FR Doc 05-24484

[Federal Register: December 27, 2005 (Volume 70, Number 247)]
[Rules and Regulations]
[Page 76414-76417]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de05-12]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 22

[WT Docket Nos. 03-103, 05-42; FCC 05-202]

Air-Ground Telecommunications Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Federal Communications Commission
(``Commission'') adopts competitive bidding rules for the 800 MHz
commercial Air-Ground Radiotelephone Service and the 400 MHz general
aviation Air-Ground Radiotelephone Service. The Commission will auction
licenses in both of these services in conformity with the general
competitive bidding rules. The Commission adopts small business
definitions and bidding credits for the 800 MHz air-ground service and
concludes that bidding credits are unnecessary for the 400 MHz air-
ground service.

DATES: Effective February 27, 2006.

FOR FURTHER INFORMATION CONTACT: Lynne Milne, Auctions and Spectrum
Access Division, Wireless Telecommunications Bureau, at 202-418-7055 or
via e-mail at Lynne.Milne@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Report and Order
portion of the Order on Reconsideration and Report and Order, FCC 05-
202, in WT Docket Nos. 03-103 and 05-42, adopted on December 8, 2005,
and released on December 9, 2005. The Commission is concurrently
publishing a summary of the Order on Reconsideration in the Federal
Register. The complete text of the Report and Order is available for
public inspection and copying from 8 a.m. to 4:30 p.m. Monday through
Thursday or from 8 a.m. to 11:30 p.m. on Friday at the FCC Reference
Information Center, Portals II, 445 12th Street, SW., Room CY-A257,
Washington, DC 20554. The Report and Order and related Commission
documents may also be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th
Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-488-
5300, facsimile 202-488-5563, or you may contact BCPI at its Web site:
http://www.BCPIWEB.com. When ordering documents from BCPI please

provide the appropriate FCC document number (for example, FCC 05-202,
Report and Order). The full text may also be downloaded at: http://www.fcc.gov.
Alternative formats are available to persons with disabilities by sending an e-mail to fcc504@fcc.gov. or call the

Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), or 202-
418-0432 (tty).

Synopsis of the Report and Order

A. Incorporation of the Part 1 Standardized Auction Rules

1. On December 15, 2004, the Commission adopted a Report and Order
and Notice of Proposed Rulemaking, WT Docket Nos. 03-103 and 05-42, 70
FR 19293 (April 13, 2005) and 70 FR 19377 (April 13, 2005). In the
Notice of Proposed Rulemaking, the Commission proposed to conduct
auctions of both commercial and general aviation air-ground licenses in
conformity with the general competitive bidding rules in part 1,
subpart Q, of the Commission's rules, and substantially consistent with
the bidding procedures that have been employed in previous Commission
auctions.
2. In this Report and Order, the Commission adopts this proposal.
Because alternative band plans are being made available in the 800 MHz
air-ground service, with the selection of the final band configuration
to be determined by applicants' bids in the auction, the determination
of whether individual applications are mutually exclusive for purposes
of section 309(j) of the Communications Act will be based on whether
different applicants have applied for licenses in different band
configurations as well as on whether different applicants have applied
for the same licenses. The Commission finds, however, that there is no
need to change the part 1 competitive bidding rules for the air-ground
services. These rules will be subject to any modifications to them that
the Commission may adopt for auctionable services generally.

B. Provisions for Designated Entities

3. The Commission concludes that it is appropriate to offer bidding
credits in the 800 MHz commercial air-ground service. No commercial
air-ground license will authorize the use of as much spectrum as other
nationwide services for which the Commission has declined to adopt
small business bidding credits. In addition, the Commission continues
to believe that the operation of a commercial air-ground service may
require lower capital expenditures than other nationwide services.
Therefore, the Commission finds that bidding credits should be made
available to small businesses to assist them with attracting capital.
4. The Commission adopts its proposed small business definitions
for the 800 MHz commercial air-ground service. Thus, for this service
the Commission will define a small business as an entity with average
annual gross revenues for the three preceding years not exceeding $40
million, and the Commission will define a very small business as an
entity with average annual gross revenues for the three preceding years
not exceeding $15 million. The Commission will offer a 15 percent
bidding credit for small businesses and a 25 percent bidding credit for
very small businesses, as set forth in the standardized schedule of
bidding credits at 47 CFR 1.2110(f)(2). The Commission rejects the
arguments of Space Data Corporation and AirCell, Inc., in favor of
higher bidding credit levels than those provided for in 47 CFR
1.2110(f)(2). The Commission concludes that neither Space Data nor
AirCell has provided sufficient support for departing from the part 1
bidding credit schedule in the 800 MHz air-ground service.
5. The Commission concludes that bidding credits are unnecessary in
the auction of licenses in the 400 MHz general aviation Air-Ground
Radiotelephone Service. If in the future the Commission is presented
with evidence of a need for bidding credits in the 400 MHz air-ground
service, the Commission will reconsider this issue.

Procedural Matters

A. Congressional Review Act

6. The Commission will send a copy of the Order on Reconsideration
and Report and Order in a report to Congress and the Government
Accountability Office pursuant to the Congressional Review Act.

B. Final Regulatory Flexibility Analysis

7. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) of the
possible significant economic impact on a substantial number of small
entities by the policies and rules proposed in the Notice of Proposed
Rulemaking (NPRM) was incorporated therein. The Commission sought
written public

[[Page 76415]]

comment on the proposals in the NPRM, including comment on the IRFA. No
comments were submitted specifically in response to the IRFA. The
Commission nonetheless discusses certain comments below. This present
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
Need for, and Objectives of, the Report and Order
8. In this Report and Order (R&O) the Commission adopts competitive
bidding rules for the 800 MHz commercial Air-Ground Radiotelephone
Service and the 400 MHz general aviation Air-Ground Radiotelephone
Service. Such rules are necessary because, under section 309(j) of the
Communications Act, 47 U.S.C. 309(j), the Commission is required to
choose among mutually exclusive applications for spectrum licenses
using competitive bidding, except in certain cases not applicable here.
The Commission has revised its rules governing the four megahertz of
dedicated spectrum in the 800 MHz commercial Air-Ground Radiotelephone
Service and intends to make new licenses available in this service. If
mutually exclusive applications are filed for these licenses, the
Commission will be required to resolve such applications by competitive
bidding. The Commission also has pending before it nine groups of
mutually exclusive applications for licenses in the 400 MHz general
aviation Air-Ground Radiotelephone Service, and it will schedule an
auction to resolve these applications. In addition to adopting its
proposal in the Notice of Proposed Rulemaking to apply its general part
1 competitive bidding rules to both the 800 MHz commercial air-ground
service and the 400 MHz general aviation air-ground service, the
Commission adopts bidding credits for small businesses in the 800 MHz
commercial air-ground service in order to help small entities attract
capital to participate in the 800 MHz air-ground auction.
Summary of Significant Issues Raised by Public Comments in Response to
the IRFA
9. No comments were submitted specifically in response to the IRFA.
Description and Estimate of the Number of Small Entities to Which the
Rules Will Apply
10. 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 rules adopted herein. The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. 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 Small Business
Administration (SBA).
11. The SBA has not developed a specific small business size
standard for the Air-Ground Radiotelephone Service. The SBA has,
however, developed a small business size standard for wireless firms
within the two broad economic census categories of ``Paging'' and
``Cellular and Other Wireless Telecommunications.'' Under both SBA
categories, a wireless business is small if it has 1,500 or fewer
employees. For the census category Cellular and Other Wireless
Telecommunications, Census Bureau data for 1997 show that there were
977 firms in this category that operated for the entire year. 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. Thus,
under this second category and size standard, the majority of firms can
be considered small. In addition, annual FCC data show that 437
carriers have reported that they are engaged in the provision of
``wireless telephony,'' which includes cellular service, personal
communications service, and specialized mobile radio telephony. The
Commission has estimated that 260 of these are small, under the SBA
small business size standard. Finally and more specifically, the
Commission has determined that currently there are 11 licensees in the
Air-Ground Radiotelephone Service, and it estimates that almost all of
them qualify as small under the SBA small business size standard for
``Cellular and Other Wireless Telecommunications.''
12. As the Commission proposed in the NPRM, it adopts small
business size standards specific to the 800 MHz commercial Air-Ground
Radiotelephone Service. Thus, the Commission defines a small business
as an entity with average annual gross revenues for the three preceding
years not exceeding $40 million, and it defines a very small business
as an entity with average annual gross revenues for the three preceding
years not exceeding $15 million. The Commission sought consultation
regarding these size standards with the SBA, as required by the Small
Business Act, 15 U.S.C. 632(a)(2)(c), and 13 CFR 121.901-903. On
January 26, 2005, the SBA indicated that these size standards appeared
reasonable and that it had no specific comments. See Letter from Gary
M. Jackson, Assistant Administrator for Size Standards, U.S. Small
Business Administration, to Gary D. Michaels, Deputy Chief, Auctions
and Spectrum Access Division, Wireless Telecommunications Bureau,
Federal Communications Commission, dated January 26, 2005. No parties
filed comments opposing these size standards. On September 19, 2005,
the SBA approved the Commission's request to adopt these small business
size standards for the commercial air-ground service. See Letter from
Hector V. Barreto, Administrator, U.S. Small Business Administration,
to Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access
Division, Wireless Telecommunications Bureau, Federal Communications
Commission, dated September 19, 2005.
13. The Commission does not know how many entities interested in
providing commercial air-ground service fall within these definitions.
For purposes of this FRFA, the Commission assumes that a significant
percentage of such entities will be small businesses or very small
businesses under these definitions. The Commission has not adopted
small business size standards specific to the 400 MHz general aviation
Air-Ground Radiotelephone Service. The Commission therefore will use
SBA's small business size standard applicable to ``Cellular and Other
Wireless Telecommunications,'' i.e., an entity employing no more than
1,500 persons, for the 400 MHz general aviation air-ground service. As
noted above, there are 11 licensees in the Air-Ground Radiotelephone
Service. Ten of these operate in the general aviation Air-Ground
Radiotelephone Service, and the Commission estimates that all or almost
all of them qualify as small under the SBA small business size
standard. In addition, as noted above, the Commission has pending
before it nine groups of mutually exclusive applications for licenses
in the 400 MHz general aviation Air-Ground Radiotelephone Service;
these nine groups include six applicants that are not already licensees
in the general aviation Air-Ground Radiotelephone Service. As with the
licensees in this service, the Commission estimates that all or almost
all of these six applicants qualify as small under the SBA small
business size standard. The Commission also estimates that all or
almost all of any future applicants in the 400 MHz

[[Page 76416]]

general aviation Air-Ground Radiotelephone Service will be small under
the SBA small business size standard.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
14. The R&O does not establish new reporting, recordkeeping, or
other compliance requirements but extends the Commission's existing
part 1 competitive bidding rules to the Air-Ground Radiotelephone
Service. Applicants for air-ground licenses will therefore be required
to file a short-form application on FCC Form 175 to participate in
auctions, and auction winners will be required to file a long-form
application on FCC Form 601. While these application requirements are
new with respect to applicants in the air-ground services, they are the
same application requirements the Commission has applied to other
auctionable services for a number of years.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
15. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its 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 and reporting requirements under the rule for such 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
such small entities.''
16. The Commission has taken significant steps to assist small
entities. For instance, the Commission has adopted its proposal to
auction both 800 MHz commercial and 400 MHz general aviation air-ground
licenses in conformity with the general competitive bidding rules set
forth in part 1, subpart Q, of the Commission's Rules. The Commission
believes that use of these well-established rules provides consistent
guidance, reduces burdens on bidders and the Commission, and avoids
undue delay in the provision of services.
17. In addition, to provide opportunities for small entities to
participate in the 800 MHz commercial air-ground auction, the
Commission offers bidding credits to small businesses (entities with
average annual gross revenues for the three preceding years not
exceeding $40 million) and very small businesses (entities with average
annual gross revenues for the three preceding years not exceeding $15
million). The bidding credits adopted are 15 percent for small
businesses and 25 percent for very small businesses. These bidding
credits are consistent with the Commission's standardized schedule of
bidding credits at 47 CFR 1.2110(f)(2). One party, Verizon Airfone
Inc., filed comments opposing the adoption of bidding credits in the
800 MHz commercial air-ground auction. Two parties, AirCell, Inc., and
Space Data Corporation, filed comments requesting higher bidding
credits than those the Commission adopts. The Commission concludes that
bidding credits are appropriate for the 800 MHz commercial air-ground
service and that AirCell, Inc., and Space Data Corporation have not
provided sufficient support for departing from the Commission's part 1
bidding credit schedule, which the Commission has used effectively
since 1997 to promote the participation of small businesses in auctions
and whose predictability is helpful to small businesses in the business
planning and capital fundraising process.
18. No parties filed comments on the issue of whether small
business bidding credits would be appropriate for the 400 MHz general
aviation Air-Ground Radiotelephone Service. As discussed in the R&O,
general aviation air-ground licenses are generally held by relatively
small businesses, and larger telecommunications providers do not
routinely apply for them. Moreover, the initial auction for the nine
general aviation licenses for which the Commission has received
applications will be limited to those parties with applications already
on file. Given these circumstances, the Commission concludes that
bidding credits are unnecessary in the auction of these licenses. If in
the future the Commission is presented with evidence of a need for
bidding credits in the 400 MHz air-ground service, it will reconsider
this issue, but it finds no need for bidding credits in this service
under current circumstances.
19. Concerning compliance burdens, the Commission notes that the
requirement of filing applications on appropriate forms is necessary in
order to ensure that applicants are qualified to participate in
auctions and hold licenses. Certain information required on FCC Form
175 is also necessary to ensure that only applicants that qualify as
small businesses or very small businesses receive the bidding credits
offered to such entities. The Commission has reduced the burden of the
application process wherever possible by requiring limited information
on FCC Form 175 and requiring more complete information only from
auction winners on FCC Form 601.
Report to Congress
20. The Commission will send a copy of this R&O, including this
FRFA, in a report to be sent to Congress pursuant to the Congressional
Review Act. In addition, the Commission will send a copy of this R&O,
including this FRFA, to the Chief Counsel for Advocacy of the Small
Business Administration. A copy of this R&O and FRFA (or summaries
thereof) will be published in the Federal Register.

C. Paperwork Reduction Act of 1995

21. The Order on Reconsideration and Report and Order does not
contain either new or modified information collection requirements
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, therefore, it does not contain any new or modified
``information collection burden for small business concerns with fewer
than 25 employees,'' pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4).

Ordering Clauses

22. Pursuant to the authority contained in sections 1, 4(i), 11,
303(r) and (y), 308, 309, and 332 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 161, 303(r), 303(y), 308, 309, and 332,
this Order on Reconsideration and Report and Order is hereby adopted.
23. Pursuant to sections 4(i), 303(c), 303(r), and 309(j) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(c),
303(r) and 309(j), part 22 of the Commission's Rules is amended as
specified in Appendix B of the Report and Order, effective 60 days
after publication in the Federal Register.
24. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of this Order On
Reconsideration and Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.

List of Subjects in 47 CFR Part 22

Communications common carriers, Radio.

[[Page 76417]]

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications
Commission amends 47 CFR part 22 as follows:

PART 22--PUBLIC MOBILE SERVICES

0
1. The authority citation for part 22 continues to read as follows:

Authority: 47 U.S.C. 154, 222, 303, 309 and 332.

0
2. Add Sec. 22.881 to read as follows:

Sec. 22.881 Air-Ground Radiotelephone Service subject to competitive
bidding.

Mutually exclusive initial applications for general aviation Air-
Ground Radiotelephone Service licenses and mutually exclusive initial
applications for commercial Air-Ground Radiotelephone Service licenses
are subject to competitive bidding. The general competitive bidding
procedures set forth in part 1, subpart Q, of this chapter will apply
unless otherwise provided in this subpart.

0
3. Add Sec. 22.882 to read as follows:

Sec. 22.882 Designated entities.

(a) Eligibility for small business provisions in the commercial
Air-Ground Radiotelephone Service.
(1) A small business is an entity that, together with its
affiliates, its controlling interests and the affiliates of its
controlling interests, has average gross revenues that are not more
than $40 million for the preceding three years.
(2) A very small business is an entity that, together with its
affiliates, its controlling interests and the affiliates of its
controlling interests, has average gross revenues that are not more
than $15 million for the preceding three years.
(b) Bidding credits in the commercial Air-Ground Radiotelephone
Service.
(1) A winning bidder that qualifies as a small business, as defined
in this section, or a consortium of small businesses may use a bidding
credit of 15 percent, as specified in Sec. 1.2110(f)(2)(iii) of this
chapter, to lower the cost of its winning bid on a commercial Air-
Ground Radiotelephone Service license.
(2) A winning bidder that qualifies as a very small business, as
defined in this section, or a consortium of very small businesses may
use a bidding credit of 25 percent, as specified in Sec.
1.2110(f)(2)(ii) of this chapter, to lower the cost of its winning bid
on a commercial Air-Ground Radiotelephone Service license.

[FR Doc. 05-24484 Filed 12-23-05; 8:45 am]

BILLING CODE 6712-01-P