow waiver requests to be

accompanied by an alternative site

proposal. The Second R&O recognized

that in certain areas of the Nation it is

possible that the technical

characteristics of base station sites

available under the relocation procedure

may be considerably inferior to the

technical characteristics of currently

licensed sites and sites that may exist at

nearby, more elevated locations. In

these cases, the Commission

contemplated that licensees would seek

a waiver of the modification procedures

the Commission adopted in the Second

R&O. Petitioners express concern that

the Second R&O did not provide for a

protection mechanism or for a tolling of

the construction period for licensees

filing such waiver requests. They argue

that if a waiver request is ultimately

denied, a licensee would lose its

authorization for failure to construct by

March 11, 1996.

56. Under the Commission’s general

waiver rule for services licensed under

part 90, a waiver applicant must show

that no reasonable alternative exists

within existing rules. Furthermore, the

standard for granting waiver requests, as

set forth in Wait Radio, is that ‘‘the very

essence of waiver is the assumed

validity of the general rule, and also the

applicant’s violation unless waiver is

granted.’’ 2 Thus, a licensee seeking a

waiver of the Commission’s rules to

locate its base station at a site not

permitted under the modification

procedure must, in order to apply for a

waiver, have no alternative available

under the rules. If a licensee is able to

offer an alternative relocation site, then,

it could be argued that there is no

reasonable basis for a waiver.

57. Therefore, a 220 MHz licensee

seeking a waiver would need to show

that site alternatives within the

parameters of the Commission’s

relocation rules would be so inferior

that they would preclude a viable

system. To decide otherwise and permit

licensees to make alternative site

showings would not be consistent with

this rule and also would impair one of

the policy objectives set forth in the

Second R&O, i.e., to provide existing

licensees flexibility to complete

construction of their systems and

provide service while not unreasonably

impairing the opportunity of potential

competitors to obtain licenses in the 220

MHz service. The Commission believes

that it provided sufficient flexibility to

incumbent licensees by permitting them

to relocate their base stations while at

the same time insulating them from any

competing filings by new applicants. To

go further, as petitioners urge the

Commission to do, would risk an

adverse impact on the competitive

development of the 220 MHz service.

58. The Commission concludes that

the Second R&O posed a clear and

reasonable choice for 220 MHz licensee,

that if a licensee believed that, due to

unique terrain features, it wanted to

apply for a waiver of the modification

procedures established in the Second

R&O, it could chose to do so. The

Second R&O did not provide licensees

with the option of applying for a waiver

while at the same time allowing them to

attempt to retain their option to

construct at an alternate, although

inferior, site which complies with the

rules.

59. The Commission provided

licensees with a reasonable framework

for modifying their base station

locations, and petitioners, in the

Commission’s view, have not presented

persuasive arguments that the

Commission should now change that

framework to allow for alternative site

proposals to accompany waiver

requests. Furthermore, since the

Commission is affirming that licensees

may not file alternative locations

proposals with a waiver request, the

Commission does not need to reach the

question of whether to allow licensees

whose waiver requests are denied a

reasonable period of time to construct

their facilities at an alternative site. The
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32587

3See 5 U.S.C. 603.

4Public Law No. 104–121, 110 Stat. 846 (1996),

codified at 5 U.S.C. 601–612. Title II of the CWAAA

is The Small Business Regulatory Enforcement

Fairness Act of 1996 (SBREFA).

Commission notes, however, that the

Second R&O stated that the Commission

will extend the deadline for a licensee

to construct its station and place it in

operation, or commence service beyond

August 15, 1996, by the number of days

after June 1, 1996, that pass before a

licensee’s timely filed modification

application is actually granted.

Therefore, a licensee who is granted a

waiver after June 1, 1996, will have an

adequate period of time to construct its

station.

60. Finally, the MO&O denies

petitions asking for clarification that the

Commission will accept waiver requests

other than the specific type of waiver

request discussed in the Second R&O

because such clarification is

unnecessary under the Commission’s

rules. The Commission notes that there

is nothing in the Second R&O that

would prevent a licensee from seeking

an appropriate and timely waiver of the

Commission’s rules if the licensee

believes it has met the Commission’s

standard for waiver.

Supplemental Final Regulatory

Flexibility Analysis

61. As required by the Regulatory

Flexibility Act (RFA),3 a Final

Regulatory Flexibility Analysis (FRFA)

was incorporated in Appendix B of the

220 MHz Second Report and Order

(Second R&O) and in Appendix A of the

220 MHz Third Report and Order (Third

R&O) in this proceeding. The

Commission’s Supplemental Final

Regulatory Flexibility Analysis

(Supplemental FRFA) in this

Memorandum Opinion and Order on

Reconsideration (MO&O) reflects

revised or additional information to that

contained in those FRFAs. This

Supplemental FRFA is thus limited to

matters raised in response to the Second

R&O or the Third R&O that are granted

on reconsideration in the MO&O. This

Supplemental FRFA conforms to the

RFA, as amended by the Contract with

America Advancement Act of 1996

(CWAAA).4

I. Need for and Objectives of the Action

62. The actions taken in this MO&O

are in response to petitions for

reconsideration or clarification of the

service rules adopted in the Third R&O

to implement service in the 220–222

MHz frequency band (220 MHz service),

and in response to petitions for

reconsideration or clarification of

license modification rules adopted in

the Second R&O. The petitions are

denied, with the following exceptions.

The rule changes adopted in the MO&O

grant in part the petitions that Phase I

licensees be permitted to modify their

authorizations to the extent that Phase

I licensees will be permitted to make

modifications to their authorizations

which do not expand their 38 dBu

service contours. Phase I licensees will

also be permitted to convert their siteby-site licenses to a single license. The

Commission’s objective in permitting

such modifications is to provide Phase

I licensees with maximum flexibility

while striking a fair balance between the

interests of incumbent licensees and

Phase II licensees.

63. The Commission also grants the

petition that the antenna height

limitation for stations operating in the

220 MHz band be associated with the

HAAT of the station’s transmitting

antenna, rather than the antenna’s

height above ground. The Commission’s

objective is to eliminate instances of

licensees inadvertently causing

interference to adjacent channel

operations.

64. The MO&O removes the 220 MHz

service spectrum efficiency standard,

and thus grants the petition that the

Commission eliminate the efficiency

standard as applied to paging

operations. In light of the observations

of petitioners regarding the

unavailability of equipment that would

meet the standard, the Commission now

believes that imposition of the standard

could inadvertently deny the provision

of certain services in the 220–222 MHz

band, contrary to the intent of the Third

R&O. The Commission’s objective in

removing the standard is to facilitate the

provision of a wide range of services in

the 220 MHz band.

65. In addition, the Commission

addresses certain issues that the Part I

Third R&O directs be resolved in this

proceeding. Consistent with the

conclusions reached in the Part I Third

R&O, the Commission eliminates

installment payment plans for small and

very small businesses participating in

the 220 MHz service auction, and

increases the level of bidding credits for

such entities. The Commission will also

amend its rules to permit auction

winners to make their final payments

within 10 business days after the

applicable deadline, provided that they

also pay a late fee of 5 percent of the

amount due.

II. Summary of Significant Issues

Raised by the Public in Response to the

Final Regulatory Flexibility Analyses

66. No comments were received in

direct response to the FRFAs. Small

Business in Telecommunications (SBT)

commented that the Commission’s

position regarding license modifications

appeared to express more concern for

future licensees than for incumbent

licensees who are currently providing

service to the public. The actions taken

in this MO&O reflect the Commission’s

recognition that licensed sites may

become unusable for a variety of

reasons. The Commission is persuaded

by arguments that, in order to maintain

the economic and technical viability of

a licensee’s 220 MHz service, Phase I

incumbent licensees should be

permitted to modify their authorizations

as long as doing so does not expand

their service contour. Modifications to

Phase I licensees’ authorizations which

do not expand their 38 dBu service

contour will therefore be permitted.

67. Phase I licensees will also be able

to add new transmitters within their 38

dBu service contour without prior

authorization from the Commission so

long as signals from such transmitters

do not expand the 38 dBu service

contour. These modification

applications will not be subject to

public notice and petition to deny

provisions in the Commission’s rules,

and will not be subject to mutually

exclusive applications. In addition, the

Commission will allow Phase I 220 MHz

licensees to convert their site-by-site

licenses to a single license authorizing

operations throughout the incumbents’

contiguous and overlapping 38 dBu

service contours of their constructed

multiple sites. The Commission believes

this decision strikes a fair balance

between the interests of incumbents and

Phase II licensees.

68. The MO&O, as provided in the

Part I Third R&O, eliminates installment

payment financing for small and very

small businesses participating in the

Phase II 220 MHz service auction. At the

same time, in order to offer small and

very small businesses a meaningful

opportunity to participate in the

auction, the Commission has offered

higher bidding credits, consistent with

those available through a loan.

III. Description and Estimate of the

Number of Small Entities to Which

Rules Will Apply

A. Phase II Licensees

69. As in the FRFAs, the service

regulations the Commission adopts to

implement the Phase II 220 MHz service

would apply to all entities seeking a

Phase II 220 MHz license. As discussed

in the FRFAs, using the Small Business

Administration (SBA) definitions

applicable to radiotelephone companies

and to cable and pay television services,
32588 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

a majority of 220 MHz service entities

may be small businesses.

70. The Commission had not

developed a more refined definition of

small entities applicable to the 220 MHz

service, prior to the Third R&O, because

the Phase II 220 MHz service is a new

service. The RFA amendments were not

in effect until after release of the Third

Notice, therefore no data was received

establishing the number of small

businesses associated with the Phase II

220 MHz service. In the Third R&O, the

Commission adopted criteria for

defining small businesses and very

small businesses for purposes of

determining their eligibility for special

provisions such as bidding credits and

installment payments. The SBA has

approved these definitions for Phase II

licensees. The Commission will use the

definitions in estimating the potential

number of small entities applying for

auctionable spectrum.

71. The Commission defined a small

business as an entity that, together with

its affiliates and controlling principals,

has average gross revenues not

exceeding $15 million for the preceding

three years. Additionally, bidding

credits and an installment payment plan

were made available to each applicant

that is a very small business, 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.

72. No parties submitting or

commenting on the petitions for

reconsideration giving rise to this

MO&O commented on the potential

number of entities that would be small

businesses or very small businesses, and

the Commission is unable to predict

accurately the number of applicants for

the Phase II 220 MHz service that would

fit the definition of a small business or

a very small business for competitive

bidding purposes.

73. In the FRFAs, the Commission

estimated that it would receive

approximately 2,220 total applications

for the Phase II 220 MHz service, i.e.,

2,000 Public Safety applications

(including 1,000 EMRS applications), 90

applications for Economic Area

channels, 20 applications for Regional

channels, 100 applications for

secondary service, and 10 applications

for Nationwide channels. These

applicants (many of whom may be small

entities), as well as Phase I 220 MHz

licensees (discussed below), and at least

six equipment manufacturers (three of

which may be small entities), were

subject to the rules adopted in the Third

R&O.

74. The Commission justified the

auctions-related estimate of

participation, including an estimate of

120 small entities, by referring to its

experience in the auction of the 900

MHz SMR service, a service similar to

the 220 MHz service. In the 900 MHz

SMR service, which utilized an

identical definition for small business,

1,050 licenses were made available and

a total of 128 applications were received

in the auction. Of these applications, 71

qualified as very small businesses and

30 qualified as small businesses. A total

of 908 licenses will be made available

for authorization in the 220 MHz service

auction. Given that 128 qualified

applications were received in the 900

MHz SMR auction, the Commission

anticipated receiving slightly fewer or

120 applications in the 220 MHz service

auction. Given that 71 applicants

qualified as very small businesses and

30 applicants qualified as small

businesses in the 900 MHz SMR

auction, the Commission estimated that

proportionately fewer, or 65 applicants,

would qualify as very small businesses

and 27 applicants would qualify as

small businesses in the 220 MHz service

auction.

75. Because the elimination of

installment payments is

counterbalanced by the Commission’s

decision to elevate the size of bidding

credits, the Commission anticipates that

the figures it has presented regarding

the estimated number of small entities

participating in the 220 MHz service

auction will remain unchanged. The

Commission therefore anticipates that

approximately 55 percent of the 120

applicants will qualify as very small

businesses and 23 percent will qualify

as small businesses.

B. Phase I Licensees

76. The Commission has not

developed a definition of small entities

applicable to 220 MHz Phase I licensees,

or equipment manufacturers for

purposes of this Supplemental FRFA,

and, since the RFA amendments were

not in effect until after the release of the

Third Notice and the 220 MHz Fourth

Notice of Proposed Rulemaking (60 FR

46566, September 7, 1995) was closed,

the Commission did not request

information regarding the number of

small businesses that are associated

with the 220 MHz service.

77. To estimate the number of Phase

I licensees and the number of 220 MHz

equipment manufacturers that are small

businesses the Commission shall use the

relevant definitions provided by SBA.

78. There are approximately 1,515

non-nationwide Phase I licensees and

four nationwide licensees currently

authorized to operate in the 220 MHz

band. To estimate the number of such

entities that are small businesses, the

Commission applies the definition of a

small entity under SBA rules applicable

to radiotelephone companies. This

definition provides that a small entity is

a radiotelephone company employing

no more than 1,500 persons. According

to the Bureau of the Census, only 12

radiotelephone firms out of a total of

1,178 such firms which operated during

1992 had 1,000 or more employees.

Therefore, even if all 12 of these firms

were 220 MHz service companies,

nearly all 220 MHz service companies

were small businesses under the SBA’s

definition.

C. Radio Equipment Manufacturers

79. The Commission anticipates that

at least six radio equipment

manufacturers will be affected by the

decisions in this proceeding. According

to SBA regulations, a radio and

television broadcasting and

communications equipment

manufacturer must have 750 or fewer

employees in order to qualify as a small

business concern. Census Bureau data

indicate that there are 858 U.S. firms

that manufacture radio and television

broadcasting and communications

equipment, and that 778 of these firms

have no more than 750 employees and

would therefore be classified as small

entities. The Commission does not have

information that indicates how many of

the six radio equipment manufacturers

associated with this proceeding are

among these 778 firms. However,

because three of these manufacturers

(Motorola, Ericsson, and E.F. Johnson)

are major, nationwide radio equipment

manufacturers, the Commission

concludes that these manufacturers

would not qualify as small business.

IV. Description of Projected Reporting,

Recordkeeping, and Other Compliance

Requirements

80. Phase I non-nationwide licensees

who modify their authorizations as

outlined in this MO&O or add new

transmitters within their 38 dBu service

contour will be required to file an FCC

Form 600 with the Commission. Phase

I non-nationwide licensees who decide

to convert their site-by-site licenses to a

single license authorizing operations

throughout the incumbents’ contiguous

and overlapping 38 dBu service

contours of their constructed multiple

sites will also be required to file an FCC

Form 600. Phase I, non-nationwide

licensees will be required to file an FCC

Form 600 to comply with the

requirement that they modify their

authorization to reflect the ERP at which

they were operating at the time the

decisions adopted in the Third R&O
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32589

5See 5 U.S.C. 801(a)(1)(A).

became effective. The FCC Form 600 is

currently in use and has already

received OMB clearance.

81. Phase I licensees authorized on

Channels 161–200 and Channels 1–40

will be required to coordinate the

addition, removal, or modification of

station sites among themselves to avoid

interference. Such licensees will also be

required to include, in their application

for minor modification of their

authorization to add, remove, or modify

a station site, a certification that the

station has been appropriately

coordinated. Phase I licensees

authorized on Channels 161–200 will be

required to coordinate the addition,

removal, or modification of station sites

with Phase II licensees authorized on

Channels 1–40. Such Phase I licensees

will also be required to include, in their

application for minor modification of

their authorization to add, remove, or

modify a station site, a certification that

the station has been appropriately

coordinated. Licensees seeking a waiver

of § 90.729(b) of the Commission’s rules

to operate fixed stations in the 221–222

MHz band at a power level of 500 watts

ERP will be required to gain the consent

for such operation from all affected 220

MHz licensees.

V. Steps Taken to Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

82. The actions taken in this MO&O

are in response to petitions for

reconsideration including, the

Commission believes, several filed by

small businesses. The changes minimize

any possible significant economic

impact on small entities, while

remaining consistent with the objectives

of this proceeding.

83. The MO&O grants the petitions of

Phase I licensees to the extent of

permitting, upon application,

modifications to Phase I licensees’

authorizations which do not expand

their 38 dBu service contour. Phase I

licensees also will be permitted to

convert their site-by-site licenses to a

single license. The deregulatory nature

of these steps helps minimize the

economic impact of telecommunications

regulation on small entities.

84. By removing the 220 MHz service

spectrum efficiency standard, the

MO&O grants the petition that the

Commission eliminate the efficiency

standard as applied to paging

operations. The deregulatory nature of

this step helps to minimize the

economic impact of telecommunications

regulation on small entities. We

considered retaining the standard and

exempting paging only, but rejected this

course as potentially discouraging the

provision of innovative services. The

Commission also considered replacing

the standard with a more lenient

standard that would be made stricter

over time, but rejected this course

because the Commission believes

operators would continue using

equipment acquired under the more

lenient standard, in which case the later

standard would have little effect. The

Commission also considered

conforming the 220 MHz band spectrum

efficiency standard to the standard used

in the Refarming proceeding. The

Commission concluded, however, that

because it applies only to aggregated,

contiguous channels, and expires in

2001, the 220 MHz standard touches too

few licensees for too short a time to

significantly increase equipment

development for the refarmed bands.

85. The Commission also believes that

small businesses may be prominent

players in developing this spectrum,

and these businesses would directly

benefit from a flexible spectrum use

policy that enables them to respond

efficiently to marketplace demand.

Given the relatively small amount of

spectrum assigned in a 220 MHz

license, the Commission thinks it is

reasonable to expect that acquisition of

the 220 MHz Phase II licenses may be

relatively affordable and therefore this

service may be particularly attractive to

small businesses.

86. Consistent with the conclusions

reached in the Part 1 Third R&O, the

MO&O eliminates installment payment

plans for small and very small

businesses participating in the 220 MHz

service auction, and increase the level of

bidding credits for such entities. The

Commission will also amend its rules to

permit auction winners to make their

final payments within 10 business days

after the applicable deadline, provided

that they also pay a late fee of 5 percent

of the amount due.

87. While installment payment plans

for small entities in the 220 MHz service

are eliminated in the MO&O, the

Commission found that better

alternatives to assist small businesses as

well as ensure provision of new services

to the public are to raise bidding credits

for existing categories of small entities.

The Commission believes that bidding

credits of sufficient size will enable

small businesses to secure private

financing. This suggestion is consistent

with the Commission’s experience in

other auctions in which installment

payments were not offered and small

entities nevertheless have been

successful (e.g., the auction of Wireless

Communications Service licenses, for

which bidding credits were heightened

to accommodate the lack of installment

payments). Prior to the MO&O, bidding

credits of 10 percent were offered to

small businesses and 25 percent to very

small businesses. The Commission now

offers bidding credits of 25 percent to

small businesses and 35 percent to very

small businesses. The levels of bidding

credits adopted offer a reasonable

accommodation for the elimination of

installment payments.

VI. Report to Congress

88. The Commission will send a copy

of this Supplementary Final Regulatory

Flexibility Analysis, along with the

MO&O, in a report to Congress pursuant

to the Small Business Regulatory

Enforcement Fairness Act of 1996.5 In

addition, the Commission will send a

copy of the MO&O, including this

Supplemental FRFA to the Chief

Counsel for Advocacy for SBA.

Ordering Clauses

89. Accordingly, it is ordered, that the

petitions for reconsideration or

clarification filed by American Mobile

Telecommunications Association;

Incom Communications Corporation,

SEA, Inc., In Touch Services, Inc.,

Philip Adler dba Communications

Management Company, and Aircom

Communications, Inc.; In Touch

Services, Inc.; Police Emergency

Services, Inc. and Bostom and

Associates Company; and SMR

Advisory Group, L.C. with respect to the

220 MHz Second Report and Order in

PR Docket No. 89–552 and GN Docket

No. 93–252, are granted to the extent

provided herein and otherwise are

denied. This action is taken pursuant to

sections 4(i), 4(j), 303(d), 303(r), 309(j),

332, and 405 of the Communications

Act of 1934, 47 U.S.C. 154(i), 154(j),

303(d), 303(r), 309(j), 332, 405.

90. It is further ordered, that the

petitions for reconsideration or

clarification filed by American Mobile

Telecommunications Association, Inc.;

Comtech Communications, Inc.;

Glenayre Technologies, Inc.; Global

Cellular Communications, Inc.; INTEK

Diversified Corp.; Metricom, Inc.;

National Communications Group,

Capital Communications Group,

Columbia Communications Group,

Lonesome Dove Communications, AllAmerican Communications Partners,

and Shiner Bock Group; Personal

Communications Industry Association;

SEA Inc.; Rush Network Corp.; and SMR

Advisory Group L.C. with respect to the

220 MHz Third Report and Order in PR

Docket No. 89–552 and GN Docket No.

93–252, are granted to the extent

provided herein and otherwise are
32590 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

denied. This action is taken pursuant to

sections 4(i), 4(j), 303(d), 303(r), 309(j),

332, and 405 of the Communications

Act of 1934, 47 U.S.C. 154(i), 154(j),

303(d), 303(r), 309(j), 332, 405.

91. It is further ordered that the

Commission’s rules are amended as

indicated. It is further ordered that the

provisions of this Order and the

Commission’s rules, as amended in this

decision, shall become effective August

11, 1998.

92. It is further ordered that a Public

Notice will be issued by the Wireless

Telecommunications Bureau following

the adoption of this Order announcing

when applications must be filed by

Phase I, non-nationwide licensees in

order to enable such licensees to comply

with the requirement that they modify

their authorization to reflect the ERP at

which they were operating at the time

the decisions adopted in the 220 MHz

Third Report and Order became

effective.

93. It is further ordered that the

Commission’s Office of Public Affairs,

Reference Operations Division, shall

send a copy of this Order, including the

Supplemental Final Regulatory

Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small

Business Administration.

List of Subjects in 47 CFR Part 90

Radio.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Rule Changes

For the reasons stated in the preamble

part 90 of title 47 of the Code of Federal

Regulations is amended as follows:

PART 90—PRIVATE LAND MOBILE

SERVICES

1. The authority citation for Part 90

continues to read as follows:

Authority: 47 U.S.C. 154, 251–2, 303, 309,

and 332, unless otherwise noted.

2. Section 90.203 is amended by

revising paragraph (k) to read as follows:

§ 90.203 Type acceptance required.

* * * * *

(k) For transmitters operating on

frequencies in the 220–222 MHz band,

type acceptance will only be granted for

equipment with channel bandwidths up

to 5 kHz, except that type acceptance

will be granted for equipment operating

on 220–222 MHz band Channels 1

through 160 (220.0025 through

220.7975/221.0025 through 221.7975),

171 through 180 (220.8525 through

220.8975/221.8525 through 221.8975),

and 186 through 200 (220.9275 through

220.9975/221.9275 through 221.9975)

with channel bandwidths greater than 5

kHz.

3. Section 90.711 is amended by

revising paragraph (a) introductory text

to read as follows:

§ 90.711 Processing of Phase II

applications.

(a) Phase II applications for

authorizations on Channels 166 through

170 and Channels 181 through 185 will

be processed on a first-come, firstserved basis. When multiple

applications are filed on the same day

for these frequencies in the same

geographic area, and insufficient

frequencies are available to grant all

applications (i.e., if all applications

were granted, violation of the station

separation provisions of § 90.723(k)

would result), these applications will be

considered mutually exclusive and will

be subject to random selection

procedures pursuant to § 1.972 of this

chapter.

* * * * *

4. Section 90.723 is amended by

revising paragraphs (e) and (f),

redesignating paragraphs (g), (h), and (i)

as paragraphs (i), (j), and (k),

respectively, and by adding paragraphs

(g) and (h) to read as follows:

§ 90.723 Selection and assignment of

frequencies.

* * * * *

(e) Phase II licensees authorized on

220–221 MHz frequencies assigned from

Sub-band B will be required to

geographically separate their base

station or fixed station transmitters from

the base station or fixed station

receivers of Phase I licensees authorized

on 221–222 MHz frequencies 200 kHz

removed or less in Sub-band A in

accordance with the Table in paragraph

(d) of this section. Such Phase II

licensees will not be required to

geographically separate their base

station or fixed station transmitters from

receivers associated with additional

transmitter sites that are added by such

Phase I licensees in accordance with the

provisions of § 90.745(a).

(f) Phase II licensees with base or

fixed stations transmitting on 220–221

MHz frequencies assigned from Subband B and Phase II licensees with base

or fixed stations receiving on Sub-band

A 221–222 MHz frequencies, if such

transmitting and receiving frequencies

are 200 kHz or less removed from one

another, will be required to coordinate

the location of their base stations or

fixed stations to avoid interference and

to cooperate to resolve any instances of

interference in accordance with the

provisions of § 90.173(b).

(g) Phase I licensees with base or fixed

stations transmitting on 220–221 MHz

frequencies assigned from Sub-band B

and Phase I licensees with base or fixed

stations receiving on Sub-band A 221–

222 MHz frequencies (if such

transmitting and receiving frequencies

are 200 kHz or less removed from one

another) that add, remove, or modify

station sites in accordance with the

provisions of § 90.745(a) will be

required to coordinate such actions with

one another to avoid interference and to

cooperate to resolve any instances of

interference in accordance with the

provisions of § 90.173(b).

(h) Phase I licensees with base or

fixed stations transmitting on 220–221

MHz frequencies assigned from Subband B that add, remove, or modify

station sites in accordance with the

provisions of § 90.745(a) will be

required to coordinate such actions with

Phase II licensees with base or fixed

stations receiving on Sub-band A 221–

222 MHz frequencies 200 kHz or less

removed.

* * * * *

5. Section 90.729 is amended by

revising paragraphs (b) and (c)

introductory text to read as follows:

§ 90.729 Limitations on power and antenna

height.

* * * * *

(b) The maximum permissible ERP for

mobile units is 50 watts. Portable units

are considered as mobile units.

Licensees operating fixed stations or

paging base stations transmitting on

frequencies in the 221–222 MHz band

may not operate such fixed stations or

paging base stations at power levels

greater than 50 watts ERP, and may not

transmit from antennas that are higher

than 7 meters above average terrain,

except that transmissions from antennas

that are higher than 7 meters above

average terrain will be permitted if the

effective radiated power of such

transmissions is reduced below 50 watts

ERP by 20 log10(h/7) dB, where h is the

height above average terrain (HAAT), in

meters.

(c) Base station and fixed station

transmissions on base station transmit

Channels 196–200 are limited to 2 watts

ERP and a maximum antenna HAAT of

6.1 meters (20 ft). Licensees authorized

on these channels may operate at power

levels above 2 watts ERP or with a

maximum antenna HAAT greater than

6.1 meters (20 ft) if:

* * * * *

6. Section 90.733 is amended by

revising paragraphs (d), (e), and (g) to

read as follows:
Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations 32591

§ 90.733 Permissible operations.

* * * * *

(d) Licensees, except for licensees

authorized on Channels 161 through

170 and 181 through 185, may combine

any number of their authorized,

contiguous channels (including

channels derived from multiple

authorizations) to form channels wider

than 5 kHz.

(e) In combining authorized,

contiguous channels (including

channels derived from multiple

authorizations) to form channels wider

than 5 kHz, the emission limits in

§ 90.210(f) must be met only at the

outermost edges of the contiguous

channels. Transmitters shall be tested to

confirm compliance with this

requirement with the transmission

located as close to the band edges as

permitted by the design of the

transmitter. The frequency stability

requirements in § 90.213 shall apply

only to the outermost of the contiguous

channels authorized to the licensee.

However, the frequency stability

employed for transmissions operating

inside the outermost contiguous

channels must be such that the emission

limits in § 90.210(f) are met over the

temperature and voltage variations

prescribed in § 2.995 of this chapter.

* * * * *

(g) The transmissions of a Phase I

non-nationwide licensee’s paging base

station, or fixed station transmitting on

frequencies in the 220–221 MHz band,

must meet the requirements of

§§ 90.723(d), (g), (h), and (k), and

90.729, and such a station must operate

at the effective radiated power and

antenna height-above-average-terrain

prescribed in the licensee’s land mobile

base station authorization.

* * * * *

7. Section 90.745 is added to read as

follows:

§ 90.745 Phase I licensee service areas.

(a) A Phase I licensee’s service area

shall be defined by the predicted 38 dBu

service contour of its authorized base

station or fixed station transmitting on

frequencies in the 220–221 MHz band at

its initially authorized location or at the

location authorized in accordance with

§§ 90.751, 90.753, 90.755 and 90.757 if

the licensee has sought modification of

its license to relocate its initially

authorized base station. The Phase I

licensee’s predicted 38 dBu service

contour is calculated using the F(50,50)

field strength chart for Channels 7–13 in

§ 73.699 (Fig. 10) of this chapter, with

a 9 dB correction factor for antenna

height differential, and is based on the

authorized effective radiated power

(ERP) and antenna height-aboveaverage-terrain of the licensee’s base

station or fixed station. Phase I licensees

are permitted to add, remove, or modify

transmitter sites within their existing

service area without prior notification to

the Commission so long as their

predicted 38 dBu service contour is not

expanded. The incumbent licensee

must, however, notify the Commission

within 30 days of the completion of any

changes in technical parameters or

additional stations constructed through

a minor modification of its license. Such

notification must be made by submitting

the appropriate FCC form and must

include the appropriate filing fee, if any.

These minor modification applications

are not subject to public notice and

petition to deny requirements or

mutually exclusive applications.

(b) Phase I licensees holding

authorizations for service areas that are

contiguous and overlapping may

exchange these authorizations for a

single license, authorizing operations

throughout the contiguous and

overlapping service areas. Phase I

licensees exercising this license

exchange option must submit specific

information for each of their external

base station sites.

8. The section heading of § 90.769 is

revised to read as follows:

§ 90.769 Construction and implementation

of Phase II nationwide licenses.

* * * * *

9. Section 90.1011 is revised to read

as follows:

§ 90.1011 Submission of upfront payments

and down payments.

(a) The Commission will require

applicants to submit an upfront

payment prior to the start of a 220 MHz

Service auction. The amount of the

upfront payment for each geographic

area license auctioned and the

procedures for submitting it will be set

forth by the Wireless

Telecommunications Bureau in a public

notice in accordance with § 1.2106 of

this chapter.

(b) Each winning bidder in a 220 MHz

Service auction must submit a down

payment to the Commission in an

amount sufficient to bring its total

deposits up to 20 percent of its winning

bid within ten (10) business days

following the release of a Public Notice

announcing the close of bidding.

10. Section 90.1013 is revised to read

as follows:

§ 90.1013 Long-form application (FCC

Form 601).

Each successful bidder for a 220 MHz

geographic area license must submit a

long-form application (FCC Form 601)

within ten (10) business days after being

notified by Public Notice that it is the

winning bidder. Applications for 220

MHz geographic area licenses on FCC

Form 601 must be submitted in

accordance with § 1.2107 of this

chapter, all applicable procedures set

forth in the rules in this part, and any

applicable Public Notices that the

Commission may issue in connection

with an auction. After an auction, the

Commission will not accept long-form

applications for 220 MHz geographic

area licenses from anyone other than the

auction winners and parties seeking

partitioned licenses pursuant to

agreements with auction winners under

§ 90.1019 of this chapter.

11. Section 90.1015 is revised to read

as follows:

§ 90.1015 License grant, denial, default,

and disqualification.

(a) Unless otherwise specified by

Public Notice, auction winners are

required to pay the balance of their

winning bids in a lump sum within ten

(10) business days following the release

of a Public Notice establishing the

payment deadline. If a winning bidder

fails to pay the balance of its winning

bids in a lump sum by the applicable

deadline as specified by the

Commission, it will be allowed to make

payment within ten (10) business days

after the payment deadline, provided

that it also pays a late fee equal to five

percent of the amount due. When a

winning bidder fails to pay the balance

of its winning bid by the late payment

deadline, it is considered to be in

default on its license(s) and subject to

the applicable default payments.

Licenses will be awarded upon the full

and timely payment of winning bids

and any applicable late fees.

(b) A bidder that withdraws its bid

subsequent to the close of bidding,

defaults on a payment due, or is

disqualified, is subject to the payments

specified in § 1.2104(g), § 1.2109, and

§ 90.1007 of this chapter, as applicable.

12. Section 90.1017 is revised to read

as follows:

§ 90.1017 Bidding credits for small

businesses and very small businesses.

(a) Bidding credits. A winning bidder

that qualifies as a small business or a

consortium of small businesses as

defined in § 90.1021(b)(1) or

§ 90.1021(b)(4) may use a bidding credit

of 25 percent to lower the cost of its

winning bid. A winning bidder that

qualifies as a very small business or a

consortium of very small businesses as

defined in § 90.1021(b)(2) or

§ 90.1021(b)(4) may use a bidding credit
32592 Federal Register / Vol. 63, No. 113/ Friday, June 12, 1998 /Rules and Regulations

of 35 percent to lower the cost of its

winning bid.

(b) Unjust enrichment—Bidding

credits. (1) If a small business or very

small business (as defined in

§§ 90.1021(b)(1) and 90.1021(b)(2),

respectively) that utilizes a bidding

credit under this section seeks to

transfer control or assign an

authorization to an entity that is not a

small business or a very small business,

or seeks to make any other change in

ownership that would result in the

licensee losing eligibility as a small

business or very small business, the

small business or very small business

must seek Commission approval and

reimburse the U.S. government for the

amount of the bidding credit, plus

interest based on the rate for ten year

U.S. Treasury obligations applicable on

the date the license was granted, as a

condition of approval of the assignment,

transfer, or other ownership change.

(2) If a very small business (as defined

in § 90.1021(b)(2)) that utilizes a bidding

credit under this section seeks to

transfer control or assign an

authorization to a small business

meeting the eligibility standards for a

lower bidding credit, or seeks to make

any other change in ownership that

would result in the licensee qualifying

for a lower bidding credit under this

section, the licensee must seek

Commission approval and reimburse the

U.S. government for the difference

between the amount of the bidding

credit obtained by the licensee and the

bidding credit for which the assignee,

transferee, or licensee is eligible under

this section, plus interest based on the

rate for ten year U.S. Treasury

obligations applicable on the date the

license was granted, as a condition of

the approval of such assignment,

transfer, or other ownership change.

(3) The amount of payments made

pursuant to paragraphs (b)(1) and (b)(2)

of this section will be reduced over time

as follows: A transfer in the first two

years of the license term will result in

a forfeiture of 100 percent of the value

of the bidding credit (or the difference

between the bidding credit obtained by

the original licensee and the bidding

credit for which the post-transfer

licensee is eligible); in year 3 of the

license term the payment will be 75

percent; in year 4 the payment will be

50 percent; and in year 5 the payment

will be 25 percent, after which there

will be no assessment.

[FR Doc. 98–15710 Filed 6–11–98; 8:45 am]

BILLING CODE 6712–01–P