15490 Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations

impede EPA efforts to recover costs

associated with response efforts.

List of Subjects in 40 CFR Part 300

Environmental protection, Air

pollution control, Chemicals, Hazardous

substances, Hazardous waste,

Intergovernmental relations, Penalties,

Reporting and recordkeeping

requirements, Superfund, Water

pollution control, and Water supply.

Dated: February 24, 1995.

William J. Muszynski,

Acting Regional Administrator.

40 CFR part 300 is amended as

follows:

PART 300—[AMENDED]

1. The authority citation for part 300

continues to read as follows:

Authority: 42 U.S.C. 9601–9657; 33 U.S.C.

1321(d); E.O. 11735, 38 FR 21243; E.O.

12580, 52 FR 2923; E.O. 12777, 56 FR 54757.

Appendix B [Amended]

2. Table 1 of appendix B to part 300

is amended by removing the Radium

Chemical Company site, Woodside,

New York.

[FR Doc. 95–6769 Filed 3–23–95; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 22 and 90

[GN Docket No. 94–90, FCC 95–98]

Eligibility for the Specialized Mobile

Radio Services and Radio Services in

the 220–222 MHz Land Mobile Band

and Use of Radio Dispatch

Communications

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this Report and Order

(Order), the Commission eliminates

rules that prohibit wireline telephone

carriers from holding licenses in the

Specialized Mobile Radio (SMR) service

and the commercial 220–222 MHz land

mobile band. The Order also eliminates

the prohibition on the provision of

dispatch service by cellular licensees,

other licensees in the Public Mobile

Services, and licensees in the Personal

Communications Services (PCS). After

reviewing the record, the Commission

finds that these restrictions no longer

serve the public interest and should be

eliminated.

EFFECTIVE DATES: Sections 22.577 and

22.901 rule changes will be effective

April 24, 1995. Sections 90.603 and

90.703 rule changes will be effective

March 24, 1995.

FOR FURTHER INFORMATION CONTACT:

Sue McNeil, Wireless

Telecommunications Bureau,

Commercial Radio Division, (202) 418–

0620.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Order in

GN Docket No. 94–90, adopted March 7,

1995 and released March 7, 1995. The

full text of Commission decisions are

available for inspection and copying

during normal business hours in the

FCC Docket Branch (Room 230), 1919 M

Street, N.W., Washington, DC. The

complete text of this decision may also

be purchased from the Commission’s

copy contractor, International

Transcription Service, Inc., (202) 857–

3800, 2100 M Street, N.W., Washington,

DC 20037.

Synopsis of the Report and Order

I. Background

1. When the Commission established

the SMR service in 1974, it elected to

prohibit wireline telephone common

carriers from holding SMR base station

licenses. The Commission has stated

that the wireline prohibition was

intended to ensure that the provision of

SMR service would be available as a

business opportunity for small

entrepreneurs and to reduce incentives

for wireline common carriers to engage

in discriminatory interconnection

practices. In 1986, the Commission

proposed to eliminate the SMR

restriction after receiving several

requests from wireline carriers for

waiver of Section 90.603(c). The

Commission observed that the original

rationale for establishing the restriction

may no longer apply. The Commission

subsequently granted several

conditional waivers to wireline carriers

seeking to acquire SMR stations.

2. In 1992, the Commission

terminated the proceeding on grounds

that the record had become stale and

stated that the restriction should be

retained until the Commission could

more fully evaluate the competitive

impact of allowing wireline providers

into the SMR marketplace. The

Commission terminated all waivers that

had been previously granted, but gave

waiver recipients an opportunity to

rejustify their waiver grants.

Southwestern Bell Corporation

(Southwestern Bell), Bell Atlantic

Enterprises International Inc. (Bell

Atlantic), and US West Paging, Inc. (US

West) filed requests to rejustify the

waiver grants that had been terminated

pursuant to the Termination Order (57

Fed. Reg. 32450 (July 22, 1992)). In

addition, RAM Mobile Data USA

Limited (RAM Mobile), Cass Cable TV,

Inc. (Cass Cable), and American Paging,

Inc. (API) subsequently have sought

waivers of the wireline prohibition. The

Commission issued a public notice

requesting public comment regarding

the waiver requests on April 12, 1994.

In addition, BellSouth has filed an

appeal of the Commission’s Termination

Order, which is pending before the D.C.

Circuit.

3. In 1991, the Commission adopted

an analogous restriction for the newly

established commercial 220 MHz

service that prevents wireline carriers

from holding licenses in that service as

well. The Commission’s rationale for

excluding wireline carriers from 220

MHz was the same as its original

rationale for excluding wireline carriers

from SMR licensing.

4. The Omnibus Budget

Reconciliation Act of 1993 (Budget Act)

amended the Communications Act and

prescribed comprehensive regulatory

changes for the mobile services

marketplace. The legislative history of

the Budget Act identified the

Commission’s ban against wireline

carriers holding SMR licenses as a

regulation that should be reviewed by

the Commission. The Commission thus

proposed to eliminate its restrictions

that prohibit wireline telephone

common carriers from holding SMR and

commercial 220 MHz licenses on the

grounds that the restrictions may no

longer be necessary and that

competition would be promoted by their

elimination.

5. At the same time, the Commission

also proposed to eliminate the

prohibition on the provision of dispatch

service by common carriers, including

cellular licensees, other licensees in the

Public Mobile Service, and PCS

licensees. The prohibition, which was

originally enacted by Congress as part of

the 1982 amendments to the

Communications Act, prohibited

common carriers licensed after January

1, 1982, including all cellular licensees,

from offering dispatch services. In the

Budget Act, Congress retained the

statutory ban, thus potentially applying

it to all CMRS providers, but granted the

Commission authority to repeal the ban

by regulation in whole or in part. In the

Notice of Proposed Rule Making (59

Fed. Reg. 42563 (Aug. 18, 1994)), the

Commission tentatively concluded that

the prohibition was outdated and that

its repeal would promote competition.

Thirty-two (32) comments and twelve

(12) reply comments were filed in

response to the proposals in this

proceeding.
Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations 15491

II. Discussion

A. Licensee Eligibility in SMR and

Commercial 220 MHz Service

6. Background. In the Notice, we

tentatively concluded that the SMR and

commercial 220 MHz wireline

ownership restrictions are no longer

appropriate in today’s competitive

mobile services marketplace. As

described in the Notice, there were

several reasons for this tentative

conclusion. First, we observed that the

risk of wireline carriers being able to

cause competitive harm if allowed to

enter the SMR market has diminished in

recent years. We indicated that the

breakup of AT&T and the rapid

introduction of new mobile service

options have combined to create an

environment in which wireline carrier

participation in mobile services has the

potential to increase competition rather

than impede it.

7. In the Notice, we also drew

comparisons to PCS, noting that we

have already concluded that wireline

entry into PCS will produce economies

of scope for that service, which will

promote its rapid development and

yield a broader array of PCS services at

lower costs to consumers. We indicated

that similar benefits could result from

allowing wireline entry into the SMR

and commercial 220 MHz services.

8. We also tentatively concluded that

the restrictions no longer are necessary

to safeguard against competitive

concerns that the LECs may (1)

discriminate in the offering of

interconnection to non-affiliated SMR

licensees or (2) use their market power

in the local exchange market to crosssubsidize SMR services and undercut

their competitors. We indicated that

existing statutory and regulatory

safeguards probably were sufficient to

prevent LECs from engaging in these

discriminatory activities. In particular,

the Commission has found that,

pursuant to Section 201 of the

Communications Act, it is in the public

interest to require LECs to provide

reasonable interconnection to

commercial mobile radio service

(CMRS) providers. We also noted that

independent accounting and structural

safeguards exist and would apply to

wireline participants in the SMR market

to prevent cross-subsidization. We did,

however, seek comment on the

effectiveness of applying these existing

safeguards to wireline carriers entering

these services.

9. We made additional observations as

well. We indicated that wireline entry

was unlikely to chill further

development of the service since SMR

spectrum has been licensed fully in

most metropolitan areas. As a result, we

stated that wireline entry into the SMR

service would likely occur through

acquisitions that are subject to

Commission review. Similarly, we

reasoned that wireline entry into

commercial 220 MHz likely would be

gradual and subject to case-by-case

review by the Commission as part of the

application process. We also asked

whether commercial 220 MHz services

were sufficiently disparate from any

LEC offering to make negligible any

ability these carriers might have to exert

undue market power or restrain trade.

This was the analysis we used to justify

LEC entry into narrowband PCS. We

further noted that wireline participation

could promote opportunities for

additional entry of small, rural

telephone companies and could infuse

new capital and expertise into the

mobile services marketplace.

10. Also, while we generally

concluded that the wireline restrictions

were outmoded, we questioned whether

there was any justification for

continuation of the restrictions for

either or both of the SMR and

commercial 220 MHz services. Finally,

we deferred consideration of whether

there was a need to restrict cellular

eligibility for SMR or commercial 220

MHz licensing pending a decision in GN

Docket No. 93–252 to impose a

spectrum cap on CMRS providers.

11. Comments. All but two

commenting parties support our

proposal to permit wireline telephone

common carriers to hold SMR and

commercial 220 MHz licenses. Many

commenters maintain that eliminating

the restrictions in the SMR service

would facilitate competition and that

increased competition would thereby

benefit consumers through lower prices

and expanded choices. Commenters also

agree that our proposal is consistent

with our efforts to achieve regulatory

symmetry by providing identical

eligibility requirements for all CMRS

licensees. In addition, several

commenters note that changes in the

SMR marketplace during the time since

the service was established eliminate

the need for wireline eligibility

restrictions. Finally, commenting parties

generally agree that existing accounting

and interconnection safeguards will

adequately prevent cross-subsidization

and discrimination. The Commission

was encouraged to enforce these

existing safeguards rigorously.

12. Most parties who expressly

commented on commercial 220 MHz

service generally support lifting the

prohibition on wireline entry for the

same reasons set forth in support of

lifting the restrictions on wireline entry

into SMR service. AMTA, however,

opposes lifing the restrictions at this

time. AMTA contends that the

commercial 220 MHz service is still in

its infancy, and that its competitive

potential is largely unknown.

13. SMR WON is the only

commenting party to oppose lifting the

wireline prohibition for both SMR and

commercial 220 MHz services.

Specifically, SMR WON expresses

concern that eliminating the restriction

would harm traditional SMR operators

that would not be able to compete

against the market power of wireline

common carriers. Moreover, SMR WON

alleges that existing safeguards have

been ineffective in preventing wireline

carriers from exercising their monopoly

power and financial strength to the

detriment of competition in the cellular

marketplace. Therefore, SMR WON

urges that no changes in the wirline

restriction should be made except as

part of comprehensive legislation

addressing the monopoly power of the

LECs.

14. Decision. We amend our rules to

permit wireline telephone common

carriers to acquire SMR and commercial

220 MHz licenses without restriction

and dismiss pending waiver requests as

moot. Eliminating the wireline

prohibition is likely to yield substantial

public benefits. Commenters echoed our

view that permitting wireline common

carriers to acquire SMR and commercial

220 MHz licenses will allow the

realization of significant economies of

scope and provide a new source of

capital that will yield a broader array of

services at lower costs to consumers.

Repealing the wireline prohibition also

will stimulate competition and promote

opportunities for additional entry of

numerous small wireline carriers,

particularly in rural areas, in addition to

the large wireline carriers. Moreover, we

note that the record supports our view

that changes in the wireless

marketplace, including our efforts to

achieve regulatory symmetry among

comparable mobile services, obviate the

need for the wireline restrictions.

Finally, we believe that existing

regulatory safeguards will prevent

wireline common carriers from engaging

in anti-competitive conduct.

15. We expect that wireline

participation in the provision of SMR

and commercial 220 MHz services will

benefit the consumer. Specifically,

allowing LECs to participate in SMR

and commercial 220 MHz services will

likely produce significant economies of

scope by allowing wireline carriers to

combine related services so that they

may be provided at less cost than

providing them separately. We expect
15492 Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations

that because of their existing wireline

infrastructure, LECs will be likely to

achieve technical efficiencies in

spectrum use that will result in lower

costs. Such economies can promote

more rapid development of technology

and yield a broader range of services at

lower costs to consumers.

16. We expect that wireline entry also

will benefit competition by providing an

additional source of capital and

expertise in the mobile services

marketplace. Allowing wireline entry

will give SMR providers the ability to

draw upon this capital and expertise as

they move from stand-alone analog to

wide-area networks. Despite AMTA’s

opposition, we reach a similar

conclusion with respect to participation

by wireline carriers in the commercial

220 MHz service. We observe that

access to the capital and technical

expertise of wireline carriers may be

important to the commercial 220 MHz

service at its critical stage of

technological development. SNET notes,

for example, that wireline carriers can

‘‘quickly allocate resources, including

existing infrastructure, into wireless

services that will speed the deployment

of services, produce innovative service

offerings, promote competition and

produce competitive rates for

consumers.’’ We also note that

commercial 220 MHz, like PCS, is a

new, developing service, and we have

elected to allow wireline carriers to

participate fully in both the narrowband

and broadband PCS services. Moreover,

we observe that commercial 220 MHz

service resembles narrowband PCS in

that it is a two-way, narrowband service

that is technically distinct from other

service offerings provided by LECs. In

the Narrowband PCS First Report and

Order (59 FR 9100 (Feb. 25, 1994)), we

concluded that the dissimilarity

between narrowband PCS and LEC

service offerings provided additional

justification for allowing wireline entry.

We conclude that the same rational

supports our conclusion with respect to

commercial 220 MHz service.

17. Wireline participation also could

promote opportunities for additional

entry of small entrepreneurs, such as

rural telephone companies, in the SMR

service. As the record in this proceeding

suggests, small wireline carriers in rural

communities are well positioned to

provide SMR and commercial 200 MHz

services in areas that presently are

unserved or underserved. Eliminating

the wireline restrictions would allow

these providers to offer cost-effective

services to rural customers by building

on their existing infrastructure and

presence in the market. We disagree

with SMR WON’s allegation that

wireline participation would impede

competition, especially in rural

communities. As commenters

(including rural telcos) point out,

wireline entry will bring new or

additional SMR services to underserved

rural areas, not merely replace existing

small SMR operators. Additional

opportunities for small business entry

into the SMR business, including

participation by small LECs, are being

considered as part of the commission’s

competitive bidding proceeding. SMR

WON erroneously suggests that our

reference to our efforts to help small

businesses successfully compete at

auctions reveals that our real motivation

for permitting wireline entry is to raise

more funds at auction. Rather, we repeal

the wireline prohibition because the

record overwhelmingly indicates that

wireline participation would serve the

public interest by promoting

competition, lowering costs, and

expanding consumer choice. Moreover,

we note that Congress specifically

prohibits us from exercising our auction

authority for the primary purpose of

raising revenues.

18. Additionally, as we tentatively

concluded in our Notice, the wireline

restrictions are outmoded in view of

recent regulatory changes in the mobile

services marketplace. The Budget Act

mandated that similar mobile services

receive comparable regulatory treatment

and divided all mobile services into two

categories, CMRS and private mobile

radio service (PMRS). In our CMRS

Second Report and Order (59 FR 18493

(April 19, 1994)), we concluded that

certain private mobile radio services,

including SMR and commercial 220

MHz licensees, would be subject to

reclassification as CMRS if they provide

‘‘interconnected service.’’ To the extent

that SMR and commercial 220 MHz

licensees qualify as CMRS providers,

the principles of regulatory symmetry

suggest that they should be subject to

regulations similar to those imposed on

cellular carriers, PCS licensees and

other CMRS providers. Elimination of

§§ 90.603(c) and 90.703(c) thereby

furthers our objective to apply a

symmetrical, consistent set of

regulations governing CMRS by

establishing identical wireline eligibility

requirements for all CMRS providers.

19. As we observed in our Notice, the

mobile services industry also has

undergone substantial changes that

obviate the need for the wireline

restrictions. The record shows that the

competitive concerns that led to the

SMR eligibility restrictions are no longer

applicable in the current competitive

marketplace. The SMR industry has

matured significantly since it was

established in 1974. As AMTA points

out, SMR channels already are in

service in most large urban areas.

Wireline carriers therefore will be

largely limited to acquiring existing

businesses, and all such transfers would

be subject to Commission review. We

will consider the competitive impact of

any transfer to a wireline carrier as part

of our public interest determination. In

addition, we note that wireline SMR

acquisitions will be subject to our CMRS

spectrum cap, which restricts the

amount of cellular, broadband PCS and

SMR spectrum that any one entity may

acquire in a geographic market. This

acts as a competitive safeguard by

limiting all wireline carriers from

exerting undue market power in these

services. Furthermore, we observe that

the spectrum cap will also limit cellular

licensees’ ability to exercise market

power and we therefore do not believe

that additional restrictions on cellular

participation are warranted.

20. Moreover, customer demand and

the desire to offer ‘‘seamless’’

communications services has fostered

the development of wide-area systems

in both the 800 MHz and 900 MHz

band. Wide-area licensees have

aggregated spectrum across large

regions, and are poised to offer services

competitive with larger CMRS

providers, such as cellular and PCS. For

these reasons, we are not persuaded by

SMR WON’s argument that the SMR

market is still relatively immature.

These systems do not continue to

require the same degree of regulatory

nurturing that may have been

appropriate during the early days of this

service. In addition, we note that

artificial eligibility restraints may

hinder the growth of wide-area systems

and their ability to compete with

cellular and other CMRS licensees.

21. In addition, we conclude that

existing regulatory safeguards are

sufficient to prevent possible

discrimination and cross-subsidization.

We note that wireline telephone

companies are required to provide

reasonable interconnection upon

request. As evidence of the infrequency

of interconnection problems, we are

unaware of any pending complaints

alleging discriminatory interconnection

filed by unaffiliated cellular providers

against wireline carriers with cellular

affiliates. We emphasize, however, that

we agree with AMTA and ITA/CICS that

the public interest is best served by

strongly enforcing our policies and

statutory requirements with respect to

the interconnection obligations of LECs.

22. Additionally, independent

accounting and structural safeguards

exist to protect against cross-
Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations 15493

1The Budget Act provides that:

[a] common carrier (other than a person that was

treated as a provider of a private land mobile

service prior to the enactment of the Omnibus

Budget Reconciliation Act of 1993) shall not

provide any dispatch service on any frequency

allocated for common carrier service, except to the

extent such dispatch service is provided on stations

licensed in the domestic public land mobile radio

service before January 1, 1982. The Commission

may by regulation terminate, in whole or in part,

the prohibition contained in the preceding sentence

if the Commission determines that such termination

will serve the public interest.

Budget Act at § 6002(b)(2), 47 U.S.C. 332(c)(2).

Most CMRS licensees are thereby prohibited from

offering dispatch service, unless the Commission

determines that termination of this prohibition will

serve the public interest.

2We note that we are not allowing cellular and

other Part 22 licensees to provide stand-alone

PMRS service, an issue that will be resolved on

reconsideration of our CMRS Second Report and

Order. See CMRS Third Report and Order, 59 Fed.

Reg. 59945 (Nov. 21, 1994). Rather, by this action

we will permit Part 22 licensees to provide noninterconnected dispatch service, so long as their

dispatch users also have the ability to utilize

interconnected service if they choose.

subsidization of services and

discriminatory pricing. In the CMRS

docket, we determined that our joint

cost and affiliate transaction rules

would apply to all CMRS providers with

LEC affiliates. These rules require LECs

to maintain procedures to separate the

costs of regulated activities from those

of their activities that are classified as

nonregulated for federal accounting

purposes, and to account for their

transactions with their nonregulated

affiliates in accordance with specified

valuation methodologies. Since most

SMRs and commercial 220 MHz

licensees fall inside the CMRS

definition (and are not rate-regulated),

these existing and applicable accounting

rules should deter cross-subsidization

problems. We also note that the largest

LECs are subject to price caps, which

provides additional assurances that no

cross-subsidization will occur. Finally,

we observe that the Commission

adopted the same approach concerning

structural separations and accounting

safeguards in our PCS proceeding. We

therefore decline to impose structural

separation requirements in addition to

those already imposed on certain

dominant telephone carriers (i.e., BOCs)

that provide cellular service. We note,

however, that we intend to enforce our

existing safeguards vigorously in this

area and are prepared to take additional

steps, if necessary, to protect against

cross-subsidization of services and

discriminatory pricing.

23. In sum, the rapid growth of mobile

services, regulatory changes and

evolving competition in the mobile

services industry justify the repeal of

the restrictions on wireline telephone

common carriers holding licenses in the

SMR and commercial 220 MHz services.

Accordingly, we eliminate these rules

today. In addition, we dismiss requests

for waivers filed by Southwestern Bell,

Bell Atlantic, US West, RAM Mobile,

Cass Cable and API. These requests are

mooted by our decision to eliminate the

wireline restriction.

B. Common Carrier Dispatch Prohibition

24. Background. In the Notice, the

Commission tentatively concluded that

eliminating the dispatch ban would

enhance competition and thereby

provide consumers with greater choice,

more innovative service offerings, and

lower prices. Commenters were invited

to address the competitive

consequences of permitting all CMRS

providers 1 to offer dispatch services. As

an alternative, however, the

Commission solicited comment on

whether it should delay repeal of the

rule until August 10, 1996 (3 years from

the date the Budget Act amendments

became law), allow CMRS licensees

(other than SMRs) to provide dispatch

only on a secondary basis, or impose a

limit on the amount of system capacity

that non-SMR CMRS licensees may

devote to dispatch service. The

Commission requested comment on

whether these measures were needed to

prevent any anti-competitive impact

that may result from participation by all

CMRS providers in the market, with

particular focus on cellular entry into

dispatch. In addition, the Commission

requested comment on whether mobile

common carriers that are not land-based

(i.e., aviation, marine, and mobile

satellite licensees who provide common

carrier service) should be permitted to

offer dispatch service. Noting that these

categories of licensees previously were

not prohibited from offering dispatch

service under Section 332, we

tentatively concluded that Congress did

not intend to extend the dispatch ban to

non-land mobile licensees when it

amended that section in 1993. Instead,

the Commission reasoned that Congress

meant simply to repeat and incorporate

its old prohibition against common

carrier land mobile service providers

offering dispatch service without

modification and to give the

Commission authority to repeal the

prohibition in whole or in part.

25. Comments. Most commenters

support our view that eliminating the

dispatch prohibition would promote

competition in the dispatch service and

thereby provide customers with

expanded choices and lower prices. In

addition, many commenters observe

that the dispatch prohibition is

inconsistent with our efforts to achieve

regulatory symmetry because it allows

SMRs to provide a service that other

CMRS providers, such as cellular

licensees, may not. Moreover, several

commenting parties note that recent

technological improvements obviate any

concern that land mobile licensees’

common carrier service obligations

would be compromised by the provision

of dispatch service. Noting the

significant benefits that would stem

from permitting all CMRS licensees to

provide dispatch services, most

commenters requested that the

Commission eliminate the prohibition

immediately and without restriction.

26. Several parties, however, urged

the Commission to retain the dispatch

prohibition. Many proponents of the

prohibition argue that certain CMRS

licensees, such as cellular providers,

would chill competition by forcing

small dispatch providers out of the

market through below-cost pricing. To

the extent that CMRS licensees seek to

offer dispatch service, commenters

advocate that they do so on SMR

frequencies.

27. Several commenters request that if

we elect to eliminate the prohibition, we

phase it out on August 10, 1996 or allow

non-SMR CMRS licensees to provide

service only on a secondary basis. As a

separate matter, several commenters

request the Commission to clarify that

the dispatch prohibition did not extend

to non-land mobile common carrier

licensees.

28. Decision. We amend our rules to

permit all mobile service common

carriers to provide dispatch service.2

The record demonstrates that repeal of

the dispatch ban will enhance

competition and thereby provide

consumers with expanded choice and

lower prices. Moreover, we agree with

commenters that retention of the ban is

inconsistent with our efforts to establish

a regulatory framework which provides

similar services with symmetrical

requirements. We also note that recent

technological developments, including

digitalization, have minimized any

concerns that using common carrier

spectrum for dispatch would impair the

licensees’ capacity to provide common

carrier service because digital

technologies allow spectrum to be used

more efficiently. Because of the

significant public benefits that we

expect by eliminating the prohibition,

we decline to impose a sunset provision

and permit all CMRS licensees to

provide dispatch upon the effective date

of these rule changes, and without

restriction.
15494 Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations

29. In eliminating the dispatch

prohibition, we expect to enhance

competition by permitting new types of

CMRS providers to enter the

commercial dispatch service. We

believe that increased competition in

dispatch service will, in turn, yield

significant public benefits. We note that

there seems to be a scarcity of spectrum

capacity available for dispatch service,

as users below 512 MHz strongly

supported the Commission’s proposals

to make more efficient use of the

spectrum in those bands and demand

exists for most licenses in the 800 and

900 MHz bands. Moreover, we agree

with commenters that the introduction

of new competitors has the potential to

lower costs to subscribers, increase

availability of choices, and improve the

quality of service. Several commenters

maintain that allowing CMRS providers

to provide dispatch in addition to other

mobile services will satisfy consumers’

growing demand for integrated services

that are customized to fit their

individual needs. AirTouch notes, for

example, that its market research reveals

that consumers want service packages to

include text messaging, vehicle location,

alpha-numeric paging, fax, dispatch,

and mobile voice. In addition, we

observe that eliminating the dispatch

ban may lower the cost of multifunction

equipment since a greater number of

CMRS licensees will be able to provide

dispatch service. Moreover, as McCaw

and East Otter Tail suggest, eliminating

the dispatch prohibition will make

service available in areas where current

options are limited. In particular, we

expect that the elimination of the

dispatch prohibition will benefit rural

communities by facilitating competition

in underserved areas and will allow

some rural subscribers to obtain lowcost dispatch service from a third-party

service provider for the first time.

30. Commenters seeking to retain the

dispatch ban argue that allowing CMRS

providers, particularly cellular

licensees, to offer dispatch services

actually would have an anti-competitive

impact on the dispatch market. Noting

that cellular carriers have significant

resources and spectrum, opponents

claim that cellular carriers will

impermissibly underprice their service

(by subsidizing the dispatch service

with cellular revenues) in order to drive

SMR operators out of business. To

prevent any anti-competitive conduct,

several commenters suggest that all

CMRS providers be required to provide

dispatch on frequencies designated for

SMR service.

31. We are unpersuaded that any

dispatch providers are likely to engage

in anticompetitive conduct. To sustain a

predatory pricing scheme, a dispatch

provider must be able to price its

services below its own costs and the

costs of its competitors in order to drive

competition out of the market. The

dispatch provider must then raise its

prices above a competitive level and

effectively preclude potential

competitors from entering or re-entering

the market. We consider this possibility

highly unlikely because the entire

CMRS market is expanding, with a

number of competitors expected to enter

the marketplace in the near term. As a

result, the two cellular providers in each

market are expected to compete with

other CMRS service providers,

including SMR and PCS licensees, in

providing a host of services in addition

to dispatch. These providers will also

compete with private mobile radio

service (PMRS) providers, including

businesses that elect to operate their

own systems, in the provision of

dispatch service. It is therefore unlikely

that cellular carriers would benefit by

engaging in any anticompetitive pricing

scheme for particular services in order

to eliminate competitors. Rather, market

share likely will be based on quality,

price, and the availability of other

service options to satisfy a customer’s

individual needs. We note, however,

that we will continue to study the

dispatch market carefully and can take

appropriate enforcement action if

licensees engage in anticompetitive

conduct. Moreover, we observe that the

Department of Justice also has authority

to take enforcement action against

carriers that engage in predatory pricing.

32. We also do not believe that

limiting dispatch service to SMR

frequencies would be an efficient use of

spectrum. To the extent that any CMRS

providers have excess spectrum, we

want to encourage them to develop

innovative uses for it that are responsive

to consumer demand, including

dispatch service. Moreover, restricting

dispatch service to SMR frequencies

would limit competition by creating an

artificial scarcity of spectrum available

to provide dispatch service.

33. Permitting all CMRS licensees to

provide dispatch service also is

consistent with our efforts to achieve

regulatory symmetry among comparable

services. As many commenters point

out, the dispatch prohibition allows

SMR licensees to offer services that its

CMRS competitors cannot. Elimination

of the dispatch prohibition will help to

equalize the regulatory requirements

applicable to all mobile service

providers by allowing competing

operators to offer the same portfolio of

service options and packages. This

result is required by Congress’ mandate

that comparable mobile services receive

similar regulatory treatment.

34. In addition, we note that recent

technological developments undermine

the original justification for the dispatch

prohibition. When Congress adopted the

dispatch prohibition, it sought to ensure

that common carriers did not misuse

frequencies by devoting them to

dispatch use. The development of new

technologies, including digitalization,

have minimized any concerns that using

common carrier spectrum for dispatch

would impair the licensees’ capacity to

provide common carrier service because

digital technologies allow spectrum to

be used more efficiently. Moreover, the

mobile services marketplace will ensure

that spectrum is not used inefficiently

for dispatch service if consumer

demand demonstrates that alternative

uses are more desirable.

35. Because of the significant public

benefits that we expect by eliminating

the prohibition, we decline to impose a

sunset provision and permit CMRS

licensees to provide dispatch without

restriction. We agree with commenters

that establishing a sunset period would

delay the introduction of new

competition without providing any

benefit to consumers. Commenters

favoring a sunset period maintain that

they need an opportunity to adjust to

common carrier obligations without

disruption by new competitors. We

note, however, that our intent in

establishing the three-year transition

period was to provide private carriers

that will be reclassified as CMRS an

opportunity to prepare for new

regulatory requirements, not to shield

them from new sources of competition.

We are unpersuaded, therefore, that a

sunset provision is needed to protect

SMR licensees. Moreover, we observe

that to the extent that non-SMR CMRS

licensees will need to construct or

modify their systems before they will be

able to offer dispatch services, SMR

providers will have an opportunity to

adjust to new competitors. We also

decline to limit non-SMR CMRS

licensees’ participation to providing

dispatch on a secondary basis. There is

no evidence in the record that

restricting their participation in this

manner would provide any benefit to

consumers.

III. Procedural Matters

36. Final Regulatory Flexibility

Analysis. Pursuant to the Regulatory

Flexibility Act of 1980, an Initial

Regulatory Flexibility Analysis (IRFA)

was incorporated in the Notice. Written

comments on the IRFA were requested,

although none were received. The

Commission has prepared the following
Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Rules and Regulations 15495

3We note that the Administrative Procedure Act

allows the rules to become effective immediately

because we are relieving a restriction rather than

imposing one. See 5 U.S.C. 553(d)(1). We believe

that it is appropriate for these rules to take effect

immediately upon publication in the Federal

Register in light of the pending requests for waiver,

discussed infra.

Final Regulatory Flexibility Analysis

(FRFA) of the expected impact of the

proposed rule changes on small entities.

I. Reason for Action. This Report and

Order eliminates the restrictions

contained in Sections 90.603(c) and

90.703(c) of the Commission’s rules that

prohibit wireline telephone common

carriers from holding licenses in the

SMR service and commercial 220 MHz

band. The Report and Order also

permits all CMRS providers to offer

dispatch service in competition with

SMR systems. The record in this

proceeding demonstrates that these

restrictions are no longer necessary and

should be repealed.

II. Objectives. The Commission

intends to promote competition, growth

and innovation at a time when the

mobile services marketplace is

undergoing regulatory changes.

III. Legal Basis. The action is

authorized under Sections 3(n), 4(i),

303(r), 332(c) and 332(d) of the

Communications Act of 1934, as

amended, 47 U.S.C. §§ 153(n), 154(i)

and 303(r), 332(c) and 332(d).

IV. Reporting, Recordkeeping and

Other Compliance Requirements. None.

V. Federal Rules Which Overlap,

Duplicate or Conflict With Rules. None.

VI. Description, Potential Impact, and

Number of Small Entities Involved.

Many small entities could be affected by

the rule changes contained in the Report

and Order. We expect that several small

entities will benefit by eliminating the

wireline restrictions and dispatch

prohibition because it will provide these

entities and additional opportunity to

participate in the provision of these

services.

VII. Significant Alternatives

Minimizing the Impact on Small Entities

Consistent with the Stated Objectives.

The Notice in this proceeding solicited

comments on whether to eliminate the

wireline eligibility restrictions and the

dispatch prohibition. No significant

alternatives were presented in the

comments.

37. Ordering Clauses. Accordingly, IT

IS ORDERED, that Part 22 of the

Commission’s Rules ARE AMENDED as

set forth below and are effective April

24, 1995. It is further ordered that Part

90 of the Commission’s Rules are

amended as set forth below and are

effective upon March 24, 1995.3

38. It is further ordered that the

Petitions for Waiver filed by

Southwestern Bell, Bell Atlantic, US

West, RAM Mobile, Cass Cable, and API

are dismissed as moot.

List of Subjects

47 CFR Part 22

Public mobile services; Radio.

47 CFR Part 90

Private land mobile services; Radio.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Amendatory Text

Parts 22 and 90 of Chapter I of Title

47 of the Code of Federal Regulations

are amended as follows:

PART 22—PUBLIC MOBILE SERVICE

1. The authority citation for part 22

continues to read as follows:

Authority: Sections 4, 303, 307, and 332,

48 Stat. 1066, 1082, as amended; 47 U.S.C.

154, 303, 307 and 332, unless otherwise

noted.

2. Section 22.577 is amended by

revising the heading, the introductory

text, the introductory text of paragraph

(a) and paragraphs (a)(1), (a)(2), (b) and

(d), to read as follows:

§ 22.577 Dispatch service.

Carriers licensed under this subpart

may provide dispatch service in

accordance with the rules in this

section.

(a) Installation without prior FCC

approval. A station licensee may install

or remove dispatch points for

subscribers without obtaining prior FCC

approval. A station licensee may install

or remove dispatch transmitters for

subscribers without applying for

specific authorization, provided that the

following conditions are met.

(1) Each dispatch transmitter must be

able to transmit only on the mobile

channel that is paired with the channel

used by the base station.

(2) The antenna of the dispatch

transmitter must not exceed the criteria

in § 17.7 of this chapter that determine

whether the FAA must be notified of the

proposed construction.

* * * * *

(b) Notification. Licensees must notify

the FCC (FCC Form 489) whenever a

dispatch transmitter is installed

pursuant to paragraph (a) of this section.

The notification must include the name

and address of the subscriber(s) for

which the dispatch transmitter was

installed, the location of the dispatch

transmitter, the height of antenna

structure above ground and above mean

sea level, the channel(s) used, and the

call sign and location of the base station.

* * * * *

(d) Dispatch transmitters requiring

authorization. A dispatch transmitter

that does not meet all of the

requirements of paragraph (a) of this

section may be installed only upon

grant of an application for authorization

therefor (FCC Form 600).

* * * * *

3. Section 22.901 is amended by

revising paragraph (c) to read as follows:

§ 22.901 Cellular service requirements and

limitations.

* * * * *

(c) Dispatch service. Cellular systems

may provide dispatch service.

* * * * *

PART 90—PRIVATE LAND MOBILE

RADIO SERVICES

4. The authority citation for part 90

continues to read as follows:

Authority: Sections 4, 303, and 332, 48

Stat. 1066, 1082, as amended; 47 U.S.C. 154,

303 and 332, unless otherwise noted.

5. Section 90.603(c) is revised to read

as follows:

§ 90.603 Eligibility.

* * * * *

(c) Any person eligible under this part

and proposing to provide on a

commercial basis base station and

ancillary facilities as a Specialized

Mobile Radio Service System operator,

for the use of individuals, federal

government agencies and persons

eligible for licensing under subparts B,

C, D, or E of this part.

6. 47 CFR 90.703(c) is revised to read

as follows:

§ 90.703 Eligibility.

* * * * *

(c) Any person eligible under this part

proposing to provide on a commercial

basis, station and ancillary facilities for

the use of individuals, federal

government agencies and persons

eligible for licensing under subparts B,

C, D, or E of this part.

[FR Doc. 95–7295 Filed 3–23–95; 8:45 am]

BILLING CODE 6712–01–M

47 CFR Part 64

[CC Docket No. 91–281; FCC 95–119]

Calling Party Telephone Number;

Privacy

AGENCY: Federal Communications

Commission.