[Federal Register Volume 74, Number 119 (Tuesday, June 23, 2009)]
[Proposed Rules]
[Pages 29636-29650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14757]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 74 and 78
[WT Docket No. 02-55, ET Docket Nos. 00-258 and 95-18; FCC 09-49]
Improving Public Safety Communications in the 800 MHz Band
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document the Commission proposes to modify our cost
sharing requirements for the 2 GHz BAS band because the circumstances
surrounding the BAS transition are very different than what was
expected when the cost sharing requirements were adopted. The
Commission believes that the best course of action is to propose new
requirements that will address the ambiguity of applying the literal
language of the current requirements to the changed circumstances, as
well as balance the responsibilities for and benefits of relocating
incumbent BAS operations among all new entrants in the band based on
the Commission's relocation policies set forth in the Emerging
Technologies proceeding.
[[Page 29637]]
DATES: Comments must be filed on or before July 14, 2009, and reply
comments must be filed on or before July 24, 2009.
ADDRESSES: You may submit comments, identified by ET Docket No. WT 02-
55, ET Docket No. 00-258 and ET Docket No. 95-18, by any of the
following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
E-mail: [Optional: Include the E-mail address only if you
plan to accept comments from the public]. Include the docket number(s)
in the subject line of the message.
Mail: [Optional: Include the mailing address for paper,
disk, or CD-ROM submissions needed/requested by your Bureau or Office.
Do not include the Office of the Secretary's mailing address here.]
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Nicholas Oros, Office of Engineering
and Technology, (202) 418-0636, e-mail: [email protected], TTY
(202) 418-2989.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Further NPRM of Proposed Rule Making, WT Docket No. 02-55, ET Docket
No. 00-258 and ET Docket No. 95-18, FCC 09-49, adopted June 10, 2009,
and released June 12, 2009. The full text of this document is available
for public inspection and copying during regular business hours in the
Commission's Reference Information Center, Portals II, 445 12th Street,
SW., (Room CY-A257), Washington, DC 20554. The complete text of this
document also may be purchased from the Commission's copy contractor,
Best Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room,
CY-B402, Washington, DC 20554, telephone (202) 488-5300, facsimile
(202) 488-5563 or via e-mail [email protected]. The full text may also be
downloaded at: http://www.fcc.gov.
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using: (1) The Commission's Electronic
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking
Portal, or (3) by filing paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to [email protected], and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington DC 20554.
People With Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty). Filings and comments are also available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., room
CY-A257, Washington, DC 20554. They may also be purchased from the
Commission's duplicating contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554,
telephone: (202) 488-5300, fax: (202) 488-5563, or via e-mail http://www.bcpiweb.com.
Summary of Further NPRM of Proposed Rulemaking
1. In this Further NPRM of Proposed Rulemaking (Further NPRM), the
Commission proposes to modify our cost sharing requirements for the 2
GHz BAS band because the circumstances surrounding the BAS transition
are very different than what was expected when the cost sharing
requirements were adopted. Sprint Nextel has asked us to issue a
declaratory ruling regarding the cost sharing obligations between
itself and the MSS and AWS-2 entrants in the band, but we decline to do
so at this time. The Commission believes that the best course of action
is to propose new requirements that will address the ambiguity of
applying the literal language of the current requirements to the
changed circumstances, as well as balance the responsibilities for and
benefits of relocating incumbent BAS operations among all new entrants
in the band based on the Commission's relocation policies set forth in
the Emerging Technologies proceeding.
2. In the Report and Order and Order, the Commission allowed MSS
entrants to operate in markets where the BAS incumbents have not been
relocated only if they successfully coordinate operations with the BAS
incumbents. In this Further NPRM the Commission seeks comment on
whether MSS can operate on an unrestricted and secondary basis in
nonrelocated BAS markets.
[[Page 29638]]
3. In this Further NPRM, the Commission also proposes to modify the
current rules regarding the MSS entrants' obligation to relocate the
BAS incumbents to take into account our decision in the Report and
Order and Order herein to eliminate the top 30 market rule. Under the
current rules, after the top 30 markets are relocated, the MSS entrants
are required to complete relocation of the BAS incumbents in markets 31
and above within either three or five years of beginning operations,
depending on the size of the BAS market. The Commission proposes to
maintain this independent obligation on MSS entrants to relocate BAS
incumbents in all markets. The Further NPRM also addresses the
independent obligation of AWS entrants to relocate BAS incumbents in
the band.
4. Finally, the Commission also seeks comment on whether it should
further modify the BAS relocation rules to allow new entrants to begin
unencumbered operations in the band before all BAS operations are
relocated. The BAS transition is taking longer than initially
anticipated and delaying the introduction of new services in the band.
The Commission seeks comment on incentives to encourage BAS licensees
to complete the relocation process promptly and without unnecessary
delay.
A. Cost Sharing
5. In 2003, when fifteen megahertz of spectrum in the 1990-2000 MHz
and 2020-2025 MHz bands was reallocated from MSS to Fixed and Mobile
services to be used for new terrestrial services, i.e., AWS-2, the
Commission decided that responsibility for BAS relocation would be
shared between the MSS entrants and the other new entrants to the band.
In 2004, Sprint Nextel was assigned five megahertz of this spectrum in
the 1990-1995 MHz band (as well as the paired 1910-1915 MHz band) in
exchange for giving up spectrum it held in the 800 MHz band. Sprint
Nextel also was given the obligation to relocate the BAS incumbents
from the entire 35 megahertz of spectrum in the 1990-2025 MHz band, as
well as the realignment of the 800 MHz band to resolve ongoing
interference between public safety and commercial operations in that
band. To ensure that Sprint Nextel did not receive an undeserved
windfall by receiving the 1.9 GHz spectrum, Sprint Nextel was required
to make an ``anti-windfall'' payment to the U.S. Treasury if the fair
value of the spectrum it received, as determined by the Commission
($4.86 billion), exceeded the total of (i) the value the Commission
attributed to the 800 MHz spectrum Sprint Nextel was vacating ($2.059
billion); (ii) the costs paid by Sprint Nextel to realign the 800 MHz
band; and (iii) the costs paid by Sprint Nextel to clear incumbent
users from the BAS spectrum (as well as the paired 1910-1915 MHz band).
The Commission required Sprint Nextel to pay any monies owed to the
U.S. Treasury under this calculation as part of a ``true-up'' that was
originally scheduled to be accomplished within six months of the end of
the 36 month 800 MHz transition period. The 36 month 800 MHz transition
deadline was later established as June 26, 2008 with the true-up to
occur by December 26, 2008. The Commission noted that Sprint Nextel was
to complete the relocation of the BAS incumbents by September 7, 2007,
prior to both the 800 MHz transition date and the subsequent true-up
date.
6. In the 2004 800 MHz R&O, 69 FR 67823, November 22, 2005, the
Commission provided that the earlier entrant to the band who relocated
BAS, whether Sprint Nextel or MSS, could receive reimbursement from a
later entrant for the band clearing costs consistent with the Emerging
Technology relocation principles. However, the unique situation that
led to the assignment of the 1.9 GHz spectrum to Sprint Nextel required
the Commission to establish additional procedures for the band.
Specifically, the Commission established in the 800 MHz R&O that Sprint
Nextel is ``entitled to seek pro rata reimbursement * * * from MSS
licensees that enter the band'' prior to the end of the 800 MHz 36-
month reconfiguration period, and it required Sprint Nextel to notify
the MSS entrants of its intention to seek cost sharing. The Commission
provided that if Sprint Nextel receives a cost sharing reimbursement
from the MSS entrants, the amount is to be deducted from the costs it
can claim credit for as BAS relocation expenses in the 800 MHz true-up.
Sprint Nextel's right to receive reimbursement from MSS was limited to
the costs of clearing the top thirty markets and all fixed BAS
facilities, regardless of market size, based on an MSS entrant's pro
rata share of the 1990-2025 MHz spectrum involved. The Commission notes
that when Sprint Nextel undertook its commitment to relocate the BAS
licensees, the Commission did not, remove the obligation of the MSS
entrants to relocate the BAS licensees, nor did it eliminate the
procedures that had already been put in place for doing so. Indeed, the
Commission provided an opportunity for the MSS entrants to relocate BAS
incumbents, particularly in the top 30 markets, so that they would not
be delayed in satisfying their entry requirements. Sprint Nextel, in
turn, is required to reimburse MSS entrants for a pro rata share of any
relocation costs MSS entrants incur if they participate in the
relocation of BAS before Sprint Nextel has completed its clearing of
the BAS band. When the decision was made to permit Sprint Nextel to use
the 1990-1995 MHz band, no BAS licensees had been relocated by the MSS
entrants, and there is no evidence that the MSS entrants exercised
their right to relocate any BAS incumbents subsequent to the
Commission's decision.
7. In the 800 MHz MO&O, 70 FR 76704, December 28, 2005, adopted in
October 2005, the Commission affirmed its decision regarding the
obligations of the MSS entrants to reimburse Sprint Nextel. The
Commission pointed out that ``[Sprint] Nextel, as the first entrant, is
entitled to seek pro rata reimbursement of eligible clearing costs from
subsequent entrants, including MSS licensees.'' The Commission
explained that ``it decided to end the reimbursement obligations of
other entrants to [Sprint] Nextel, and any reimbursement by [Sprint]
Nextel to other entrants, at the end of the 800 MHz band true-up period
for administrative efficiency in the accounting process and because of
the unique circumstances in [Sprint] Nextel's receipt of BAS
spectrum.'' Finally, the Commission rejected a request that it move up
the date by which MSS entrants had to ``enter the band'' in order for
Sprint Nextel to obtain cost sharing from them, and instead decided to
``maintain the schedule previously established, i.e., the true-up
period.''
8. As noted, ten megahertz of the 2 GHz BAS spectrum (1995-2000 MHz
and 2020-2025 MHz) has been reallocated for use by future AWS-2
licensees. In the AWS Sixth R&O, 69 FR 62615, October 27, 2004, the
Commission established obligations for the future AWS licensees to
reimburse Sprint Nextel for the BAS transition costs. As with the MSS
entrants, Sprint Nextel ``is entitled to seek pro rata reimbursement of
eligible clearing costs incurred during its 36-month 800 MHz
reconfiguration period from AWS licensees that enter the band prior to
the end of that period.'' Sprint Nextel ``is not entitled to
reimbursement'' from the AWS licensees ``after receiving credit for its
relocation cost at the 800 MHz true-up.'' The AWS-2 NPRM of Proposed
Rulemaking (AWS-2 NPRM), 69 FR 63489, November 2, 2004, for
[[Page 29639]]
service rules for the AWS-2 licensees was issued concurrently with the
AWS Sixth R&O. The AWS-2 NPRM states that ``we also note that if
[Sprint] Nextel has received credit for BAS relocation costs in the 800
MHz true-up, late-entering AWS licensees will not have any
reimbursement obligation to Nextel for such costs.'' The AWS-2 NPRM
sought comment on a number of issues regarding cost-sharing between the
AWS entrants and other new entrants to the band. These issues include
whether a timetable should be adopted for AWS entrants to relocate BAS;
how the reimbursement rights and obligations of each AWS licensee could
be most efficiently and equitably allocated, whether on the basis of
the geographic area or population covered by each license, or the value
of each license as indicated by the winning auction bid, or by some
other means; how the relocation costs should be allocated if not all
AWS licenses are issued; how later arriving AWS licensees should be
treated; and how an accounting between MSS and AWS licensees should
occur.
9. Since the time the Commission adopted or proposed cost sharing
procedures for Sprint Nextel, MSS, and AWS-2 in the 2 GHz BAS band,
many of the assumptions underlying those procedures have not occurred.
The 800 MHz transition, which was to be completed within 36 months
(June 26, 2008) is not yet complete. The Commission has granted
individual 800 MHz licensees waivers of the rebanding deadline, but has
not modified the completion date itself. The original ``true-up date''
for calculating the anti-windfall payment, which was linked to the
completion of 800 MHz rebanding and set to occur by December 26, 2008,
was modified by the Commission in December 2008. The true-up is
currently scheduled to occur by July 1, 2009, but it may be delayed
further and could occur before 800 MHz rebanding is completed. Sprint
Nextel has not completed the BAS relocation, and the BAS transition
deadline has been modified several times, most recently to June 10,
2009.
10. In a letter filed June 25, 2008, Sprint Nextel asks the
Commission to make a number of adjustments in deadlines and procedures
that are tied to the June 26, 2008 end date of the 36-month 800 MHz
reconfiguration period. Sprint Nextel posits that these deadlines
should be adjusted due to the extension of the BAS relocation deadline
and the grant of a large number of waivers of the 800 MHz rebanding
deadline to public safety licensees. In particular, Sprint Nextel notes
that the 800 MHz R&O contains references relating the June 26, 2008
rebanding date to the MSS reimbursement obligation to Sprint Nextel for
BAS relocation costs, and it requests that these references be
harmonized with the postponed true-up date. On the same date, Sprint
Nextel filed a lawsuit against ICO and TerreStar in the Eastern
District of Virginia seeking pro rata reimbursement of its BAS
relocation costs. On August 29, 2008, the court referred the case to
the Commission and stayed all proceedings pending further decision by
the Commission.
11. TerreStar responded to Sprint Nextel's June 25, 2008 letter on
September 8, 2008, and ICO responded on September 9, 2008. TerreStar
and ICO both argue that the MSS entrants' reimbursement obligation to
Sprint Nextel terminated on June 26, 2008. TerreStar and ICO also argue
that the Commission limited Sprint Nextel's ability to recover costs
from MSS as part of striking ``an appropriate balance'' between Sprint
Nextel and the MSS entrants' interests. ICO states that the Commission
expected Sprint Nextel to complete the BAS relocation and MSS to begin
operations long before reimbursement to Sprint Nextel was due on June
26, 2008. With the long delay in BAS relocation, ICO claims that MSS
has no ability to earn revenue prior to the reimbursement due date or
the certainty needed to plan to do so. TerreStar argues that, when the
800 MHz R&O was adopted, Sprint Nextel could not have had a reasonable
expectation of recouping expenses from TerreStar and TerreStar had a
justifiable expectation that it would not have to pay these expenses
because TerreStar's satellite operational milestone was after June 26,
2008; thus, it did not ``enter the band'' before the cost sharing
obligation terminated. TerreStar claims that establishing a new date to
terminate the cost sharing obligation would upset its settled
expectations, reward Sprint Nextel for not completing the 800 MHz
reconfiguration on time, and jeopardize TerreStar's initiation of
service. ICO claims that because Sprint Nextel has delayed in
completing the BAS relocation by the original date, the requirement
that BAS in the top 30 markets be relocated before MSS can begin
operations has not been satisfied, and thus ICO can not ``enter the
band'' and incur a cost sharing obligation even though its satellite
was successfully launched and found operational in May 2008.
12. On October 8, 2008, Sprint Nextel filed a letter asking for a
declaratory ruling affirming that TerreStar and ICO must reimburse
Sprint Nextel for a pro rata share of the eligible BAS relocation
costs. Sprint Nextel argues that the reimbursement obligation did not
end or ``sunset'' on June 26, 2008, as TerreStar and ICO claim, but
extends at least through the end of the BAS and 800 MHz relocation
projects. Sprint Nextel claims that the cost sharing obligation was
connected to the end of the 800 MHz reconfiguration to avoid a windfall
to Sprint Nextel and facilitate the accounting in the true-up, which
has been extended, and the relevance of the June 26, 2008 date has been
superseded by the extended BAS and 800 MHz deadlines. Sprint Nextel
points out that TerreStar and ICO have been on NPRM of their
obligations for years and cannot have reasonably expected that they
would be able to circumvent the Commission's long-standing cost sharing
principles. Even if one assumed that the reimbursement obligation
sunset on June 26, 2008, Sprint Nextel claims that both ICO and
TerreStar have entered the band by that date: ICO by transmissions from
its satellite and TerreStar through its licensing activities, system
build out, testing, satellite construction, and ATC operations. Sprint
Nextel also requests that if it does not owe any payment to the U.S.
treasury for the spectrum it is receiving, the Commission should
establish 2015 as the BAS relocation reimbursement sunset date.
13. The requirements that the Commission adopted for cost sharing
among Sprint Nextel, MSS and AWS-2 entrants were based on a number of
assumptions regarding the transition of the 2 GHz and 800 MHz bands,
MSS and AWS-2 entry, and the true-up. As reflected in the current
requirements, the BAS relocation was contemplated to be complete within
thirty months, and thus the Commission expected the BAS relocation to
be finished by September 7, 2007, well before the end of the 800 MHz
36-month reconfiguration period, which was ultimately slated to end on
June 26, 2008. Because ICO's satellite operational milestone was July
2007 and TerreStar's was November 2008 when the requirements were
adopted, the Commission also expected that one and possibly both MSS
operators would participate in the BAS relocation process, especially
in clearing the top 30 markets, so that they would be able to commence
service quickly once their satellites were successfully launched,
possibly before the end of the 800 MHz reconfiguration period. Indeed,
the Commission's requirements provided an opportunity for the MSS
entrants to relocate BAS incumbents even while ordering Sprint Nextel
to undertake the same task, and required that Sprint
[[Page 29640]]
Nextel reimburse the MSS entrants for any relocation expenses they
incurred. For its band clearing efforts, Sprint Nextel would have been
able to seek reimbursement for a portion of the relocation costs from
the MSS and AWS-2 entrants who entered the band prior to the end of the
800 MHz thirty-six month reconfiguration period on June 26, 2008. The
Commission also expected that the total cost of the BAS relocation,
1910-1915 MHz band clearing, and 800 MHz transition would be such that
Sprint Nextel would have to make an anti-windfall payment to the United
States Treasury even after receiving credit for all of its band
clearing and transition costs. Consequently, even if the MSS entrants
and AWS-2 licensees did not have to reimburse Sprint Nextel for BAS
clearing costs because of delayed entry into the band, the Commission
would have anticipated that Sprint Nextel would suffer no adverse
financial consequence because the amount of the anti-windfall payment
that Sprint Nextel would have to make would be reduced by the amount of
any BAS relocation cost not reimbursed by the MSS entrants.
14. The circumstances now surrounding the 2 GHz band BAS transition
are very different than what the Commission expected when the cost
sharing requirements were adopted and explained in the 800 MHz R&O.
Neither the 800 MHz transition nor the BAS relocation has yet been
completed. While the 800 MHz thirty-six month reconfiguration date of
June 26, 2008 has never officially been extended, Sprint Nextel and
numerous 800 MHz licensees have received waivers of that date.
Moreover, the 800 MHz true-up date, which was set to occur within six
months after the 800 MHz reconfiguration date, has been extended to
July 1, 2009 and may be delayed further. The expected relocation costs
for the 800 MHz transition is so large that Sprint Nextel does not now
expect to make an anti-windfall payment.
15. In this context, the underlying assumptions of the approach
taken by the Commission in the 800 MHz R&O did not occur, such that a
narrow, literal interpretation of certain language in the Commission's
decision would not correspond to the stated purposes and structure of
the cost sharing principles set forth in the 800 MHz R&O and other
decisions regarding the shared responsibilities of new entrants for BAS
relocation. Certain specific language cannot be reasonably applied to
the current circumstances.
16. On the one hand, a narrow literal interpretation of certain
language in the 800 MHz R&O could be argued as suggesting that Sprint
Nextel may only be entitled to seek pro rata reimbursement to the
extent that the MSS and AWS-2 licensees entered the 2 GHz band before
the then-contemplated 36-month 800 MHz rebanding period ended, a date
later established to be June 26, 2008. Moreover, because the Commission
has never defined what ``entered the band'' means, applying this
interpretation is problematic.
17. On the other hand, such an interpretation of the deadline would
arguably undermine the stated purposes of the BAS cost-sharing regime
set up by the Commission in the 800 MHz R&O, where it discussed its
decision as generally consistent with the cost-sharing principle that
the licensees that ultimately benefit from the spectrum cleared by the
first entrant shall bear the cost of reimbursing the first entrant for
that benefit, though modified to fit the particular concerns raised in
the 800 Rebanding proceeding. Specifically, as stated in the 2005 800
MHz MO&O, the Commission modified the traditional Emerging Technologies
cost-sharing policy that new entrants who ultimately benefit from
having the spectrum cleared should pay their share of band-clearing
costs only to the extent necessary to provide ``administrative
efficiency in the accounting process'' and to take into account ``the
unique circumstances in Nextel's receipt of the BAS spectrum.'' In
other words, the Commission limited the time that Sprint Nextel could
receive reimbursements from MSS entrants so that Sprint Nextel could
not get a double benefit, i.e., receive reimbursements from MSS after
it had received credit for these expenses in the true up. The
Commission clearly allowed for the possibility that the MSS entrants
would incur a cost-sharing obligation, and Sprint Nextel was explicitly
allowed to pursue cost sharing from the MSS entrants by giving them
NPRM within one year of adoption of the 800 MHz R&O.
18. Nothing in the text of the relevant orders suggests that the
Commission limited the time in which Sprint Nextel could seek
reimbursements from MSS entrants to provide an independent benefit to
MSS entrants, e.g., to subsidize them or provide them certainty about
their business costs. Thus, the Commission finds that the MSS entrants'
cost sharing obligations must be interpreted in light of the
unanticipated changed circumstances, and these obligations should not
be tied to a deadline that is no longer relevant. In short, MSS
entrants should pay a pro rata share of the BAS relocation costs unless
doing so would allow Sprint Nextel to be reimbursed twice (by both the
Treasury and the MSS and AWS-2 licensees). Accordingly, the most
logical and appropriate interpretation of the language in the 800 MHz
orders is that the MSS entrants must pay their pro rata share of BAS
relocation costs to the extent that they enter the band before the 800
MHz rebanding or true up is complete. The difficulty with applying this
interpretation is that there is no future date certain for completing
either the 800 MHz rebanding or the true up.
19. The Commission thus declines to resolve the conflict between
Sprint Nextel and the MSS entrants by issuing a declaratory ruling. It
concludes that, given the changed circumstances surrounding the 2 GHz
BAS relocation and the ambiguity between certain language in the 800
MHz R&O and the overall purposes and structure of the BAS cost-sharing
regime caused by the changed circumstances, the best course of action
is to propose clearly delineated cost sharing requirements reflecting
these changed circumstances to balance the responsibilities for and
benefits of relocating incumbent BAS operations among Sprint Nextel,
MSS, and AWS-2 based on the Commission's relocation policies set forth
in the Emerging Technologies proceeding.
20. This Further NPRM provides an opportunity for us to address
issues that are ambiguous or not specifically addressed by the current
requirements. In particular, we reach the following tentative
conclusions:
Sprint Nextel may either obtain cost sharing for an
eligible expense from MSS or AWS-2 entrants when those licensees
``enter the band'' or take credit for that expense against the anti-
windfall payment to the Treasury (true-up) for the 5 megahertz of BAS
spectrum (1990-1995 MHz) it obtained as part of the 800 MHz band
realignment.
The attachment of the cost sharing obligation between
Sprint Nextel and MSS and AWS-2 would follow traditional Emerging
Technologies policies, i.e., the obligation to share costs among new
entrants would continue to the BAS sunset date (December 9, 2013); any
entity that ``enters the band'' prior to that date would be obligated
to reimburse the earlier entrant that incurred the relocation expense a
proportional share of cost based on the amount of spectrum assigned to
it.
As in the current requirements, the MSS cost sharing
obligation to Sprint Nextel would be limited to the top 30 markets by
population and all fixed BAS links.
[[Page 29641]]
An MSS entrant would be deemed to have ``entered the
band'' for incurring a cost sharing obligation when its satellite is
found operational under its authorization milestone.
For cost sharing purposes, Sprint Nextel would be required
to share with other new entrants information on the relocation costs it
has incurred as documented in its annual external audit of 2 GHz band
clearing expenses and as provided to the 800 MHz Transition
Administrator, as required by the 800 MHz R&O.
21. The overall approach proposed seeks to balance the BAS
relocation costs among all new entrants based on the benefit each
receives of the total of 35 megahertz of cleared spectrum, consistent
with our Emerging Technologies policies. Following BAS relocation, MSS
will have access to 20 megahertz in the 2000-2020 MHz band (\4/7\),
AWS-2 will have 10 megahertz in the 1995-2000 and 2020-2025 MHz bands
(\2/7\), and Sprint Nextel will have 5 megahertz in the 1990-1995 MHz
band (\1/7\). These basic proportions inform our proposals. As the
Commission decided in the 800 MHz R&O, this approach will follow the
traditional relocation principle that the licensees that ultimately
benefit from the spectrum cleared by the first entrant shall bear the
cost of reimbursing the first entrant for the accrual of that benefit.
22. As is the case with our current requirements, the Commission
tentatively concludes that Sprint Nextel may not both receive
reimbursement from another new entrant and take credit for the same BAS
relocation cost at the 800 MHz true-up. If another new entrant enters
the band before the true-up and Sprint Nextel obtains reimbursement for
relocation costs from the new entrant, Sprint Nextel may not obtain
credit against the anti-windfall payment for the reimbursed costs.
Further, the Commission tentatively concludes that any new entrant to
the band who incurs relocation cost will be able to obtain pro rata
reimbursement from other new entrants who enter the band prior to the
BAS band sunset date of December 9, 2013. In other words, the cost-
sharing obligation will no longer be linked to the 800 MHz thirty-six
month reconfiguration period or the 800 MHz true-up date. Extending the
relocation obligation to the BAS sunset date provides certainty to all
new entrants, rather than linking the obligation to the 800 MHz thirty-
six month reconfiguration period or the 800 MHz true-up date, since the
timing of both of these events is less certain. Thus, the Commission
tentatively concludes that the attachment of the cost sharing
obligation between Sprint Nextel and MSS and AWS-2 should follow the
traditional Emerging Technologies policies in obligating new entrants
to share the costs of relocating the BAS incumbents. A later entrant's
cost-sharing obligation to the earlier entrant who cleared the spectrum
shall be in proportion to the spectrum assigned to the later entrant.
For example, if a future AWS licensee is assigned 5 megahertz of
spectrum in the band on a nationwide basis, the licensee will be
responsible for \1/7\ of the total spectrum clearing costs if it enters
the band before the sunset date.
23. In the 800 MHz R&O, the MSS entrants' cost sharing obligation
to Sprint Nextel was limited to the cost of clearing the thirty largest
markets (by population) and all fixed BAS links. This was done because
the MSS entrants were required to clear the thirty largest markets and
all fixed BAS links before they could begin operations, but were not
required to relocate BAS in the other markets until later. Because this
exception to the general cost-sharing principle was clearly established
in the 800 MHz R&O in 2004, we propose to continue to limit the MSS
entrants' cost-sharing obligation in this way even though we are now
eliminating the top 30 market rule.
24. Consequently, the Commission tentatively concludes that Sprint
Nextel's right to seek reimbursement from any MSS entrant entering
before the sunset date will be limited to the costs Sprint Nextel
incurred for clearing the top thirty markets and for relocating all
fixed BAS facilities, regardless of market size, and to an MSS
entrant's pro rata share of the 1990-2025 MHz spectrum. Sprint Nextel
claims that under this approach MSS would only be responsible for
approximately 27 percent of the total BAS relocation expenses, which is
substantially less than the 57 percent of the cleared BAS spectrum
assigned to the two MSS entrants. The Commission also seeks comment on
whether it should require MSS entrants to pay a pro rata share of all
BAS relocation costs, regardless of market size.
25. In addition, regarding MSS-to-MSS cost sharing, under the
original requirements for MSS entrants to relocate the BAS incumbents,
all MSS entrants share in the relocation costs on a pro rata basis
depending on the amount of spectrum each is assigned. Later entering
MSS operators are required to reimburse the earlier MSS entrants who
clear the spectrum a pro rata share of the earlier MSS entrants' band
clearing costs. After the BAS transition is completed, all of the MSS
entrants are to ``true-up'' their costs to ensure that each MSS entrant
pays a pro rata share of the relocation costs based on the amount of
spectrum assigned. The Commission proposes to retain these MSS-to-MSS
cost sharing requirements. The Commission notes that these inter-
service and intra-service cost sharing requirements can work in tandem.
For example, if Sprint Nextel was reimbursed from only one MSS entrant,
that entrant could in turn seek reimbursement of what it owed Sprint
Nextel from another MSS entrant. It appears that Sprint Nextel has
asked both ICO and TerreStar to pay equal amounts of relocation costs
based on their equal amount of assigned spectrum (i.e., ten megahertz
each), consistent with current requirements. The Commisssion seeks
comment on whether Sprint Nextel should be allowed to request
relocation costs for BAS operations in all of the 20 megahertz of
spectrum allocated for MSS from a single MSS entrant that may, in turn,
seek reimbursement from another MSS entrant.
26. The Commission also tentatively concludes that AWS-2 licensees
will be responsible for reimbursing earlier entrants for relocating BAS
operations in their assigned geographic areas, but determining how to
apportion a licensee's pro rata share will depend on future Commission
action to adopt service rules for the AWS licensees in the 1995-2000
MHz and 2020-2025 MHz band. These licenses may be issued either on a
nationwide basis or for geographic areas, and could include all or only
a portion of the allocated bandwidth. If licenses are issued for
geographic areas, the geographic areas are not likely to coincide with
the BAS market boundaries and licenses for geographic areas may be
issued at different times. Another factor that our service rules will
have to address is apportioning the reimbursement costs fairly among
AWS licensees. For example, some licensees' service areas cover cleared
spectrum for which Sprint Nextel may claim a credit at the true-up,
thus preventing Sprint from seeking cost sharing from those AWS
licensees. Other AWS licensees' service areas may cover cleared
spectrum not claimed by Sprint for a true up credit and thus subject to
cost sharing. These factors will complicate the calculation of cost
sharing for the AWS entrants to the band. In the 2004 AWS-2 NPRM on
service rules for the AWS entrants to the band, the Commission sought
comment on a number of issues regarding the licensing scheme for the
AWS entrants
[[Page 29642]]
and the cost-sharing obligations between the AWS entrants and other new
entrants to the band. Because the licensing scheme for the AWS entrants
to the band has not yet been determined, we are not making proposals
here for apportioning an AWS licensee's pro rata share for cost-sharing
with other new service entrants or between AWS-2 entrants beyond those
made in the 2004 AWS-2 NPRM. The Commission intends to adopt specific
cost-sharing procedures for the AWS entrants when service rules are
adopted for the 1995-2000 MHz and 2020-2025 MHz bands.
27. The cost sharing scheme that the Commission adopted in 2004
required that MSS and AWS entrants reimburse Sprint Nextel for the BAS
relocation costs after they ``enter the band,'' but did not define the
term. For clearing other bands under our Emerging Technologies
policies, the Commission's rules usually make a distinction between
determining when a new entrant must relocate an incumbent operation
before it can operate and when a new entrant incurs a cost sharing
obligation to an earlier entrant who relocated an incumbent. Generally,
Commission rules rely on an interference analysis to determine when a
new entrant must relocate an incumbent. On the other hand, a later
entrant is generally required to share in the cost that an earlier
entrant has incurred in relocating an incumbent if the subsequent
entrant would have been in a position to have caused interference to
the incumbent. Because the incumbent has already been relocated, the
cost sharing determination is not usually based on a rigorous
interference analysis but often on a simplified proximity test for ease
in administration. The rules may vary from these general principles
depending on the technical characteristics of the specific services
involved in the relocation.
28. Because the Commission has already determined that MSS and AWS-
2 entry in the 2 GHz band requires that all BAS operations in the band
be relocated to avoid interference between the new and incumbent
services, we only need to determine here when a new entrant ``enters
the band'' for purposes of the attachment of the cost sharing
obligation. In this regard, we are mindful that in other bands a new
entrant incurs a cost sharing obligation at the time the subsequent
entrant would be in a position to have caused interference to the now
relocated incumbent.
29. With this principle in mind, the Commission tentatively
concludes to adopt the following requirements for determining when the
MSS entrants have ``entered the band.'' The Commission proposes that an
MSS entrant will have entered the band and incurred a cost sharing
obligation when it certifies that its satellite is operational for
purposes of meeting its operational milestone. For the 2000-2020 MHz
band, a satellite is considered operational based upon the occurrence
of transmissions between the satellite and an authorized earth station
using the 2000-2020 MHz and 2180-2200 MHz bands. The satellite systems
which the MSS entrants are deploying are capable of providing
nationwide coverage. The customer equipment transmitting to the
satellites in this band are therefore capable of causing interference
to any of the BAS incumbents in the local area in which that equipment
is used. The MSS entrants having an operational satellite is therefore
analogous to the Personal Communications Service (PCS) or AWS entrants
building a base station in proximity to the incumbent fixed microwave
links in the prior spectrum clearings. Like the PCS and AWS entrants,
an MSS entrant with an operational satellite is in a position to cause
interference to the incumbents and therefore should incur a cost
sharing obligation to an earlier entrant who has relocated the
incumbents. Simplicity of administration is especially important in the
case of BAS because there is no clearinghouse to determine when a party
has ``entered the band'' or to parse out the relocation costs on a BAS
receiver site-by-site basis.
30. The AWS entrants will operate terrestrial networks and thus the
definition of ``enter the band'' which the Commission proposes for the
MSS entrants would not be appropriate for AWS. Although no service
rules have been adopted for the AWS portions of the 1990-2025 MHz band,
the Commission expects that the AWS entrants will deploy terrestrial
networks wherein fixed base stations communicate with mobile radios.
Because both the AWS entrants and BAS incumbents will employ mobile
radios, the interference scenarios will be more complicated than with
the fixed point-to-point microwave incumbents being relocated in the
PCS, AWS, and MSS downlink bands addressed by other relocation rules.
Furthermore, there is no clearinghouse for the BAS relocation that will
be able to determine when interference between the AWS entrants and
previously relocated BAS incumbents would likely occur. These two
facts--the complicated interference scenarios and lack of
clearinghouse--require that the test for determining when AWS entrants
incur a cost sharing obligation be simple and easy to apply.
31. As one option, the Commission proposes to specify that AWS
entrants in the 1990-2025 MHz band be found to have ``entered the
band'' and incur a cost sharing obligation upon grant of the long form
applications for their licenses. This would provide a clear and easy-
to-administer standard and provide certainty for all parties involved.
While this proposed requirement does depart somewhat from other
relocation rules, it is not entirely inconsistent. Because of the
mobile nature of BAS, once the AWS entrant is licensed any deployment
of its services could potentially have resulted in interference to
mobile BAS incumbents.
32. The Commission also seeks comment on an alternate approach for
when AWS entrants should be found to ``enter the band.'' An AWS entrant
in the 1990-2025 MHz band could be found to ``enter the band'' and
incur a cost sharing obligation when it activates a base station in an
AWS-2 license area that overlaps a cleared DMA. The Commission notes
that this alternate approach presents a number of issues that could
make it difficult to implement. Because there is no clearinghouse for
the 1990-2025 MHz band, there currently is no entity that is
responsible for tracking when the AWS-2 licensee activates a base
station and for determining which DMA's are overlapped by the base
station. Each DMA will potentially have a separate ``enter the band''
date, and it is likely that, whatever service rules we ultimately adopt
for this band, any given AWS-2 licensee would trigger numerous ``enter
the band'' dates. Consequently, the Commission seeks comment on
whether, under this approach, an AWS-2 licensee that activates a first
base station should incur a cost sharing obligation only for relocating
BAS in that DMA or should it incur its entire cost sharing obligation
for all DMAs that overlap its service area. Also, under this approach
AWS-2 licensees could potentially delay the initiation of service, and
thus seek to avoid incurring a cost sharing obligation, until after the
BAS sunset date of December 9, 2013, making it more difficult for
Sprint Nextel to decide whether to take credit for BAS relocation cost
in the 800 MHz true-up because of the uncertainty as to whether AWS-2
licensees will share in the cost of the BAS relocation. The Commission
seeks comment on how, if we adopt this alternative approach, we could
prevent
[[Page 29643]]
AWS-2 licensees from avoiding their cost sharing obligation through
delay. If AWS-2 licensee's are able to avoid incurring a cost sharing
obligation through delay, the Commission also seeks comment on how to
make it easier for Sprint Nextel to determine whether to take credit
for BAS relocation cost in the 800 MHz true-up despite the uncertainty
as to whether the AWS-2 will share in the BAS relocation cost.
33. When the Commission adopted the requirements allowing Sprint
Nextel to pursue reimbursement of BAS relocation costs from MSS and AWS
entrants, it did not specify when the MSS and AWS entrants would owe
reimbursement to Sprint Nextel. Generally, in other band clearings the
later new entrant has to pay its reimbursement costs when beginning
operations or shortly thereafter. For example, in the relocation of
fixed microwave links by AWS entrants in the 2110-2150 MHz band and by
MSS entrants in the 2180-2200 MHz band (this is the paired downlink
band for the MSS at issue in this proceeding), the AWS and MSS entrant
must notify a clearinghouse prior to initiating operations. The
clearinghouse determines if the AWS or MSS entrant must reimburse a
prior new entrant for moving an incumbent licensee, and the AWS or MSS
entrant has 30 days to pay the reimbursement costs. Similar rules are
followed for the relocation of BRS incumbents in the 2150-2162 MHz band
by AWS entrants.
34. As the Commission discussed in the Further NPRM, there are
unique circumstances in this case that require additional
consideration. The Commission has already determined to permit MSS
entrants to begin operations in the near term, even if this were to
occur before they have actually satisfied the cost sharing
reimbursement obligations that would attach under our proposals here.
Here, we seek comment on various approaches that the Commission might
take concerning when such reimbursements are owed.
35. If the Commission were to apply a similar scheme as that
followed by our relocation rules in other bands with the BAS transition
in the 2 GHz band, once the later entrant has entered the band, it may
not begin operations until it has reimbursed the earlier entrant that
relocated BAS incumbents for the later entrant's pro rata share of the
relocation costs for all BAS markets that have been transitioned as of
the date that the later entrant entered the band (or, in the case of
MSS, the later of these two dates: the date MSS is determined to have
entered the band or the earliest date MSS is permitted to begin
operations under our rules). Thereafter, as the BAS relocation
continues and each additional BAS market is transitioned to the new
channel plan, the new entrant would have to pay its share of the cost
of transitioning that market within thirty days of being notified of
the market transitioning or cease operations in that band. Under this
approach, it may be more reasonable to expect an MSS entrant to pay
reimbursement costs only when a BAS market is cleared and it can
operate on a primary basis, rather than to pay these costs on a per
station basis in nonrelocated BAS markets where it may operate only on
a secondary basis. The entrant who is relocating the BAS incumbents
could have the responsibility of notifying the other new entrants and
the Commission of the transition of each BAS market. The Commission
seeks comment generally on this approach, or variations to it.
36. The Commission also seeks comment, given the unique
circumstances in this case, on alternative approaches for when MSS
entrants should be required to reimburse Sprint Nextel for their pro
rata share of the BAS relocation costs. Because the MSS entrants have
not yet begun to provide commercial services, they do not have an
established revenue stream. Consequently, it may be difficult for the
MSS entrants to reimburse Sprint Nextel immediately for their pro rata
share of costs for all of the markets that have transitioned when the
MSS entrant enters the band or begins service, as proposed. Rather than
require that, when an MSS entrant is ready to begin operations, it pay
its reimbursement share for all markets cleared when it either entered
the band or was permitted to begin operations under the rules, should
MSS entrants only initially have to pay reimbursement costs for those
markets in which they choose to operate? If so, what schedule should
they follow for reimbursing costs associated with the remaining
markets--when they start providing service in those markets, or under a
different timetable? The Commission also seeks comment on establishing
a reimbursement scheme that is not specifically tied to MSS entry in
each market. For example, should MSS entrants be allowed to delay
payment of some portion of their pro rata share of reimbursement costs
until the BAS relocation is complete, or some other date? Would this
provide some needed certainty to MSS entrants that they could begin
operating? Should the MSS entrants' payments be linked to the pace of
the BAS transition--e.g., as additional BAS markets are transitioned,
should MSS entrants be required to make additional payments? The
Commission also seeks comment on how any of these approaches would
affect the true-up, particularly if Sprint Nextel is owed monies that
MSS entrants have not yet paid when the true-up occurs. More generally,
the Commission also seeks comment on whether any of these approaches
would undermine our goal of ensuring that later entrants reimburse, on
a pro rata basis, the first entrant that paid for relocation, and on
what actions we should take if MSS entrants fail to pay.
37. Finally, the Commission tentatively concludes that, for cost
sharing purposes, Sprint Nextel would be required to share with other
new entrants information on the relocation costs it has incurred as
documented in its annual external audit of 2 GHz band clearing expenses
and as provided to the 800 MHz Transition Administrator, as required by
the 800 MHz R&O. As part of the financial reconciliation process in the
800 MHz true-up, Sprint Nextel is required to conduct an annual
external audit of its 2 GHz band clearing expenses and to provide this
audit to the Transition Administrator for the 800 MHz rebanding and
true-up. Sprint Nextel also is to report to the Transition
Administrator the amount of reimbursement it receives from other
entrants to the band. With this information, the Transition
Administrator will be able to ensure that Sprint Nextel receives the
proper amount of credit against the anti-windfall payment for BAS
relocation. However, the annual external audit provides data on total
expenses, rather than by market, and the Transition Administrator is
under no obligation to analyze, audit or verify the data that Sprint
Nextel supplies on the cost of clearing the 2 GHz spectrum.
Furthermore, if an MSS or AWS licensee enters the band after the true-
up occurs, the Transition Administrator will not be present to
calculate the amount that Sprint Nextel claims the new entrant owes. To
facilitate the cost sharing process, the Commission proposes to require
that Sprint Nextel share with any other new entrant who owes it
relocation reimbursement information about its relocation costs as
documented in its annual external audit and as provided to the
Transition Administrator. Similarly, if a new entrant other than Sprint
Nextel relocates a BAS incumbent and seeks cost sharing from later
entrants, the first entrant would be required to provide the later
entrants with documented
[[Page 29644]]
relocation costs. The Commission seeks comment.
38. The Commission seeks comment on all of the proposed changes to
the cost-sharing requirements for the 1990-2025 MHz BAS relocation. It
seeks comment on this proposal as well as alternative proposals.
B. BAS-MSS Spectrum Sharing
39. In the accompanying Report and Order and Order, the Commission
eliminated the top 30 market rule which prevented the MSS entrants from
beginning operations before the BAS incumbents in the thirty largest
markets by population and fixed BAS links in all markets had been
relocated. The MSS entrants are now able to operate with primary status
in those markets where the BAS incumbents have been relocated to the
new channel plan and with secondary status in nonrelocated markets
subject to coordination.
40. The Commission concluded that coordination was necessary in
nonrelocated markets because we were not persuaded by the record that
MSS could conduct unrestricted operations in these markets without
causing interference to the BAS incumbents. TerreStar asserts that,
based on its probabilistic analysis, interference from MSS handsets to
BAS operations is unlikely to occur, and thus suggests that
coordination may not be necessary. Rather, it would cease operations if
a BAS incumbent experiences interference. MSTV disputes these claims.
The Commission is concerned that if interference occurs to BAS
licensees in nonrelocated markets, that interference will harm BAS
operations and could prove difficult to resolve because the location of
the handset which is the source of the interference may not be easily
determined. Such interference could have a significant impact given the
number of major markets that will transition toward the end of Sprint
Nextel's relocation schedule. Nonetheless, the Commission invites
additional analysis on whether MSS can operate on an unrestricted and
secondary basis in nonrelocated BAS markets. Commenters should include
evidence on the likelihood of harmful interference occurring to the
nonrelocated BAS incumbents from MSS operations.
41. In the Report and Order and Order the Commission also
recognizes that interference could occur to BAS incumbents in a
nonrelocated market from MSS operations in an adjacent market where BAS
has been relocated. Consequently, it requires that MSS may not operate
mobile terminals within line-of-sight of BAS receive sites in markets
where the BAS transition has not been completed, absent coordination.
The Commission seeks comment on whether this requirement continues to
be necessary.
C. MSS Relocation Obligations
42. Our current rules provide that the MSS entrants may not begin
operations until BAS in the top 30 markets and all fixed BAS links have
been relocated. Once an MSS entrant begins operations, all of the MSS
entrants jointly have the responsibility to relocate the BAS incumbents
in markets 31-100 within three years and the remaining markets (i.e.,
101 and above) within five years. The rule establishes a relocation
obligation on MSS that is independent of other new entrants' relocation
activity in the band, and provides a market tier approach for
completing the BAS relocation that is pegged to beginning operations
when the top 30 markets and fixed links are relocated.
43. The accompanying Report and Order and Order removes the
requirement that BAS in the top 30 markets and all fixed BAS links must
be relocated before MSS can begin operations, but maintains the
obligation for the MSS entrants to relocate the BAS incumbents once an
MSS entrant begins operations. Thus, this rule needs further
modification to specify when an MSS entrant ``begins operations'' for
purposes of completing BAS relocation and to account for the relocation
of markets 1-30 along with markets 31-100.
44. The Commission proposes to trigger the obligation of an
individual MSS operator to relocate BAS incumbents within three or five
years, depending on market size--i.e., markets 1-100 within three
years, and the remaining markets within five years--on the later of
these two dates: When the MSS operator certifies, prior to the BAS
sunset date of December 9, 2013, that its satellite system is
operational for purposes of meeting its operational milestone; or the
date when the top 30 market rule is eliminated. The Commission believes
that this is appropriate because once the satellite system is certified
operational and the top 30 market rule has been eliminated, an MSS
entrant will be in the position to make use of the spectrum.
Furthermore, the criteria will be easy to apply because the MSS entrant
must notify the Commission when it accomplishes its operational
milestone and the elimination of the top 30 market rule will be
effective thirty days after publication of the Report and Order and
Order in the Federal Register. The Commission notes that the obligation
to relocate the BAS incumbents within three and five years, depending
on market size, is a joint obligation of all the MSS entrants and not
just the entrant who has begun operations. Consequently, both MSS
entrants will have an obligation to relocate the BAS incumbents in
markets 1-100 within three years and the remaining markets within five
years.
45. The Commission also proposes to specify that once the MSS
entrants have incurred an obligation to relocate the BAS incumbents
within the three and five year periods, the occurrence of the December
9, 2013 sunset date will not serve to terminate that obligation. The
Commission views this approach as appropriate to ensure that all
eligible BAS incumbents who are entitled to relocation are fairly
compensated.
46. Finally, the Commission notes that our rules currently are
silent on what consequences the MSS entrants face for not meeting the
three and five year relocation deadlines. The Commission seeks comment
on what consequences, if any, should be applied for failure to meet
these deadlines.
D. BAS Relocation Process
47. The bimonthly status reports which Sprint Nextel has filed on
the progress of the BAS transition show that BAS relocation activity
slows between the time when replacement equipment is ordered for
installation by individual licensees, and when all licensees in a
market retune to the new channel plan. The reports have cited a number
of different reasons for the delays in completing relocation, such as
weather conditions, the availability and scheduling of installers, and
so on. However, some market delays are due to a single BAS licensee in
a market that has lagged in cooperating with the BAS transition and a
handful of BAS licensees that have failed to execute frequency
relocation agreements.
48. The Commission is concerned that some BAS licensees may not be
making a good faith effort to complete the BAS transition in a timely
manner. Because of the integrated nature of BAS, all BAS licensees in a
market must transition as a group. Consequently, the failure of one BAS
licensee to cooperate in the transition can delay many other BAS
incumbents from completing the transition. Given that the BAS
transition has taken far longer than anyone has expected, the
Commission seeks comment on incentives it might apply to encourage all
BAS incumbents to diligently work toward completing the BAS transition
so as not to delay further the introduction of new services in the
band.
[[Page 29645]]
49. Under our current rules, the BAS incumbents are primary until
they are relocated, they refuse relocation, or the BAS relocation rules
sunset on December 9, 2013. Because individual BAS licensees may delay
the transition, the Commission seeks comment on the following proposal.
If a BAS licensee has not completed relocation by February 9, 2010, the
Commission could change its status for interference purposes, but
continue to require that new entrants who incur a relocation and cost
sharing obligation fulfill this obligation. Thus, Sprint Nextel, MSS
and AWS-2 entrants would continue to have an obligation to relocate
those BAS incumbents whose initial applications were filed prior to
June 27, 2000 and who have primary status in the band.
50. The interference status between a nonrelocated BAS licensee and
a new entrant, whether Sprint Nextel, MSS, or AWS-2, could be modified
in one of several different ways. First, nonrelocated BAS incumbents
could become secondary in the 1990-2025 MHz band and Sprint Nextel, MSS
and AWS entrants primary as of February 9, 2010. This would allow
Sprint Nextel, MSS and AWS-2 entrants to provide unimpeded commercial
service. The nonrelocated BAS incumbent would be able to continue
operations in the band if the new entrants are not ready to begin using
the band or if the BAS incumbent can operate without causing harmful
interference to the new entrants. Second, the Commission could require
the nonrelocated BAS incumbent to cease operations in the 1990-2025 MHz
band as of February 9, 2010. This proposal has similarities to the BAS
relocation rules prior to 2004. Third, the Commission could make the
nonrelocated BAS licensee and the new entrants co-primary in the 1990-
2025 MHz band as of February 9, 2010. Because a later arriving co-
primary licensee must protect the operations of an existing co-primary
licensee, the new entrants, whether Sprint Nextel, MSS, or AWS-2, would
have to avoid causing interference to the existing BAS systems and
accept interference from the BAS licensee. The Commission seeks comment
on these approaches, or possible alternative approaches.
51. If the Commission adopts either the first or second of the
procedures described, it seeks comment on whether we should look
favorably upon waiver request from individual nonrelocated BAS
licensees to allow them to maintain their primary status and continue
operations if enforcing the rule would cause hardship or otherwise not
serve the public interest. The BAS licensee could, for example show
that the BAS spectrum in its market is so heavily used that there is no
other available channel or that circumstances beyond the incumbent's
control have prevented the incumbent from completing the transition by
the deadline.
Initial Regulatory Flexibility Analysis
1. 52. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA),\1\ the Commission has prepared this present 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 this Further Notice of Proposed Rule
Making (Further NPRM). Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments provided in the Further NPRM. The
Commission will send a copy of this Further NPRM, including this IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration
(SBA).\2\
---------------------------------------------------------------------------
\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).
\2\ See 5 U.S.C. 603(a).
---------------------------------------------------------------------------
A. Need for, and Objectives of, the Proposed Rules
53. In this Further Notice of Proposed Rulemaking, the Commission
seeks comment on tentative conclusions and proposals for modifying and
clarifying the Commission's requirements for the new entrants to the
1990-2025 MHz band to share the cost of relocating the incumbent BAS
licensees from that band. The BAS incumbents are being removed from the
1990-2025 MHz band to make way for Sprint Nextel, MSS entrants, and
future AWS licensees. Sprint Nextel, who will occupy the 1990-1995 MHz
spectrum, is required to relocate the BAS incumbents from the band by
February 8, 2010. The MSS entrants (ICO and TerreStar), who will occupy
the 2000-2020 MHz spectrum, are also obligated to relocate the BAS
incumbents before they may begin operations. The AWS licenses for the
1995-2000 MHz and 2020-2025 MHz have not yet been issued.
54. The cost sharing requirements for the BAS relocation must be
modified because circumstances surrounding the relocation have
significantly changed since the requirements were adopted. When the
current cost sharing requirements were adopted in 2004, Sprint Nextel
was expected to have completed the BAS transition by September 7, 2007;
one or both of the MSS entrants was expected to have entered the band
and incurred a cost sharing obligation to Sprint; the reconfiguration
of the 800 MHz band, which Sprint Nextel was also undertaking, would
have been completed by June 26, 2008; and Sprint Nextel was expected to
be able to receive credit for the BAS relocation costs not reimbursed
by MSS and AWS licenses toward the value of spectrum it was receiving.
None of these assumptions have in fact been correct. Furthermore, the
current requirements have a number of ambiguities, such as not
specifying a standard for determining how MSS and AWS licenses incur a
cost sharing obligation to Sprint Nextel and not specifying when
reimbursement of BAS relocation expenses is to occur.
55. The Further NPRM tentatively concludes that Sprint Nextel may
not both receive reimbursement for cost sharing from other new entrants
and receive credit for the same relocation costs against the value of
the spectrum it is receiving. The MSS and AWS-2 entrants can incur a
relocation obligation until the band relocation rules sunset on
December 9, 2013. The Further NPRM tentatively concludes that an MSS
entrant will incur an obligation to reimburse Sprint for BAS relocation
costs when it certifies that its satellite is operational for purposes
of meeting its operational milestone. As for AWS licensees, the Further
NPRM proposes that AWS entrants will incur a cost sharing obligation
upon grant of their long form application for their licenses, but also
seeks comment on whether the AWS licensees should incur a cost sharing
obligation when they activate a base station in an area that overlaps a
DMA where the BAS incumbents have been relocated. The Further NPRM also
seeks comment on whether once the AWS and MSS entrants incur a cost
sharing obligation, they may not begin operations until they have
reimbursed the party who relocated the BAS incumbents for their pro
rata share of relocation costs for BAS markets that have transitioned
when they incur the cost sharing obligation. As the BAS relocation
continues and each additional BAS market is transitioned, the new
entrant must pay their share of relocation costs within 30 days of
being notified of the market transitioning. The Further NPRM also seeks
comment on alternative proposals on when AWS and MSS entrants should be
required to reimburse earlier entrants for their share of the BAS
relocation costs.
56. In addition, the Further NPRM tentatively concludes that the
MSS
[[Page 29646]]
entrants' reimbursement obligation to Sprint Nextel should continue to
be limited to a pro rata share of the costs of relocating BAS in the
thirty largest markets (by population) and all fixed BAS links. The
FNPRM seeks comment on whether this limitation on the MSS entrants'
liability should be removed. Furthermore, the Further NPRM proposes to
retain the MSS-to-MSS cost sharing, under which the MSS entrants are to
``true-up'' their cost after the BAS transition is complete to ensure
that that each MSS entrant pays a pro rata share of the relocation cost
depending on the amount to spectrum assigned. The Further NPRM also
seeks comment on allowing Sprint Nextel to recover BAS relocation costs
from one of the MSS entrants for BAS operations on 20 MHz of spectrum
(the entire MSS allocation in the band), after which that MSS entrants
could seek reimbursement from the other MSS entrant. The Further NPRM
tentatively concludes that Sprint Nextel be required to share with
other new entrants from whom it is seeking reimbursement, information
about its relocation cost as documented in its annual external audit
and as Sprint Nextel provides to the Transition Administrator of the
800 MHz transition. Furthermore, the Further NPRM proposes that if new
entrants other than Sprint Nextel relocate BAS incumbents and seek
reimbursement from other new entrants, the first entrant must provide
the later entrants with documented relocation costs.
57. The current relocation rules require that the MSS entrants
relocate BAS incumbents in markets 31-100 within three years of
beginning operations and markets above 100 within five years of
beginning operations. The Further NPRM proposes that the MSS entrants
be required to relocate BAS incumbents in markets 1-30 within three
years of beginning operations, as they are currently required to do for
BAS incumbents in markets 31-100. For purposes of this rule, the FNPRM
proposes that ``beginning operations'' be defined as the later of two
dates: when an MSS operator certifies that its satellite is operational
for purposes of meeting its operational milestone; or the date when the
top 30 market rule is eliminated. The Further NPRM also proposes that
the December 9, 2013 sunset date for the band not serve to terminate
this obligation once it has been incurred. In addition, the Further
NPRM seeks comment on what consequences, if any, should be applied for
the failure of MSS entrants to meet these deadlines.
58. The Futher NPRM also seeks comment on incentives for all BAS
incumbents to work diligently toward completing the BAS transition. The
Further NPRM seeks comments on several approaches to changing the
interference status of the BAS incumbents: Nonrelocated BAS could
become secondary while Sprint Nextel, MSS, and AWS could become primary
in the 1990-2025 MHz band on February 9, 2010; Nonrelocated BAS could
be required to cease operation in the 1990-2025 MHz band on February 9,
2010; Nonrelocated BAS could become co-primary with Sprint Nextel, MSS,
and AWS in the 1990-2025 MHz band on February 9, 2010. If any of these
approaches are adopted, the Further NPRM seeks comment on whether we
should look favorably upon waiver request from nonrelocated BAS
licensees to allow them to maintain primary status and continue
operations if enforcing the rule would cause hardship or otherwise not
serve the public interest. Furthermore, the Further NPRM invites
additional analysis of whether MSS entrants should be able to operate
on an unrestricted and secondary basis in nonrelocated BAS markets
instead of just when MSS entrants can successfully coordinate with
nonrelocated BAS incumbents.
B. Legal Basis
59. The proposed action is taken pursuant to Sections 4(i), 5(c),
303(f), 332, 337 and 405 of the Communications Act of 1934, as amended,
47 U.S.C. 154(i), 155(c), 303(f), 332, 337 and 405.
C. Description and Estimate of the Number of Small Entities To Which
the Proposed Rules Will Apply
60. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted.\3\ The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \4\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\5\ A small business concern is one which:
(1) Is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria
established by the SBA.\6\
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\3\ 5 U.S.C. 603(b)(3).
\4\ 5 U.S.C. 601(6).
\5\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the
RFA, the statutory definition of a small business applies ``unless
an agency, after consultation with the Office of Advocacy of the
Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are
appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
\6\ Small Business Act, 15 U.S.C. 632 (1996).
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61. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted.\7\ The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \8\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\9\ A small business concern is one which:
(1) Is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria
established by the SBA.\10\
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\7\ 5 U.S.C. 603(b)(3).
\8\ 5 U.S.C. 601(6).
\9\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the
RFA, the statutory definition of a small business applies ``unless
an agency, after consultation with the Office of Advocacy of the
Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are
appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
\10\ Small Business Act, 15 U.S.C. 632 (1996).
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62. The proposed rule modifications may affect the interest of BAS,
LTTS, and CARS licensees (which we have been referring to throughout
this document generically as ``BAS'') because these licensees are being
relocated from the 1990-2025 MHz band by the new entrants. In addition,
the rule modifications will affect the interest of the new entrants to
the 1990-2025 MHz band: MSS, Sprint Nextel, and future AWS entrants to
the band.
63. BAS. This service uses a variety of transmitters to relay
broadcast programming to the public (through translator and booster
stations) or within the program distribution chain (from a remote news
gathering unit back to the stations). The BAS licensees in the 1990-
2110 MHz band will ultimately be required to use only the 2020-2110 MHz
portion of that band. It is unclear how many of the BAS licensees will
be affected by our new rules.
64. The Commission has not developed a definition of small entities
specific to BAS licensees. However, the U.S. Small Business
Administration (SBA) has developed small business size
[[Page 29647]]
standards. For BAS, we use the size standard for Television
Broadcasting.\11\ The SBA has developed a size standard for firms in
this category, which is all firms having revenues less than $14
million. The only data which we have available for this category are
for when the SBA size standard was for firms having revenues of less
than $13.5 million. According to Commission staff review of the BIA
Publications, Inc. Master Access Television Analyzer Database (BIA) on
March 30, 2007, about 986 of an estimated 1,374 commercial television
stations \12\ (or approximately 72 percent) have revenues of $13.5
million or less and thus qualify as small entities under the SBA
definition. Thus, under this standard, the majority of firms can be
considered small.
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\11\ 13 CFR 121.201, NAICS code 515120.
\12\ Although we are using BIA's estimate for purposes of this
revenue comparison, the Commission has estimated the number of
licensed commercial television stations to be 1374. See News
Release, ``Broadcast Station Totals as of December 31, 2006'' (dated
Jan. 26, 2007); see http://www.fcc.gov/mb/audio/totals/bt061231.html.
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65. CARS. The CARS licensees in the 1990-2110 MHz band will
ultimately be required to use only the 2020-2110 MHz portion of that
band. CARS licenses are issued to the owners or operators of cable
television systems, cable networks, licensees of the BRS/EBS band, and
private cable operators or other multichannel video programming
distributors.\13\ It is unclear how many of these will be affected by
our new rules.
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\13\ 47 CFR 78.13.
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66. Cable Television Distribution Services. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' \14\ The SBA has developed a small business size
standard for this category, which is: all such firms having 1,500 or
fewer employees.\15\ To gauge small business prevalence for these cable
services we must, however, use current census data that are based on
the previous category of Cable and Other Program Distribution and its
associated size standard; that size standard was: all such firms having
$13.5 million or less in annual receipts.\16\ According to Census
Bureau data for 2002, there were a total of 1,191 firms in this
previous category that operated for the entire year.\17\ Of this total,
1,087 firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million.\18\ Thus,
the majority of these firms can be considered small.
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\14\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\15\ 13 CFR 121.201, NAICS code 517110.
\16\ 13 CFR 121.201, NAICS code 517110.
\17\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\18\ Id. An additional 61 firms had annual receipts of $25
million or more.
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67. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide.\19\ Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard.\20\ In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers.\21\ Industry data indicate that, of 7,208 systems
nationwide, 6,139 systems have under 10,000 subscribers, and an
additional 379 systems have 10,000-19,999 subscribers.\22\ Thus, under
this second size standard, most cable systems are small.
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\19\ 47 CFR 76.901(e). The Commission determined that this size
standard equates approximately to a size standard of $100 million or
less in annual revenues. Implementation of Sections of the 1992
Cable Act: Rate Regulation, Sixth Report and Order and Eleventh
Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
\20\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
& C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\21\ 47 CFR 76.901(c).
\22\ Warren Communications News, Television & Cable Factbook
2006, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data
current as of Oct. 2005). The data do not include 718 systems for
which classifying data were not available.
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68. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' \23\ The Commission has determined that an operator
serving fewer than 677,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all its affiliates, do not exceed $250 million in the
aggregate.\24\ Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard.\25\ We note
that the Commission neither requests nor collects information on
whether cable system operators are affiliated with entities whose gross
annual revenues exceed $250 million,\26\ and therefore we are unable to
estimate more accurately the number of cable system operators that
would qualify as small under this size standard.
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\23\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
\24\ 47 CFR 76.901(f); see Public NPRM, FCC Announces New
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001).
\25\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
& C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\26\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's
finding that the operator does not qualify as a small cable operator
pursuant to 76.901(f) of the Commission's rules. See 47 CFR
76.909(b).
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69. Wireless Telecommunications Carriers (except satellite).
Wireless Telecommunications Carriers (except satellite) is an SBA
standard which has a size standard of fewer than 1500 employees.\27\
Wireless cable systems use 2 GHz band frequencies of the Broadband
Radio Service (``BRS''), formerly Multipoint Distribution Service
(``MDS''), and the Educational Broadband Service (``EBS''), formerly
Instructional Television Fixed Service (``ITFS''), to transmit video
programming and provide broadband services to residential subscribers.
These services were originally designed for the delivery of
multichannel video programming, similar to that of traditional cable
systems, but over the past several years licensees have focused their
operations instead on providing two-way high-speed Internet access
services. We estimate that the number of wireless cable subscribers is
approximately 100,000, as of March 2005. As noted, within the category
of Wireless Telecommunications Carriers, except satellite, such firms
with fewer than 1500 employees are considered to be small.\28\ The data
presented were acquired when the applicable SBA small business size
standard was called Cable and Other Program Distribution,
[[Page 29648]]
and which referred to all such firms having $13.5 million or less in
annual receipts.\29\ According to Census Bureau data for 2002, there
were a total of 1,191 firms in this category that operated for the
entire year.\30\ Of this total, 1,087 firms had annual receipts of
under $10 million, and 43 firms had receipts of $10 million or more but
less than $25 million.\31\ The SBA small business size standard for the
broad census category of Wireless Telecommunications Carriers, which
consists of such entities with fewer than 1,500 employees, appears
applicable to MDS and ITFS.
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\27\ 13 CFR 121.201, NAICS Code 517210. Standard for small
business is 1500 employees or fewer.
\28\ 13 CFR 121.201, NAICS Code 517210.
\29\ 13 CFR 121.201, NAICS Code 517110.
\30\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\31\ Id. An additional 61 firms had annual receipts of $25
million or more.
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70. The Commission has defined small MDS (now BRS) entities in the
context of Commission license auctions. In the 1996 MDS auction, the
Commission defined a small business as an entity that had annual
average gross revenues of less than $40 million in the previous three
calendar years. This definition of a small entity in the context of MDS
auctions has been approved by the SBA. In the MDS auction, 67 bidders
won 493 licenses. Of the 67 auction winners, 61 claimed status as a
small business. At this time, the Commission estimates that of the 61
small business MDS auction winners, 48 remain small business licensees.
In addition to the 48 small businesses that hold BTA authorizations,
there are approximately 392 incumbent MDS licensees that have gross
revenues that are not more than $40 million and are thus considered
small entities. MDS licensees and wireless cable operators that did not
receive their licenses as a result of the MDS auction fall under the
SBA small business size standard for Wireless Telecommunications
Carriers (except satellite).\32\ As noted, within the category of
Wireless Telecommunications Carriers, such firms with fewer than 1500
employees are considered to be small.\33\ The data presented were
acquired when the applicable SBA small business size standard was
called Cable and Other Program Distribution, and which referred to all
such firms having $13.5 million or less in annual receipts.\34\
According to Census Bureau data for 2002, there were a total of 1,191
firms in this category that operated for the entire year.\35\ Of this
total, 1,087 firms had annual receipts of under $10 million, and 43
firms had receipts of $10 million or more but less than $25
million.\36\ Information available to us indicates that there are
approximately 850 of these licensees and operators that do not generate
revenue in excess of $13.5 million annually. Therefore, we estimate
that there are approximately 850 small entity MDS (or BRS) providers,
as defined by the SBA and the Commission's auction rules.
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\32\ 13 CFR 121.201, NAICS Code 517210.
\33\ 13 CFR 121.201, NAICS Code 517210.
\34\ 13 CFR 121.201, NAICS Code 517110.
\35\ U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005).
\36\ Id. An additional 61 firms had annual receipts of $25
million or more.
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71. Educational institutions are included in this analysis as small
entities; however, the Commission has not created a specific small
business size standard for ITFS (now EBS). We estimate that there are
currently 2,032 ITFS (or EBS) licensees, and all but 100 of the
licenses are held by educational institutions. Thus, we estimate that
at least 1,932 ITFS licensees are small entities.
72. LTTS. The Local Television Transmission Service (LTTS) in the
1990-2110 MHz band is used by communications common carriers to provide
service to television broadcast stations, television broadcast
networks, cable system operations, and cable network entities.\37\
There are 45 LTTS licensees in the 1990-2110 MHz band, and these
licensees will ultimately be required to use only the 2025-2110 MHz
portion of that band. It is unclear how many of these will be affected
by our new rules. The Commission has not yet defined a small business
with respect to local television transmission services. For purposes of
this IRFA, we will use the SBA's definition applicable to Wireless
Telecommunications Carriers (except satellite). As noted, within the
category of Wireless Telecommunications Carriers, except satellite,
such firms with fewer than 1500 employees are considered to be
small.\38\ The data presented were acquired when the applicable SBA
small business size standard was called Cellular and Other Wireless
Telecommunications--which referred to all such firms having no more
than 1,500 persons. According to Census Bureau data for 1997, there
were 977 firms in this category, total, that operated for the entire
year.\39\ 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.\40\ Thus, under this size standard, the majority of firms can
be considered small.
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\37\ 47 CFR 101.803(b).
\38\ 13 CFR 121.201, NAICS Code 517210.
\39\ U.S. Census Bureau, 1997 Economic Census, Subject Series:
Information, ``Employment Size of Firms Subject to Federal Income
Tax: 1997,'' Table 5, NAICS code 517212 (issued Oct. 2000).
\40\ Id. The census data do not provide a more precise estimate
of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is ``Firms with 1,000
employees or more.''
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73. MSS. There are two MSS operators in the 1990-2110 MHz band.
These operators will provide services using the 2000-2020 MHz portion
of the band. The SBA has developed a small business size for Satellite
Telecommunications, which consist of all companies having annual
revenues of less than $15 million.\41\ Neither of the two MSS operators
currently has revenues because one has not launched a satellite yet and
the other is unable to provide service with its satellite because of
the delays in the BAS transition. However, given that as of December
31, 2008, these MSS operators had assets of $1.341 billion and $664
million, respectively, we expect that both of these companies will have
annual revenue of over $15 million once they are able to offer
commercial services.\42\ Consequently, we find that neither MSS
operator is a small business. Small businesses often do not have the
financial ability to become MSS system operators due to high
implementation costs associated with launching and operating satellite
systems and services.
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\41\ 13 CFR 121.201, NAICS Code 517410.
\42\ TerreStar Corp., SEC Form 10-K 2008 Annual Report, filed
March 12, 2009 at F2; ICO Global Communications (Holdings) Limited,
SEC Form 10-K 2008 Annual Report, filed March 31, 2009 at 52. ICO's
subsidiary which controls its satellite covering the United States
has recently filed for bankruptcy. ICO Global Communications
(Holdings) Limited, Form 8-K, filed May 15, 2009.
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74. AWS. The AWS licensees have not been issued and the Commission
has no definite plans to issue these licensees. Presumably some of the
businesses which will eventually obtain AWS licensees will be small
businesses. However, we have no means to estimate how many of these
licensees will be small businesses.
75. Sprint Nextel. Sprint Nextel as a new entrant to the band will
occupy spectrum from 1990-1995 MHz. The Report and Order and Order
grants Sprint Nextel a waiver of the deadline by which it must relocate
the BAS, CARS, and LTTS incumbents from the 1990-2025 MHz portion of
the band. Sprint Nextel belongs to the SBA category Wireless
Telecommunications Carriers (except satellite).\43\ Businesses in this
category are considered small if
[[Page 29649]]
they have fewer than 1500 employees.\44\ As of December 31, 2008 Sprint
Nextel had about 56,000 employees.\45\ Consequently, we find that
Sprint Nextel is not a small business.
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\43\ 13 CFR 121.201, NAICS Code 517210.
\44\ Id.
\45\ Sprint Nextel Corp., SEC Form 10-K 2008 Annual Report,
filed Feb. 27, 2009 at 14.
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D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
76. The FNPRM proposes that if a new entrant other than Sprint
Nextel relocates BAS, CARS, or LTTS incumbents and seeks cost sharing
from a new entrant who enters the band later, then the first new
entrant must provide the later new entrant with documentation of the
relocation costs. The new entrants to whom this requirement applies may
be an MSS operator or a future AWS licensee. Some of the future AWS
licensees may be small entities.
E. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
77. Our primary concern in this FNPRM, which we release at the same
time we release the Report and Order and Order, continues to be
balancing the needs of incumbent BAS, CARS, and LTTS licensees to
provide service without suffering harmful interference and the
introduction of new MSS in a timely manner. The interest of the BAS,
CARS, and LTTS licensees would be affected if one of the approaches for
modifying the interference status of the nonrelocated BAS, CARS, and
LTTS incumbents on February 9, 2010 is adopted: such as making the
nonrelocated BAS, CARS, and LTTS incumbents secondary; requiring them
to discontinue operations; or making them co-primary with the new
entrants. The potential harm to BAS, CARS, and LTTS will depend on the
particular changes made to the rules and the progress of Sprint Nextel
in relocating the BAS, CARS, and LTTS incumbents. If Sprint Nextel is
able to relocate all of the BAS, CARS, and LTTS incumbents by the
February 8, 2010, then no BAS, CARS, and LTTS licensees will be harmed
by the proposed changes. However, if not all of the BAS, CARS, and LTTS
incumbents are relocated by February 8, 2010, the changes to the
remaining incumbents' interference status on February 9, 2010 may cause
significant economic harm to these incumbents.
78. The degree of harm suffered by nonrelocated BAS, CARS, and LTTS
incumbents will depend on many factors. If the BAS, CARS, and LTTS
incumbents' interference status is changed to co-primary, they would
suffer no economic harm because, as the first primary licensees to
enter the band, they would enjoy interference protection from the new
entrants and would not have to avoid interfering with new entrants. If
the nonrelocated BAS, CARS, and LTTS incumbents' status is changed to
secondary, the BAS, CARS, and LTTS incumbents would still be able to
operate their equipment as long as they do not cause interference to
the primary users of the band. If the nonrelocated BAS, CARS, and LTTS
incumbents are required to discontinue operations, they will suffer
economic harm. BAS is used primarily for electronic newsgathering and
fixed television relay links. If the BAS incumbents are not able to use
their BAS equipment, the quality of their newscast may be affected and
they would have to find alternate means of replacing the relay links.
If CARS licensees are not able to use their equipment, they may have
difficulty in delivering their cable television programming.
79. The possible change in the incumbents' interference status as
of February 9, 2010 will affect any BAS, CARS, or LTTS incumbents who
have not been relocated from the 1990-2025 MHz band by that date. This
status change will affect all incumbent licensees equally.
Consequently, we do not believe that the proposed rule changes will
have a disparate impact on small entities.
80. Because of the integrated nature of BAS, CARS, and LTTS, all
licensees in a market must transition to the new band plan at the same
time. As a result, a single licensee who lags behind its peers in
completing the transition could cause inconvenience and hardship to the
new entrants as well as the other incumbent licensees in the market.
Consequently, in the FNPRM the Commission seeks comment on changing the
interference status of nonrelocated BAS, CARS, and LTTS incumbents
despite the potential of these incumbents experiencing interference or
having to discontinue use of part of their licensed spectrum.
81. Nonetheless, however, we note that the number of BAS, CARS, and
LTTS incumbents that will be affected by the change in interference
status should be small because Sprint Nextel is required to complete
the BAS transition by February 8, 2010. To minimize the potential
hardship to BAS, CARS, and LTTS incumbents, we seek comment on whether
we should look favorably on requests from individual incumbents for
waiver of the change of the interference status in the event that it
would cause hardship or not be in the public interest. In addition, the
possible change in the interference status of the BAS, CARS, and LTTS
incumbents would not change the obligation of the new entrants to
relocate the remaining incumbents until the band sunset date of
December 9, 2013.
82. Most of the proposals in the FNPRM address the cost sharing
obligations between the MSS entrants, AWS entrants, and Sprint Nextel.
However, the interest of BAS, CARS, and LTTS licensees would be
positively affected by making it more likely that these licensees in
the thirty largest markets will be relocated to the new channel plan.
The FNPRM proposes adding the requirement that MSS entrants relocate
BAS, CARS, and LTTS in markets 1-30 within three years of beginning
operations. Because BAS, CARS, and LTTS that are not relocated by the
band sunset date of December 9, 2013 become secondary, increasing the
likelihood that BAS, CARS, and LTTS will be relocated by MSS is a
potential benefit for the incumbents--especially since the MSS entrants
will be required to provide the relocated incumbents with comparable
facilities. Note that because Sprint Nextel has an obligation to
relocate the BAS, CARS, and LTTS incumbents by February 8, 2010, the
MSS entrants may not have to relocate the incumbents.
83. The proposals made in the FNPRM may affect the interest of
future AWS licensees in the band, some of whom may be small businesses.
However, because these licenses have not been issued, we have no means
to determine whether the proposals will have a disparate impact on
these potentially small businesses. We also have no means to determine
what steps would minimize the impact on any of these potentially small
businesses.
F. Federal Rules That May Duplicate, Overlap or Conflict With the
Proposed Rules
84. None.
Ordering Clauses
85. Pursuant to Sections 4(i), 5(c), 303(f), 332, 337 and 405 of
the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 155(c),
303(f), 332, 337 and 405, this Further NPRM of Proposed Rulemaking is
adopted.
86. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of this Report and
Order and Order and
[[Page 29650]]
Further NPRM of Proposed Rulemaking, including the Initial Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E9-14757 Filed 6-22-09; 8:45 am]
BILLING CODE 6712-01-P