[Federal Register Volume 66, Number 42 (Friday, March 2, 2001)]
[Rules and Regulations]
[Pages 13022-13024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5041]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 90

[PR Docket No. 93-144; RM 8117; RM 8029; RM 8030; GN Docket No. 93-252; 
PP Docket No. 93-253; FCC 01-33]


Future Development of SMR Systems in the 800 MHz Frequency Band, 
Regulatory Treatment of Mobile Services, and Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this Third Order on Reconsideration, the Commission answers 
petitions for reconsideration filed by the American Mobile 
Telecommunications Association (``AMTA'') and Petroleum Communications, 
Inc. (``Petrocom'') of the Commission's Memorandum Opinion and Order on 
Reconsideration. In that document, the Commission completed the 
implementation of a new licensing framework for the 800 MHz Specialized 
Mobile Radio Service (``SMR''). In this document, the Commission denies 
the petition filed by AMTA seeking interim payments for incumbent 800 
MHz licensees being involuntarily relocated to new frequencies by 
geographic licensees. Additionally, the Commission denies the Petrocom 
petition requesting that the Commission include the Gulf of Mexico as 
an additional Economic Area (``EA'') in the then-upcoming 800 MHz 
auctions for the 150 General Category channels (Auction 34) and the 
Lower 80 channels (Auction 36).

FOR FURTHER INFORMATION CONTACT: Don Johnson, Wireless 
Telecommunications Bureau, Commercial Wireless Division at (202) 418-
7240.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's (``the Commission'') Third Order on 
Reconsideration, FCC 01-33, in PR Docket No. 93-144; RM-8117; RM-8029; 
RM-8030; GN Docket No. 93-252; PP Docket No. 93-253 was adopted January 
26, 2001, and was released February, 2, 2001. The full text of this 
Third Order on Reconsideration is available for inspection and copying 
during normal business hours in the FCC Reference Center, Room CY-A257, 
445 12th Street, SW., Washington, DC. The complete text may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., 1231 20th Street, N.W.,

[[Page 13023]]

Washington, D.C. 20037. The full text may also be downloaded at: 
www.fcc.gov. Alternative formats are available to persons with 
disabilities by contacting Martha Contee at (202) 418-0260 or TTY (202) 
418-2555.

Synopsis of Third Order on Reconsideration

I. Introduction

    1. On January 19, 2000, the American Mobile Telecommunications 
Association (AMTA) \1\ and Petroleum Communications, Inc. (Petrocom) 
\2\ filed separate petitions for reconsideration of the Commission's 
Memorandum Opinion and Order on Reconsideration.\3\ Three parties filed 
comments, and two filed reply comments.\4\ In the MO&O on 
Reconsideration, the Commission completed the implementation of a new 
licensing framework for the 800 MHz Specialized Mobile Radio Service 
(SMR).\5\ In this order, we deny the petitions filed by AMTA and 
Petrocom for the reasons discussed below.
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    \1\ AMTA Petition for Reconsideration filed January 19, 2000 
(AMTA Petition).
    \2\ Petrocom Petition for Reconsideration filed January 19, 2000 
(Petrocom Petition).
    \3\ See Amendment of Part 90 of the Commission's Rules to 
Facilitate Future Development of SMR Systems in the 800 MHz 
Frequency Band, Memorandum Opinion and Order on Reconsideration, 64 
FR 71042 (pub. Dec. 20, 1999) (MO&O on Reconsideration).
    \4\ On March 16, 2000, the Commission released a public notice, 
Report No. 2395, informing parties interested in filing comments 
regarding the AMTA and Petrocom petitions that they would be due 
within 15 days of the date of public notice in the Federal Register. 
Notice was published in the Federal Register on March 24, 2000. See 
Petitions for Reconsideration of Action in Rulemaking Proceedings, 
Report No. 2395, 65 FR 15907 (Pub. March 24, 2000). Comments were 
filed by Nextel Communications, Inc. (styled as an ``Opposition'' to 
AMTA's petition); Mobex Communications, Inc. (urging the Commission 
``to embrace'' the AMTA proposal); and, the Personal Communications 
Industry Association (PCIA) (urging the Commission to allow progress 
payments). Reply comments were filed by Nextel and AMTA.
    \5\ Id. at 17558 (paragraph 1).
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I. Summary of Third Order on Reconsideration

A. AMTA Petition
    2. AMTA requests that the Commission reconsider its decision with 
respect to the timing of EA licensee payments to incumbent licensees 
who are involuntarily relocated to new frequencies.\6\ Specifically, it 
urges the Commission to require EA licensees to make ``reasonable 
progress payments to the incumbent if requested.'' \7\ AMTA argues that 
the MO&O on Reconsideration's decision to make payments for incumbent 
relocation costs due at the end of the relocation process is 
unsupported by our rules or previous decisions.\8\ According to AMTA, 
the MO&O on Reconsideration incorrectly relied on the 800 MHz Second 
Report and Order published in the Federal Register at 62 FR 41190 (July 
31, 1997), because the referenced discussion in the 800 MHz Second 
Report and Order ``did not relate to the timing of payments from EA 
licensees to incumbents during the retuning process'' but instead 
concerned the ``timing of payments among EA licensees when the 
relocation of an incumbent by one EA licensee would result in the 
availability of a channel(s) to another EA licensee, one that had not 
paid any of the associated relocation costs'.'' \9\ AMTA reiterated 
that the Commission's decision not to require progress payments to 
incumbent licensees would render incumbent licensees especially 
vulnerable after the involuntary relocation period begins because each 
incumbent will have lost any bargaining power it previously possessed 
vis-a-vis the EA licensee.\10\
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    \6\ AMTA Petition at 1. See Public Notice, Petitions for 
Reconsideration of Action in Rulemaking Proceeding, Report No. 2395 
(rel. March 16, 2000), 65 FR 15907 (Mar. 24, 2000).
    \7\ AMTA Petition at 3, note 4 (citing AMTA's October 20, 1997 
Reply to Opposition to Petitions for Reconsideration of the 800 MHz 
Second Report and Order).
    \8\ AMTA Petition at 3-4 (paragraphs 6-7).
    \9\ AMTA Petition at 4 (paragraph 7) (referring to the costs set 
forth in 47 CFR 90.699(f)(4)(i)).
    \10\ AMTA Petition at 4-5 (paragraph 8), 6-7 (paragraphs 11-13).
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    3. Upon further review, we conclude that AMTA is correct that 
neither the 800 MHz Second Report and Order nor the MO&O on 
Reconsideration adequately addressed the question of when incumbent 
licensees should be repaid for their involuntary relocation costs.\11\ 
On reconsideration of this issue here, however, we affirm our decision 
that EA licensees should not be required to make progress payments of 
an incumbent's relocation costs. We believe that this policy is 
consistent with the involuntary relocation procedures established in 
our 800 MHz Second Report and Order and adopted in Sec. 90.699(c) and 
(d) of the Commission's rules.\12\ Section 90.699(c)(1) requires that 
the EA licensee guarantee repayment of relocation costs, ``including 
all engineering, equipment, site and FCC fees, as well as any 
legitimate and prudent transaction expenses . . .'' \13\ Additionally, 
Sec. 90.699(c)(2) states that the EA licensee must ``[c]omplete all 
activities necessary for implementing the replacement facilities [of 
the incumbent], including all engineering and cost analysis of 
relocation and, if radio facilities are used, identifying and 
obtaining, on the incumbent's behalf, new frequencies and frequency 
coordination.'' \14\ Furthermore, Sec. 90.699(c)(3) requires that EA 
licensees must ``build the replacement system and test it for 
comparability with the existing 800 MHz system.'' \15\ Section 
90.699(d) requires that the ``replacement system'' provided by the EA 
licensee to an incumbent licensee during this involuntary relocation 
process ``must be at least equivalent to the existing 800 MHz system'' 
with respect to the system itself, capacity, quality of service, and 
operating costs.\16\
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    \11\ The cited discussion in the 800 MHz Second Report and Order 
concerns cost-sharing among EA licensees, not the payments EA 
licensees must make to involuntarily relocated incumbents. See 800 
MHz Second Report and Order, 12 FCC Rcd. at 19123 (paragraph 124).
    \12\ 47 CFR 90.699(c), (d).
    \13\ 47 CFR 90.699(c)(1).
    \14\ 47 CFR 90.699(c)(2).
    \15\ 47 CFR 90.699(c)(3).
    \16\ 47 CFR 90.699(d).
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    4. In view of the requirements of Sec. 90.699(c) and (d) that the 
EA licensees directly bear the cost of building and testing the 
replacement system, it is clear that the primary cost burden for 
involuntary relocation rests on the EA licensees, not the incumbent. To 
the extent that the incumbent may incur additional relocation costs, 
the rule further requires the EA licensee to guarantee payment of those 
costs. However, because we anticipate that EA licensees will bear most 
relocation costs directly we believe that it is equitable for the 
incumbent to be repaid for any remaining costs that it has incurred 
after relocation has occurred. We note that such reimbursable costs may 
include costs that reflect the time-value of money, such as reasonable 
and customary interest expenses incurred by incumbents who must borrow 
or finance the funds needed to relocate. We pointed out previously that 
this approach is unlikely to prejudice incumbents inasmuch as EA 
licensees ``have a large financial incentive to relocate the incumbent 
licensees, construct their facilities, and begin operating.'' \17\ We 
also stated in the MO&O on Reconsideration that ``parties are free to 
negotiate when reimbursement of relocation costs will occur, and may 
agree to reimbursement as such expenses are incurred.'' \18\ Thus, we 
have consistently encouraged EA and incumbent licensees to arrange for

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the payment of relocation costs as they see fit, and we continue to do 
so.
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    \17\ MO&O on Reconsideration, 14 FCC Rcd. at 17584-5 (paragraph 
57-8).
    \18\ Id.
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    5. AMTA does not present any new arguments to support its current 
request that the Commission require EA licensees to make progress 
payments to incumbent 800 MHz licensees during their involuntary 
relocation. Moreover, there is nothing currently before us in the 
record that would prompt us to change our decision. In its opposition, 
Nextel, the predominant winner of EA licenses in the upper 200 channel 
auction, states that it has initiated relocation discussions with over 
ninety percent of the nation's upper 200 channel incumbents and has 
already reached voluntary agreements to acquire or relocate over fifty 
percent of the total number of incumbent channels that it, as an EA 
licensee, will be allowed to relocate.\19\ Nextel recommends that the 
timing of payments for relocation expenses should continue to be left 
to the negotiation process and the common sense of the parties ``to 
select the payment schedule and other terms that meet the unique 
requirements of the individual transaction.'' \20\ Nextel also points 
out that neither AMTA nor PCIA has cited any instance in which an EA 
licensee did not agree to some form of progress payments or an 
incumbent has been harmed by the current rule structure.\21\ We also 
note that the Commission did not adopt a progress payments method when 
it established policies relocating 2 GHz microwave licensees by PCS MTA 
and BTA licensees.\22\ For these reasons, we deny AMTA's petition.
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    \19\ Opposition of Nextel Communications, Inc., to Petition for 
Reconsideration of the American Mobile Telecommunications 
Association, Inc., filed on April 10, 2000, at 2 (Nextel 
Opposition).
    \20\ Nextel Opposition at 5.
    \21\ Id. AMTA and PCIA agree that the relocation process has 
proceeded successfully. AMTA Petition at 2; PCIA Comments at 3.
    \22\ Amendment to the Commission's Rules Regarding a Plan for 
Sharing the Costs of Microwave Relocation, First Report and Order 
and Further Notice of Proposed Rule Making, 11 FCC Rcd. 8825, 8838 
(paragraph 23) 61 FR 29679 (June 12, 1996) (incumbent must be made 
``whole,'' which includes being provided with ``comparable 
facilities''). Section 101.75 requires the payment of relocation 
costs to the incumbent but envisages that this will occur after the 
relocation process is completed, not according to a progress 
payments system. See 47 CFR 101.75.
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    6. We also disagree with AMTA's contention that incumbent licensees 
will be especially vulnerable after the involuntary relocation period 
begins because they will not be in a position to negotiate with the EA 
licensee.\23\ As our discussion above demonstrates, an EA licensee that 
seeks to involuntarily relocate an incumbent licensee assumes a broad 
range of obligations to the incumbent that must be met before the 
incumbent can be required to relocate. Because the burden of providing 
comparable facilities and paying relocation costs rests on the EA 
licensee, we do not believe that an incumbent will be prejudiced by the 
process.
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    \23\ AMTA Petition at 4-5 (paragraph 8), 6-7 (paragraphs 11-13).
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B. Petrocom Petition
    7. In its petition,\24\ Petrocom, which holds site-specific SMR 
licenses as well as one of the cellular licenses for the Gulf of 
Mexico, requested that the Commission include the Gulf of Mexico as an 
additional Economic Area (EA) in the then-upcoming 800 MHz auctions for 
the 150 General Category channels (Auction 34) and the Lower 80 
channels (Auction 36). Petrocom acknowledged that it had not previously 
raised this issue in the 800 MHz proceeding.\25\ Since Petrocom filed 
its petition, both Auction 34 and Auction 36 have concluded.\26\ 
Although neither of these auctions provided for EA licensing in the 
Gulf, we note that Petrocom has filed a similar petition for rulemaking 
in the Gulf Cellular proceeding,\27\ and that we have sought comment in 
that proceeding as to whether we should establish a Gulf EA in the 800 
and 900 MHz SMR services for possible future licensing. Because this 
issue is before us in the Gulf Cellular proceeding, and because 
Petrocom has not raised it previously in this proceeding, we decline to 
address it here. Therefore, we dismiss Petrocom's petition.
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    \24\ Petrocom Petition at 1.
    \25\ Id.
    \26\ Auction 34 concluded on September 1, 2000, and Auction 36 
concluded on December 5, 2000.
    \27\ See In re Cellular Service and Other Commercial Mobile 
Radio Services in the Gulf of Mexico, WT Docket No. 97-112, Second 
Further Notice of Proposed Rule Making, 12 FCC Rcd. 4578, 4600 
(paragraph 62) (1997), 65 FR 24168 (Apr. 25, 2000) (Gulf Cellular 
Second Further Notice). The Commission took notice in the Gulf 
Cellular Second Further Notice of Petrocom's petition for 
rulemaking. Id. at 4600-1 (paragraph 62) (citing Letter from Kenneth 
W. Burnley, Myers Keller Communications Law Group, to David Furth, 
FCC, dated February 21, 1997).
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III. Procedural Matters

A. Regulatory Flexibility Act
    8. No Supplemental Final Regulatory Flexibility Analysis 
(Supplemental FRFA) has been prepared for this item because this Third 
Order on Reconsideration does not promulgate or revise any rules, and 
our previous RFA analyses in this proceeding remain unchanged. 
Furthermore, no Regulatory Flexibility comments were received regarding 
the Memorandum Opinion and Order on Reconsideration.
B. Paperwork Reduction Act of 1995 Analysis
    9. This Third Report and Order on Reconsideration does not contain 
a new or modified information collection.

IV. Ordering Clauses

    10. Pursuant to sections 4(i) and 405 of the Communications Act as 
1934, as amended, 47 U.S.C. 154(i), 405, the petition for 
reconsideration filed by the American Mobile Telecommunications 
Association is denied.
    11. Further, pursuant to sections 4(i) and 405 of the 
Communications Act as 1934, as amended, 47 U.S.C. 154(i), 405, the 
petition for reconsideration filed by the Petroleum Communications, 
Inc., is dismissed.

Federal Communications Commission.
William F. Caton,
Deputy, Secretary.
[FR Doc. 01-5041 Filed 3-1-01; 8:45 am]
BILLING CODE 6712-01-P