Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4771

1See National Telecommunications and

Information Administration Organization Act, 47

U.S.C. 901 (b)(1)–(2).

2Pub. L. 103–66, 107 Stat. 31 (1993).

3See National Telecommunications and

Information Administration, U.S. Department of

Commerce, NTIA Special Publication 94–27,

Spectrum Reallocation Final Report (Feb. 1995).

4Pub. L. 105–33, 111 Stat. 251 (1997).

5See National Telecommunications and

Information Administration, U.S. Department of

Commerce, NTIA Special Publication 98–36,

Spectrum Reallocation Report (Feb. 1998).

6See note 4 supra at section 3002(b). Of the 20

MHz of spectrum, eight (8) MHz (i.e., 139–140.5

MHz, 141.5–143 MHz and 1385–1390 MHz bands)

were subsequently reclaimed by the Federal

Government in accordance with the National

Defense Authorization Act for Fiscal Year 2000, See

Pub. L. 106–65, 113 Stat. 512 (1999).

7Pub. L. 105–261, 112 Stat. 1920 (1998)

(amending section 113(g) of the NTIA Organization

Act (codified at 47 U.S.C. 923(g)).

8See 47 U.S.C. 923(g)(1)(A). ‘‘Federal entity’’ is

defined as ‘‘any department, agency, or other

instrumentality of the Federal Government that

utilizes a Government station license obtained

under section 305 of the 1934 Act (47 U.S.C. 305).’’

47 U.S.C. 923(i).

9See 47 U.S.C. 923(g)(1)(B).

10See 47 U.S.C. 923(g)(1)(A).

11 Id.

DEPARTMENT OF COMMERCE

National Telecommunications and

Information Administration

47 CFR Part 301

[Docket No. 001206341–0341–01]

RIN 0660–AA14

Mandatory Reimbursement Rules for

Frequency Band or Geographic

Relocation of Federal SpectrumDependent Systems

AGENCY: National Telecommunications

and Information Administration,

Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The National

Telecommunications and Information

Administration (NTIA) proposes to

amend its regulations to set forth the

rules governing reimbursement to

Federal entities by the private sector as

a result of reallocation of frequency

spectrum. This action is necessary to

provide spectrum for future commercial

wireless communications service and to

compensate the Federal Government for

the costs incurred in making that

spectrum available.

DATES: Submit comments on or before

March 19, 2001. Reply comments are

due April 18, 2001.

ADDRESSES: The public is invited to

submit written comments in paper or

electronic form. Comments may be

mailed to Milton Brown, Office of the

Chief Counsel, National

Telecommunications and Information

Administration (NTIA), Room 4713,

U.S. Department of Commerce, 1401

Constitution Avenue, N.W.,

Washington, DC 20230. Paper

submissions should include a version

on diskette in ASCII, Word Perfect

(please specify version), or Microsoft

Word (please specify version) format.

Comments may be viewed on NTIA’s

website at http://www.ntia.doc.gov.

Comments submitted in electronic

form may be sent to

reimbursement@ntia.doc.gov. Electronic

comments should be submitted in the

formats specified above.

FOR FURTHER INFORMATION CONTACT:

Milton Brown, NTIA, (202) 482–1816.

SUPPLEMENTARY INFORMATION:

Authority: 47 U.S.C. 921, et seq. (Supp. V.

1993); Strom Thurmond National Defense

Authorization Act for FY 1999, Pub. L. No.

105–261, 112 Stat. 1920 (1998); 47 U.S.C.

923(g).

I. Introduction

1. NTIA is the executive branch

agency principally responsible for

developing and articulating domestic

and international telecommunications

policy. NTIA acts as the principal

advisor to the President on

telecommunications policies pertaining

to the Nation’s economic and

technological advancement and to the

regulation of the telecommunications

industry. NTIA is also responsible for

managing the Federal Government’s use

of the radio spectrum. The Federal

Communications Commission (FCC), an

independent agency of the Federal

Government, manages electromagnetic

spectrum used by the private sector,

including state and local governments.

With the proliferation of radio-based

technologies, management and use of

the radio spectrum has become

increasingly complex. Federal agencies

are extremely dependent on spectrum

access to provide a wide variety of

critical services to the American people.

Congress has found that

telecommunications and information

are vital to the public welfare, national

security, and competitiveness of the

United States, and that technological

advances in the telecommunications

and information fields make it

imperative that the United States

maintain effective national and

international policies and programs

capable of taking advantage of these

continued advancements.1

II. Background

2. On August 10, 1993, Title VI of the

Omnibus Budget Reconciliation Act of

1993 (OBRA 93) was signed into law.2

OBRA 93 authorized the FCC to use

competitive bidding (auctions) for the

reassignment and licensing of spectrum

frequencies for certain commercial

services. OBRA 93 also directed the

Secretary of Commerce to transfer at

least 200 megahertz (MHz) of spectrum

below 5 gigahertz (GHz) from Federal

agencies to the FCC for licensing to the

private sector. Pursuant to OBRA 93,

NTIA identified Federal bands for

reallocation totaling 235 MHz from the

Federal Government to non-Government

use in its February 1995 Spectrum

Reallocation Final Report.3

3. Title III of the Balanced Budget Act

of 1997 (BBA 97) required the Secretary

of Commerce to identify an additional

20 MHz below 3 GHz for reallocation to

non-Federal users.4 In response to this

directive, NTIA issued a Spectrum

Reallocation Report in February 1998

which identified the additional bands

for reallocation.5 BBA 97 directed the

FCC to auction the 20 MHz by 2002 and

the 1710–1755 band identified in the

1995 Spectrum Reallocation Final

Report after January 1, 2001.6

4. In 1998, Congress passed the Strom

Thurmond National Defense

Authorization Act for Fiscal Year 1999

(the Act).7 This legislation sought to

encourage the transfer of

electromagnetic spectrum from Federal

government to private use by

authorizing Federal entities to accept

compensation payments when they

relocate or modify their frequency use to

accommodate non-Federal users of the

spectrum.8 Indeed the Act requires ‘‘any

person on whose behalf a Federal entity

incurs costs’’ pursuant to frequency

spectrum relocation or modification ‘‘to

compensate the Federal entity in

advance’’ for the entity’s modification or

relocation expenses.9 The Act also

references various expenses associated

with frequency relocation or

modification that qualify for

reimbursement including ‘‘the costs of

any modification, replacement, or reissuance of equipment, facilities,

operating manuals, or regulations

incurred by that entity.’’ 10 Moreover,

the Act requires the Federal entity to

notify NTIA of the ‘‘marginal costs

anticipated to be associated with such

relocation or with the modifications

necessary to accommodate prospective

licensees.’’ 11

5. The Act directs NTIA and the FCC

to ‘‘develop procedures for the

implementation of [relocation] which

* * * shall include a process for

resolving any differences that arise

between the Federal Government and

commercial licensees regarding

4772 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

12See 47 U.S.C. 923(g)(1)(E).

13We note that the FCC will notify potential

bidders prior to the auction of the estimated

relocation costs submitted by the Federal entities

for the affected bands.

14See note 3, supra. The Federal Government,

however, later reclaimed fifty (50) MHz of this

spectrum (i.e., 4635–4685 MHz) and substituted

4940–4990 MHz in its place. See 47 U.S.C. 924(b),

926; see also Letter from Larry Irving, Assistant

Secretary for Communications and Information,

U.S. Department of Commerce, to William E.

Kennard, Chairman, Federal Communications

Commission (March 30, 1999) (notifying FCC of

reclamation and substitutiuon of spectrum).

15See note 5, supra.

16The NTIA Spectrum Reallocation Final Report

provided for early reallocation band (i.e., 1999) for

the top 25 major cities in the United States with the

private sector reimbursing the Federal users.

Subsequently, Title III of BBA 97 (entitled

‘‘Communications and Spectrum Allocation

Provisions’’) provides for the reallocation of this

band for competitive bidding commencing after

January 1, 2001.

17See note 14, supra.

18See note 7, supra.

19See note 6, supra.

estimates of relocation or modification

costs.’’ 12

6. These proposed rules provide a

procedure for Federal entities to receive

reimbursement for the relocation or

modification expenses that they incur as

a result of the reallocation of radio

spectrum mandated by OBRA 93, BBA

97, and future reallocations. As such,

these proposed rules address

reimbursement issues associated with

the relocation or modification of

frequency spectrum that have been

reallocated. The proposed rules do not

apply to issues involving the

reallocation of frequency spectrum.

These proposed rules provide a

mechanism for the Federal entities to

submit estimates of the costs to relocate.

The proposed rules direct NTIA to

solicit estimates of the costs of

relocation from the affected Federal

entities, and provide that information to

the FCC at least 180 days prior to an

auction.13

7. The proposed rules also provide

procedures for the successful bidder to

make payment to the Federal entity after

an auction. Pursuant to direction from

Congress, the proposed rules also

include a process for resolving

differences that arise between the

Federal Government and the successful

bidder regarding estimates of relocation

or modification of costs. To the extent

that a successful bidder disagrees with

a Federal entity’s estimated relocation

costs, the proposed rules provide for a

mandatory negotiation and/or thirdparty mediation period. If the parties do

not agree to relocation costs within the

mandatory negotiation period, the

parties must enter into a non-binding

arbitration program.

8. As required by section 603 of the

Regulatory Flexibility Act, 5 U.S.C. 603,

NTIA has prepared an Initial Regulatory

Flexibility Analysis (IRFA) of the

expected impact on small entities of the

proposals suggested in this document.

The IRFA is set forth in the Regulatory

Flexibility Analysis section of these

proposed rules. Written public

comments are requested on the IRFA.

These comments must be filed in

accordance with the same filing

deadlines as comments filed in this

Notice of Proposed Rulemaking

(NPRM), but they must have a separate

and distinct heading designating them

as responses to the IRFA. NTIA shall

send a copy of this NPRM, including the

IRFA, to the Chief Counsel for Advocacy

of the Small Business Administration in

accordance with section 603(a) of the

Regulatory Flexibility Act, 5 U.S.C.

603(a).

III. Discussion

9. These proposed rules have been

developed to ensure that the Federal

Government is fully reimbursed for the

expenses it incurs in retuning,

modifying or relocating a system as a

result of reallocation. To the extent that

there are other ways to accomplish this

goal, NTIA will entertain comments

from interested parties.

Affected Bands

10. Pursuant to OBRA 93, NTIA

identified 235 MHz of Federal

Government spectrum for transfer to the

private sector.14 Similarly, NTIA

identified another 20 MHz of spectrum

for reallocation to the private sector as

mandated by the BBA 97.15 The table

below shows the specific frequency

bands reallocated from Federal

Government use to the private sector as

a result of the legislation and Federal

Government action.

REALLOCATED FREQUENCY BANDS FROM THE FEDERAL GOVERNMENT TO THE PRIVATE SECTOR

Freq. band (MHz) Legislation Bandwidth

(MHz) Schedule

1390–1400 ...................................................................................................................... OBRA–93 10 January 1999

1427–1432 ...................................................................................................................... OBRA–93 5 January 1999

1670–1675 ...................................................................................................................... OBRA–93 5 January 1999

1710–1755 ...................................................................................................................... OBRA–93 45 January 2004 16

2300–2310 ...................................................................................................................... OBRA–93 10 August 1995

2390–2400 ...................................................................................................................... OBRA–93 10 February 1995

2400–2402 ...................................................................................................................... OBRA–93 2 August 1995

2402–2417 ...................................................................................................................... OBRA–93 15 February 1995

2417–2450 ...................................................................................................................... OBRA–93 33 August 1995

3650–3700 ...................................................................................................................... OBRA–93 50 January 1999

4940–4990 ...................................................................................................................... OBRA–93 17 50 January 1997

216–220 .......................................................................................................................... BBA–97 4 January 2002

1432–1435 ...................................................................................................................... BBA–97 3 January 1999

2385–2390 ...................................................................................................................... BBA–97 5 January 2005

11. On October 17, 1998, the

President signed into law the Strom

Thurmond National Defense

Authorization Act for Fiscal Year 1999,

which among other things, amended the

NTIA Organization Act to require

private sector entities to reimburse

Federal users for relocations due to

reallocation of spectrum assignments.18

The Act also sets forth which spectrum

would be the subject of the mandatory

reimbursement rules: the 1710–1755

MHz band from the first reallocation

report, the 20 MHz identified in the

second reallocation report, and any

future reallocations.19 The affected

frequency bands that currently qualify

for reimbursement under the proposed

rule include the following:

Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4773

20See 47 U.S.C. 923(h). 21We note, however, that the statute provides

reimbursement to Federal entities that relocate to

‘‘another frequency or frequencies.’’ 47 U.S.C.

923(g).

Bands That Qualify for Reimbursement

216–220 MHz

1432–1435 MHz

1710–1755 MHz

2385–2390 MHz

12. We seek comment on the affected

bands identified above. Future bands

that qualify for reimbursement will be

identified via a public notice and

request for comment.

Mandatory Relocation

13. DOBRA 93 and BBA 97 require

NTIA to identify spectrum for

reallocation to exclusive nonGovernment uses. Moreover, Section

3002 of BBA 97 amended the NTIA

Organization Act to add a subsection to

encourage Federal entities to relocate

Government stations from the bands

identified in any reallocation report

through means of these reimbursement

requirements or any other provision of

law to ‘‘maximize[ ] the spectrum

available for non-Federal use.’’ 20

Nevertheless, in some cases, it may be

technically possible for incumbent

Federal entities to continue to share the

reallocated spectrum with the new

commercial licensees. We seek

comment on whether these Federal

entities should be required to relocate in

those cases where sharing is technically

possible. If not, we seek comment on the

conditions whereby such Federal

entities should be permitted to remain

in the band and who would pay for any

system modification that would

enhance spectrum sharing. For example,

because the spectrum will be reallocated

to exclusive non-Government uses as

required by DOBRA 93 or BBA 97,

should such a Federal entity be

permitted to remain in the band only on

a non-interference basis after the

appropriate regulatory approvals have

been obtained?

14. We also solicit comment on

whether a Federal entity should be

entitled to reimbursement of relocation

costs if it relocates to a landline

communications system or commercial

radio services.21 We note that such an

option may provide the most spectrum

efficient and cost-effective alternative to

a government-exclusive radio frequency

system consistent with policy directive

set forth in the NTIA Organization Act.

For example, section 104 of the NTIA

Organization Act provides that the

Secretary of Commerce, in assigning

frequencies for mobile radio services

and other radio services ‘‘shall promote

efficient and cost-effective use of the

spectrum to the maximum extent

feasible.’’ 47 U.S.C. 903(d)(1). Moreover,

the NTIA Organization Act provides

that any Federal Government station

identified for reallocation shall ‘‘to the

maximum extent practicable * * *

relocate its spectrum use to other

frequencies that are reserved for Federal

use or to consolidate its spectrum use

with other Federal Government stations

in a manner that maximizes the

spectrum available for non-Federal

use.’’ Id. at section 923(h). There may

also be other circumstances where no

other frequency is available and a

landline or other commercial service is

a viable alternative available to the

Federal entity that is required to

relocate.

Availability of a Comparable Facility

15. The proposed rules do not require

a Federal entity to relocate until a

comparable facility is available to it for

a reasonable time to make adjustments,

determine compatibility, and ensure a

seamless transition from an existing

facility or frequency band(s) to the new

or modified facility or frequency

band(s). NTIA defines the term

‘‘comparable facility’’ to mean that the

replacement facility restores the

operational capabilities of the original

facility to an equal or superior level. For

example, in the 1710–1755 MHz band,

the vast majority of Non-DoD Federal

Government facilities are fixed point-topoint microwave networks, and may be

replaced by fixed microwave facilities

in other bands. On the other hand, DoD

operates a number of systems, including

highly mobile, non-communications

systems. These military systems must

operate within the limits of established

doctrine.

16. NTIA will consider four basic

factors to determine comparability of

replacement communications facility,

although there may be other factors to

consider. These four basic factors are

communications throughput, system

reliability, operating costs, and

operational capability. A replacement

facility will be considered comparable if

the new system’s operational capability,

communications throughput and

reliability are equal to or greater than

that of the system being replaced, taking

into account the operating costs.

17. Communications throughput, for

the purposes of this proceeding, means

the amount of information transferred

within the system for a given amount of

time. For digital systems,

communications throughput is

measured in bits per second (bps), for

analog systems the communications

throughput is measured by the number

of voice, video or data channels.

18. System reliability means the

percentage of time information is

accurately transferred within a system.

The reliability of a system is a function

of equipment failures (e.g., transmitters,

feed lines, antennas, receivers and

battery back-up power) and the

availability of the frequency channel

given the propagation characteristics

(e.g., frequency, terrain, atmospheric

condition, and noise) and equipment

sensitivity. System reliability also

includes the ability of a radiocommunications station to perform a

required function under stated

conditions for a stated period of time.

System reliability may involve three

distinct concepts: Attaining a specified

level of performance; the probability of

achieving that level; and maintaining

that level for a specified time. For

digital systems this would be measured

by the percent of time the bit error rate

(BER) exceeds a desired value, and for

analog transmissions this would be

measured by the percentage of time that

the receiver carrier-to-noise ratio

exceeds the receiver threshold. It should

be noted for many DoD systems,

performance is defined by sophisticated

system specifications as related to

specific mission requirements. In

measuring/assessing DoD systems, these

specific system specifications must be

used.

19. Operating costs are the costs to

operate and maintain the Federal

entity’s replacement system. New

licensees would compensate federal

entities for any increased recurring costs

associated with the replacement

facilities (e.g., additional rental

payments and increased utility fees) for

five years after relocation.

20. Operational capability is the

measure of a system’s ability to perform

its validated functions within doctrinal

requirements, including service, joint

service, and allied interoperability

requirements with related systems.

21. These four factors, however, may

not be appropriate measures for all

Federal Government stations required to

relocate. For example, to measure

comparability for radar systems it may

be more accurate to compare the

minimum required radar target cross

section able to be detected at a given

range with a specified probability of

false alarm under mission-required

conditions. Other measures of radar

system comparability may include target

resolution and the ability to meet

performance specifications under

adverse conditions such as weather and

hostile jamming. Radar and other

spectrum-dependent systems may

require access to specific frequency

bands to perform their missions in an

4774 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

22See 47 U.S.C. § 923(c)(4)(C). The term Federal

power agency refers to the Tennessee Valley

Authority, the Bonneville Power Administration,

the Western Area Power Administration, the

Southwestern Power Administration, the

Southeastern Power Administration, and the Alaska

Power Administration.

23See Spectrum Reallocation Final Report, NTIA

Special Publication 95–32, Appendix E, Tables

1and 2.

24See id. at Appendix E (Exempted Safety-of-Life

Fixed Microwave Stations in the 1710–1755 MHz

band); see also 1998 Spectrum Reallocation Report

at 3–18 (Table 3–2), 3–38 (Table 3–4), 3–48 (Table

3–6), 4–1 (Table 4–1) (setting forth the sites exempt

from relocation or with special relocation dates in

the 216–220 MHz, 1432–1435 MHz, and 2385–2390

MHz bands).

25NTIA Manual of Regulations and Procedures

for Federal Radio Frequency Management, Section

10.3.1 (September 1995). Stage 3 certification is

required for testing proposed operational hardware

and potential equipment configurations.

optimal manner. For example, long

range surveillance functions relatively

free of weather effects are optimized at

low frequencies and weapon control at

higher frequencies. The use of higher

frequencies, however, may limit the

useful range of some spectrumdependent systems, such as radar or

data links. Such limitations could affect

mission performance.

22. NTIA seeks comments on this

proposed definition and whether the

factors described above are sufficient to

determine comparability of facilities. If

not, NTIA seeks comment on what other

factors should be considered, and

whether such factors should be tailored

to specific Federal Government systems

to be relocated.

Frequency Assignments Eligible for

Reimbursement

23. The proposed rules outline the

conditions, limitations and eligibility

requirements for reimbursement of the

costs associated with relocation as a

result of reallocation.

24. Equipment/system modification:

Sometimes radiocommunication

systems in certain bands can be

modified to tune outside of the

reallocated band to the upper or lower

portion of the incumbent band. Retuning is oftentimes less expensive to

implement, assuming there is no

congestion in the upper portion of the

band as a result of the migration and

assuming the transmitter-receiver

frequency separation can be met. Retuning could save an agency a

considerable amount of money because

it does not require additional towers or

stations, new feed lines or associated

equipment. Thus, to the extent that a

Federal entity that is required to

relocate is able to modify its equipment,

with the result that the retuned

equipment provides operational

capabilities comparable with its original

system, NTIA proposes to limit

reimbursement to the costs associated

with re-tuning. We note, however, that

modification/retuning may not be

possible when taking into consideration

the factor of ‘‘operational

comparability’’ as noted above. We seek

comment on this proposed limitation.

25. Old Assignments versus new

assignments: NTIA identified the

Federal bands for reallocation from the

Federal Government to non-Government

use in the February 1995 Spectrum

Reallocation Final Report, as well as the

February 1998 Spectrum Reallocation

Report. On October 17, 1998, the

President subsequently signed into law

the National Defense Authorization Act

for Fiscal Year 1999 that requires the

private sector to reimburse Federal

entities for the cost of relocation or

modification of systems as a result of

reallocation. Thus, for purposes of these

proposed rules, we propose to

characterize an old assignment to a

Federal entity as one that was

authorized before October 17, 1998, and

a new assignment as one that was

authorized after October 17, 1998. With

respect to reimbursement under these

rules, we propose that only old

assignments within the affected bands

(i.e., 216–220 MHz, 143–1435 MHz,

1710–1755 MHz, 2385–2390 MHz)

would be entitled to reimbursement.

NTIA believes that the costs associated

with any new assignment requested by

Federal entities after the respective

dates of reallocation reports in the

affected bands should be borne by that

Federal entity rather than a new

commercial licensee to prevent unjust

enrichment. We seek comment on this

limitation.

26. Exempted Federal power agencies:

Assignments made to Federal power

agencies (FPAs) are statutorily exempt

from the requirements to relocate under

the reallocation reports.22 Thus, the

1995 Spectrum Reallocation Final

Report provides a list of frequency

assignments in the 1710–1755 MHz

band that support the FPAs and that are

not required to relocate.23 NTIA

believes, however, that Section

923(g)(1)(A) of Title 47 of the U.S. Code

can be read to permit an FPA to accept

reimbursement for relocations

undertaken on a voluntary basis. We

seek comment on whether an FPA that

wishes to relocate from a band of

spectrum identified for reallocation can

accept voluntary reimbursement from a

commercial licensee. If so, should the

parties be subject to these proposed

rules or be left exclusively to voluntary

negotiations?

27. Other government stations: Under

the 1995 Spectrum Reallocation Final

Report and the 1998 Spectrum

Reallocation Report, NTIA also

exempted other Federal Government

assignments from the requirement to

relocate from the bands identified for

reallocation either indefinitely or for a

longer terms of years.24 We seek

comment on whether these Federal

entities can accept reimbursement for

voluntarily relocating these stations to a

commercial licensee, and if so, whether

such negotiations should be subject to

these proposed rules.

28. Experimental Stations: In general,

the proposed rules do not permit

reimbursement for relocated frequency

assignments for experimental stations or

experimental testing stations. An

‘‘experimental station’’ means a station

utilizing radio waves in experiments

with a view to the development of

science or technique. An ‘‘experimental

testing station’’ is used for the

evaluation or testing of electronics,

equipment or systems, including site

selection and transmission path surveys.

These stations are oftentimes temporary

use stations and are operated on a noninterference basis. NTIA believes that

most experimental stations not be

entitled to reimbursement under the

statute. Reimbursement, however,

would still be required for frequency

assignments to experimental stations for

systems that are in the developmental

stage that have been certified for

spectrum support by NTIA for Stage 3

developmental testing.25 Because

systems at the Stage 3 are certified for

testing of proposed operational

hardware and potential equipment

configurations, we believe that these

systems are entitled to reimbursement.

We seek comment on our treatment of

experimental stations in the proposed

rules.

Cost Sharing

29. NTIA proposes to adopt a costsharing plan where the potential

requirement to reimburse a Federal

entity for relocation costs could

disproportionately fall upon one

potential bidder or licensee or a small

number of potential bidders or

licensees. For example, there may be

multiple bidders in a geographic area for

small bandwidth that may result in

division of a Federal entity’s bandwidth.

There is no mechanism in place to

compensate the Federal entity for that

portion of the spectrum that is not

licensed or acquired by any particular

auction winner. In these circumstances,

one auction winner could be made to

pay for the entire spectrum allocation

held by the Federal entity, despite the

Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4775

26There also may be circumstances where the

national nature of federal systems is such that the

requirement to reimburse a federal entity for

relocation costs may disproportionately fall on a

small number of successful bidders. Thus, a

particular licensee’s geographic area may cover a

critical element of a much larger national system,

such as a system where a small number of satellite

uplink transmitter terminals, each located at a

specific site, communicates to many satellites. In

other situations, there are highly mobile systems

(e.g., airborne telemetry or data link systems) that

are not related to any specific geographic area.

fact that only a portion of the bandwidth

is needed. On the other hand, auction

bidders that need only a portion of the

bandwidth may perceive the cost of

relocating a Federal entity too expensive

in the absence of a cost-sharing plan,

and thus may forgo providing a

particular service to a geographic area.26

To ensure that no private entity bears

the full cost burden of relocating a

government entity and to ensure that a

geographic area is not denied service

because the costs of reimbursement are

disproportionate, we seek comment on

whether a cost sharing plan, among

auction winners, should be

implemented. We also seek comment on

what measures might reasonably be

implemented to assure that the federal

entity is guaranteed full payment from

multiple licensees. We also seek

comment on whether a band manager or

some other entity that licensees may

establish would be appropriate to serve

as a clearinghouse to administer the

cost-sharing plan. Although we

contemplate developing a cost-sharing

plan and criteria for identifying a

clearinghouse for each auction, NTIA

proposes to determine on a case-by-case

basis whether a cost-sharing plan is

needed for each auction. We seek

comment on whether this case-by-case

approach is appropriate.

30. If the proposed cost-sharing plan

is adopted, NTIA proposes and seeks

comment on whether it should be

administered by an industry-supported

organization or the government. NTIA

does not propose at this time to

designate any particular organization as

the representative of the industry that

will benefit from the auction of

government spectrum, nor does NTIA

propose any particular form that such

an organization might take. NTIA seeks

comment on the criteria it should use in

designating a clearinghouse, and on

whether it should be an existing

organization or a new entity created for

this purpose. NTIA also seeks comment

on how the clearinghouse would be

funded. If a clearinghouse is established

receipts from expenses already incurred

would be submitted to the

clearinghouse for accounting purposes.

We propose to sunset the cost-sharing

plan to five years after any auction of a

government spectrum subject to

reimbursement rules. We believe that it

is important to set a date certain on

which any clearinghouse will be

dissolved, and adopt a cost-sharing plan

with the fewest possible variables so

that it will be easy to administer.

31. We also seek comment on how a

negotiation framework can best be

established so as to minimize the

personnel and other budgetary costs to

the Government. For example, should

NTIA establish a negotiation framework

that will permit relocation of each

Government system on a system-wide

basis? Under such a framework, a

Federal agency could request that all

auction winners with frequency

assignments that require that the agency

relocate its system, participate in a

single negotiation process so that a

system-wide relocation solution can be

achieved. Each Federal entity would

provide a single point of contact for

such consolidated negotiations. NTIA

believes that such a negotiation

mechanism could benefit both affected

agencies and the private sector by

streamlining administrative processes

and reducing negotiating costs for both

parties.

Sunset of Reimbursement Rights

32. The Defense Authorization Act of

1999 mandated reimbursement to

Federal agencies and did not limit the

time period for reimbursement. Thus,

these proposed rules do not provide a

sunset provision with respect to the

reimbursement rights of Federal entities.

We seek comments on our proposal not

to include a sunset provision in these

rules. Specifically, we seek comment on

whether the statute precludes a sunset

date.

Costs to Relocate

33. The proposed rules identify the

marginal relocation and modification

costs that are reimbursable. NTIA

proposes to define ‘‘marginal costs’’ as

the costs that will be incurred by a

Federal entity to achieve comparable

capability of systems relocated to a new

frequency assignment or band or

otherwise modified. Specifically,

marginal costs would include all

engineering, equipment, software, site

acquisition and construction costs, as

well as any legitimate and prudent

transaction expenses, including outside

consultants, and reasonable additional

costs incurred by the Federal entity that

are attributable to relocation, including

increased recurring costs associated

with the replacement facilities. Marginal

costs would include costs related to the

need to achieve comparable capability

when replacing, modifying or reissuing

equipment in order to relocate when the

systems that must be procured or

developed have increased functionality

due to technological growth, but would

not include costs related to optional

increased functionality that is

independent of the need to achieve

comparable capability. To the extent

that a Federal entity needs to accelerate

the introduction of systems and

equipment to allow for relocation earlier

than the Federal entity had planned,

replacement costs of the accelerated

systems and equipment shall be

included in marginal costs. Marginal

costs would also include the costs of

any modification or replacement of

equipment, software, facilities,

operating manuals, training costs, or

regulations that are attributable to

relocation. Marginal costs would not

include costs related to routine

upgrades and operating costs and

lifecycle replacements that would have

occurred prior to the date of the

required relocation. The costs identified

as reimbursable in these proposed rules

conform to those identified by Congress

in 47 U.S.C. § 923(g)(1)(A) and 923

(g)(2)(A). We seek comment on this

definition of marginal costs.

34. Consistent with the statute, the

proposed rules would require

reimbursement payments to be made in

advance of relocation. The proposed

rules would also require the successful

bidder to guarantee to pay all marginal

costs as a precondition of NTIA’s

withdrawal of the relevant Federal

license. The proposed rules also would

permit payments to be made in cash or

in kind, as agreed to by the affected

Federal entity. The proposed rules

further require that cash payments be

made in the account of the Federal

entity in the Treasury of the United

States, or in a separate account as

authorized by law.

Notification of Marginal Costs

35. Under 47 U.S.C. 923(g)(1)(A),

NTIA must provide information to the

FCC so that the FCC can advise

potential bidders of the marginal costs

of relocation or modification. This

statute also requires Federal entities that

propose to relocate to notify NTIA of the

marginal costs anticipated to be

associated with such relocation or with

modifications necessary to

accommodate a prospective licensee.

NTIA’s proposed rules thus require

Federal entities that propose to relocate,

modify or retune systems to provide

such marginal cost information to NTIA

at least 240 days prior to an FCC

4776 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

27The marginal costs submitted on behalf of the

Federal agencies as part of the notification process

may be subject to review and approval by the Office

of Management and Budget (OMB). OMB’s review

would assure the accuracy of the costs. See also

Section 1064(d) of the Strom Thurmond National

Defense Authorization Act for Fiscal Year 1999,

Pub. L. No. 105–261, 112 Stat. 1920 (1998). 28For example, we anticipate that the first FCC

auction for spectrum frequency subject to these

rules will occur in December 2001. In that case,

NTIA would provide cost information to the FCC

no later than June 1, 2001. Therefore, the Federal

entities would have to provide estimated cost

information to NTIA by April 1, 2001.

29We note that the statute permits the Federal

entity to reclaim its facilities if it demonstrates to

the FCC that the new facilities are not comparable.

See 47 U.S.C. 923(g)(3). Rules regarding the Federal

entity’s right to reclaim will be promulgated by the

FCC. See also Reallocation of the 216–220 MHz,

1390–1395 MHz, 1427–1429 MHz, 1429–1432 MHz,

1432–1435 MHz, 1670–1675 MHz, and 2385–2390

MHz Government Transfer Bands, ET Docket No.

00–221, Notice of Proposed Rule Making, FCC 00–

395, at ¶ 64 (November 20, 2000).

auction.27 In turn, NTIA intends to

provide this information to the FCC at

least 180 days prior to such auction so

that the FCC will have a sufficient

amount of time to notify potential

bidders.28

Negotiation and Mediation

36. Under the proposed rules, within

30 days after the license is granted, the

auction winner would be required to

contact the Federal entity that is

required to relocate. Under the proposed

rules, receipt of the notification by the

Federal entity would trigger a 135-day

negotiation and/or third-party

mediation period between the Federal

entity and the auction winner. During

the mandatory negotiation period,

parties are encouraged to resolve any

differences with respect to relocation or

modification costs or any other related

issues. If, at the end of the 135-day

period, the parties have not reached an

agreement with respect to relocation,

under the proposed rules, the parties

may agree, by mutual consent, to extend

the mandatory negotiation period. We

believe that this mandatory negotiation

period affords the parties an

opportunity to freely, and without

constraints, negotiate the terms relative

to relocation. To the extent that the 135-

day period is insufficient, we believe

that the extension of time provision

gives the party additional time that may

be necessary to come to an agreement.

This provision would also allow the

parties to take advantage of a neutral

third party to help facilitate the

negotiation process without rendering a

decision. We solicit comments on the

proposed rule to require mandatory

party-to-party negotiations and/or thirdparty mediation.

37. Under the proposed rules, the

parties would be required to negotiate

relocation or modification costs in good

faith during the mandatory negotiation

period. Good faith requires each party to

provide information to the other that is

reasonably necessary to facilitate the

relocation process. Good faith means

that (1) neither party may refuse to

negotiate; and (2) each party must

behave in a manner necessary to

facilitate negotiation in a timely

manner. We seek comments on these

good faith obligations.

Non-Binding Arbitration

38. If the parties have not reached

agreement and do not agree to extend

the negotiation/mediation period, or if a

previously extended negotiation/

mediation period expires, the proposed

rules would require the parties to enter

into non-binding arbitration. The parties

would have to agree on the arbitrator,

and to prevent bias, the arbitrator would

not be the same person as the mediator

if mediation has been used by the

parties and failed. Each party would pay

its own costs for arbitration and share

equally the cost of the arbitrator. The

arbitrator’s non-binding decision may be

requested by NTIA as part of the record

in a petition for relocation, as described

below. The recommended decision may

be a factor, among others, in NTIA’s

determination on a petition for

relocation. We seek comments on the

proposed requirement that parties enter

into non-binding arbitration. We also

seek comments on any alternative

proposal for the resolution of disputes

between the parties.

Petition for Relocation

39. Under 47 U.S.C. 923(g)(2), an

auction winner seeking to relocate a

Federal Government station must

submit a petition for relocation to NTIA.

Under the proposed rules, NTIA

requires that a copy of the petition also

be simultaneously provided to the

FCC.29 Moreover, under the proposed

rule, NTIA’s determination on the

petition would be set forth in writing

within six months after the petition has

been filed and be provided to the

auction winner and the Federal entity.

The statute requires NTIA to limit or

terminate the Federal entity’s license

within six months after receiving the

petition if the following requirements

are met:

(A) the person seeking relocation of

the Federal Government station has

guaranteed to pay all relocation or

modification costs incurred by the

Federal entity, including all

engineering, equipment, site acquisition

and construction, and regulatory fee

costs;

(B) all activities necessary for

implementing the relocation or

modification have been completed,

including construction of replacement

facilities (if necessary and appropriate)

and identifying and obtaining new

frequencies for use by the relocated

Federal Government station;

(C) any necessary replacement

facilities, equipment modifications, or

other changes have been implemented

and tested to ensure that the Federal

Government station is able to

accomplish its purposes; and

(D) NTIA has determined that the

proposed use of the spectrum frequency

band to which the Federal entity will

relocate is consistent with:

(i) Obligations undertaken by the

United States in international

agreements and United States national

security and public safety interests; and

(ii) The technical characteristics of the

band and other uses of the band.

If NTIA does not act within 6 months

after the Petition for Relocation is filed,

the Petition is deemed denied. NTIA’s

determination, or failure to act on a

Petition within 6 months, would be

final and conclusive upon the parties.

40. The proposed rules would permit

an auction winner to file a petition for

relocation anytime after an agreement

has been reached on marginal costs. The

proposed rules also permit an auction

winner to file a petition for relocation if

the parties fail to reach agreement and

non-binding arbitration has occurred. In

that case, the auction winner may file a

petition for relocation with NTIA after

a decision has been rendered by the

arbitrator. Any recommended decision

by the arbitrator may be requested by

NTIA as part of the record in a petition

for relocation determination. The

recommended decision may be a factor,

among others, in the NTIA

determination on the petition for

relocation. In making its determination,

NTIA will consult with the affected

Federal entity and, as appropriate, may

also consult with the Office of

Management and Budget and other

executive branch agencies. We seek

comment on these proposed rules as

they relate to the Petition for Relocation.

41. In certain circumstances, it may be

beneficial for the Federal entity to seek

voluntary withdrawal of an assignment

after the parties reach an agreement

through negotiation, mediation, or nonbinding arbitration. NTIA anticipates

the vast majority of relocations to occur

under agreements reached between the

parties, thus permitting voluntary

withdrawals of assignments would

greatly streamline the administrative

process of making the spectrum

available to auction winners. NTIA

Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4777

30Exec. Order No. 12958, 3 CFR 333 (1995).

31Exec. Order No. 12968, 3 C.F.R. 391 (1995).

32Many of these assignments involve federal

public safety and law enforcement activities.

33See 5 U.S.C. 603.

34 47 U.S.C. 923(g)(1).

35Pub. L. 103–66, 107 Stat. 31 (1993).

36See 47 U.S.C. 923(g)(1)(E).

seeks comment on permitting such

voluntary requests for assignment

withdrawal as an alternative to the

petition for relocation in cases in which

the parties have reached agreement.

Unclassified, Classified and Sensitive

Assignments

42. Unclassified government facilities.

With respect to unclassified government

facilities, we propose to provide the

following information to the FCC prior

to an auction of the affected bands:

(1) List of Government facilities.

(2) Government agency operating each

facility.

(3) Location of each facility.

(4) General type of operation and

equipment (e.g., fixed microwave,

tactical mobile radio, etc.).

(5) Whether the facility can be

retuned, modified, or must be relocated.

(6) Estimated marginal cost of

retuning, modification, or relocation.

(7) Whether the facility overlaps to

one or more license areas or spectrum

blocks.

(8) Total estimated costs of relocation

for all assignments.

43. Classified government facilities.

These proposed rules would permit

reimbursement to the Federal entity,

even if an assignment is classified. As

defined in the proposed rule and

consistent with Executive Order

12958,30 a ‘‘classified assignment’’

would be a frequency assignment and

information related to a frequency

assignment that has been determined

pursuant to Executive Order 12958 or

any predecessor order to require

protection against unauthorized

disclosure and that is marked as

‘‘confidential,’’ ‘‘secret,’’ or ‘‘top secret’’

to indicate its classified status when in

documentary form. As directed by

Executive Order 12958, Executive Order

12968 31 and related national security

regulations, classified assignment can

only be made available to individuals

with the appropriate clearances and

with a ‘‘need to know’’ (need for access)

in order to perform or assist in

performing a lawful and authorized

government function.

44. Prior to an auction, Federal

entities will provide a single,

consolidated and unclassified figure to

NTIA for the cost of relocating, retuning,

or modifying all such classified systems.

NTIA will provide this information to

the FCC which in turn will provide the

figure to bidders with the following

conditions: To the extent it is consistent

with national security considerations,

the figure may be broken down by

license service area and spectrum block

to give those bidding on a geographic

basis the best indication possible of the

cost they may have to pay to relocate,

retune or modify the systems at issue.

Following the auction, the winner may

apply for a facility clearance pursuant to

the National Industrial Security Program

Operating Manual and related

individual security clearances. If those

clearances and accesses are granted,

classified information may be made

available with regard to certain

Government systems in accordance with

the terms and conditions prescribed in

the clearances and accesses provided,

and subject to the overall rules and

authorities found in Executive Order

12958, Executive Order 12968, and

related federal laws, rules and

regulations.

45. Sensitive assignments. As defined

in the proposed rule, a ‘‘sensitive

assignment’’ would be a frequency

assignment and information related to a

frequency assignment (e.g. operations or

technical parameters) that are not

releasable to the public under the

Freedom of Information Act or relevant

laws or regulations.32 Prior to an

auction, Federal entities will provide a

single, consolidated and unclassified

figure to NTIA for the cost of relocating,

retuning, or modifying all such sensitive

systems. NTIA will provide this

information to the FCC which in turn

will provide the figure to bidders with

the following conditions: To the extent

it is consistent with the sensitive nature

of the assignment, the figure may be

broken down by license service area and

spectrum block to give those bidding on

a geographic basis the best indication

possible of the cost they may have to

pay to relocate, retune or modify the

systems at issue. Following the auction,

we propose that the government agency

release the sensitive information to the

winning licensee pursuant to a nondisclosure agreement.

46. We seek comment on our

proposed treatment of these

assignments.

Other Information

Executive Order 12866

47. This proposed rule has been

determined to be significant under

section 3(f) of Executive Order 12866.

Executive Order 13312

48. This rule does not contain policies

with Federalism implications sufficient

to warrant preparation of a Federalism

assessment under Executive Order

12612.

Regulatory Flexibility Act

49. As required by the Regulatory

Flexibility Act (RFA) 33 NTIA has

prepared an Initial Regulatory

Flexibility Analysis (IRFA) of the

possible impact that this proposed rule,

if adopted, would have on small

entities. Written public comments are

requested on the IRFA. Comment must

be identified as responses to the IRFA

and must be filed by the deadlines for

comments on the NPRM.

Initial Regulatory Flexibility Analysis

50. As required by the Regulatory

Flexibility Act (RFA), NTIA has

prepared this present Initial Regulatory

Flexibility Analysis (IRFA) of the

possible significant economic impact on

small entities by the policies and rules

proposed in this NPRM. Written public

comments are requested on this IRFA.

Comments must be identified as

responses to the IRFA and must be filed

by the deadlines for comments on this

NPRM.

A. Need for, and Objectives of, the

Proposed Rules

51. The Strom Thurmond National

Defense Authorization Act for Fiscal

Year 1999 authorized Federal entities to

accept compensation payments when

they relocate or modify their frequency

use to accommodate non-Federal users

of the spectrum.34 In essence, the Act

requires the private sector to reimburse

Federal entities for the costs that are

incurred as a result of the reallocation

of radio spectrum mandated by Title VI

of the Omnibus Budget Reconciliation

Act of 1993 (OBRA 93),35 the Balanced

Budget Act of 1997 (BBA 97) and future

reallocations. The Act also directs NTIA

and the Federal Communications

Commission (FCC) to ‘‘develop

procedures for the implementation of

[relocation] which * * * shall include a

process for resolving any differences

that arise between the Federal

Government and commercial licensees

regarding estimates of relocation and

modification costs.’’ 36

52. This initial regulatory flexibility

analysis provides, to the extent possible,

relevant information regarding

reimbursement such as the Federal

frequency assignments for reallocation

and the estimated relocation costs that

will ultimately be borne by the private

sector. As stated above Congress

directed NTIA and the FCC to develop

procedures for the implementation of

the reimbursement process. Pursuant to

4778 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

37See National Telecommunications and

Information Administration, U.S. Department of

Commerce, NTIA Special Publication 94–27,

Spectrum Reallocation Final Report (Feb. 1995). 38Pub. L. 105–33, 111 Stat. 251 (1997). 39Of the 20 MHz of spectrum, eight (8) MHz were

subsequently reclaimed by the Federal Government

in accordance with the National Defense

Authorization Act for Fiscal Year 2000. See Pub. L.

106–65, 113 Stat. 512 (1999).

40Reallocation of the 216–220 MHz, 1390–1395

MHz, 1427–1429 MHz, 1429–1432 MHz, 1432–1435

MHz, 1670–1675 MHz, and 2385–2390 MHz

Government Transfer Bands, ET Docket No. 00–221,

Notice of Proposed Rule Making, FCC 00–395, at

¶ 64 (November 20, 2000).

this direction from Congress, NTIA

prepared this NPRM. NTIA is not able

to determine the type of entities that

will be potential bidders for the

particular spectrum frequencies at issue

here, thus NTIA is unable to fully

describe the effect that the proposed

rules will have on small entities.

However, significant economic impacts

are unlikely because it is expected that

bidders in an auction for the eligible

spectrum, including small entities, will

factor in the estimated relocation costs

and adjust their bids accordingly.

B. Federal Frequency Assignments

Subject to Reallocation

53. On August 10, 1993 OBRA 93 was

signed into law. OBRA 93 authorized

the FCC to use competitive bidding

(auctions) for the reassignment and

licensing of spectrum frequencies for

certain commercial services. OBRA 93

also directed the Secretary of Commerce

to transfer at least 200 megahertz (MHz)

of spectrum below 5 gigahertz (GHz)

from Federal agencies to the FCC for

licensing to the private sector. Pursuant

to OBRA 93, NTIA identified Federal

bands for reallocation totaling 235 MHz

from the Federal Government to nonGovernment use in its February 1995

Spectrum Reallocation Final Report.37

Subsequently, BBA–97 required the

Secretary of Commerce to identify an

additional 20 MHz below 3 Ghz for

reallocation to non-Federal users.38 In

response to this directive, NTIA issued

a Spectrum Reallocation Report in

February 1998 which identified the

additional bands for reallocation.39 The

specific frequency bands that currently

qualify for reimbursement pursuant to

the proposed rules are: 216–220 MHz;

1432–1435 MHz; 1710–1755 MHz; and

2385–2390 MHz.

C. Estimated Relocation Costs

54. At this point, NTIA does not have

the final estimated costs of relocation

for all of the bands identified in the

NPRM. In fact, the NPRM proposes

dates for the Federal entities to provide

that information to NTIA. The final

spectrum reallocation reports prepared

by NTIA in response to OBRA 93 and

BBA 97 identified estimates of

implementation costs to Federal

agencies of approximately $1.5 billion

based on data provided by major

Federal agencies. Subsequent

modifications to these estimates have

been made based on a report to Congress

from the Department of Defense (DoD),

and changes to the reallocation plan as

directed by the National Defense

Authorization Act for FY 2000. Taking

these factors into account, the current

reimbursable long-term cost estimates to

the Federal agencies of implementing

the spectrum reallocations under OBRA

93 and BBA 97 is between $460–$810

million.

Although NTIA identifies spectrum to

reallocate from the Federal government

to the private sector, NTIA does not

determine how the spectrum will be

used by the private sector. The Federal

Communications Commission, through

its regulations identifies options for

making use of bands transferred from

Government to non-Government use

pursuant to OBRA 93 and BBA 97. In

fact, the FCC recently issued an NPRM

on the allocation of 27 megahertz of

spectrum from the 216–220 MHz, 1390–

135 MHz, 1427–1429 MHz, 1429–1432

MHz, 1432–1435 MHz, 1670–1675 MHz,

and 2385–2390 MHz bands.40 In that

NPRM, the FCC proposes general Fixed

Service and Mobile Service allocation

for these bands, and solicits comments

on other possible allocations and

potential service rules for the services to

which the bands may be allocated. The

FCC also solicits comments on its Initial

Regulatory Flexibility Analysis of the

NPRM which describes the number of

small entities to which its proposed

rules would apply.

In accordance with 5 U.S.C. 603, the

following information is provided to

conduct the necessary initial regulatory

flexibility analysis:

D. Legal Basis

55. The objective of the proposed rule

is to establish procedures to compensate

the Federal Government for expenses it

incurs in relocating to a new frequency

as a result of a reallocation of spectrum.

Congress determined that the Federal

Government should be reimbursed by

commercial licensees that are awarded

spectrum previously held by the Federal

Government. The legal basis for the

proposed rule is the Defense

Authorization Act for Fiscal Year 1999

which directs NTIA and the FCC to

develop procedures to implement

reimbursement, including a process for

resolving differences that arise between

the parties regarding estimates of

relocation or modification costs.

E. Description and Estimate of the

Number of Small Entities to Which the

Proposed Rules Will Apply

56. It is difficult, if not impossible, to

estimate the number of small entities, if

any, to which the proposed rule would

apply. The rule applies to winners of a

competitive bidding (auction) that the

FCC will hold at an undetermined date

after January 2001. There is no way to

predict, at this point in time, the type

of entities that will be potential bidders

for the spectrum that the FCC makes

available. In fact, entities that are not

even in existence at this time may be

participating in a future auction for the

particular spectrum frequency at issue.

The FCC may impose eligibility

requirements, however the auctions are

usually open to any type of entity. Any

estimate of the number of small entities

to which this proposed rule will apply

should be made after the FCC makes a

determination of the type of service that

the FCC allocates for these bands of

spectrum. The proposed rules, however,

require the FCC to provide the estimated

cost of reimbursement to potential

bidders. Thus, to the extent that a small

entity is a potential bidder, it will be

able to calculate its costs to bid on the

particular spectrum frequency, taking

into account the estimated cost to

reimburse the Federal Government. As

stated above the estimated costs of

relocation at this time is between $460–

$810 million. Because these costs are

only estimates and bids may be adjusted

to reflect these costs, it is difficult at this

time to determine the impact that these

costs will have on small entities. We

solicit public comment on this IRFA as

to the impact that the proposed rule will

have on small entities as well as any

alternative ways to alleviate such an

impact.

F. Description of Projected Reporting,

Recordkeeping and Other Compliance

Requirements

57. The proposed rules do not impose

reporting, record keeping or other

compliance requirements on the private

sector, small entities or otherwise.

G. Federal Rules That May Duplicate,

Overlap, or Conflict With the Proposed

Rules

58. It does not appear that any other

Federal rule duplicates, overlaps or

conflicts with the proposed rule. The

proposed rules are focused on

reimbursement to Federal entities for

relocation costs from specific spectrum

frequencies. No other Federal rule

requires the private sector to reimburse

Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4779

41See 47 U.S.C. 923(g)(1)(E).

Federal entities for relocation costs of

the specific radio spectrum frequencies

identified in the proposed rules. The

FCC, however, will promulgate service

rules regarding these spectrum

frequencies, however, we do not

anticipate that the FCC’s rules will

duplicate, overlap or conflict with this

proposed rule.

H. Steps Taken To Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

59. As stated above, the applicable

statute requires NTIA to develop rules

to implement the reimbursement

process.41 The NPRM, proposes and

solicits comment on a number of

alternatives which would minimize

economic impact on small entities. For

example, the proposed rules solicit

comments on whether a Federal entity

could retune or modify its equipment

outside of the reallocated band to the

upper or lower portion of the incumbent

band. Re-tuning is usually less

expensive to implement and can save an

agency a considerable amount of money

thus lessening the reimbursement

obligation of the private sector. Another

alternative in the proposed rule which

could minimize the economic impact on

small entities is the proposal to permit

Federal entities to relocate to a landline

communications system or a

commercial radio service. Such an

option may be a cost-effective

alternative to the Federal entity

relocating to another frequency. Again,

this alternative may reduce

reimbursement expenses that would be

borne by the private sector and,

perhaps, small entities. To the extent

that there are other ways to accomplish

the stated objectives of Congress, the

proposed rule states that ‘‘[t]hese

proposed rules have been developed to

ensure that the Federal Government is

fully reimbursed for the expenses it

incurs in retuning, modifying or

relocating a system as a result of

reallocation. To the extent that there are

other ways to accomplish this goal,

NTIA will entertain comments from

interested parties. Comments received

addressing alternatives to the proposed

rules will be discussed in a more

thorough analysis in the Final Rule.

List of Subjects in 40 CFR Part 301

Administrative practice and

procedure, Classified information,

Communications, Communications

equipment, Government procurement,

Government property, Radio, Satellites,

Telecommunications, Telephone.

Proposed Rules

Accordingly, NTIA amends 47 CFR

chapter III by adding part 301 to read as

follows:

PART 301—-MANDATORY

REIMBURSEMENT FOR FREQUENCY

BAND OR GEOGRAPHIC RELOCATION

OF SPECTRUM-DEPENDENT

SYSTEMS

Subpart A—General Information

Sec.

301.1 Purpose.

301.10 Applicability.

301.20 Definitions.

Subpart B—Procedure for Reimbursement

for Relocations and Dispute Resolution.

301.100 Costs to relocate.

301.110 Notification of marginal costs.

301.120 Negotiations and mediation.

301.130 Nonbinding arbitration.

301.140 Petition for relocation.

301.150 Request for withdrawal.

Authority: 47 U.S.C. 921 et seq.; Pub. L.

105–261, 112 Stat. 1920.

Subpart A—General Information

§ 301.1 Purpose.

Pursuant to Public Law 105–261 (112

Stat. 1920), private sector entities are

required to reimburse Federal users for

relocation of Federal Government

stations from one or more frequencies

due to reallocation. Reimbursement

costs are in addition to any costs paid

by the successful bidder for the

frequency spectrum at the FCC auction.

301.10 Applicability.

(a) Affected bands.

(1) These provisions apply to the

following bands of frequencies located

below 3 gigahertz:

(i) 216 to 220 MHz

(ii) 1432 to 1435 MHz

(iii) 1710 to 1755 MHz

(iv) 2385 to 2390 MHz

(2) NTIA may periodically identify

additional bands that are subject to this

part in a notice published in the Federal

Register.

(b) Availability of comparable facility.

The Federal entity will not relocate

until a comparable facility, or

modification to an existing facility, is

available for enough time to determine

comparability, make adjustments, and

ensure a seamless handoff. The factors

to be considered in determining

comparability are communications

throughput, system reliability, operating

costs, and operational capability as

defined in this part.

(c) Frequency Assignments Eligible for

Reimbursement.

(1) Equipment modification/retuning.

To the extent that a Federal entity that

is required to relocate is able to modify/

re-tune its equipment with the result

that the modified equipment provides

operational capabilities comparable

with the original system, reimbursement

will be limited to the marginal costs

associated with modification/retuning.

(2) Old assignments/new assignments.

Old assignments are those that were

authorized prior to October 17, 1998

(i.e., 216–220 MHz, 143–1435 MHz,

1710–1755 MHz, 2385–2390 MHz). New

assignments are those assignments in

the affected bands that were authorized

after October 17, 1998. New assignments

in the affected bands are not eligible for

reimbursement under these rules.

(3) Exempted Federal power agencies.

Frequency assignments in the 1710—

1755 MHz band that support the Federal

power agencies that are exempt from

reallocation requirements are not

entitled to reimbursement under these

rules.

(4) Experimental stations. Frequency

assignments for experimental stations or

experimental testing stations are not

entitled to reimbursement under this

part. Reimbursement shall apply to

experimental stations that have been

certified for spectrum support by NTIA

for stage 3 developmental tests under

section 10.3.1. of the NTIA Manual of

Federal Regulations and Procedures for

Federal Radio Frequency Management.

This manual is available on NTIA’s

website at http://www.ntia.doc.gov/

osmhome/redbook/redbook.html. The

manual is also available from the U.S.

Government Printing Office (S/N: 903–

008–0025–3).

(5) Certain other government stations.

Other exempted stations identified

under the 1995 Spectrum Reallocation

Final Report and the 1998 Spectrum

Reallocation Report are not entitled to

reimbursement under these rules. These

reports are available at http://

www.ntia.doc.gov.

(d) Sunset of reimbursement rights.

There is no sunset of reimbursement

rights for affected agencies.

§ 301.20 Definitions.

As used in this part:

(a) The term allocation means an

entry in the national table of frequency

allocations (47 CFR 2.105) of a given

frequency band for the purpose of its

use by one or more radiocommunication

services, or the radio astronomy service

under specified conditions.

(b) The term assignment means

authorization given for a radio station to

use a radio frequency or radio frequency

channel under specified conditions.

(c) The term auction means the

competitive bidding process that

Congress authorized the Federal

4780 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

Communication Commission to use in

title VI of the Omnibus Budget

Reconciliation Act of 1993 and the

Balanced Budget Act of 1997 for the

reassignment and licensing of spectrum

identified in § 301.10(a) of this subpart

for certain commercial radio-based

services.

(d) The term classified assignment

means a frequency assignment and

information related to a frequency

assignment that has been determined

pursuant to Executive Order 12958 or

any predecessor order to require

protection against unauthorized

disclosure and that is marked as

‘‘confidential,’’ ‘‘secret,’’ or ‘‘top secret’’

to indicate its classified status when in

documentary form.

(e) The term Commission or FCC

means the Federal Communications

Commission.

(f) The term communications

throughput means the amount of

information transferred within the

system for a given amount of time. For

digital systems, the communications

throughput is measured in bits per

second (bps) and for analog systems the

communications throughput is

measured by the number of voice, video

or data channels.

(g) The term comparable facility

means that the replacement facility

restores the operational capabilities of

the original facility to an equal or

superior level taking into account at

least four factors: communications

throughput, system reliability, operating

costs, and operational capability.

(h) The term experimental station

means a station utilizing radio waves in

experiments with a view to the

development of science or technique.

(i) The term experimental testing

station refers to an experimental station

used for the evaluating or testing of

electronics equipment or systems,

including site selection and

transmission path surveys, which have

been developed for operational use.

(j) The term Federal entity means any

department, agency or other

instrumentality of the Federal

Government that utilizes a Government

station license obtained under section

305 of the Communications Act of 1934

(47 U.S.C. 305).

(k) The term in-kind means the value

of non-cash contributions provided by

non-Federal private parties. In-kind

contributions may be in the form of real

property, equipment, supplies and other

expendable property, and the value of

goods and services directly benefitting

and specifically identifiable to the

project or program.

(l) The term marginal costs means the

costs that will be incurred by a Federal

entity to achieve comparable capability

of systems relocated to a new frequency

assignment or band or otherwise

modified.

(m) The term mediation means a

flexible and voluntary dispute

resolution procedure in which a

specially trained mediator facilitates

negotiations to reach a mutually

agreeable resolution. The mediator may

not dictate a settlement. The mediation

process involves one or more sessions in

which counsel, parties and the mediator

participates, and may continue over the

period of time specified in this part. The

mediator can help the parties improve

communication, clarify interests, and

probe the strengths and weaknesses of

positions. The mediator can also

identify areas of agreement and help

generate options that lead to a

settlement.

(n) The term NTIA means the National

Telecommunications and Information

Administration.

(o) The term operational costs means

the cost to operate and maintain the

federal entity’s replacement facility.

New licensees would compensate

federal entities for any increased

recurring costs associated with the

replacement facilities for five years after

relocation. Such costs shall include, but

not be limited to additional rental

payments and increased utility fees.

(p) The term operational capability

means the measure of a system’s ability

to perform its validated functions

within doctrinal requirements,

including service, joint service, and

allied interoperability requirements

with related systems.

(q) The term relocation refers to the

process of moving a system that is

displaced as a result of reallocation.

(r) The term sensitive assignments

refer those assignments whose

operations or technical parameters are

not releasable to the public under the

Freedom of Information Act.

(s) The term system reliability means

the percentage of time information is

accurately transmitted within a system.

The reliability of a system is a function

of equipment failures (e.g., transmitters,

feed lines, antennas, receivers and

battery back-up power), the availability

of the frequency channel given the

propagation characteristics (e.g.,

frequency, terrain, atmospheric

condition and noise), and equipment

sensitivity. System reliability also

includes the ability of a radiocommunications station to perform a

required function under stated

conditions for a stated period of time.

System reliability may involve three

concepts: attaining a specified level of

performance; the probability of

achieving that level; and maintaining

that level for a specified time. For

digital systems, system reliability shall

be measured by the percentage of time

the bit error rate (BER) exceeds a desired

value, and for analog transmissions, this

would be measured by the percentage of

time that the received carrier-to-noise

ratio exceeds the receiver threshold.

Subpart B—Procedure for Reimbursement

for Relocations and Dispute Resolution

§ 301.100 Costs to relocate.

(a) Relocation costs. The auction

winner is required to reimburse the

Federal entity for all costs incurred as

a result of modification, retuning and/or

relocation.

(b) Method of reimbursement.

Reimbursement payments shall be made

in advance of relocation and may be in

cash or in kind as agreed to by the

affected Federal entity. Any such

payment in cash shall be deposited in

the account of such Federal entity in the

Treasury of the United States or in a

separate account as authorized by law.

If actual costs are less than the

payments made, the Federal entity shall

refund the difference.

§ 301.110 Notification of marginal costs.

(a) NTIA shall provide the Federal

entity’s estimated marginal cost

information to the FCC at least 180 days

before to an auction. Marginal costs are

the costs that will be incurred by a

Federal entity to achieve comparable

capability of systems relocated to a new

frequency assignment or band or

otherwise modified. Specifically,

marginal costs would include all

engineering, equipment, software, site

acquisition and construction costs, as

well as any legitimate and prudent

transaction expenses, including outside

consultants, and reasonable additional

costs incurred by the Federal entity that

are attributable to relocation, including

increased recurring costs associated

with the replacement facilities. Marginal

costs would include costs related to the

need to achieve comparable capability

when replacing, modifying or reissuing

equipment in order to relocate when the

systems that must be procured or

developed have increased functionality

due to technological growth, but would

not include costs related to optional

increased functionality that is

independent of the need to achieve

comparable capability. To the extent

that a Federal entity needs to accelerate

the introduction of systems and

equipment to allow for relocation earlier

than the Federal entity had planned,

replacement costs of the accelerated

systems and equipment shall be

included in marginal costs. Marginal

Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules 4781

costs would also include the costs of

any modification or replacement of

equipment, software, facilities,

operating manuals, training costs, or

regulations that are attributable to

relocation. Marginal costs would not

include costs related to routine

upgrades and operating costs and

lifecycle replacements that would have

occurred prior to the date of the

required relocation. Any Federal entity

that proposes to relocate shall notify

NTIA at least 240 days before the

auction of the marginal costs anticipated

to be associated with relocation or with

modifications necessary to

accommodate prospective licensees.

The information provided to NTIA must

also include the name and telephone

number of a person within the Federal

entity that can be contacted by the

auction winner.

(b) Unclassified assignments. NTIA

will provide the following information

to the FCC prior to the auction with

repect to unclassified government

facilities:

(1) List of Government facilities.

(2) Government agency operating each

facility.

(3) Location of each facility.

(4) General type of operation and

equipment.

(5) Whether the facility can be

retuned, modified, or must be relocated.

(6) Estimated marginal cost of

retuning, modification, or relocation.

(7) Whether the facility overlaps to

one or more license areas or spectrum

blocks.

(8) Total estimated costs of relocation

for all assignments.

(c) Classified assignments. Prior to an

auction, Federal entities will provide a

single, consolidated and unclassified

figure to NTIA for the cost of relocating,

retuning, or modifying all such

classified systems. NTIA will provide

this information to the FCC which in

turn will provide the figure to bidders

with the following conditions: To the

extent it is consistent with national

security considerations, the figure may

be broken down by license service area

and spectrum block to give those

bidding on a geographic basis the best

indication possible of the cost they may

have to pay to relocate, retune or modify

the systems at issue. Following the

auction, the winner may apply for a

facility clearance pursuant to the

National Industrial Security Program

Operating Manual and related

individual security clearances. The

manual is available throught the

Defense Security Service at http://

www.dss.mil/isec/nistom.htm or the

Government Printing Office (ISBN 0-16–

045560–X). If those clearances and

accesses are granted, classified

information may be made available with

regard to certain Government systems in

accordance with the terms and

conditions prescribed in the clearances

and accesses provided, and subject to

the overall rules and authorities found

in Executive Order 12958, Executive

Order 12968, and related Federal laws,

rules, and regulations.

(d) Sensitive assignments. Prior to an

auction, Federal entities will provide a

single, consolidated, and unclassified

figure to NTIA for the cost of relocating,

retuning, or modifying all such sensitive

systems. NTIA will provide this

information to the FCC which in turn

will provide the figure to bidders with

the following conditions: To the extent

it is consistent with the sensitive nature

of the assignment, the figure may be

broken down by license service area and

spectrum block to give those bidding on

a geographic basis the best indication

possible of the cost they may have to

pay to relocate, retune, or modify the

systems at issue. Following the auction,

the government agency shall release the

sensitive information to the winning

licensee pursuant to a non-disclosure

agreement.

§ 301.120 Negotiations and mediation.

(a) Within 30 days after the license is

granted, the auction winner is required

to contact the Federal entity that

occupies the band that the FCC has

awarded to the auction winner. Receipt

of this notification by the Federal entity

triggers the 135-day period for

negotiation or mediation between the

Federal entity and the auction winner.

During this period, parties are

encouraged to resolve any differences

with respect to relocation or

modification costs or any other related

issues, either through party-to-party

negotiations and/or a third party

mediator. If, at the end of the 135-day

period, the parties have not reached an

agreement with respect to relocation,

the parties may agree to extend the

negotiation period.

(b) Good faith obligation. The parties

are required to negotiate in good faith.

Good faith means that:

(1) Neither party may refuse to

negotiate; and

(2) Each party must behave in a

manner necessary to facilitate the

relocation process in a timely manner.

Classified or sensitive information will

be treated in accordance with § 301.110

of this subpart.

§ 301.130 Nonbinding arbitration.

If the parties have not reached

agreement to extend the negotiation/

mediation period, or if a previously

extended negotiation/mediation period

expires, the parties shall enter into

nonbinding arbitration. The parties shall

agree on an arbitrator, and the arbitrator

may not be the same person as the

mediator if mediation has been used by

the parties and failed. The parties may

design such rules for arbitration as

deemed appropriate. The arbitrator’s

nonbinding decision may be requested

by NTIA as part of the record in its

determination on a petition for

relocation under § 301.140. The

decision may be a factor, among other

things, in the NTIA determination on a

petition for relocation.

301.140 Petition for relocation.

(a) In general. An auction winner

seeking to relocate a Federal

Government station must submit a

petition for relocation to NTIA. A copy

of the petition must also be

simultaneously provided to the FCC.

NTIA’s determination shall be set forth

in writing within 6 months after the

petition for relocation has been filed,

and be provided to the auction winner

and the Federal entity. NTIA shall limit

or terminate the Federal entity’s

operating license within 6 months after

receiving the petition if the following

requirements are met:

(1) The person seeking relocation of

the Federal Government station has

guaranteed to pay all modification and

relocation costs incurred by the Federal

entity, including all engineering,

equipment, site acquisition and

construction, and regulatory fees;

(2) All activities necessary for

implementing the relocation or

modification have been completed,

including construction of replacement

facilities (if necessary and appropriate)

and identifying and obtaining new

frequencies for use by the relocated

Federal Government station (where such

station is not relocating to spectrum

reserved exclusively for Federal use);

(3) Any necessary replacement

facilities, equipment modifications, or

other changes have been implemented

and tested to ensure that the Federal

Government station is able to

accomplish its purposes; and

(4)(i)NTIA has determined that the

proposed use of the spectrum frequency

band to which the Federal entity will

relocate its operations is

(A) Consistent with obligations

undertaken by the United States in

international agreements and with

United States national security and

public safety interests; and

(B) Suitable for the technical

characteristics of the band and

consistent with other uses of the band.

4782 Federal Register / Vol. 66, No. 12 / Thursday, January 18, 2001 / Proposed Rules

(ii) In exercising its authority, NTIA

shall consult with the Secretary of

Defense, the Secretary of State, or other

appropriate officers of the Federal

Government

(5) If these requirements are not met,

NTIA shall notify the petitioner that the

request is declined and why.

(6) If NTIA does not issue a

determination under this section within

6 months of the filing of a petition for

relocation, the petition for relocation is

deemed to be denied.

(7) In making its determination under

this section, NTIA shall consult with the

affected Federal entity and, as

appropriate, the Office of Management

and Budget and other executive branch

agencies.

(b) Petition after agreement between

the parties. The auction winner may file

a petition for relocation pursuant to

§ 301.140 of this subpart at anytime after

the parties have reached agreement on

relocation in negotiations or mediation

as provided in § 301.120 of this subpart

and submit the agreement as evidence of

having met the requirements of the

petition for relocation.

(c) Petition after failure to reach an

agreement. If the parties fail to reach an

agreement as provided in § 301.120 and

non-binding arbitration has occurred

pursuant to § 301.130, the auction

winner may file a petition for relocation

with NTIA after a decision has been

rendered by the arbitrator. Any

recommended decision by the arbitrator

may be requested by NTIA as part of the

record in a petition for relocation under

§ 301.140. The recommended decision

may be a factor, among others, in the

NTIA determination on the petition for

relocation.

§ 301.150 Request for withdrawal.

If the parties reach an agreement in

negotiations or mediation or agree with

the decision of the arbitrator, the

Federal entity may seek voluntary

withdrawal of the assignments that are

the subject of the relocation.

Dated: January 11, 2001.

Gregory L. Rohde,

Assistant Secretary for Communications and

Information.

[FR Doc. 01–1306 Filed 1–17–01; 8:45 am]

BILLING CODE 3510–60–P

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

RIN 1018–AG71

Endangered and Threatened Wildlife

and Plants; Determinations of Whether

Designation of Critical Habitat is

Prudent for 81 Plants and Proposed

Designations for 76 Plants From the

Islands of Kauai and Niihau, Hawaii

AGENCY: Fish and Wildlife Service,

Interior.

ACTION: Proposed rule; reopening of

comment period and public hearing.

SUMMARY: The U.S. Fish and Wildlife

Service (Service) gives notice of a public

hearing on the prudency determinations

for 81 plants and the proposed critical

habitat designations for 76 plants from

the islands of Kauai and Niihau, Hawaii.

In addition, the comment period which

originally closed on January 8, 2001,

will be reopened. The new comment

period and hearing will allow all

interested parties to submit oral or

written comments on the proposal. We

are seeking comments or suggestions

from the public, other concerned

governmental agencies, the scientific

community, industry, or any other

interested parties concerning the

proposed rule. Comments already

submitted on the proposed rule need

not be resubmitted as they will be fully

considered in the final determination.

DATES: The comment period for this

proposal now closes on February 19,

2001. Any comments received by the

closing date will be considered in the

final decision on this proposal. The

public hearing will be held from 1:00

p.m. to 3:00 p.m. and 6:00 p.m. to 8:00

p.m. on Tuesday, February 6, 2001, on

the island of Kauai, Hawaii. Prior to the

public hearing, the Service will be

available from 12:30 to 1:00 p.m. and

from 5:30 to 6:00 p.m. to provide

information and to answer questions.

ADDRESSES: The public hearing will be

held at the Radisson Kauai Beach

Resort, Pakalana Room, 4331 Kauai

Beach Drive, Lihue, Kauai. Comments

and materials concerning this proposal

should be sent to the Field Supervisor,

U.S. Fish and Wildlife Service, Pacific

Islands Ecoregion Office, 300 Ala Moana

Boulevard, Room 3–122, P.O. Box

50088, Honolulu, Hawaii 96850.

Comments and materials received will

be available for public inspection, by

appointment, during normal business

hours at the above address.

FOR FURTHER INFORMATION CONTACT: Paul

Henson, at the above address, phone

808–541–3441, facsimile 808–541–3470.

SUPPLEMENTARY INFORMATION:

Background

On November 7, 2000, the Service

published a notice of prudency

determinations for 81 plants species and

proposed designations of critical habitat

for 76 plant species from the islands of

Kauai and Niihau, Hawaii, pursuant to

the Endangered Species Act of 1973, as

amended (Act) in the Federal Register

(65 FR 66808). The original comment

period closed on January 8, 2001. The

comment period now closes on

February 19, 2001. Written comments

should be submitted to the Service (see

ADDRESSES section).

A total of 95 species historically

found on Kauai and Niihau were listed

as endangered or threatened species

under the Act, between 1991 and 1996.

Some of these species may also occur on

other Hawaiian islands. At the time

each plant was listed, we determined

that designation of critical habitat was

not prudent because designation would

increase the degree of threat to the

species and/or would not benefit the

species.

Due to litigation, we reconsidered our

previous prudency determinations for

the 95 plants. From this review, we are

proposing that critical habitat is prudent

for 76 of these species because the

potential benefits of designating critical

habitat essential for the conservation of

these species outweigh the risks of

designation. We are proposing that the

designation of critical habitat is not

prudent for five species. The remaining

14 species historically found on Kauai

and/or Niihau, no longer occur on these

islands. However, these species do

occur on other islands, so proposed

prudency determinations will be made

in future rules addressing plants on

those islands.

This proposed rule also proposes

designation of critical habitat for the 76

species. Twenty-three critical habitat

units, covering a total of 24,539.23

hectares (60,636.42 acres), are proposed

for designation on the islands of Kauai

and Niihau.

Section 4(b)(5)(E) of the Act (16 U.S.C.

1531 et seq.), requires that a public

hearing be held if it is requested within

45 days of the publication of a proposed

rule. In response to a request from a

government agency of the State of

Hawaii, the Service will hold a public

hearing on the date and at the address

described in the DATES and ADDRESSES

sections above.

Anyone wishing to make an oral

statement for the record is encouraged