[Federal Register Volume 63, Number 143 (Monday, July 27, 1998)]
[Rules and Regulations]
[Pages 40059-40066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19943]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 20, 80, and 90

[PR Docket No. 92-257; FCC 98-151]


Maritime Communications

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted a Third Report and Order and 
Memorandum Opinion and Order in PR Docket No. 92-257 which simplifies 
the licensing process and introduces additional flexibility for public 
coast stations. Specifically, the Commission amends the maritime 
service rules to designate geographic licensing regions for very high 
frequency (VHF) public coast stations, and assign all currently 
unassigned VHF public correspondence channels on a geographic basis by 
competitive bidding. The uniform competitive bidding rules will apply 
in public coast station auctions. The Commission also adopts small 
business provisions for qualifying public coast station applicants, and 
defines the criteria used to determine eligibility for these 
provisions. The effect will be to promote and facilitate the 
participation of small businesses in the Commission's auctions and in 
the provision of spectrum-based services.

EFFECTIVE DATE: September 25, 1998.

FOR FURTHER INFORMATION CONTACT: Non-auction information: Scot Stone of 
the Wireless Telecommunications Bureau, Public Safety and Private 
Wireless Division, at (202) 418-0680 or via E-mail to 
<a href="/cdn-cgi/l/email-protection#7818180b0b0c17161d381e1b1b561f170e">``<span class="__cf_email__" data-cfemail="e99a9a9d86878ca98f8a8ac78e869f">[email protected]</span></a>''. Auction information: Anne Napoli of the Wireless 
Telecommunications Bureau, Auctions and Industry Analysis Division, 
Legal Branch, at (202) 418-0660. TTY: (202) 418-7233.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Report and Order and Memorandum Opinion and Order, PR Docket No. 92-
257, FCC 98-51, adopted , July 6, 1998, and released, July 9, 1998. The 
full text of this Third Report and Order and Memorandum Opinion and 
Order is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, NW, 
Washington, DC. The complete text may be purchased from the 
Commission's copy contractor, International Transcription Services, 
1231 20th Street, NW, Washington, DC 20036, telephone (202) 857-3800, 
facsimile (202) 857-3805. Alternative formats (computer diskette, large 
print, audio cassette, and Braille) are available to persons with 
disabilities by contacting Martha Contee at (202) 418-0260, TTY (202) 
418-2555, or at <a href="/cdn-cgi/l/email-protection#0b666864657f6e6e4b6d6868256c647d"><span class="__cf_email__" data-cfemail="e78a848889938282a7818484c9808891">[email protected]</span></a>. The full text of the Third Report and 
Order and Memorandum Opinion and Order can also be downloaded at: 
http://www.fcc.gov/Bureaus/Wireless/Orders/1998/fcc98151.txt or <a href="http://
www.fcc.gov/Bureaus/Wireless/Orders/1998/fcc98151.wp">http://
www.fcc.gov/Bureaus/Wireless/Orders/1998/fcc98151.wp</a>, and the map set 
out in the paper version may be downloaded at <a href="http://www.fcc.gov/
Bureaus/Wireless/Orders/1998/fc98151a.pdf">http://www.fcc.gov/
Bureaus/Wireless/Orders/1998/fc98151a.pdf</a>.

Summary of the Third Report and Order and Memorandum Opinion and 
Order

    1. The Commission initiated the instant proceeding to update the 
Maritime Service rules to promote the use of new, spectrally efficient 
radio communications techniques. In the Second Further Notice of 
Proposed Rule Making (62 FR 37533, July 14, 1997), the Commission 
proposed rules to simplify the license process for VHF public coast 
stations.
    2. The Commission amends the rules to license VHF public 
correspondence channel pairs on a geographic basis, in lieu of the 
site-based approach presently used. The Commission designates forty-two 
licensing areas: nine maritime VHF Public Coast areas (VPCs), each 
consisting of one or more Economic Areas (EAs) within one hundred miles 
of major waterways and grouped together in accordance with Coast Guard 
Districts; and thirty-three inland VPCs, each consisting of a single EA 
no part of which is within one hundred miles of a major waterway.
    3. The Commission amends the rules to authorize a single geographic 
area licensee to operate on all currently unassigned VHF public 
correspondence frequencies within its licensing area for a ten-year 
license term. Each geographic area licensee may place stations anywhere 
within its region to serve vessels or units on land, so long as marine-
originating traffic is given priority and incumbent operations are 
protected. Base stations and land units will be blanket licensed under 
the geographic license, except that individual licensing is required 
for base stations that require submission of an Environmental 
Assessment under 47 CFR 1.1307 or international coordination, or will 
affect the radio frequency quiet zones described in 47 CFR 80.21. The 
Commission amends the rules to permit partitioning and disaggregation 
of the geographic licenses, with partitionees and disaggregatees to 
hold their licenses for the remainder of the original licensee's term 
and to have a renewal expectancy.
    4. Incumbent VHF public coast station licensees, and private land 
mobile radio (PLMR) licensees sharing marine spectrum in inland 
regions, may continue operating indefinitely, and incumbents and 
geographic area licensees must afford interference protection to one 
another. If an incumbent fails to construct, discontinues operations, 
or otherwise has its license terminated, its authorization 
automatically reverts to the geographic licensee. Incumbent licensees 
may renew, transfer, assign, and modify their license in any manner so 
long as such modifications do not extend the incumbent's service area; 
proposed modifications that would extend an incumbent's service area or 
request additional frequencies are contingent upon an agreement with 
each affected licensee.
    5. Geographic licensees must provide substantial service. 
Licensees' showings will be reviewed on a case-by-case basis, but the 
Commission provides the following safe-harbor examples: for maritime 
VPC licensees, coverage to one-third of the region's major waterways 
within five years, and continuous to two-thirds of the region's major 
waterways within ten years; for inland VPC licensees (and partitionees 
of maritime VPC licensees where the partitioned area is not contiguous 
with a major waterway), coverage to one-third of the population of the 
region within five years and two-thirds of the region's population 
within ten years.

Competitive Bidding Procedures

    6. Background. In Implementation of Sections 3(n) and 332 of the 
Communications Act, Regulatory Treatment of Mobile Services, Second 
Report and Order, 59 FR 18493 (March 7, 1994), the Commission 
classified the public coast station service as a commercial mobile 
radio service (CMRS). Subsequently, in Implementation of Section 309(j) 
of the Communications Act--Competitive Bidding, Second Report and 
Order, 59 FR 22980 (May 4, 1994), the Commission determined that as a 
CMRS service, mutually exclusive applications for public coast station 
licenses would be resolved through competitive

[[Page 40060]]

bidding. The Commission proposed to establish competitive bidding rules 
for public coast station licenses in the Second Further Notice. 
Following the release of the Second Further Notice, Congress passed the 
Balanced Budget Act of 1997, Pub. L. 105-33, 111 Stat. 251 (Aug. 5, 
1997) (Balanced Budget Act), which expanded and extended the 
Commission's auction authority.
    7. Decision. The Commission earlier concluded that the public coast 
station service is subject to competitive bidding. This conclusion is 
unchanged by the Balanced Budget Act, which provides that all licenses 
and construction permits for which mutually exclusive applications are 
accepted, with certain exceptions not applicable here, shall be granted 
by means of competitive bidding. The Commission therefore believes that 
it lacks discretion to resolve mutually exclusive public coast license 
applications by any means other than competitive bidding. Since the 
Balanced Budget Act expressly provides that competitive bidding shall 
not be used for public safety radio services, the inland VPC channel 
pairs set aside for public safety use shall be awarded by other means, 
to be decided as part of the Commission's pending public safety 
proceeding, see 62 FR 60199 (November 7, 1997).

Competitive Bidding Issues

    8. Proposal. The Commission proposed in the Second Further Notice 
to adopt service specific rules to govern public coast station 
auction(s), pending the adoption of final uniform competitive bidding 
rules, as proposed in Amendment of Part 1 of the Commission's Rules--
Competitive Bidding Procedures, Second Report and Order, Order on 
Reconsideration, and Fifth Notice of Proposed Rule Making, 62 FR 13540 
(March 21, 1997). In accordance with the Commission's practice of 
establishing definitions for ``small business'' on a service-by-service 
basis, the Commission also sought comment on establishing a ``small 
business'' definition for public coast station auction(s). The 
Commission tentatively concluded that, to determine small business 
status, public coast station applicants should attribute the gross 
revenues of their controlling principals and affiliates, and that the 
definition of affiliate in the public coast context should include an 
exception for Indian tribes, Alaska Region and Village Corporations. 
The Commission tentatively decided not to provide special consideration 
for incumbent licensees in the competitive bidding process.
    9. Decision. The uniform competitive bidding rules recently adopted 
in Amendment of Part 1 of the Commission's Rules--Competitive Bidding 
Procedures, Third Report and Order, 63 FR 2315 (January 15, 1998) (Part 
1 Third Report and Order), and found in Subpart Q of Part 1 of the 
Commission's rules, will apply in public coast station auction(s). 
Thus, the Part 1 definition of affiliate, which includes an exemption 
for Indian Tribes and Alaska Region and Village Corporations, will 
apply in public coast station auction(s), see 47 CFR 1.2110(b)(4). 
Consistent with this approach, procedural matters such as the general 
design and timing of the auction(s); license grouping; bid increments; 
activity and stopping rules; and application and payment requirements, 
including upfront payments, will be determined by the Wireless 
Telecommunications Bureau pursuant to its delegated authority. See 47 
CFR 0.131(c), 0.331, 0.332.
    10. For purposes of public coast auction(s), the Commission defines 
a small business as an entity that, together with controlling interests 
and affiliates, has average gross revenues for the preceding three 
years not to exceed fifteen million dollars, and a ``very small'' 
business as an entity that, together with controlling interests and 
affiliates, has average gross revenues for the preceding three years 
not to exceed three million dollars. A two-tiered definition will allow 
very small incumbents to compete favorably with larger entities, and 
will provide entities with relatively low gross revenues an opportunity 
to participate meaningfully in the auction(s).
    11. The Commission also adopts its tentative conclusion to 
attribute the gross revenues of the applicant, its controlling 
principals and their affiliates in determining small business 
eligibility. However, the adopted rule refers to ``controlling 
interests'' rather than ``controlling principals,'' and provides a 
definition of this term for further clarification. A ``controlling 
interest'' includes individuals or entities with de jure and de facto 
control of the applicant. De jure control is 50.1% of the voting stock 
of a corporation or, in the case of a partnership, the general 
partners. De facto control is determined on a case-by-case basis. The 
controlling interest definition also provides for attribution of 
partnership and other ownership interests, and offers guidance on 
calculation of various types of ownership interests. When an applicant 
cannot identify controlling interests under the definition, the 
revenues of all interest holders in the applicant and their affiliates 
are counted. This approach is consistent with the Commission's proposal 
in Amendment of Part 1 of the Commission's Rules--Competitive Bidding 
Procedures, Second Further Notice of Proposed Rule Making, 63 FR 770 
(January 7, 1998), and with the attribution rules applied in recent 
Commission auctions. The effect will be to ensure that only qualifying 
entities receive small business benefits, and to enable these entities 
to attract passive financing in a highly competitive and evolving 
market. The Commission also emphasizes that all bidders are subject to 
the ownership disclosure requirements set forth in 47 CFR 1.2112.
    12. The Commission adopts its tentative decision not to provide 
special consideration to incumbent public coast service licensees that 
participate in the auction(s), because the Commission believes that new 
entrants and incumbents should have an equal opportunity to obtain 
spectrum. Qualifying incumbents may benefit from the adopted small 
business provisions.
    13. The bidding credit levels for public coast auction(s) will 
conform to the schedule adopted in the Part 1 Third Report and Order. 
The Part 1 Third Report and Order adopted bidding credits of thirty-
five percent for entities with annual gross revenues not to exceed 
three million, and twenty-five percent for entities with annual gross 
revenues not to exceed fifteen million. See 47 CFR 1.21110(e)(2)(i)-
(ii). Thus, public coast station applicants meeting the definition of 
``very small'' business will receive a thirty-five percent bidding 
credit, and applicants meeting the definition of ``small'' business 
will receive a twenty-five percent bidding credit.
    14. In the Part 1 Third Report and Order, the Commission held that 
installment payments will not be used in the immediate future as a 
means of financing small business participation in Commission auctions. 
Since the Commission received no comment on this issue in this 
proceeding, installment payments will not be available in public coast 
station auctions for reasons discussed in the Part 1 Third Report and 
Order.
    15. The Commission also received no comments or proposals regarding 
the sufficiency of small business provisions in promoting participation 
by minority-and women-owned businesses and rural telephone companies. 
Therefore, the Commission concludes that it lacks a sufficient record 
to support such provisions at this time.
    16. The Commission may seek comment in a future proceeding on

[[Page 40061]]

whether the adopted small business provisions should be modified for 
auctions of high seas and Automated Maritime Telecommunications Service 
public coast station spectrum.

Regulatory Flexibility Act

    17. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated into the Second 
Further Notice of Proposed Rule Making in this proceeding (Second 
Further Notice). The Commission sought written public comment on the 
proposals in the Second Further Notice, including comment on the IRFA. 
This present Final Regulatory Flexibility Analysis (FRFA) conforms to 
the RFA.
    18. Need for, and Objectives of, the Third Report and Order and 
Memorandum Opinion and Order. Our objective is to simplify our 
licensing process for VHF public coast stations. Specifically, this 
action will: (1) convert licensing of VHF public coast station spectrum 
from site-by-site licensing to geographic area licensing, (2) simplify 
and streamline the VHF public coast spectrum licensing procedures and 
rules, (3) increase licensee flexibility to provide communication 
services that are responsive to dynamic market demands, and (4) 
introduce market-based forces into the Maritime Services by using 
competitive bidding procedures (auctions) to resolve mutually exclusive 
applications for public coast spectrum. We find that these actions will 
increase the number and types of communications services available to 
the maritime community and improve the safety of life and property at 
sea, and that the potential benefits to the maritime community exceed 
any negative effects that may result form the promulgation of rules for 
this purpose. Thus, we conclude that the public interest is served by 
amending our rules as described above.
    19. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. No comments were submitted in response to the 
IRFA. In general comments on the Second Further Notice, however, some 
small business commenters raised issues that might affect small 
business entities. In particular, some small business commenters argued 
that geographic licensing should be used only in certain areas; or that 
incumbent licensees be permitted to expand their systems before any 
auctions are held; or that license areas should be smaller than Coast 
Guard Districts, to permit smaller licensees to participate in auctions 
without having to bid for territory far exceeding their operating 
needs. The Commission carefully considered each of these comments in 
reaching the decision set forth herein.
    20. Description and Estimate of the Number of Small Entities to 
Which Rules Will Apply. The rules adopted herein will apply to 
licensees using public coast spectrum. The Commission has not developed 
a definition of the term ``small entity'' specifically applicable to 
public coast station licensees. Therefore, the applicable definition of 
small entity is the definition under the Small Business Administration 
rules applicable to radiotelephone service providers. This definition 
provides that a small entity is any entity employing less than 1,500 
persons. See 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4812. Since the size data provided by the Small Business 
Administration does not enable us to make a meaningful estimate of the 
number of current or prospective public coast station licensees which 
are small businesses, no commenters responded to our request for 
information regarding the number of small entities that use or are 
likely to use public coast spectrum, we used the 1992 Census of 
Transportation, Communications, and Utilities, conducted by the Bureau 
of Census, which is the most recent information available. This 
document shows that only 12 radiotelephone firms out of a total of 
1,178 such firms which operated during 1992 had 1,000 or more 
employees. There are over 100 public coast station licensees. Based on 
the proposals contained herein, it is unlikely that more than 50 
licensees will be authorized in the future. Therefore, for purposes of 
our evaluations and conclusions in this FRFA, we estimate that there 
are approximately 150 public coast station licensees which are small 
businesses, as that term is defined by the Small Business 
Administration.
    21. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. All small businesses that choose to 
participate in the competitive bidding for these services will be 
required to demonstrate that they meet the criteria set forth to 
qualify as small businesses, as required under part 1, subpart Q of the 
Commission's Rules, 47 CFR part 1, subpart Q. Any small business 
applicant wishing to avail itself of small business provisions will 
need to make the general financial disclosures necessary to establish 
that the small business is in fact small. Prior to auction each small 
business applicant will be required to submit an FCC Form 175, OMB 
Clearance Number 3060-0600. The estimated time for filling out an FCC 
Form 175 is 45 minutes. In addition to filing an FCC Form 175, each 
applicant will have to submit information regarding the ownership of 
the applicant, any joint venture arrangements or bidding consortia that 
the applicant has entered into, and financial information demonstrating 
that a business wishing to qualify for bidding credits is a small 
business. Applicants that do not have audited financial statements 
available will be permitted to certify to the validity of their 
financial showings. While many small businesses have chosen to employ 
attorneys prior to filing an application to participate in an auction, 
the rules are intended to enable a small business working with the 
information in a bidder information package to file an application on 
its own. When an applicant wins a license, it will be required to 
submit an FCC Form 494 (common carrier), which will require technical 
information regarding the applicant's proposals for providing service. 
This application will require information provided by an engineer who 
will have knowledge of the system's design.
    22. Steps Taken to Minimize Burdens of Small Entities, and 
Significant Alternatives Considered. The Commission in this proceeding 
has considered comments on ways to implement broad changes to the 
Maritime Service rules. In doing so, the Commission has adopted 
alternatives which minimize burdens placed on small entities. First, it 
has decided to establish a presumption that geographic area licensees 
are telecommunications carriers, avoiding the need for small 
telecommunications to provide detailed information about their 
operations. Also, it has exempted by rule from the Channel 16 safety 
watch requirement public coast stations eligible whose areas are served 
by government stations, replacing the prior requirement that such coast 
stations individually request an exemption. In addition, the Commission 
has eased the construction requirements for VHF public coast stations.
    23. The Commission considered and rejected several significant 
alternatives. It rejected the alternative of licensing all VHF public 
coast spectrum by Coast Guard District. Instead, it will license such 
spectrum in areas removed from major waterways by inland VHF Public 
Coast Station Area (VPCs), identical to Economic Areas (EAs), allowing 
small entities there to participate in the auction without bidding for 
territory far exceeding their operating needs. The Commission rejected 
the alternative of

[[Page 40062]]

delaying the auctions for the inland VPCs by holding frequencies open 
for public safety applications. Instead, the Commission designated 
public safety channels in advance. The Commission rejected the 
alternative of requiring each geographic area licensee to provide 
detailed information about the services it will offer, so the 
Commission could determine whether the licensee is a telecommunications 
carrier. Instead, the Commission established a rebuttable presumption 
that geographic area licensees are telecommunications carriers, so only 
those seeking to avoid that classification need submit such 
information.
    24. The Commission will send a copy of the Third Report and Order 
and Memorandum Opinion and Order, including this FRFA, in a report to 
be sent to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). In 
addition, the Commission will send a copy of the Third Report and Order 
and Memorandum Opinion and Order, including this FRFA, to the Chief 
Counsel for Advocacy of the Small Business.

Paperwork Reduction Act

    25. This Third Report and Order and Memorandum Opinion and Order 
contains neither a modified nor a new information collection.

List of Subjects

47 CFR Part 20

    Communications common carriers, Radio, Reporting and recordkeeping 
requirements.

47 CFR Part 80

    Communications equipment, Radio, Vessels.

47 CFR Part 90

    Communications equipment, Radio.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Accordingly, 47 CFR parts 20, 80, and 90 are amended as follows:

PART 20--COMMERCIAL MOBILE RADIO SERVICES

    1. The authority citation for part 20 continues to read as follows:

    Authority: Secs. 4, 251-2, 303, and 332, 48 Stat. 1066, 1062, as 
amended; 47 U.S.C. 154, 251-4, 303, and 332 unless otherwise noted.

    2. Amend Sec. 20.9 by revising paragraph (b) introductory text and 
paragraph (b)(1) to read as follows:


Sec. 20.9  Commercial mobile radio service.

* * * * *
    (b) Licensees of a Personal Communications Service or applicants 
for a Personal Communications Service license, and Public Coast Station 
licensees or applicants, proposing to use any Personal Communications 
Service or Public Coast Station spectrum to offer service on a private 
mobile radio service basis must overcome the presumption that Personal 
Communications Service and Public Coast Stations are commercial mobile 
radio services.
    (1) The applicant or licensee (who must file an application to 
modify its authorization) seeking authority to dedicate a portion of 
the spectrum for private mobile radio service, must include a 
certification that it will offer Personal Communications Service or 
Public Coast Station service on a private mobile radio service basis. 
The certification must include a description of the proposed service 
sufficient to demonstrate that it is not within the definition of 
commercial mobile radio service in Sec. 20.3 of this chapter. Any 
application requesting to use any Personal Communications Service or 
Public Coast Station spectrum to offer service on a private mobile 
radio service basis will be placed on public notice by the Commission.
* * * * *

PART 80--STATIONS IN THE MARITIME SERVICES

    3. The authority citation for part 80 is revised to read as 
follows:

    Authority: Secs. 4, 303, 307(e), 309, and 332, 48 Stat. 1066, 
1082, as amended; 47 U.S.C. 154, 303, 307(e), 309, and 332, unless 
otherwise noted. Interpret or apply 48 Stat. 1064-1068, 1081-1105, 
as amended; 47 U.S.C. 151-155, 301-609; 3 UST 3450, 3 UST 4726, 12 
UST 2377.

    4. Amend Sec. 80.3 by revising paragraph (b) to read as follows:


Sec. 80.3  Other applicable rule parts of this chapter.

* * * * *
    (b) Part 1. This part includes rules of practice and procedure for 
license applications, adjudicatory proceedings, procedures for 
reconsideration and review of Commission actions; provisions concerning 
violation notices and forfeiture proceedings; and the environmental 
processing requirements that, if applicable, must be complied with 
prior to the initiation of construction. Subpart Q of Part 1 contains 
rules governing competitive bidding procedures for resolving mutually 
exclusive applications for certain initial licenses.
* * * * *
    5. Amend Sec. 80.25 by revising paragraph (b) to read as follows:


Sec. 80.25  License term.

* * * * *
    (b) Licenses other than ship stations in the maritime services will 
normally be issued for a term of five years from the date of original 
issuance, major modification, or renewal, except that licenses for VHF 
public coast stations will normally be issued for a term of ten years 
from the date of original issuance, major modification, or renewal. 
Licenses, other than Public Coast and Alaska Public Fixed stations, may 
be renewed up to ninety (90) days after the date the license expires.
* * * * *
    6. Revise Sec. 80.49 to read as follows:


Sec. 80.49  Construction and regional service requirements.

    (a) Public coast stations. (1) Each VHF public coast station 
geographic area licensee must make a showing of substantial service 
within its region or service area (subpart P) within five years of the 
initial license grant, and again within ten years of the initial 
license grant, or the authorization becomes invalid and must be 
returned to the Commission for cancellation. ``Substantial'' service is 
defined as service which is sound, favorable, and substantially above a 
level of mediocre service which just might minimally warrant renewal. 
For site-based VHF public coast station licensees, when a new license 
has been issued or additional operating frequencies have been 
authorized, if the station or frequencies authorized have not been 
placed in operation within twelve months from the date of the grant, 
the authorization becomes invalid and must be returned to the 
Commission for cancellation.
    (2) For LF, MF, HF, and AMTS band public coast station licensees, 
when a new license has been issued or additional operating frequencies 
have been authorized, if the station or frequencies authorized have not 
been placed in operation within eight months from the date of the 
grant, the authorization becomes invalid and must be returned to the 
Commission for cancellation.
    (b) Public fixed stations. When a new license has been issued or 
additional operating frequencies have been authorized, if the station 
or frequencies authorized have not been placed in operation within 
twelve months from the date of the grant, the authorization

[[Page 40063]]

becomes invalid and must be returned to the Commission for 
cancellation.
    7. Add Sec. 80.60 to subpart B to read as follows:


Sec. 80.60  Partitioned licenses and disaggregated spectrum.

    (a) Eligibility. VHF Public Coast Station Area (VPCSA) licensees, 
see Sec. 80.371(c)(1)(ii) of this part, may partition their geographic 
service area or disaggregate their spectrum pursuant to the procedures 
set forth in this section. Parties seeking approval for partitioning 
and disaggregation shall request an authorization for partial 
assignment pursuant to Sec. 1.924 of this chapter.
    (b) Technical standards. (1) Partitioning. In the case of 
partitioning, all requests for authorization for partial assignment of 
a license must include, as an attachment, a description of the 
partitioned service area. The partitioned service area shall be defined 
by coordinate points at every 3 degrees along the partitioned service 
area unless an FCC-recognized service area is utilized (e.g., 
Metropolitan Service Area, Rural Service Area, or Economic Area) or 
county lines are used. The geographic coordinates must be specified in 
degrees, minutes, and seconds to the nearest second of latitude and 
longitude, and must be based upon the 1983 North American Datum 
(NAD83). In a case where an FCC-recognized service area or county lines 
are utilized, applicants need only list the specific area(s) (through 
use of FCC designations or county names) that constitute the 
partitioned area.
    (2) Disaggregation. Spectrum may be disaggregated in any amount, 
provided acquired spectrum is disaggregated according to frequency 
pairs.
    (3) Combined partitioning and disaggregation. The Commission will 
consider requests for partial assignment of licenses that propose 
combinations of partitioning and disaggregation.
    (c) License term. The license term for a partitioned license area 
and for disaggregated spectrum shall be the remainder of the original 
licensee's term as provided for in Sec. 80.25 of this part.
    (d) Construction Requirements. (1) Partitioning. Partial assignors 
and assignees for license partitioning have two options to meet 
construction requirements. Under the first option, the partitionor and 
partitionee would each certify that they will independently satisfy the 
substantial service requirement for their respective partitioned areas. 
If either licensee failed to meet its substantial service showing 
requirement, only the non-performing licensee's renewal application 
would be subject to dismissal. Under the second option, the partitioner 
certifies that it has met or will meet the substantial service 
requirement for the entire market. If the partitioner fails to meet the 
substantial service standard, however, only its renewal application 
would be subject to forfeiture at renewal.
    (2) Disaggregation. Partial assignors and assignees for license 
disaggregation have two options to meet construction requirements. 
Under the first option, the disaggregator and disaggregatee would 
certify that they each will share responsibility for meeting the 
substantial service requirement for the geographic service area. If 
parties choose this option and either party fails to do so, both 
licenses would be subject to forfeiture at renewal. The second option 
would allow the parties to agree that either the disaggregator or the 
disaggregatee would be responsible for meeting the substantial service 
requirement for the geographic service area. If parties choose this 
option, and the party responsible for meeting the construction 
requirement fails to do so, only the license of the nonperforming party 
would be subject to forfeiture at renewal.
    8. Amend Sec. 80.70 by adding new paragraph (c) to read as follows:


Sec. 80.70  Special provisions relative to coast station VHF 
facilities.

* * * * *
    (c) A VHF (156-162 MHz) public coast station licensee initially 
authorized on any of the channels listed in the table in 
Sec. 80.371(c)(1)(i) of this part may transfer or assign its channel(s) 
to another entity. If the proposed transferee or assignee is the 
geographic area licensee for the geographic area to which the channel 
is allocated, such transfer or assignment will be deemed to be in the 
public interest. However, such presumption will be rebuttable.
    9. Revise Sec. 80.105 to read as follows:


Sec. 80.105  General obligations of coast stations.

    Each coast station or marine-utility station must acknowledge and 
receive all calls directed to it by ship or aircraft stations. Such 
stations are permitted to transmit safety communication to any ship or 
aircraft station. VHF (156-162 MHz) public coast stations may provide 
fixed or hybrid services on a co-primary basis with mobile operations.
    10. Amend Sec. 80.303 by revising paragraph (b) to read as follows:


Sec. 80.303  Watch on 156.800 MHz (Channel 16).

* * * * *
    (b) A coast station is exempt from compliance with the watch 
requirement when Federal, State, or Local Government stations maintain 
a watch on 156.800 MHz over 95% of the coast station's service area. 
Each licensee exempted by rule must notify the nearest district office 
of the U.S. Coast Guard at least thirty days prior to discontinuing the 
watch, or in the case of new stations, at least thirty days prior to 
commencing service. The Coast Guard may require any coast station to 
maintain the watch temporarily or permanently. The Coast Guard may also 
require any coast station to remain capable of either immediately 
resuming the watch or providing the Coast Guard direct dial-up access 
to the necessary 156.800 MHz transceiver at no charge so that the Coast 
Guard can maintain the watch.
* * * * *
    11. Amend Sec. 80.371 by revising paragraph (c) intoductory text, 
adding paragraph (c)(1)(i) before the table, and adding paragraphs 
(c)(1)(ii), (c)(1)(iii), (c)(2), (c)(3), and (c)(4) to read as follows:


Sec. 80.371  Public correspondence frequencies.

* * * * *
    (c) Working frequencies in the marine VHF 156-162 MHz band. (1)(i) 
The frequency pairs listed in the table in paragraph (c)(1)(ii) are 
available for assignment to public coast stations for public 
correspondence communications with ship stations and units on land.
* * * * *
    (ii) Service areas in the marine VHF 156-162 MHz band are VHF 
Public Coast Station Areas (VPCSAs). As listed in the table in this 
paragraph, VPCSAs are based on, and composed of one or more of, the U.S 
Department of Commerce's 172 Economic Areas (EAs). See 60 FR 13114 
(March 10, 1995). In addition, the Commission shall treat Guam and the 
Northern Mariana Islands, Puerto Rico and the United States Virgin 
Islands, American Samoa, and the Gulf of Mexico as EA-like areas, and 
has assigned them EA numbers 173-176, respectively. Maps of the EAs and 
VPCSAs are available for public inspection and copying at the Public 
Safety and Private Wireless Division, room 8010, 2025 M Street, NW, 
Washington, DC. Except as shown in the table, the frequency pairs 
listed in paragraph (c)(1)(i) of this section are available for 
assignment to a single licensee in each of the VPCSAs listed in the 
table in this paragraph. In addition to the listed EAs listed in the 
table in this paragraph, each VPCSA also includes the adjacent waters 
under the jurisdiction of the United States.

[[Page 40064]]



------------------------------------------------------------------------
                 VHF Public coast station areas (VPCSAs)                
-------------------------------------------------------------------------
                                                        Frequency pairs 
            VPCSAs                       EAs           not available for
                                                           assignment   
------------------------------------------------------------------------
1 (Northern Atlantic).........  1-5, 10..............  .................
2 (Mid-Atlantic)..............  9, 11-23, 25, 42, 46.  .................
3 (Southern Atlantic).........  24, 26-34, 37, 38,     .................
                                 40, 41, 174.                           
4 (Mississippi River).........  34, 36, 39, 43-45, 47- .................
                                 53, 67-107, 113, 116-                  
                                 120, 122-125, 127,                     
                                 130-134, 176.                          
5 (Great Lakes)...............  6-8, 54-66, 108, 109.  .................
6 (Southern Pacific)..........  160-165..............  .................
7 (Northern Pacific)..........  147, 166-170.........  .................
8 (Hawaii)....................  172, 173, 175........  .................
9 (Alaska)....................  171..................  .................
10 (Grand Forks)..............  110..................  84, 25.          
11 (Minot)....................  111..................  84, 25.          
12 (Bismarck).................  112..................  84, 25.          
13 (Aberdeen).................  114..................  84, 25.          
14 (Rapid City)...............  115..................  84, 25.          
15 (North Platte).............  121..................  84, 25.          
16 (Western Oklahoma).........  126..................  25, 85.          
17 (Abilene)..................  128..................  25, 85.          
18 (San Angelo)...............  129..................  25, 85.          
19 (Odessa-Midland)...........  135..................  25, 85.          
20 (Hobbs)....................  136..................  25, 85.          
21 (Lubbock)..................  137..................  25, 85.          
22 (Amarillo).................  138..................  25, 85.          
23 (Santa Fe).................  139..................  84, 25.          
24 (Pueblo)...................  140..................  84, 25.          
25 (Denver-Boulder-Greeley)...  141..................  84, 25.          
26 (Scottsbluff)..............  142..................  84, 25.          
27 (Casper)...................  143..................  84, 25.          
28 (Billings).................  144..................  84, 25.          
29 (Great Falls)..............  145..................  84, 25.          
30 (Missoula).................  146..................  84, 25.          
31 (Idaho Falls)..............  148..................  25, 85.          
32 (Twin Falls)...............  149..................  25, 85.          
33 (Boise City)...............  150..................  84, 25.          
34 (Reno).....................  151..................  84, 25.          
35 (Salt Lake City-Ogden).....  152..................  25, 85.          
36 (Las Vegas)................  153..................  84, 25.          
37 (Flagstaff)................  154..................  84, 25.          
38 (Farmington)...............  155..................  84, 25.          
39 (Albuquerque)..............  156..................  84, 25.          
40 (El Paso)..................  157..................  25, 85.          
41 (Phoenix-Mesa).............  158..................  84, 25.          
42 (Tucson)...................  159..................  84, 25.          
------------------------------------------------------------------------

    (iii) Subject to paragraph (c)(3) of this section, each licensee 
may also operate on 12.5 kHz offset frequencies in areas where the 
licensee is authorized on both frequencies adjacent to the offset 
frequency, and in areas where the licensee on the other side of the 
offset frequency consents to the licensee's use of the adjacent offset 
frequency.
    (2) Any recovered channel pairs will revert automatically to the 
holder of the VPCSA license within which such channels are included, 
except the channel pairs listed in the table in paragraph (c)(1)(ii) of 
this section. Those channel pairs, and any channel pairs recovered 
where there is no VPCSA licensee, will be retained by the Commission 
for future licensing.
    (3) VPCSA licensees may not operate on Channel 228B (162.0125 MHz), 
which is available for use in the Coast Guard's Ports and Waterways 
Safety System (PAWSS)). In addition, within six months of the 
conclusion of the competitive bidding procedures to determine the 
licensees in each VPCSA, the U.S. Coast Guard shall submit to each 
licensee of VPCSAs 1-9 a plan specifying up to two narrowband channel 
pairs offset 12.5 kHz from the channels set forth in the table in 
paragraph (c)(1)(i) of this section, for use in the PAWSS. The final 
selection of the PAWSS channel pairs can be negotiated (if the VPCSA 
licensee objects to the Coast Guard proposal, it shall make a 
counterproposal within three months) and established by an agreement 
between the parties. All parties are required to negotiate in good 
faith. If no agreement is reached within one year of the date the Coast 
Guard submitted its plan, the Coast Guard may petition the Commission 
to select the channel pairs.
    (4) Subject to the requirements of Sec. 80.21, each VPCSA licensee 
may place stations anywhere within its region without obtaining prior 
Commission approval provided:
    (i) It provides to co-channel coast station incumbent licensees, 
and incumbent Private Land Mobile Radio licensees authorized under part 
90 of this chapter on a primary basis, protection as defined in subpart 
P of this part. VPCSA licensees that share a common border may either 
distribute the available frequencies upon mutual agreement or request 
that the Commission assign frequencies along the common border.

[[Page 40065]]

    (ii) The locations and/or technical parameters of the transmitters 
are such that individual coordination of the channel assignment(s) with 
a foreign administration, under applicable international agreements and 
rules in this part, is not required.
    (iii) For any construction or alteration that would exceed the 
requirements of Sec. 17.7 of this chapter, licensees must notify the 
appropriate Regional Office of the Federal Aviation Administration (FAA 
Form 7460-1) and file a request for antenna height clearance and 
obstruction marking and lighting specifications (FCC Form 854) with the 
FCC, Attn: Information Processing Branch, 1270 Fairfield Rd., 
Gettysburg, PA 17325-7245.
    (iv) The transmitters must not have a significant environmental 
effect as defined by Secs. 1.1301 through 1.1319 of this chapter.
* * * * *
    12. Revise Sec. 80.751 to read as follows:


Sec. 80.751  Scope.

    This subpart specifies receiver antenna terminal requirements in 
terms of power, and relates the power available at the receiver antenna 
terminals to transmitter power and antenna height and gain. It also 
sets forth the co-channel interference protection that VHF public coast 
station geographic area licensees must provide to incumbents.
    13. Revise Sec. 80.773 to read as follows:


Sec. 80.773  Co-channel interference protection.

    (a) Where a VHF public coast station geographic area licensee 
shares a frequency with an incumbent VHF public coast station licensee, 
the ratio of desired to undesired signal strengths must be at least 12 
dB within the service area of the station.
    (b) Where a VHF public coast station geographic area licensee 
shares a frequency with an incumbent private land mobile radio 
licensee, the VHF public coast station geographic area licensee must 
provide at least 10 dB protection to the PLMR incumbent's predicted 38 
dBu signal level contour. The PLMR incumbent's predicted 38 dBu signal 
level contour is calculated using the F(50, 50) field strength chart 
for Channels 7-13 in Sec. 73.699 (Fig. 10a) of this chapter, with a 9 
dB correction factor for antenna height differential, and is based on 
the licensee's authorized effective radiated power and antenna height-
above-average-terrain.
    14. Add new subpart Y to read as follows:

Subpart Y--Competitive Bidding Procedures

Sec.
80.1251  Maritime communications services subject to competitive 
bidding.
80.1252  Designated entities.


Sec. 80.1251  Maritime communications services subject to competitive 
bidding.

    Mutually exclusive initial applications for VPCSA licenses, high 
seas public coast station licenses, and AMTS coast station licenses are 
subject to competitive bidding procedures. The procedures set forth in 
part 1, subpart Q of this chapter will apply unless otherwise provided 
in this part.


Sec. 80.1252  Designated entities.

    (a) This section addresses certain issues concerning designated 
entities in maritime communications services subject to competitive 
bidding. Issues that are not addressed in this section are governed by 
the designated entity provisions in part 1, subpart Q of this chapter.
    (b) Eligibility for small business provisions. (1) A small business 
is an entity that, together with its affiliates and controlling 
interests, has average gross revenues not to exceed $15 million for the 
preceding three years.
    (2) A very small business is an entity that, together with its 
affiliates and controlling interests, has average gross revenues not to 
exceed $3 million for the preceding three years.
    (3) For purposes of determining whether an entity meets either of 
the definitions set forth in paragraph (b)(1) or (b)(2) of this 
section, the gross revenues of the entity, its affiliates, and 
controlling interests shall be considered on a cumulative basis and 
aggregated.
    (4) Where an applicant or licensee cannot identify controlling 
interests under the standards set forth in this section, the gross 
revenues of all interest holders in the applicant, and their 
affiliates, will be attributable.
    (5) A consortium of small businesses (or a consortium of very small 
businesses) is a conglomerate organization formed as a joint venture 
between or among mutually independent business firms, each of which 
individually satisfies the definition in paragraph (b)(1) of this 
section (or each of which individually satisfies the definition in 
paragraph (b)(2) of this section). Where an applicant or licensee is a 
consortium of small businesses (or very small businesses), the gross 
revenues of each small business (or very small business) shall not be 
aggregated.
    (c) Controlling interest. (1) For purposes of this section, 
controlling interest includes individuals or entities with de jure and 
de facto control of the applicant. De jure control is greater than 50 
percent of the voting stock of a corporation, or in the case of a 
partnership, the general partner. De facto control is determined on a 
case-by-case basis. An entity must disclose its equity interest and 
demonstrate at least the following indicia of control to establish that 
it retains de facto control of the applicant:
    (i) The entity constitutes or appoints more than 50 percent of the 
board of directors or management committee;
    (ii) The entity has authority to appoint, promote, demote, and fire 
senior executives that control the day-to-day activities of the 
licensee; and
    (iii) The entity plays an integral role in management decisions.
    (2) Calculation of certain interests. (i) Ownership interests shall 
be calculated on a fully diluted basis; all agreements such as 
warrants, stock options and convertible debentures will generally be 
treated as if the rights thereunder already have been fully exercised.
    (ii) Partnership and other ownership interests and any stock 
interest equity, or outstanding stock, or outstanding voting stock 
shall be attributed as specified in paragraphs (c)(2)(iii) through 
(c)(2)(ix) of this section.
    (iii) Stock interests held in trust shall be attributed to any 
person who holds or shares the power to vote such stock, to any person 
who has the sole power to sell such stock, and, to any person who has 
the right to revoke the trust at will or to replace the trustee at 
will. If the trustee has a familial, personal, or extra-trust business 
relationship to the grantor or the beneficiary, the grantor or 
beneficiary, as appropriate, will be attributed with the stock 
interests held in trust.
    (iv) Non-voting stock shall be attributed as an interest in the 
issuing entity.
    (v) Limited partnership interests shall be attributed to limited 
partners and shall be calculated according to both the percentage of 
equity paid in and the percentage of distribution of profits and 
losses.
    (vi) Officers and directors of an entity shall be considered to 
have an attributable interest in the entity. The officers and directors 
of an entity that controls a licensee or applicant shall be considered 
to have an attributable interest in the licensee or applicant.
    (vii) Ownership interests that are held indirectly by any party 
through one or more intervening corporations will be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and

[[Page 40066]]

application of the relevant attribution benchmark to the resulting 
product, except that if the ownership percentage for an interest in any 
link in the chain exceeds 50 percent or represents actual control, it 
shall be treated as if it were a 100 percent interest.
    (viii) Any person who manages the operations of an applicant or 
licensee pursuant to a management agreement shall be considered to have 
an attributable interest in such applicant or licensee if such person, 
or its affiliate pursuant to Sec. 1.2110(b)(4) of this chapter, has 
authority to make decisions or otherwise engage in practices or 
activities that determine, or significantly influence:
    (A) The nature or types of services offered by such an applicant or 
licensee;
    (B) The terms upon which such services are offered; or
    (C) The prices charged for such services.
    (ix) Any licensee or its affiliate who enters into a joint 
marketing arrangement with an applicant or licensee, or its affiliate, 
shall be considered to have an attributable interest, if such applicant 
or licensee, or its affiliate, has authority to make decisions or 
otherwise engage in practices or activities that determine, or 
significantly influence,
    (A) The nature or types of services offered by such an applicant or 
licensee;
    (B) The terms upon which such services are offered; or
    (C) The prices charged for such services.
    (d) A winning bidder that qualifies as a small business or a 
consortium of small businesses as defined in Sec. 80.1252(b)(1) or 
Sec. 80.1252(b)(5) of this subpart may use the bidding credit specified 
in Sec. 1.2110(e)(2)(ii) of this chapter. A winning bidder that 
qualifies as a very small business or a consortium of very small 
businesses as defined in Sec. 80.1252(b)(2) or Sec. 80.1252(b)(5) of 
this subpart may use the bidding credit specified in 
Sec. 1.2110(e)(2)(i) of this chapter.

PART 90--PRIVATE LAND MOBILE RADIO SERVICES

    15. The authority citation for part 90 continues to read as 
follows:

    Authority: Secs. 4, 251-2, 303, 309, and 332, 48 Stat. 1066, 
1082, as amended; 47 U.S.C. 154, 251-2, 303, 309 and 332, unless 
otherwise noted.


Sec. 90.283  [Removed and Reserved]

    16. Removed and reserve Sec. 90.283.

[FR Doc. 98-19943 Filed 7-24-98; 8:45 am]
BILLING CODE 6712-01-P


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