[Federal Register Volume 74, Number 119 (Tuesday, June 23, 2009)]
[Rules and Regulations]
[Pages 29607-29613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14760]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 74 and 78

[WT Docket No. 02-55; ET Docket Nos. 00-258, 95-18; FCC 09-49]


Relocation of 2 GHz Broadcast Auxiliary Service

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Commission waives the deadline by which 
Sprint Nextel must complete relocation of the broadcast auxiliary 
service (BAS) to frequencies above 2025 MHz until February 8, 2010. The 
Commission also eliminates the requirement that MSS entrants to the 
2000-2020 MHz band may not begin operations until the BAS incumbents in 
the top 30 markets by population and all fixed BAS links in the 1990-
2025 MHz band have been relocated. MSS entrants will be allowed to 
conduct operations in markets where the BAS incumbents have not been 
relocated only if they successfully coordinate with the BAS incumbents. 
In addition, the Commission waives the requirement that New ICO 
Satellite Services G.P. must first make available to the public 
commercial satellite service throughout its satellite's coverage area 
before it may commercially operate Ancillary Terrestrial Service (ATC) 
in conjunction with it satellite system.

DATES: Effective July 23, 2009.

FOR FURTHER INFORMATION CONTACT: Nicholas Oros, (202) 418-0636, e-mail 
<a href="/cdn-cgi/l/email-protection#cb85a2a8a3a4a7aab8e584b9a4b88bada8a8e5aca4bd"><span class="__cf_email__" data-cfemail="713f1812191e1d10025f3e031e02311712125f161e07">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order and Order, WT Docket No. 02-55, ET Docket Nos. 00-258 and 95-
18, FCC 09-49, adopted June 10, 2009, and released June 12, 2009. The 
full text of the document is available on the Commission's Internet 
site at http://www.fcc.gov. It is also available for inspection and 
copying during regular business hours in the FCC Reference Center (Room 
CY-A257), 445 12th St., SW., Washington, DC 20554. The full text may 
also be purchased from the Commission's duplication contractor, Best 
Copy and Printing Inc., Portals II, 445 12th St., SW., Room CY-B402, 
Washington, DC 20554, telephone (202) 488-5300; fax (202) 488-5563; e-
mail <a href="/cdn-cgi/l/email-protection#d99f9a9a999b9a89908e9c9bf7bab6b4"><span class="__cf_email__" data-cfemail="2d6b6e6e6d6f6e7d647a686f034e4240">[email protected]</span></a>.

Summary of the Report and Order and Order

    1. In this Report and Order and Order, the Commission waives the 
deadline by which Sprint Nextel must complete relocation of the 
broadcast auxiliary service (BAS) to frequencies above 2025 MHz until 
February 8, 2010. The BAS incumbents are being relocated so that new 
entrants such as the Mobile Satellite Service (MSS), Advanced Wireless 
Service (AWS), and Sprint Nextel can provide new and innovative 
services. In 2004, Sprint Nextel undertook the obligation to relocate 
the BAS incumbents within 30 months--i.e. by September 7, 2007. In 
March 2008 the Commission waived the BAS transition deadline until 
March 5, 2009. On February 12, 2009, Sprint Nextel, the Association for 
Maximum Service Television (MSTV), the National Association of 
Broadcasters (NAB), and the Society of Broadcast Engineers (SBE) filed 
a supplemental request that the BAS transition deadline be waived until 
February 7, 2010.
    2. The Commission concludes that waiver of the BAS relocation 
deadline until February 8, 2010 is in the public interest for a number 
of reasons. The timely relocation of BAS licensees remains a necessary 
step for the full introduction of new services in the 1990-2025 MHz 
band, and Sprint Nextel remains the sole entity actively undertaking 
such relocations. No commenter has suggested an alternate plan by which 
BAS licensees can be relocated quicker in order to give new entrants 
full and complete access to the band. The pace of the BAS transition is 
constrained by the small number of manufacturers who make the BAS 
equipment, a shortage of qualified equipment installers and tower 
climbers, and coordination problems between the new radio equipment and 
preexisting controllers. The Commission concludes that a fair reading 
of the overall record indicates that Sprint Nextel has made 
considerable progress in the BAS relocation process that has proven to 
be a more complex undertaking than any party may have initially 
anticipated.
    3. Further delays in BAS transition will frustrate our goal of 
providing opportunity for new entrants to begin offering service in the 
band and the Commission fully intends to take all necessary steps to 
ensure that the BAS licensees, Sprint Nextel, and the MSS operators act 
to complete the BAS relocation process in a timely manner. While the 
Commission intends to exercise appropriate enforcement action if Sprint 
Nextel is not able to complete the BAS transition by February 8, 2010 
for reasons it could have reasonably avoided, we also believe that 
there should be appropriate consequences for BAS licensees for failure 
to complete the relocation by the new deadline. In the accompanying 
Further Notice, the Commission considers further modifying the BAS 
relocation rules to allow new entrants to begin unencumbered operations 
in the band before all BAS operations are relocated. The Commission 
also emphasize that, under existing relocation rules, MSS operators 
have an absolute responsibility to protect incumbent BAS licensees, and 
that it will consider taking vigorous enforcement action against any 
violations of this rule. Furthermore, the Commission reminds BAS 
licensees that under the Commission's rules they have an obligation to 
negotiate in good faith with Sprint Nextel and the other new entrants 
relocation agreements for the 1990-2025 MHz band. If a party believes 
that another party, whether a BAS licensee or a new entrant, is not 
negotiating in good faith, it may petition the Commission for a 
declaratory ruling.
    4. As proposed in a March 2008 Further Notice of Proposed 
Rulemaking in this docket, in this Report and Order and Order the 
Commission also eliminates the requirements in Sec. Sec.  
74.690(e)(1)(i) and 78.40(f)(1)(i) of the Commission's Rules that MSS 
entrants relocate all BAS licensees in Nielsen Designated Market areas 
1-30, as they existed on September 6, 2000, and all fixed BAS stations 
operating in the band on a primary basis prior to beginning

[[Page 29608]]

operations. Eliminating these requirements will allow the benefits of 
MSS--such as public safety service during disasters when terrestrial 
communications networks may be compromised and increased competition in 
wireless communications through the provision of new and unique mobile 
services--to be provided to the public sooner than what the rules 
currently allow. The delays in the relocation of BAS have increased the 
importance of finding opportunities that can allow MSS operators to 
begin to deploy robust commercial services.
    5. The Commission recognizes that allowing the MSS entrants to 
operate on cleared spectrum before they have satisfied their cost 
sharing obligations to Sprint Nextel is a departure from prior 
Commission decisions on this issue. Nonetheless, the Commission 
concludes that, given the unique circumstances in this case, our 
decision to allow the MSS entrants to begin operations in the near 
term, before they may have satisfied their cost sharing reimbursement 
obligations, best serves the public interest. The Commission want to be 
clear, though, that our decision to allow the MSS entrants to begin 
operations before they may have satisfied their cost sharing 
obligations to Sprint Nextel in no way relieves them of these 
obligations. A guiding principle for relocation is that those entrants 
that benefit from cleared spectrum have an obligation to shoulder their 
portion of the costs to relocate incumbent operations. The Commission 
fully intends to apply that principle here, as set forth in the 
accompanying Further Notice.
    6. The Commission also retains the rule that BAS licensees maintain 
primary status until they are relocated, decline relocation, or the BAS 
relocation rules sunset on December 13, 2013. The Commission also has 
not modified the requirement for MSS entrants to relocate the incumbent 
BAS licensees in markets 31-100 within three years of beginning 
operations and the remaining BAS licensees within five years.
    7. The Commission's decision to modify Sec. Sec.  74.690(e)(1)(i) 
and 78.40(f)(1)(i) makes it vital for us to effectively manage the 
interference environment during the period in which both MSS entrants 
and incumbent BAS licensees occupy the band. During the pendency of the 
BAS transition, BAS incumbents are primary in the band until they are 
relocated, they refuse relocation, or the relocation rules sunset on 
December 9, 2013. The Commission imposes the following requirements to 
protect the primary BAS operations: First, MSS entrants will be 
required to successfully coordinate any operations in nonrelocated 
markets with BAS incumbents in those markets prior to beginning 
service. Second, MSS entrants are prohibited from marketing their 
services to customers in markets where the BAS transition has not been 
completed. Third, the Commission prohibits MSS entrants from operating 
ATC networks in markets where the BAS transition is not complete.
    8. Interference may also occur to BAS incumbents from MSS mobile 
terminals operating adjacent to markets where the BAS transition has 
not been completed. To address this possibility, the Commission has 
determined that MSS mobile terminals may not operate within line-of-
sight of BAS receiver sites in markets where the BAS transition has not 
been completed, unless such use has been coordinated between the MSS 
operator and BAS licensee. In addition, the Commission will not allow 
the MSS entrants to operate ATC equipment within line-of-sight of a BAS 
receiver site for a market which has not been transitioned. MSS 
transponders must also accept any interference caused by BAS operations 
in uncleared markets.
    9. The Commission expects BAS incumbents to act cooperatively to 
accommodate good faith proposals for MSS operation in markets where the 
BAS incumbents have not been relocated. Because not all BAS receive 
site information is available in the Commission's licensing databases, 
it expects BAS licensees to disclose to MSS the locations of these 
sites upon request in order to facilitate coordination. While the 
Commission believes that there may be instances where individual BAS 
licensees may be able to adjust the channels or bandwidth on which they 
operate or make other adjustments to accommodate MSS operations, the 
Commission emphasizes that BAS incumbents are not expected to agree to 
coordination proposals that would impair their ability to meet the 
electronic newsgathering needs of a particular market at a particular 
time or that would delay the scheduled relocation of BAS. To a certain 
extent, the Commission disagrees with MSTV and NAB that BAS operations 
should never reduce bandwidth or cease channel operation, if doing so 
is agreed to as part of coordination. However, the Commission does not 
expect broadcasters to retune or modify equipment to accommodate MSS 
when that equipment is already scheduled to be replaced, unless it will 
not divert resources from the BAS transition. The Commission will not 
permit an MSS entrant to approach the BAS incumbents in a particular 
market to coordinate operations until sixty days before the MSS entrant 
expects to provide commercial service in that market.
    10. The Commission also determined that an MSS entrant will be 
required to coordinate with fixed BAS links that overlap the spectrum 
it will be using. Where the MSS entrant and BAS licensee determine by 
mutual agreement that harmful interference to the BAS fixed link will 
not occur, the MSS entrant will be able to operate in that market. It 
may not be possible in some cases for the MSS entrant to operate 
without causing interference to the fixed BAS link. In these 
situations, the MSS entrant will have to relocate the fixed BAS link 
before it may operate in that market.
    11. New ICO Satellite Services G.P. (ICO), which has recently 
changed its name to New DBSD Satellite Services G.P., has been granted 
authority to operate ATC in conjunction with its satellite system 
conditioned on its commercial satellite service being available to the 
public throughout its satellite's coverage area, as required by Sec.  
25.149(b)(3). However, ICO can not satisfy this requirement until the 
BAS transition is complete because it may not market MSS where the BAS 
incumbents have not been relocated. ICO has requested a waiver of this 
requirement to allow it to begin ATC operations prior to the end of the 
BAS transition. The Commission grants ICO a limited waiver of this 
requirement, pending completion of the BAS transition. Once ICO begins 
to commercially offer satellite service in a market in which the BAS 
transition has been completed, ICO will be permitted to operate ATC in 
that market. Once the BAS transition has been completed, ICO may 
operate ATC service throughout its coverage area, provided that it is 
also offering commercial satellite service throughout its coverage 
area. The Commission also delegated authority to the Commission's 
International Bureau to grant a similar waiver to MSS operator 
TerreStar Networks Inc., if such a waiver is necessary.

Final Regulatory Flexibility Analysis

    12. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA),\1\ an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the

[[Page 29609]]

Further Notice of Proposed Rule Making (FNPRM).\2\ The Commission 
sought written public comment on the proposals in the FNPRM, including 
comment on the IRFA.\3\ No commenting parties specifically addressed 
the IRFA.\4\ This present Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.\5\
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    \1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 857 (1996).
    \2\ See Improving Public Safety Communications in the 800 MHz 
Band; Consolidating the 900 MHz Industrial/Land Transportation and 
Business Pool Channels, WT Docket No. 02-55, Notice of Proposed 
Rulemaking, 17 FCC Rcd 4873, 4927 (2002) (NPRM).
    \3\ See id. at 4920 ] 93.
    \4\ Business Autophones, Inc., Comments on IRFA (May 6, 2002) 
Skitronics, LLC, Comments on IRFA (May 6, 2002); Small Business in 
Telecommunications, Comments on IRFA (May 6, 2002).
    \5\ See 5 U.S.C. 604.
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A. Need for, and Objectives of, the Proposed Rules

    13. In this Report and Order and Order, we eliminate the rule 
requiring that BAS in the top 30 markets by population and all fixed 
BAS links be transitioned before 2 GHz MSS operators may begin 
operations.\6\ This rule change is necessary because of the changed 
circumstances since the rule was first adopted. When the rule was 
adopted the MSS entrants were the only new entrants to the band and 
were expected to relocate BAS in the top 30 markets before they could 
begin operations. Sprint Nextel and future AWS licensees have 
subsequently been allocated spectrum in the band. Sprint Nextel was 
expected to relocate the BAS incumbents by September 7, 2007. However, 
the BAS transition has been delayed and Sprint Nextel is now required 
to relocate BAS by February 8, 2010. Despite the fact that BAS 
incumbents have been relocated in many markets, the top 30 market rule 
continues to prevent the MSS entrants from beginning operations 
anywhere--even in markets where the spectrum is currently not being 
used. Elimination of the top 30 market rule will allow the benefits 
from MSS--such as public safety service during disasters when 
terrestrial networks may be compromised and increased competition 
wireless services--to be provided sooner.
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    \6\ The Report and Order and Order also waive the deadline by 
which Sprint Nextel must relocate the BAS incumbents until February 
8, 2010.
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    14. Because BAS is a critical part of the broadcasting system by 
which information and entertainment is provided to the American public, 
the Report and Order and Order implements a number of requirements to 
help prevent interference to nonrelocated BAS incumbents from MSS until 
the transition is complete. The MSS entrants will only be permitted to 
operate in markets where the BAS incumbents have not been relocated if 
the MSS entrants successfully coordinate with the BAS incumbents. This 
coordination requirement also applies to MSS operations in a market 
where BAS has been relocated that are within line-of-sight of BAS 
receiver sites in adjacent markets that have not yet been transitioned. 
Furthermore, to simplify the coordination process, MSS will not be able 
to operate ATC systems or market services to customers in markets where 
the BAS incumbents have not been relocated.\7\
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    \7\ The Report and Order and Order does waive the commercial 
availability ATC gating requirement for ICO. This will allow ICO to 
operate ATC systems in transitioned BAS markets prior to its 
satellite service being available throughout its coverage area.
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B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    15. There were no comments filed that specifically addressed the 
rules and policies proposed in the IRFA.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    16. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\8\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \9\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\10\ A small business concern is one 
which: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) satisfies any additional criteria 
established by the SBA.\11\
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    \8\ 5 U.S.C. 603(b)(3).
    \9\ 5 U.S.C. 601(6).
    \10\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the 
RFA, the statutory definition of a small business applies ``unless 
an agency, after consultation with the Office of Advocacy of the 
Small Business Administration and after opportunity for public 
comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
    \11\ Small Business Act, 15 U.S.C. 632 (1996).
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    17. The proposed rule modifications may affect the interest of BAS, 
LTTS, and CARS licensees (which we have been referring to throughout 
this document generically as ``BAS'') because these licensees are being 
relocated from the 1990-2025 MHz band by the new entrants. In addition, 
the rule modifications will affect the interest of the new entrants to 
the 1990-2025 MHz band: MSS, Sprint Nextel, and future AWS entrants to 
the band.
    18. BAS. This service uses a variety of transmitters to relay 
broadcast programming to the public (through translator and booster 
stations) or within the program distribution chain (from a remote news 
gathering unit back to the stations). The BAS licensees in the 1990-
2110 MHz band will ultimately be required to use only the 2020-2110 MHz 
portion of that band. It is unclear how many of the BAS licensees will 
be affected by our new rules.
    19. The Commission has not developed a definition of small entities 
specific to BAS licensees. However, the U.S. Small Business 
Administration (SBA) has developed small business size standards. For 
BAS, we use the size standard for Television Broadcasting.\12\ The SBA 
has developed a size standard for firms in this category, which is all 
firms having revenues less than $14 million. The only data which we 
have available for this category are for when the SBA size standard was 
for firms having revenues of less than $13.5 million. According to 
Commission staff review of the BIA Publications, Inc. Master Access 
Television Analyzer Database (BIA) on March 30, 2007, about 986 of an 
estimated 1,374 commercial television stations \13\ (or approximately 
72 percent) have revenues of $13.5 million or less and thus qualify as 
small entities under the SBA definition. Thus, under this standard, the 
majority of firms can be considered small.
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    \12\ 13 CFR 121.201, NAICS code 515120.
    \13\ Although we are using BIA's estimate for purposes of this 
revenue comparison, the Commission has estimated the number of 
licensed commercial television stations to be 1,374. See News 
Release, ``Broadcast Station Totals as of December 31, 2006'' (dated 
Jan. 26, 2007); see http://www.fcc.gov/mb/audio/totals/bt061231.html.
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    20. CARS. The CARS licensees in the 1990-2110 MHz band will 
ultimately be required to use only the 2020-2110 MHz portion of that 
band. CARS licenses are issued to the owners or operators of cable 
television systems, cable networks, licensees of the BRS/EBS band, and 
private cable operators or other multichannel video programming 
distributors.\14\ It is unclear how many of these will be affected by 
our new rules.
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    \14\ 47 CFR 78.13.
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    21. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired

[[Page 29610]]

Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' \15\ The SBA has developed a small business size 
standard for this category, which is: all such firms having 1,500 or 
fewer employees.\16\ To gauge small business prevalence for these cable 
services we must, however, use current census data that are based on 
the previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: all such firms having 
$13.5 million or less in annual receipts.\17\ According to Census 
Bureau data for 2002, there were a total of 1,191 firms in this 
previous category that operated for the entire year.\18\ Of this total, 
1,087 firms had annual receipts of under $10 million, and 43 firms had 
receipts of $10 million or more but less than $25 million.\19\ Thus, 
the majority of these firms can be considered small.
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    \15\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \16\ 13 CFR 121.201, NAICS code 517110.
    \17\ 13 CFR 121.201, NAICS code 517110.
    \18\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \19\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    22. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide.\20\ Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard.\21\ In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers.\22\ Industry data indicate that, of 7,208 systems 
nationwide, 6,139 systems have under 10,000 subscribers, and an 
additional 379 systems have 10,000-19,999 subscribers.\23\ Thus, under 
this second size standard, most cable systems are small.
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    \20\ 47 CFR 76.901(e). The Commission determined that this size 
standard equates approximately to a size standard of $100 million or 
less in annual revenues. Implementation of Sections of the 1992 
Cable Act: Rate Regulation, Sixth Report and Order and Eleventh 
Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
    \21\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \22\ 47 CFR 76.901(c).
    \23\ Warren Communications News, Television & Cable Factbook 
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data 
current as of Oct. 2005). The data do not include 718 systems for 
which classifying data were not available.
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    23. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' \24\ The Commission has determined that an operator 
serving fewer than 677,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all its affiliates, do not exceed $250 million in the 
aggregate.\25\ Industry data indicate that, of 1,076 cable operators 
nationwide, all but ten are small under this size standard.\26\ We note 
that the Commission neither requests nor collects information on 
whether cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million,\27\ and therefore we are unable to 
estimate more accurately the number of cable system operators that 
would qualify as small under this size standard.
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    \24\ 47 U.S.C. 543(m)(2) see 47 CFR Sec.  76.901(f) & nn. 1-3.
    \25\ 47 CFR 76.901(f); see Public Notice, FCC Announces New 
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001).
    \26\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \27\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's 
finding that the operator does not qualify as a small cable operator 
pursuant to Sec.  76.901(f) of the Commission's rules. See 47 CFR 
76.909(b).
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    24. Wireless Telecommunications Carriers (except satellite). 
Wireless Telecommunications Carriers (except satellite), is a SBA 
standard which has a size standard of fewer than 1,500 employees.\28\ 
Wireless cable systems use 2 GHz band frequencies of the Broadband 
Radio Service (``BRS''), formerly Multipoint Distribution Service 
(``MDS''), and the Educational Broadband Service (``EBS''), formerly 
Instructional Television Fixed Service (``ITFS''), to transmit video 
programming and provide broadband services to residential subscribers. 
These services were originally designed for the delivery of 
multichannel video programming, similar to that of traditional cable 
systems, but over the past several years licensees have focused their 
operations instead on providing two-way high-speed Internet access 
services. We estimate that the number of wireless cable subscribers is 
approximately 100,000, as of March 2005. As noted, within the category 
of Wireless Telecommunications Carriers (except satellite), such firms 
with fewer than 1,500 employees are considered to be small.\29\ The 
data presented were acquired when the applicable SBA small business 
size standard was called Cable and Other Program Distribution, and 
which referred to all such firms having $13.5 million or less in annual 
receipts.\30\ According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year.\31\ Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million.\32\ The SBA small business size standard for the broad 
census category of Wireless Telecommunications Carriers, which consists 
of such entities with fewer than 1,500 employees, appears applicable to 
MDS and ITFS.
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    \28\ 13 CFR 121.201, NAICS Code 517210. Standard for small 
business is 1,500 employees or fewer.
    \29\ 13 CFR 121.201, NAICS Code 517210.
    \30\ 13 CFR 121.201, NAICS Code 517110.
    \31\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \32\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    25. The Commission has defined small MDS (now BRS) entities in the 
context of Commission license auctions. In the 1996 MDS auction, the 
Commission defined a small business as an entity that had annual 
average gross revenues of less than $40 million in the previous three 
calendar years. This definition of a small entity in the context of MDS 
auctions has been approved by the SBA. In the MDS auction, 67 bidders 
won 493 licenses. Of the 67 auction winners, 61 claimed status as a 
small business. At this time, the Commission estimates that of the 61 
small business MDS auction winners, 48 remain small business licensees. 
In addition to the 48 small businesses that hold BTA authorizations, 
there are approximately 392 incumbent MDS licensees that have gross 
revenues that

[[Page 29611]]

are not more than $40 million and are thus considered small entities. 
MDS licensees and wireless cable operators that did not receive their 
licenses as a result of the MDS auction fall under the SBA small 
business size standard for Wireless Telecommunications Carriers (except 
satellite).\33\ As noted, within the category of Wireless 
Telecommunications Carriers, such firms with fewer than 1,500 employees 
are considered to be small.\34\ The data presented were acquired when 
the applicable SBA small business size standard was called Cable and 
Other Program Distribution, and which referred to all such firms having 
$13.5 million or less in annual receipts.\35\ According to Census 
Bureau data for 2002, there were a total of 1,191 firms in this 
category that operated for the entire year.\36\ Of this total, 1,087 
firms had annual receipts of under $10 million, and 43 firms had 
receipts of $10 million or more but less than $25 million.\37\ 
Information available to us indicates that there are approximately 850 
of these licensees and operators that do not generate revenue in excess 
of $13.5 million annually. Therefore, we estimate that there are 
approximately 850 small entity MDS (or BRS) providers, as defined by 
the SBA and the Commission's auction rules.
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    \33\ 13 CFR 121.201, NAICS Code 517210.
    \34\ 13 CFR 121.201, NAICS Code 517210.
    \35\ 13 CFR 121.201, NAICS Code 517110.
    \36\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \37\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    26. Educational institutions are included in this analysis as small 
entities; however, the Commission has not created a specific small 
business size standard for ITFS (now EBS). We estimate that there are 
currently 2,032 ITFS (or EBS) licensees, and all but 100 of the 
licenses are held by educational institutions. Thus, we estimate that 
at least 1,932 ITFS licensees are small entities.
    27. LTTS. The Local Television Transmission Service (LTTS) in the 
1990-2110 MHz band is used by communications common carriers to provide 
service to television broadcast stations, television broadcast 
networks, cable system operations, and cable network entities.\38\ 
There are 45 LTTS licensees in the 1990-2110 MHz band, and these 
licensees will ultimately be required to use only the 2025-2110 MHz 
portion of that band. It is unclear how many of these will be affected 
by our new rules. The Commission has not yet defined a small business 
with respect to local television transmission services. For purposes of 
this IRFA, we will use the SBA's definition applicable to Wireless 
Telecommunications Carriers (except satellite). As noted, within the 
category of Wireless Telecommunications Carriers, (except satellite), 
such firms with fewer than 1,500 employees are considered to be 
small.\39\ The data presented were acquired when the applicable SBA 
small business size standard was called Cellular and Other Wireless 
Telecommunications--which referred to all such firms having no more 
than 1,500 persons. According to Census Bureau data for 1997, there 
were 977 firms in this category, total, that operated for the entire 
year.\40\ Of this total, 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more.\41\ Thus, under this size standard, the majority of firms can 
be considered small.
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    \38\ 47 CFR 101.803(b).
    \39\ 13 CFR 121.201, NAICS Code 517210.
    \40\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Employment Size of Firms Subject to Federal Income 
Tax: 1997,'' Table 5, NAICS code 517212 (issued Oct. 2000).
    \41\ Id. The census data do not provide a more precise estimate 
of the number of firms that have employment of 1,500 or fewer 
employees; the largest category provided is ``Firms with 1,000 
employees or more.''
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    28. MSS. There are two MSS operators in the 1990-2110 MHz band. 
These operators will provide services using the 2000-2020 MHz portion 
of the band. The SBA has developed a small business size for Satellite 
Telecommunications, which consist of all companies having annual 
revenues of less than $15 million.\42\ Neither of the two MSS operators 
currently has revenues because one has not launched a satellite yet and 
the other is unable to provide service with its satellite because of 
the delays in the BAS transition. However, given that as of December 
31, 2008, these MSS operators had assets of $1.341 billion and $664 
million, respectively, we expect that both of these companies will have 
annual revenue of over $15 million once they are able to offer 
commercial services.\43\ Consequently, we find that neither MSS 
operator is a small business. Small businesses often do not have the 
financial ability to become MSS system operators due to high 
implementation costs associated with launching and operating satellite 
systems and services.
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    \42\ 13 CFR 121.201, NAICS Code 517410.
    \43\ TerreStar Corp., SEC Form 10-K 2008 Annual Report, filed 
March 12, 2009 at F2; ICO Global Communications (Holdings) Limited, 
SEC Form 10-K 2008 Annual Report, filed March 31, 2009 at 52. ICO's 
subsidiary which controls its satellite covering the United States 
has recently filed for bankruptcy. ICO Global Communications 
(Holdings) Limited, SEC Form 8-K, filed May 15, 2009.
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    29. AWS. The AWS licensees have not been issued and the Commission 
has no definite plans to issue these licensees. Presumably, some of the 
businesses which will eventually obtain AWS licensees will be small 
businesses. However, we have no means to estimate how many of these 
licensees will be small businesses.
    30. Sprint Nextel. Sprint Nextel as a new entrant to the band will 
occupy spectrum from 1990-1995 MHz. The Report and Order and Order 
grants Sprint Nextel a waiver of the deadline by which it must relocate 
the BAS, CARS, and LTTS incumbents from the 1990-2025 MHz portion of 
the band. Sprint Nextel belongs to the SBA category Wireless 
Telecommunications Carriers (except satellite).\44\ Businesses in this 
category are considered small if they have fewer than 1,500 
employees.\45\ As of December 31, 2008 Sprint Nextel had about 56,000 
employees.\46\ Consequently, we find that Sprint Nextel is not a small 
business.
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    \44\ 13 CFR 121.201, NAICS Code 517210.
    \45\ Id.
    \46\ Sprint Nextel Corp., SEC Form 10-K 2008 Annual Report, 
filed Feb. 27, 2009 at 14.
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    31. MSS entrants are required to coordinate their operations within 
line-of-sight of BAS receiver sites for those BAS licensees who have 
not yet been relocated. In addition, the MSS entrants may not operate 
ATC networks within line-of-sight of BAS receiver sites which have not 
yet been relocated. Because the locations of the BAS receiver sites are 
not in the Commission's databases, the BAS licensees are required to 
notify the MSS entrants of the location of the receiver sites upon 
request.

E. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    32. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements

[[Page 29612]]

under the rule for small entities; (3) the use of performance, rather 
than design standards; and (4) an exemption from coverage of the rule, 
or any part thereof, for small entities.\47\
---------------------------------------------------------------------------

    \47\ See 5 U.S.C. 603(c)(1-4).
---------------------------------------------------------------------------

    33. No parties have submitted comments indicating that there will 
be a disparate impact on small entities because of these rule changes. 
Because we have no evidence that small businesses will suffer disparate 
harm based on the rules we adopt today, based on the record now before 
us, we do not perceive a need for the Commission to take steps to 
minimize the adverse economic impact on small entities or consider 
alternatives to the rule amendments in the Report and Order and Order. 
In general, the BAS, CARS, and LTTS licensees may suffer harm in two 
ways from our amended rules: By suffering harmful interference to their 
transmissions from MSS entrants to the band or by having to expend 
resources to coordinate operations with the MSS entrants prior to 
completion of the BAS transition.\48\
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    \48\ We do not believe that the BAS, CARS, and LTTS licensee 
will suffer a disparate impact from the two waivers we grant in the 
Report and Order and Order. The waiver of the deadline by which 
Sprint Nextel must relocate the BAS incumbents will benefit the BAS, 
CARS and LTTS licensees by making it more likely they will be 
relocated above 2025 MHz. If they are not relocated, the BAS, CARS, 
and LTTS will become secondary after the December 2013 sunset date. 
The waiver of the commercial availability ATC requirement for ICO 
will not affect the interest of BAS, CARS, and LTTS licensees 
because ICO is prohibited from operation ATC in markets where the 
incumbents have not been relocated and must avoid operating ATC 
networks within line-of-sight of BAS receiver sites that have not 
been relocated.
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    34. The interest of BAS, CARS, and LTTS licensees would be affected 
by the proposed rule changes by either subjecting them to the threat of 
increased interference from MSS or by requiring MSS entrants to 
coordinate with the incumbents in order the operate in markets where 
the BAS incumbents have not yet been relocated to the new channel 
plan.\49\ After the elimination of the top 30 market rule the 
nonrelocated BAS, CARS, and LTTS incumbents have primary status in the 
band until the band sunset date of December 9, 2013, while the new 
entrants will be secondary. As such, the new entrants will be required 
to avoid causing harmful interference to the nonrelocated BAS, CARS, 
and LTTS incumbents and will have to accept interference from the 
incumbents. Despite this requirement, there may be instances where the 
BAS, CARS, LTTS incumbents will experience harmful interference. 
Furthermore, the Commission expects the BAS, CARS, LTTS incumbents to 
act cooperatively to accommodate the MSS operators in nonrelocated 
markets to the greatest extent possible while not impairing their 
ability to make use of the spectrum.
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    \49\ We do not believe the interest of future AWS licensees will 
be negatively affected by the actions of the Report and Order and 
Order. However, because there are no definite plans to issue the AWS 
licenses, any consideration of the effects of the Report and Order 
and Order on the AWS licensees is necessarily speculative.
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    35. The Commission notes that because the time period for exposure 
to potential interference is very short in duration, the potential of 
harmful interference actually occurring to BAS, CARS, and LTTS 
incumbents is small. All BAS, CARS, and LTTS incumbents are expected to 
be relocated by Sprint Nextel before the February 8, 2010 transition 
deadline. ICO has stated that they do not intend to offer commercial 
services during 2009.\50\ TerreStar's operational milestone is not 
until August 30, 2009. The Commission expects that TerreStar will need 
a significant amount of time after its satellite is operational to 
begin providing commercial service. As a result, the amount of time 
that MSS will share spectrum with nonrelocated incumbents should be 
brief. As the transition progresses, fewer and fewer incumbents will 
remain unrelocated. Those BAS, CARS, and LTTS incumbents who have not 
been relocated are unlikely to receive harmful interference from MSS 
because of the coordination and non-interference requirements. 
Furthermore, any interference that does occur to incumbents will affect 
small entities in the same way that it affects large entities.
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    \50\ ICO Global Communications (Holdings) Limited, SEC Form 10-K 
2008 Annual Report, filed March 3, 2009 at 3; Grant of FCC 
Application for Space and Earth Station: Mod or AMD, File No. Sat-
Mod-20080718-00143, granted Nov. 12, 2008.
---------------------------------------------------------------------------

    36. As for the coexistence of unrelocated BAS, CARS, and LTTS 
incumbents with MSS entrants until the incumbents are relocated, the 
unrelcoated BAS, CARS, and LTTS incumbents may have to expend some 
resources to coordinate operations with the MSS entrants. However, we 
do not expect that this coordination will be any more burdensome than 
the coordination that BAS licensees commonly do with other BAS 
incumbents. The requirement to coordinate with MSS entrants will affect 
all the BAS, CARS, and LTTS licensees equally, regardless of the size 
of these entities. We do not expect that BAS, CARS, and LTTS incumbents 
to suffer significant harm because they will not have to impair their 
use of the spectrum as a result of the coordination with the MSS 
entrants. Furthermore, if the MSS entrants can not successfully 
coordinate their use of the spectrum with the urnelocated incumbents, 
they will have to avoid use of the spectrum in markets where the 
incumbents have not been relocated.
    37. Our primary concern in this proceeding continues to be 
balancing the needs of incumbent BAS licensees to provide service 
without suffering harmful interference and the introduction of new MSS 
in a timely manner. The Commission believes the slight hardship that 
may occur to BAS entities is justified by the benefit to the public of 
receiving MSS services earlier than they might have without the changes 
we are making to our rules.
    38. However, because of our ongoing concern with avoiding arbitrary 
and unfair burdens on small entities, we considered a number of 
alternatives to the rules we are adopting. The Commission considered 
not eliminating the top 30 market rule. Because Sprint Nextel is not 
expected to relocate the last of the top 30 markets until the end of 
the BAS transition, this would have likely required MSS to wait until 
the BAS transition is complete before offering service to the public. 
In the meantime, a large amount of spectrum would have remained unused 
in the markets where the BAS incumbents have been relocated. The 
Commission believes it would not be in the public interest to allow 
this valuable spectrum to lie fallow. It also considered allowing BAS 
to operate only in those markets where the BAS incumbents had been 
relocated. The Commission concluded that allowing MSS operations in 
unrelocated markets with successful coordination was preferable to this 
approach because there will be instances in which coordination will 
permit sharing of the spectrum in markets where the BAS transition has 
not been completed.

F. Federal Rules That May Duplicate, Overlap or Conflict With the 
Proposed Rules

    39. None.

Ordering Clauses

    40. Pursuant to Sections 4(i), 5(c), 303(f), 332, 337 and 405 of 
the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 155(c), 
303(f), 332, 337 and 405, this Report and Order and Order is adopted. 
Parts 74 and 78 of the Commission's Rules are amended as specified in 
the Final Rules, effective July 23, 2009.
    41. Pursuant to Sections 4(i), 5(c), 303(f), 332, 337 and 405 of 
the

[[Page 29613]]

Communications Act of 1934, as amended, 47 U.S.C. 154(i), 155(c), 
303(f), 332, 337 and 405, this Further Notice of Proposed Rulemaking is 
adopted.
    42. Pursuant to Sections 4(i) and (j) of the Communications Act of 
1934, as amended, 47 CFR 154(i) and (j), and Sec.  1.3 of the 
Commission's Rules, 47 CFR 1.3, that the waiver of the deadline by 
which Sprint Nextel must complete relocation of the broadcast auxiliary 
service to frequencies above 2025 MHz adopted in FCC 08-73, is extended 
until February 8, 2010.
    43. The Supplemental Request is granted.
    44. Pursuant to Sections 4(i) and (j) of the Communications Act of 
1934, as amended, 47 CFR 154(i) and (j), and Sec.  1.3 of the 
Commission's Rules, 47 CFR 1.3, that the waiver of the requirement 
under 47 CFR 25.149(b)(3) that New ICO Satellite Services G.P. (New 
DBSD Satellite Services G.P.) have commercially available satellite 
service in accordance with its coverage requirements as a prerequisite 
to offering ATC services is granted consistent with the terms of this 
order.
    45. Pursuant to Sec. Sec.  0.201, 0.203, 0.204, and 0.261 of the 
Commission's Rules, 47 CFR 0.201, 0.203, 0.204, 0.261, that authority 
to waive Section 25.149(b)(3) of the Commission rules, 47 CFR 
25.149(b)(3) for TerreStar Networks Inc. is hereby delegated to the 
Commission's International Bureau.
    46. Pursuant to Sections 4(i) and (j) of the Communications Act of 
1934, as amended, 47 CFR 154(i) and (j), and Section 1.3 of the 
Commission's Rules, 47 CFR 1.3, that the Application for Review filed 
by Sprint Nextel of the grant of ATC authority to New ICO Satellite 
Services G.P. (New DBSD Satellite Services G.P.) is dismissed.
    47. New ICO Satellite Services G.P.'s (New DBSD Satellite Services 
G.P.'s) request that we waive 47 CFR 74.690(e)(1)(i) of the 
Commission's rules is dismissed.
    48. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Report and 
Order and Order and Further Notice of Proposed Rulemaking, including 
the Final Regulatory Flexibility Analysis and Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    49. The Commission shall send a copy of this Report and Order and 
Order and Further Notice of Proposed Rulemaking in a report to be sent 
to Congress and the General Accounting Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 74

    Communications equipment, Reporting and recordkeeping requirements, 
and Television.

47 CFR Part 78

    Cable television, Communications equipment, and Reporting and 
recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR parts 74 and 78 to read as follows:

PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER 
PROGRAM DISTRIBUTION SERVICES

0
1. The authority citation for part 74 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 307, 336(f), 336(h) and 554.


0
2. Section 74.690 is amended by revising paragraph (e)(1)(i) to read as 
follows:


Sec.  74.690  Transition of the 1990-2025 MHz band from the Broadcast 
Auxiliary Service to emerging technologies.

* * * * *
    (e) * * *
    (1) * * *
    (i) MSS licensees may relocate all Existing Licensees in Nielsen 
Designated Market Areas (DMAs) 1-30, as such DMAs existed on September 
6, 2000, and all fixed stations operating in the 1990-2025 MHz band on 
a primary basis, except those Existing Licensees that decline 
relocation. Such relocation negotiations shall be conducted as 
``mandatory negotiations,'' as that term is used in Sec.  101.73 of 
this chapter. If these parties are unable to reach a negotiated 
agreement, MSS Licensees may involuntarily relocate such Existing 
Licensees and fixed stations after December 8, 2004.
* * * * *

PART 78--CABLE TELEVISION RELAY SERVICE

0
3. The authority citation for part 78 continues to read as follows:

    Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as 
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085; 47 U.S.C. 
152, 153, 154, 301, 303, 307, 308, 309.


0
4. Section 78.40 is amended by revising paragraph (f)(1)(i) to read as 
follows:


Sec.  78.40  Transition of the 1990-2025 MHz band from the Cable 
Television Relay Service to emerging technologies.

* * * * *
    (f) * * *
    (1) * * *
    (i) MSS licensees may relocate all Existing Licensees in Nielsen 
Designated Market Areas (DMAs) 1-30, as such DMAs existed on September 
6, 2000, except those Existing Licensees that decline relocation. Such 
relocation negotiations shall be conducted as ``mandatory 
negotiations,'' as that term is used in Sec.  101.73 of this chapter. 
If these parties are unable to reach a negotiated agreement, MSS 
Licensees may involuntarily relocate such Existing Licensees after 
December 8, 2004.
* * * * *

[FR Doc. E9-14760 Filed 6-22-09; 8:45 am]
BILLING CODE 6712-01-P


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