Service Rules for the 746-764 and 776-794 MHz Bands

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

This document establishes service rules for licensing Guard Bands that encompass six megahertz of spectrum in the 746-764 MHz and 776-794 MHz bands which have been reallocated for commercial use from their previous use for the broadcasting service. The Commission previously established service rules for thirty of the thirty-six megahertz reallocated for commercial use, and established two paired Guard Bands, one of 4 megahertz and one of 2 megahertz. This document adopts licensing, technical, and operational rules for these Guard Bands.

DATES:

Effective April 4, 2000.

FOR FURTHER INFORMATION CONTACT:

Legal Information: Gary Michaels, 202-418-0660; Technical Information: Marty Liebman, 202-418-1310.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Second Report and Order (Second R&O) in WT Docket No. 99-168; FCC 00-90, adopted March 8, 2000, and released March 9, 2000. The complete text of this Second R&O is available for inspection and copying during normal business hours in the FCC Reference Information Center, Courtyard Level, 445 12th Street, SW, Washington, DC, and also may be purchased from the Commission's copy contractor, International Transcription Services (ITS, Inc.), CY-B400, 445 12th Street, SW, Washington, DC.

Synopsis of the Second Report and Order

1. The Commission adopts a Second R&O in WT Docket No. 99-168, establishing service and auction rules for the commercial licensing of 6 megahertz of spectrum in the 746-764 and 776-794 MHz bands (700 MHz band) formerly reserved for analog UHF television service. The Notice of Proposed Rulemaking, NPRM, initiating this proceeding may be found at 64 FR 36686, July 7, 1999. The First Report and Order in this proceeding, First R&O, 65 FR 3139, (January 20, 2000) adopted service and auction rules for thirty of the thirty-six megahertz reallocated for commercial use, and established two paired Guard Bands, one of 4 megahertz and one of 2 megahertz, located adjacent to spectrum allocated for public safety use. This Second R&O adopts licensing, technical, and operational rules for these Guard Bands. The 2 megahertz Guard Band includes 746-747 MHz and 776-777 MHz, and the 4 megahertz Guard Band includes 762-764 MHz and 792-794 MHz.

2. The Second R&O seeks to minimize the potential for harmful interference to public safety operations in the immediately adjacent 700 MHz spectrum by adopting a package of interference protections modeled on the interference standards within the 700 MHz public safety spectrum. Thus, 700 MHz public safety licensees should experience no greater interference risk from Guard Band users than from public safety licensees. Accordingly, entities operating in the Guard Bands must comply with specified “out-of-band emission” criteria, and with prescribed frequency coordination procedures that include advance notification to the Commission-recognized public safety frequency coordinators and adjacent area Guard Band users. To reduce the potential for such harmful interference to public safety operations, the Commission also finds that entities operating in the Guard Bands should not be permitted to employ a cellular system architecture, an architecture not used by public safety licensees. Entities using cellular architectures may, however, participate in the 30 megahertz band auction. Additionally, the Commission recently announced an auction of broadband Personal Communications Service (PCS) licenses that would make additional spectrum available for systems using cellular architectures. The technical and operational requirements for Guard Band systems are discussed in more detail in paragraphs 14 through 24 of the full text of the Second R&O.

3. The Commission will assign licenses in the Guard Bands to Guard Band Managers using competitive bidding. The Guard Band Manager will be a new class of commercial licensee who will be engaged in the business of leasing spectrum for value to third parties on a for-profit basis. Guard Band Managers will be required to adhere to strict frequency coordination and interference rules, and control use of the spectrum so as to facilitate protection for public safety. The Guard Band Manager may subdivide its spectrum in any manner it chooses and make it available to any system operator, or directly to any end user for fixed or mobile communications, consistent with the frequency coordination and interference rules specified for these bands.

4. Guard Band Managers will be allowed the flexibility to subdivide their spectrum, and lease it to third party users without having to secure approval for the transfer or assignment of their license. Additionally, although the Commission adopts a performance standard under which the Guard Band Manager will be required to provide substantial service during the term of its license, the Guard Band Manager will be able to meet that standard by leasing spectrum, rather than by incurring the substantial capital costs associated with system buildout. This licensing represents an innovative spectrum management approach that should enable parties to acquire spectrum more readily for varied uses, while streamlining the Commission's spectrum management responsibilities.

5. The Commission will not impose any restrictions on the type of customers with whom Guard Band Managers may seek to do business, and will provide Guard Band Manager licensees significant flexibility, within the technical constraints necessary to protect public safety, to tailor use of their assigned spectrum. The Commission's principal reason for licensing Guard Band spectrum to Guard Band Managers is that this is the most effective and efficient way to manage this spectrum while protecting public safety operations in adjacent bands. The Commission also believes that there is a significant benefit to having a single entity in a service area that is responsible for coordinating the selection of Guard Band frequencies to be used and the operating parameters of the sites to be constructed. The use of Guard Band Managers will also enable end users to acquire spectrum that can meet unique geographic requirements. The Guard Band Manager license will also enable small businesses to acquire spectrum in amounts, and for periods of time, that better suit their unique characteristics and specialized communications needs.

6. Each Guard Band Manager will be granted a license under which it will allow others to construct and operate stations at any available site within the licensed area and on any channel for which the Guard Band Manager is licensed. The only exception to this blanket license approach is for stations that require individual Commission review, because submission of an Environmental Assessment is required under § 1.1307 of the Commission's rules; international coordination is required; or the station would affect the radio frequency quiet zones described in § 90.177 of the Commission's rules. Additionally, station antenna structures that require notification to the Federal Aviation Administration must be registered with the Commission prior to construction. In cases where individual Commission review is required, the Guard Band Manager must file a separate application and obtain appropriate approvals or authorizations. Guard Band Managers may allow third-party system operators or end users to modify stations that are covered under a Guard Band Manager's blanket license without prior Commission approval. In all instances, however, a primary responsibility of the Guard Band Manager will be to coordinate carefully operations and modifications of systems in the Guard Bands to ensure non-interference with public safety.

7. To minimize the potential for interference to public safety operations in the adjacent 700 MHz bands, as well as adjacent channel and co-channel operations in adjacent geographic areas, the Commission adopts coordination requirements. Under these coordination requirements, Guard Band Managers must notify Commission-recognized public safety frequency coordinators in the 700 MHz public safety band and adjacent-area Guard Band Managers of the technical parameters of any site constructed in the Guard Band Manager's license area. This notification requirement applies to the coordination of both new stations and station modifications. At a minimum, each notification must include the frequency or frequencies coordinated, antenna height, antenna location, type of emission, effective radiated power, a description of the service area, date of coordination and user name or, in the alternative, a description of the type of operation.

8. Such notifications must be made within one business day after a Guard Band Manager has coordinated the station. To allow the public safety community and other Guard Band Managers time to evaluate the coordinations, entities coordinated by a Guard Band Manager must wait at least ten business days after notification before they can begin operating under the Guard Band Manager's license. Guard Band Managers must also notify the same entities when an application for an individual station license is filed with the Commission and users must wait the same 10-day period. The Commission expects Guard Band Managers to cooperate with one another and the public safety community in the selection of frequencies. In the event of harmful interference, Guard Band Managers are expected to cooperate to resolve the problem by mutually satisfactory arrangements. If the parties involved are unable to reach a mutually satisfactory solution, the Commission may impose restrictions on the operation(s) of any of the parties involved, consistent with its enforcement powers under the Communications Act.

9. Statutory Considerations. The Commission finds that the licensing of spectrum in this band to Guard Band Managers is consistent with section 337 of the Communications Act, the Commission's spectrum management obligations, and the public interest. Congress instructed the Commission to reallocate 24 megahertz of the spectrum between 746 and 806 MHz for public safety services and 36 megahertz for commercial use. The Commission believes it is a reasonable interpretation of the “commercial use” requirement in section 337(a)(2) to permit non-public safety, commercial entities to lease spectrum within the 36 megahertz to third-party users (commercial or individual) upon which no end-use restrictions, except for certain technical restrictions set forth in the Second R&O, will be imposed.

10. The Commission's decision to reserve this spectrum for Guard Band Managers is consistent with Congress's direction in section 337(d)(4) of the Communications Act, and the Conference Report language pertaining to that section, that users of the public safety spectrum be protected from interference. Section 337 also supports licensing the Guard Bands to Guard Band Managers because this licensee is a commercial entity that will be engaged in a for-profit use of the spectrum. The Commission concludes that the Guard Band Manager's generation of revenues from its use of the licensed spectrum meets the section 337(a)(2) requirement that the spectrum be for commercial use.

11. The Commission also concludes that the creation of the Guard Band Manager as a new class of licensee is consistent with the Commission's broad licensing and spectrum management authority under sections 301, 303(b), and 309(j) of the Communications Act, and the Commission's broad authority to adopt reasonable rules in the public interest establishing licensing eligibility criteria. Moreover, the Commission believes that the Guard Band Manager concept is consistent with the requirement in section 310(d) of the Communications Act that licensees retain ultimate de facto control of their licenses. Guard Band Managers will have full authority and the duty to take whatever actions are necessary to ensure third-party compliance with the Act and the Commission's rules. In establishing this new class of licensee, the Commission does not exceed its statutory authority or relinquish its statutory responsibilities pertaining to the licensing of wireless services. The Commission will continue to fulfill its statutory obligation under section 309(a) to determine whether the public interest, convenience, and necessity will be served by the granting of a Guard Band Manager's license application. As with any other licensee, the Commission will hold Guard Band Managers directly responsible for compliance with all obligations that the Communications Act imposes on licensees. The Commission will also hold Guard Band Managers directly responsible for any interference or misuse of the frequencies arising from their use by non-licensed entities. Further, the Commission intends to exercise its general enforcement powers under section 303 of the Act by imposing appropriate sanctions against noncomplying Guard Band Managers, and, where warranted, revoking licenses pursuant to section 312 of the Act, for violations of the Act or Commission regulations committed by the Guard Band Manager or third-party users of its licensed spectrum. Finally, the Commission emphasizes that third-party spectrum users who violate the Commission's rules or other federal laws are subject to forfeitures under section 503 of the Communications Act, other administrative sanctions, and criminal prosecution.

12. Rules Governing Guard Band Manager Licenses. Concerns regarding the Guard Band Manager's ability to manage the spectrum in the best interest of prospective eligible users can be addressed by Commission rules that will govern both the Guard Band Manager's operations and its contractual relationships with third-party users. Commenters suggested a number of terms and conditions that might be included in written agreements between Guard Band Managers and their customers. With respect to many of the contractual terms and conditions suggested in the comments, the Commission elects not to incorporate them in its service rules, but rather to leave to the Guard Band Manager's discretion the decision whether such terms and conditions are necessary in the prudent structuring of the Guard Band Manager-customer relationship. Consistent with its decision to afford licensees in the 746-764 MHz and 776-794 MHz bands maximum practicable flexibility in the use of this spectrum, the Commission will not encumber Guard Band Managers with numerous regulations at this time. The Commission will, however, closely monitor how Guard Band Managers carry out their spectrum management responsibilities and will impose more detailed rules of general applicability if presented with evidence of specific conduct that would warrant imposition of such rules.

13. The Guard Band Manager will contractually provide customers the right to use certain frequencies in its service area, as identified in the contract. The duration of spectrum user agreements may vary; however, no agreement may extend beyond the term of the Guard Band Manager's FCC authorization. The Guard Band Manager may enter into contingent agreements providing any spectrum user with an option or right to renew its agreement if the Guard Band Manager is able to renew its authorization on similar terms and conditions with the Commission. The Commission will also require Guard Band Manager agreements to detail the operating parameters of the spectrum user's system, including power, maximum antenna heights, frequencies of operation, base station location(s), area(s) of operation, and other parameters as appropriate.

Additionally, the spectrum user must agree to operate its system in compliance with all technical specifications for the system consistent with Commission policy, and must use FCC-approved equipment where appropriate. Guard Band Managers will also be required to include provisions in their agreements that the spectrum user complete post-construction proofs of system performance prior to system activation.

14. Guard Band Manager contracts must include provisions that apply all existing licensee obligations to the spectrum user. The spectrum user must agree to comply with all applicable Commission rules, and accept FCC oversight and enforcement consistent with the Guard Band Manager's license. Guard Band Managers also must include provisions in their contracts obligating the spectrum user to cooperate fully with any investigation or inquiry conducted by either the Commission or the Guard Band Manager. In the event that the Guard Band Manager has knowledge or reason to believe that its customer has committed a violation of the Commission's rules, or that the customer's system is causing harmful interference with other systems, the Guard Band Manager will have the right to conduct onsite inspections of all transmission facilities. If the Guard Band Manager determines that there is an ongoing violation of the Commission's rules or that the customer's system is causing harmful interference, the Guard Band Manager shall have the right to suspend or terminate the operation of the system, or take other measures to resolve the interference until the situation can be remedied. Third-party spectrum user agreements must also stipulate that if the customer refuses to comply with a suspension or termination order, the Guard Band Manager will be free to use all legal means necessary to enforce the order. Finally, Guard Band Managers will be required to maintain their written agreements with spectrum users at their principal place of business, and to retain these records for at least two years after the date such agreements expire. These records must be kept current and be made available upon request for inspection by the Commission or its representatives.

15. In the event that there is a dispute between a Guard Band Manager and one of its customers, or among multiple customers of the same Guard Band Manager, the Commission expects such disputes to be resolved by the Guard Band Manager in the same manner as would be used by the parties to resolve other commercial disputes arising under the contract. The Commission will consider any complaints filed against a Guard Band Manager for violating the Act or the Commission's policies. The Commission will resolve such complaints pursuant to its authority granted in sections 308(b) and 309(d) of the Act. With respect to disputes between non-contracting parties and a Guard Band Manager or the Guard Band Manager's customers, when the Guard Band Manager is unable or unwilling to resolve such disputes in a timely fashion, the aggrieved party may file a complaint with the Commission, to ensure that the Guard Band Manager and its customers are complying with the requirements of the Act, Commission rules, and the terms of the Guard Band Manager license. However, the Commission expects Guard Band Managers to coordinate use of their licensed frequencies carefully to ensure that their customers do not interfere with public safety or other licensees on adjacent channels.

16. Regulatory Status. Because the Guard Band Manager licensee will act only as a spectrum broker and not as a wireless service provider, it will not be a carrier of any type. Accordingly, as licensed in the 6 megahertz block of the 700 MHz band, the Guard Band Manager will not be a common carrier as defined in section 3 of the Communications Act. Consistent with the Commission's decision to amend Form 601 to allow licensees in the 30 megahertz block to designate the regulatory status of the services they provide, the Commission has also amended item 35 of the Form 601 to add the Guard Band Manager classification.

17. Although Guard Band Managers will not provide services regulated as Commercial Mobile Radio Services (CMRS), they may lease their spectrum to customers that will provide CMRS and that will be required to comply with Commission rules applicable to CMRS providers. CMRS provided on the Guard Bands will not count against the 45/55 megahertz spectrum cap.

18. Eligibility and Use Restrictions. The Commission will assign licenses in the Guard Bands exclusively to Guard Band Managers. The Commission will not impose restrictions on the types of entities that may be licensed as Guard Band Managers. Instead it adopts certain basic requirements for Guard Band Managers that will further the Commission's objective of making the Guard Band Manager spectrum available to a wide range of users.

19. The Commission believes that assigning licenses in the 6 megahertz Guard Bands solely to Guard Band Managers will be the most efficient and effective way to manage spectrum that is subject to commercial uses for the protection of public safety licensees in the adjacent bands. Thus, the purpose of the Guard Band Manager will be to lease spectrum to third party, and in doing so, to manage the spectrum efficiently in a manner that also protects adjacent public safety bands from interference. Guard Band Managers will have a financial incentive to coordinate use of their frequencies to ensure non-interference. Guard Band Managers may subdivide their spectrum and make it available to end users for private internal use, or to service providers that may provide common carrier or non-common carrier services to their customers. A Guard Band Manager may also aggregate the various demands for spectrum within its service area to meet the unique needs of that service area. The Commission is currently considering innovative assignment mechanisms that enable parties to more easily aggregate and disaggregate spectrum for alternative uses, and the Guard Band Manager approach adopted in the Second R&O can potentially be an important step in that direction.

20. Guard Band Managers will be permitted to lease some of their licensed spectrum to affiliated entities for the affiliate's own internal use or for its provision of commercial or private radio services. However, to ensure that the Commission conducts a useful test of the Band Manager concept and obtains the full benefits of this new licensing approach, a core feature of which is leasing spectrum to third parties, Guard Band Managers will be required to lease the predominant amount of their spectrum to non-affiliates. The Commission also provides Guard Band Managers with a “safe harbor” example of compliance with this requirement. To take advantage of this “safe harbor,” a Guard Band Manager must lease no more than 49.9 percent of its licensed spectrum in a geographic service area to its affiliates. For the purpose of measuring the percent of spectrum leased under this rule, if a Guard Band Manager leases spectrum to an affiliate covering any portion of the defined geography of the service area, that spectrum will be considered to be leased to the affiliate.

21. The Commission clarifies that among those that may be licensed as Guard Band Managers in the Guard Bands are entities in the critical infrastructure industries—entities that utilize private communications systems to support their commercial operations. The critical infrastructure industries are not eligible for licensing in the 24 megahertz of spectrum allocated for public safety service providers. The Commission finds nothing in the language of section 337 or its legislative history that indicates Congress intended to treat the critical infrastructure industries differently from other commercial entities by excluding them from both the 24 megahertz of public safety spectrum and the 36 megahertz of commercial spectrum.

22. In the Second R&O the Commission considers whether to limit the number of channel blocks in a geographic service area that may be licensed to a Guard Band Manager. The Commission determines that, for the first auction of licenses in the 6 megahertz block, it will limit an entity and its affiliates to holding only one of the two Guard Band Manager licenses that will be available in a geographic service area. However, if any Guard Band Manager licenses remain unsold after the first auction, the Commission intends to lift this “one-to-a-market” rule in any subsequent auctions in this band. Limiting the number of Guard Band Manager licenses that one entity may hold will provide the Commission with an ability to benchmark one Guard Band Manager against another serving the same geographic area.

23. The Commission anticipates that the competitive environment in which Guard Band Managers will operate will serve to constrain them from unreasonably restricting access to their spectrum. However, some general safeguards are appropriate for at least an initial period. The Commission expects Guard Band Managers to not engage in unjust or unreasonable discrimination among spectrum users and to honor all reasonable requests by potential users for access to the licensed spectrum. The Commission nevertheless recognizes that the number of users that can be granted exclusive use of a Guard Band Manager's channels will be limited. The Commission also recognizes that a Guard Band Manager may have valid business reasons for denying a potential user's request for spectrum. For example, denial of a request for spectrum might be reasonable when the request, if granted, would preclude the Guard Band Manager from entering into an agreement with another user needing coverage of a wider geographic area for a longer period of time.

24. Because the Guard Band Manager license is a new concept and we cannot predict the type or amount of demand that will exist for spectrum licensed in this manner, the Commission finds it appropriate to provide Guard Band Managers with a considerable amount of latitude to develop methods and procedures for determining the most efficient way to apportion their spectrum among prospective users. The Commission believes Guard Band Managers should be free to enter into as many user agreements as they determine to be feasible given the capacity and other technical limits on use of their spectrum, market demand, and the varied needs of their users for different amounts of spectrum for different periods of time. For this reason, the Commission is not imposing specific requirements on the number of users that must be provided access to their spectrum.

25. The Commission also recognizes the potential for Guard Band Managers to impose unnecessary conditions or restrictions on their spectrum users, which may have anticompetitive impacts on those entities with whom the Guard Band Manager is in competition. Therefore, it adopts a rule prohibiting Guard Band Managers from imposing unduly restrictive requirements on use of its licensed frequencies. A requirement is unduly restrictive if it is not reasonably related to the efficient management of the spectrum licensed to the Guard Band Manager. Requirements that are reasonably related to the Guard Band Manager's spectrum management responsibilities are those that are necessary to ensure efficient spectrum use or ensure compliance with the Commission's rules, including those rules pertaining to field strength limits, power and antenna height limits, interference, emission limits, and radiofrequency (RF) safety requirements. For example, the Commission would consider it unduly restrictive for a Guard Band Manager to require a spectrum user to purchase telecommunications equipment only from one manufacturer or vendor, to require use of a particular technology, or to impose operating rules that would have the same practical effect. The Commission will consider any complaints filed against a Guard Band Manager for unreasonably denying access to its spectrum or imposing unreasonable terms and conditions on third-party service providers or end users, pursuant to its authority granted in sections 308(b) and 309(d) of the Communications Act.

26. The Commission is prepared to impose additional constraints if it receives complaints indicating that Guard Band Managers are unfairly denying access to spectrum, or imposing unreasonable terms and conditions on its use, thereby undermining the Commission's objectives in licensing Guard Band Managers. Conversely, the Commission is prepared to lift these requirements if experience with the Guard Band Manager licensing approach proves them unnecessary.

27. Size of Service Areas for Geographic Area Licensing. The Commission will auction licenses for both the 2 megahertz and the 4 megahertz Guard Bands on the basis of 52 Major Economic Areas (MEAs), rather than Economic Areas (EAs) as proposed by some commenters. The use of MEAs will facilitate greater participation in the auction, and allow a larger number and more diverse pool of Guard Band Managers, than larger regional or nationwide licensing areas, while simultaneously giving medium-sized and larger companies the flexibility to aggregate spectrum to put together regional and nationwide licenses tailored to their particular business needs.

28. License Term; Renewal Expectancy. The Commission adopts a license term for the Guard Bands that extends to January 1, 2015. This is eight years beyond the date as of which incumbent broadcasters are required to have relocated to other portions of the spectrum. The Commission also adopts for Guard Band licenses the right to a renewal expectancy established in § 27.14(b) of the Commission's rules. In the event that a Guard Band license is partitioned or disaggregated, any partitionee or disaggregatee is authorized to hold its license for the remainder of the original licensee's term, and the partitionee or disaggregatee may obtain a renewal expectancy on the same basis as other licensees in the band. Guard Band licensees meeting the substantial service requirement discussed herein will be deemed to have met this element of the renewal expectancy requirement.

29. Performance Requirements. In establishing the Guard Band Manager as a new class of licensee, the Commission will require Guard Band Managers to provide “substantial service” to their service areas no later than January 1, 2015. The Commission will not impose other build-out requirements or channel usage requirements. In lieu of these more stringent requirements, the Commission is imposing a reporting requirement. Guard Band Managers may avail themselves of either of the following “safe harbors” for the Guard Bands. A Guard Band Manager can satisfy the substantial service requirement by leasing the predominant amount of its licensed spectrum in at least 50 percent of the geographic area covered by its license at the license-renewal mark. A Guard Band Manager can also satisfy the substantial service requirement by providing coverage to 50 percent of the population of the Guard Band Manager's service area at the license-renewal mark. These “safe harbor” examples are intended to provide Guard Band Managers a degree of certainty regarding how to comply with the substantial service requirement. The requirement can be met in other ways, which will vary depending on the market and type of spectrum users served, and the Commission will review licensees' showings on a case-by-case basis.

30. The Commission will, however, reserve the right to review its service rules and impose more stringent performance requirements on Guard Band Managers in the future if it receives complaints from prospective users or determines that reassessment is warranted because spectrum is being anticompetitively warehoused or is otherwise not being made available despite existing demand. To facilitate such review, the Second R&O adopts an annual reporting requirement that will obligate Guard Band Managers to provide the Commission with information about the manner in which their spectrum is being utilized. Guard Band Managers will be required to supply the Commission with basic information about the total number of users and the number of those users that are affiliates of the Guard Band Manager; the amount of spectrum being used by the Guard Band Manager's affiliates in any part of the licensed service area and the amount of spectrum being used pursuant to agreements with unaffiliated third parties; the general nature of its customers' spectrum use; and the length of the term of each user agreement. To minimize the burden placed on Guard Band Managers by this reporting requirement, the Commission anticipates collecting this information electronically, through the Universal Licensing System. The specific information that Guard Band Managers will provide and the procedures that Guard Band Managers will follow in filing this annual report will be announced in a subsequent Public Notice to be issued by the Wireless Telecommunications Bureau. The Commission will make this information available to the public in order to enhance prospective users' ability to determine the availability of frequencies in their service areas that will meet their needs. The Commission also reserves the authority to subject Guard Band Managers to audits using in-house and contract resources.

31. Disaggregation and Partitioning of Licenses. Guard Band Managers will be allowed to partition their service areas and to disaggregate their spectrum to any entity that would otherwise be eligible to hold an authorization as a Guard Band Manager for this spectrum. Licensees seeking to partition and disaggregate are required to obtain Commission authorization for partial assignment of their license. In reviewing requests for approval of partitioning and disaggregation, the Commission will consider the impact that such partitioning or disaggregation would have on public safety operations in the adjacent 700 MHz bands. Additionally, the partitioning licensee must include with its request a description of the partitioned service area and calculations of the population of the partitioned service area and the licensed geographic service area, and will be subject to the provisions against unjust enrichment set forth in § 27.15(c) of the Commission's rules.

32. The Commission will also allow partitioning Guard Band Managers to choose between two options for satisfying the performance requirement in § 27.14 of the Commission's rules. Under the first option, the partitioner and partitionee would each certify that it will independently satisfy the substantial service requirement for its respective partitioned area. If a Guard Band Manager fails to meet its substantial service requirement during the relevant license term, the non-performing Guard Band Manager's authorization will be subject to cancellation at the end of the license term. Under the second option, the partitioner can certify that it has met or will meet the substantial service requirement for the entire market. If the partitioner fails to meet the substantial service standard during the relevant license term, only its license will be subject to cancellation at the end of the license term; the partitionee's license will not be affected by the failure.

33. In addition, parties to disaggregation agreements may choose between two options for satisfying the performance requirement. Under the first option, the disaggregator and disaggregatee would certify that they will share responsibility for meeting the performance requirement for the entire geographic service area. If the parties choose this option, both parties jointly will be required to meet the substantial service requirement at the end of the relevant license term, and both Guard Band Manager licenses will be subject to cancellation, if the requirement is not met. The second option allows the parties to agree that either the disaggregator or the disaggregatee will be responsible for meeting the substantial service requirement for the geographic service area. If the parties choose this option, and the Guard Band Manager responsible for meeting the performance requirement fails to do so, only the license of the non-performing Guard Band Manager will be subject to cancellation.

34. Public Notice of Initial Applications; Petitions to Deny. Sections 309(b) and 309(c) of the Communications Act require public notice for initial applications for authorizations in, inter alia, the broadcasting or common carrier services, and substantial amendments thereof. The administrative procedures for spectrum auctions adopted in section 3008 of the Balanced Budget Act of 1997 and the Consolidated Appropriations Act permit the Commission to shorten notice periods in the auction context to five days for petitions to deny and seven days for public notice, notwithstanding the provisions of section 309(b) of the Communications Act. The Commission exercises its authority under section 309(b)(2)(F) and adopts a seven-day notice requirement for initial applications for Guard Band Manager licenses and a five-day period for petitions to deny such applications.

35. Foreign Ownership Restrictions. Section 310(a) of the Communications Act prohibits any foreign government or representative from holding a station license. Section 310(b) prohibits certain defined ownership interests in broadcast, common carrier, aeronautical en route or aeronautical fixed radio station licenses. The Commission determines that § 27.12 of the Commission's rules regarding foreign ownership will apply to applicants for Guard Band licenses. Because the Guard Band Manager is a non-common carrier, an applicant requesting authorization for a Guard Band Manager license will be subject to section 310(a) but not to the additional prohibitions of section 310(b). With respect to the Commission's alien ownership reporting requirements, applicants for the Guard Band spectrum must file changes in foreign ownership information to the extent required by part 27 of the Commission's rules.

36. Applicability of General Common Carrier Obligations. Based on the Commission's conclusions set forth in the First R&O, and on its assessment that the decisions adopted therein are appropriate for application to the Guard Bands, the Commission adopts for the Guard Bands the forbearance measures discussed in the First R&O with respect to tariff and contract filings, interlocking directors, new and discontinued facilities, service provider local number portability, section 226 of the Communications Act, franks, and pro forma transfer applications.

37. The Commission also adopts the provisions of § 27.66 of its rules for operations on the Guard Bands. Section 27.66 tracks the provisions of § 63.71, requiring a common carrier voluntarily discontinuing, reducing or impairing service to provide notice to affected customers and the Commission and providing for the automatic grant of a fixed service common carrier's application for discontinuance after 31 days. In the case of Guard Band operations, this notice to the Commission must be provided by the Guard Band Manager. If a non-common carrier voluntarily discontinues, reduces, or impairs service, § 27.66 requires the carrier to give written notice to the Commission within seven days. In the case of Guard Band operations, this notice to the Commission, as well, must be provided by the Guard Band Manager. A mere change in common carrier or non-common carrier status does not constitute a “discontinuance.” If fixed service common carrier operations are involuntarily discontinued, reduced, or impaired for a period exceeding 48 hours, the Guard Band Manager must promptly notify the Commission, in writing, of the reasons for the discontinuance, reduction, or impairment of service, including a statement indicating when normal service is to be resumed. When normal service is resumed, the Guard Band Manager must promptly notify the Commission. The Commission continues to invite suggestions on ways to alleviate or streamline regulations that would otherwise be applicable to fixed services provided on this spectrum.

38. Equal Employment Opportunity. Because the Commission's Equal Employment Opportunity (EEO) rules are service-specific, a Guard Band user's EEO requirements will depend on the type of service it chooses to provide. FCC Form 601, as amended, identifies five regulatory statuses: (a) Common carrier, (b) non-common carrier, (c) private, internal communications, (d) broadcast, and (e) Band Manager. However, Guard Band users do not file FCC Form 601, because they are not licensees. Nevertheless, these operators will be subject to such EEO requirements as the nature of the services they provide dictates.

39. Other Technical Rules. The Commission adopts a field strength limit for the Guard Bands of 40 dBu/m to control in-band interference. However, users in adjoining areas may agree to alternate field strengths at their common border. The predicted 40 dBu/m field strength shall be calculated using figure 10 in 47 CFR 73.699 with a correction factor for antenna height differential of −9 dB.

40. The Commission adopts a threshold of 1000 w ERP for categorical exclusion from routine evaluation for RF radiation exposure for base and fixed stations in the Guard Bands. The threshold for routine evaluation of mobile devices for RF safety purposes will be 1.5 w or greater, in conformance with § 2.1091. For portable devices in the Guard Bands, the Commission adopts a maximum power limit of 3 w ERP with the provision that these devices be evaluated for RF exposure in compliance with § 2.1093. The Commission is providing guidance on acceptable methods of evaluating compliance with the Commission's RF exposure limits in OET Bulletin No. 65, which has replaced OST Bulletin No. 65.

41. The Commission adopts the following power limits for the Guard Bands:

(i) For base stations and fixed stations operating in the 746-747 MHz and 762-764 MHz bands, an ERP no greater than 1,000 watts and an antenna height above average terrain (HAAT) no greater than 305 m;

(ii) For mobile, fixed, and control stations operating in the 776-777 MHz and 792-794 MHz bands, an ERP no greater than 30 watts; and

(iii) For portable stations operating in the 776-777 MHz and 792-794 MHz bands, an ERP no greater than 3 watts.

42. The second harmonic transmissions of Guard Band services that will be operating on TV channels 65 and 67 fall within a band used for radionavigation in the Global Navigation Satellite System (GNSS), which includes the Global Positioning System (GPS) at 1563.42-1587.42 MHz. The Commission therefore adopts the following out-of-band-emissions limits for all spurious emissions, including harmonics, that fall within the 1559-1610 frequency range, from equipment operating in the 746-747 MHz, 762-764 MHz, 776-777 MHz and 792-794 MHz Guard Bands:

(i) For wideband emissions, -70 dBW/MHz equivalent isotropically radiated power (EIRP); and

(ii) For discrete emissions of less than 700 Hz bandwidth, an absolute EIRP limit of −80 dBW. Outside of emissions into the 1559-1610 MHz RNSS band, the out of band emission standards adopted in section III.A.1 of the Second R&O will apply.

43. Competitive Bidding. In light of the accelerated schedule for auction of the 746-764 MHz and 776-794 MHz bands the Commission believes that it should not use, combinatorial bidding for the auction of licenses in these bands. Consistent with its decision in the First R&O, the Commission will not prohibit any entities from participating in the auction of licenses for the Guard Bands.

44. Also consistent with its decision in the First R&O, the Commission will use for the Guard Bands the competitive bidding procedures contained in subpart Q of part 1 of the Commission's rules, including any amendments adopted in the ongoing part 1 proceeding. However, to facilitate the Commission's compliance with its statutory obligation to deposit the proceeds from the auction in the Treasury by September 30, 2000, the Commission delegates to the Wireless Telecommunications Bureau authority to suspend the payment deadlines in §§ 1.2107(b) and 1.2109(a) of the Commission's rules and require that winning bidders on all licenses in the 700 MHz bands pay the full balance of their winning bids upon submission of their long-form applications pursuant to § 1.2107(c) of the Commission's rules.

45. The Commission adopts for the Guard Bands the same definitions of small and very small businesses that it adopted for the 747-762 MHz and 777-792 MHz bands in the First R&O in this proceeding. A small business is defined as an entity with average annual gross revenues for the three preceding years not in excess of $40 million, and a very small business is defined as an entity with average annual gross revenues for the three preceding years not in excess of $15 million. In calculating gross revenues for purposes of small business eligibility, the Commission will attribute the gross revenues of the applicant, its controlling interests and its affiliates. For the auction of licenses for the Guard Bands, the Commission also adopts tiered bidding credits for small and very small businesses. Accordingly, small businesses will receive a 15 percent bidding credit. Very small businesses will receive a 25 percent bidding credit.

46. The Commission declines to adopt special preferences for entities owned by minorities or women. The Commission believes the bidding credits adopted in this Second R&O for small businesses will further Congress's objective of disseminating licenses among a wide variety of applicants because many minority- and women-owned entities, as well as rural telephone companies, are small businesses and will therefore qualify for these special provisions. The Commission also declines to provide bidding credits to LPTV licensees or state and local governments seeking spectrum for public safety communications.

47. Protection of Television Services. In order to protect analog and TV and DTV operations during the DTV transition period, the Commission extends the protection criteria applicable to 30 megahertz spectrum operations to operations in the Guard Bands. Thus, § 27.60, as amended, requires 700 MHz commercial operations, including those in the Guard Bands, to comply with the provisions of § 90.545 of the Commission's rules. The Congressional plan set forth in sections 336 and 337 of the Act and in the 1997 Budget Act is to transition this spectrum from its current use for broadcast services to commercial use and public safety services. Congress also has directed the Commission to auction the 36 megahertz of spectrum for commercial use six years before the relocation deadline for incumbent broadcasters in this spectrum, while adopting interference limits and other technical restrictions necessary to protect full-service analog television service during the transition to DTV. The extended license term specified for 700 MHz commercial services on these bands reflects, in part, the recognition that incumbent television licensees on these frequencies may, under the statutory provision for DTV transition, continue to broadcast for some years, delaying the time when new users have uncompromised use of the spectrum resource.

48. In addition, the Commission indicated in the First R&O that it will consider specific regulatory requests needed to implement voluntary agreements reached between incumbent licensees and new users in these bands, and it extends that policy to Guard Band operations.

49. Canadian and Mexican Border Regions. There are currently separate agreements with Canada and Mexico covering TV broadcast use of the UHF 470-806 MHz band. Such agreements do not reflect the additional use or services being adopted in the First R&O in this proceeding and in this Second R&O. While the Commission staff has been involved in discussions with both countries regarding coordination or interference criteria for the use of these bands in the border areas for the additional services, agreements have yet to be reached. Therefore, until such agreements have been finalized, the Commission believes it necessary to adopt certain interim requirements for operations in the Guard Bands along the Canada and Mexico borders. Accordingly, licenses issued for these bands within 120 km of the borders will be subject to whatever future agreements the United States develops with these two countries. In that the existing agreements for the protection of TV stations in these countries are still in effect and must be recognized until they are replaced or modified to reflect the new uses, licenses in the border areas will be granted on the condition that harmful interference may not be caused to, but must be accepted from, UHF TV transmitters in Canada and Mexico. Furthermore, modifications may be necessary to comply with whatever provisions are ultimately specified in future agreements with Canada and Mexico regarding the use of these bands. Pending further negotiations, the Second R&O also adopts the protection criteria described in this Second R&O for domestic TV and DTV stations as interim criteria for Canadian and Mexican TV and DTV stations.

50. Procedural Matters. The Second R&O contains new and modified information collections. The actions contained in this Second R&O are, however, exempt from the provisions of the Paperwork Reduction Act of 1995, under the Consolidated Appropriations statute, See Consolidated Appropriations, Appendix E, Sec. 213. See also 145 Cong. Rec. at H12493-94 (November 17, 1999). Implementation of the revisions to part 27 required to assign licenses in these commercial spectrum bands, including revisions to information collections, are therefore not subject to approval by the Office of Management and Budget, and became effective upon adoption. Similarly, the Consolidated Appropriations statute exempts this decision from the Regulatory Flexibility Act provisions and from the Contract With America Advancement Act provisions.

51. Authority Citation and Ordering Clauses. This action is taken pursuant to sections 1, 4(i), 7, 10, 201, 202, 208, 214, 301, 303, 307, 308, 309(j), 309(k), 310, 311, 324, 332 and 336 and 337 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 157, 160, 201, 202, 208, 214, 301, 303, 307, 308, 309(j), 309(k), 310, 311, 324, 332, and 336, and 337 and the Consolidated Appropriations Act, 2000, Public Law 106-113, 113 Stat. 1501, section 213.

52. Part 27 of the Commission's Rules is amended to establish service rules for the 746-747/ 776-777 MHz and 762-764/ 792-794 MHz bands, as set forth in this synopsis. In accordance with section 213 of the Consolidated Appropriations Act, 2000, Public Law 106-113, 113 Stat. 1501 (1999), these rules shall be effective April 4, 2000.

53. Further, pursuant to 47 U.S.C. 155(c), the Chief of the Wireless Telecommunications Bureau is granted delegated authority to implement and modify auction procedures in the Wireless Communications Services, including the general design and timing of the auction, the number and grouping of authorizations to be offered in any particular auction, the manner of submitting bids, the amount of any minimum opening bids and bid increments, activity and stopping rules, and application and payment requirements, including the amount of upfront payments, and to announce such procedures by Public Notice.

54. Finally, pursuant to 47 U.S.C. 155(c), the Chief of the Wireless Telecommunications Bureau is granted delegated authority to suspend the payment deadlines in §§ 1.2107(b) and 1.2109(a) of the Commission's rules, 47 CFR 1.2107(b), 1.2109(a), and require that winning bidders on all licenses in the 746-764 and 776-794 MHz bands pay the full balance of their winning bids upon submission of their long-form applications pursuant to § 1.2107(c) of the Commission's rules, 47 CFR 1.2107(c).

List of Subjects in 47 CFR Part 27

• Guard band managers
• Radio
• Reporting and recordkeeping requirements
• Telecommunications

Federal Communications Commission.

Rule Changes

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 27 as follows:

1. The authority citation for part 27 continues to read as follows:

Authority: 47 U.S.C. 154, 301, 302, 303, 307, 309, 332, 336, and 337 unless otherwise noted.

PART 27—MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES

2. Section 27.1 is amended by revising paragraph (b)(2) to read as follows:

3. Section 27.2 is amended by redesignating paragraph (b) as paragraph (c), revising paragraph (a), and adding a new paragraph (b) to read as follows:

4. Section 27.4 is amended by adding a new definition for “affiliate,” and “guard band manager” in alphabetical order to read as follows:

5. Section 27.5 is amended by revising paragraphs (b)(1) and (b)(2) to read as follows:

6. Section 27.6 is amended by revising paragraph (b)(1) to read as follows:

7. Section 27.10 is amended by adding the introductory text to read as follows:

8. Section 27.12 is revised to read as follows:

9. Section 27.13 is amended by revising paragraph (b) to read as follows:

10. Section 27.50 is amended by redesignating paragraph (a) as paragraph (b) and paragraph (b) as paragraph (a), revising newly redesignated paragraph (b) and revising the heading to the table in paragraph (c) to read as follows:

11. Section 27.53 is amended by redesignating paragraphs (e) and (f) as paragraphs (f) and (g), revising newly redesignated paragraph (f) and adding a new paragraph (e) to read as follows:

12. Section 27.55 is amended by revising paragraph (b) to read as follows:

13. Section 27.60 is amended by removing the phrase “747-762 MHz and 777-792 MHz” from the introductory text and adding in its place the phrase “746-764 MHz and 776-794 MHz”, removing the phrase “747-762 MHz and 777-792 MHz” and “747-762 MHz or 777-792 MHz “ from paragraph (b) introductory text and adding in its place the phrase “746-764 MHz and 776-794 MHz” and “746-764 MHz or 776-794 MHz”, respectively, removing the phrase “747-762 MHz” from paragraph (b)(2)(i) and adding in its place the phrase “746-764 MHz”, and removing the phrase “777-792 MHz” from paragraph (b)(2)(ii) and adding in its place the phrase “776-794 MHz”.

14. Section 27.66 is amended by revising paragraphs (a), (b), and (c) to read as follows:

15. The heading for subpart F is revised to read as follows:

Subpart F—Competitive Bidding Procedures for the 746-764 MHz and 776-794 MHz Bands

16. Section 27.501 is revised to read as follows:

17. Part 27 is amended by adding subpart G to read as follows:

Subpart G—Guard Band Managers