WPCk 2JBFTZF3|N  ) X4Њ#Xj\  P6G;XP#HP LaserJet 5Si/5Si MXHPLA5SMX.WRSx  @,,,% uX@ X4Њ#Xj\  P6G;XP#2(|XCourier New (TT)Times New Roman (TT)"5^2BQdd$BBdq2B28dddddddddd88qqqYzoBNzoozzB8B^dBYdYdYBdd88d8ddddBN8ddddY`(`l2BBBBPBddYYYYYYzYzYzYzYB8B8B8B8ddddddddddYdddddoddYYYYzYzYzYdddddPdBdBBBdNdoNNF2ZdBYddddd7>d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddnddddddd6?xxxX/Xx6X@DQX@.7PC2XXP\  P6QXPuHu[-u-&u-&u!HHu-uHu-u<-uHHu-2jHuHuHugHuHu-uHuHuHu-uHuHuW2y ./ Z 3|N  "5^.=K\\!==\g.=.3\\\\\\\\\\33gggQzzpf=Gpfzfpp=3=V\=Q\Q\Q=\\33\3\\\\=G3\\\\QX%Xc.====I=\\QQQQQzzQpQpQpQpQ=3=3=3=3\\\\\\\\\\Q\\\\\f\\QQzQzQpQpQpQ\\\\\I\=\===\G\fGN@.S\=Q\\\\\39\7\7==QQ\==\\=Q=7N=ddgIig\\i.=K\\!==\g.=.3\\\\\\\\\\33gggQzzpf=Gpfzfpp=3=V\=Q\Q\Q=\\33\3\\\\=G3\\\\QX%Xc=\Q\\=f===QQ@\=G=.=\\\\%\=3\g=\Id77=iS.=79\Qzpppp====gf\QQQQQQzQQQQQ3333\\\\\\\d\\\\\\\HP LaserJet 5Si/5Si MXHPLA5SMX.WRS&I\  P6Q,,,% u&P2  v p k "5^*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ*7777C7SSxJxJxJxJxJooJfJfJfJfJ7.7.7.7.xSxSxSxSxSxSxSxSxSxSxJxSxSxSxSxS]SxSxJxJoJoJfJfJfJxSxSxSxSxSCS7S777SAxSx]AN:*KS7JSSSSS.4}}S2~~S}277JJS77SS7J72N7[[^C`^SS`*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZv7SJSS7]777JJ:S7A7xx*7SSSS!S7~.S^7~SC[227`K*724S}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx]SJJJJJJoJJJJJ....SSSSSSS[SSSSSSSa8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  2kv.ta5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# 2J   .a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# 2   Ha4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# 2vJ#a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p a1DocumentgDocument Style StyleXqq   l ^) I. ׃  Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala5TechnicalTechnical Document Style)WD (1) . 2*/a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   2-"\*a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . PleadingHeader for numbered pleading paperP@n   $] X X` hp x (#%'0*,.8135@8:9E?~Efootnote tex#<'p #FxX  Pg9CXP#header=Ax 4 <D  #FxX  Pg9CXP# reference>;#FxX  Pg9CXP#itemizeX1?&V 8F ` hp xr#FxX  Pg9CXP#2N@i|GA^HBOCJKheader2@I ` hp x`    #FxX  Pg9CXP# heading 3AF` hp x #FxX  Pg9CXP# footer!B!!#d\  PCP#"5^*7]SS.77S_*7*.SSSSSSSSSS77___SxoxxofASoxfx]oxxxxo7.7aS7S]J]J7S].7].]S]]JA7]SxSSJB%BV*7777C7S]xSxSxSxSxSxxJoJoJoJoJA.A.A.A.x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxJxJoJoJoJSSS]]C]A]A7A]SSx]AN:*ZS7SSSSSS27}}S2||S}277SSS77SS7S72N7[[_C`_SS`*7]SS.77S_*7*.SSSSSSSSSS77___SxoxxofASoxfx]oxxxxo7.7aS7S]J]J7S].7].]S]]JA7]SxSSJB%BVv7SSSS7]777SS:S7A7xx*7SSSS%S7|2S_7|SC[227`Z*727S}}}SxxxxxxxooooAAAAxx_xxxxxf]SSSSSSxJJJJJ....S]SSSSS[S]]]]S]2 XNQTU"5^2BQdd$BBdq2B28dddddddddd88qqqYzoBNzoozzB8B^dBYdYdYBdd88d8ddddBN8ddddY`(`l2BBBBPBddYYYYYYzYzYzYzYB8B8B8B8ddddddddddYdddddoddYYYYzYzYzYdddddPdBdBBBdNdoNNF2ZdBYddddd7>d<d<BBYYdBBddBYBdYzzzzBBBBqodYYYYYYYYYYY8888dddddddnddddddd"5^2BoddȦ8BBdr2B28ddddddddddBBrrrdzNdzoȐB8BtdBdoYoYBdo8Bo8odooYNBodddYO,Oh2BBBBPBdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYdddooPoNoNBNoddȐoNNF2ldBddddddX.[^ a"5^.=M\\'==\|.=.3\\\\\\\\\\==|||\ppzpp=Qzfzpp\fppffG3GM\=\\Q\Q3\\33Q3\\\\GG3\QzQQGI2Ic.====I=\\p\p\p\p\p\zzQpQpQpQpQ=3=3=3=3z\\\\\\\\\fQp\\\\fQ\p\p\p\p\zQzQpQpQpQ\\\\\I\=\===\Q\z\GN@.`\G\\\\\\39\7\7==ff\==\\=f=7N=dd|Ii|\\i.=M\\'==\|.=.3\\\\\\\\\\==|||\ppzpp=Qzfzpp\fppffG3GM\=\\Q\Q3\\33Q3\\\\GG3\QzQQGI2Ic=\f\\=\===ff@\=G=zf.G\\\\2\=3\|=\Id77=i`.=79\\ppppppzpppp====z|fp\\\\\\\zQQQQQ3333\\\\\\\d\\\\\Q\"5^%-77[U%%7>%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777U7777%+77O77155;%%%%,%77O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1C1C1C1O7O7O7O7O7,7%7%%%7+O7bO=+N&27%177777"RR7!SS7R!%%117n%%77ln%1n%!N%<<>,?>77?%-77[U%%7>%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777U7777%+77O77155;N%71n77%n=%b%%11&7n%l+%OO%77777%S7>%S7,OOOOOO=7111111I111117777777<7777777"5^!)22SN!!28!2222222222888,\HCCH=8HH!'H=YHH8HC8=HH^HH=!!/2!,2,2,!222N2222!'22H22,006!!!!(!22H,H,H,H,H,YCC,=,=,=,=,!!!!H2H2H2H2H2H2H2H2H2H2H,H2H2H2H2H282H2H,H,C,C,=,=,=,H2H2H2H2H2(2!2!!!2'H2YH8'N#-2!,22222KK2LL2K!!,,2d!!22bd!,d!N!778(98229!)22SN!!28!2222222222888,\HCCH=8HH!'H=YHH8HC8=HH^HH=!!/2!,2,2,!222N2222!'22H22,006G!2,d22!d8!Y!!,,#2d!b'!HH!22222!L28!L2(7!9-!2KKK,HHHHHHYC====!!!!HHHHHHH8HHHHHH82,,,,,,C,,,,,222222272222222"5^*7FSS$77Sp*7*.SSSSSSSSSS77pppSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ*7777C7SSfSfSfSfSfSooJfJfJfJfJ7.7.7.7.oSxSxSxSxSxSxSxSxS]JfSxSxSxS]JxSfSfSfSfSoJoJfJfJfJxSxSxSxSxSCS7S777SJxSoSAN:*WSASSSSSS.4}}S2~~S}277]]S77SS7]72N7[[pC`pSS`*7FSS$77Sp*7*.SSSSSSSSSS77pppSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZv7S]SS7S777]]:S7A7o]*ASSSS.S7~.Sp7~SC[227`W*724S}}}Sffffffoffff7777xoxxxxxpxxxxx]fSSSSSSSoJJJJJ....SSSSSSS[SSSSSJS2 0d^ gR~k"5^.Gf\\3==\h.=.3\\\\\\\\\\==hhh\zzzzzG\zppzfpzzpp=3=h\=\\Q\Q=\f33\3f\\\GG3fQz\QG@(@h.====I=\\z\z\z\z\z\zQzQzQzQzQG3G3G3G3f\\\\ffffpQz\\\\pQ\p\z\z\z\zQzQzQzQzQ\\\ffI\G\G=G\\\fGN@.\\G\\\\\\17\7\7==\\\==\\=\=7N=ddoIih\\i.Gf\\3==\h.=.3\\\\\\\\\\==hhh\zzzzzG\zppzfpzzpp=3=h\=\\Q\Q=\f33\3f\\\GG3fQz\QG@(@h=\\\\=f===\\@\=G=p.G\\\\(\=1\o=\Id77=i\.=77\\zzzzzzzzzzzGGGGhpp\\\\\\\QQQQQ3333\f\\\\\d\ffffQ\.62I=.X &I\  P6Q&P.7y.C8*X/C\  P6QP l8y.G8*X<G4  pQ.<7PC2XXP\  P6QXPl97UC2XXU4  pQXl=2N=.X&N4  pQ&?0J=.X3L&J*f9 xQ&X .@P,%XJ,\  P6QJP.AI(!X,(\  P6Q,PB{,C8*X3VC*f9 xQX6?xxxXRbXx6X@DQX@1K=.Xdj &K9 xyQ&1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1C1C1C1O7O S(.] S( YFederal Communications Commission`j(#FCC 98228  yxdddy    H Q Before the YFederal Communications Commission Washington, D.C. 20554 x  S`( In the Matter of ,hhh) ` `  ,hhh)  S(Amendment of Part 95 of the Commission's)ppXWT Docket No. 98169  S(Rules to Provide Regulatory Flexibility in the)ppXRM8951  S(218219 MHz Service ,hhh) ` `  ,hhh)  Sp(Amendment of Part 95 of the Commission's)ppXWT Docket No. 9547  SH (Rules to Allow Interactive Video and Data)ppXRM8476  S (Service Licensees to Provide Mobile Services)ppX(proceeding terminated)  S (  ORDER, MEMORANDUM OPINION AND ORDER  S (1I AND NOTICE OF PROPOSED RULEMAKING x  S( Adopted: September 15, 1998ppX Released: September 17, 1998  S( Comment Date: October 30, 1998  S( Reply Comment Date: November 25, 1998 Comments to be filed in WT Docket No. 98169 only. By the Commission:  S( TABLE OF CONTENTS  S(x`A (#;Paragraphă  Sx(I.Introduction`"(#{1  SP(II.Executive Summary`"(#{2  S((III.Background`"(#{4  S(IV.Order`"(#{9  S(V.Memorandum Opinion and Order`p"(#r15  S(A.` ` Service Designation`p"(#r16  S(B.` ` Operation of Mobile RTUs`p"(#r17  S`(C.` ` Duty Cycle`p"(#r20  S8(D.` ` Limitations on Types of Service`p"(#r22  S (` ` 1. ,CTStoCTS Communications and Section 95.861`p"(#r22  S (` ` 2. ,Use of PSN or CMRS for Internal Control Purposes(# `p"(#r24  S!(` ` 3. ,Annual Reviews`p"(#r27  S"(VI.Notice of Proposed Rulemaking`p"(#r28  Sp#(A.` ` Regulatory Status and Permissible Communications`p"(#r32  SH$(B.` ` License Term`p"(#r35  S %(` ` 1. ,Extension of the License Term`p"(#r36  S%(` ` 2. ,Reamortization of Installment Payment Debt and Financing Options`p"(#r37  S&(C.` ` Service and Construction Requirements`p"(#r40  S'(D.` ` License Transferability`p"(#r47  S((E.` ` Spectrum Aggregation`p"(#r48  SX)(F.` ` Partitioning and Disaggregation`p"(#r51 "0*,++44'"Ԍ S(G.` ` Technical Standards`p"(#r54  S(H.` ` Incorporation by Reference of Part 1 Standardized Auction Rules`p"(#r56  S(VII.Conclusion`p"(#r58  S(VIII.Procedural Matters`p"(#r59  S`(IX.Ordering Clauses`p"(#r65  S8(APPENDIX A` ` Initial Regulatory Flexibility Analysis  S(APPENDIX B` ` Proposed Rules X` hp x (#%'0*,.8135@8:(  XClarifies that 218219 MHz Service licensees may use the public switched network (PSN) or commercial mobile radio services (CMRS) facilities for internal system communications.(#" ,t)t)44"Ԍ S(  ԙXDenies the request that the Commission undertake annual reviews of 218219 MHz Service licensee system use.(#  Q(Notice of Proposed Rulemaking  S8(  XRevisits the regulatory status and permissible uses of licenses in the 218219 MHz Service, and seeks comment on allowing licensees to provide both common carrier and private services.(#  S(  XProposes to extend the license term for stations licensed in the 218219 MHz Service from five   to ten years, which would result in a reamortization of installment plan principal and interest payments from three to eight years.(#  S (  XProposes to grant all properly filed 218219 MHz Service licensee grace period requests pending   as of the effective date of the proposed reamortization, and allow all nondefaulting licensees the   Doption of retaining their licenses under reamortized payment obligations or returning their licenses  S (to the Commission for reauction (i.e., amnesty).(#  SZ(  |XProposes to increase buildout flexibility for the 218219 MHz Service by eliminating the three  year and fiveyear construction benchmarks currently required, seeks comment on allowing   218-219 MHz Service licensees to meet their buildout requirement through a "substantial service"   showing, and seeks comment on how to apply the antitrafficking rule to licenses granted pursuant to lotteries under the proposed construction benchmark scheme.(#  Sj(  XSeeks comment on whether to allow the same entity to own or control both A and B licenses in   ba single market; what impact such a rule change would have on competition; and whether existing substitute services exist.(#  S(  0XProposes that licensees should be permitted to partition and disaggregate their licenses, and seeks   comment on what limits, if any, should be placed on a licensee's ability to partition its service area and disaggregate its spectrum.(#  S*(  XSeeks comment on several technical matters, including raising the 100 milliwatt restriction on   mobile RTUs, changing or eliminating duty cycle requirements, and easing tower height and transmitter power ratio rules.(#  S(  XSeeks comment on whether any of the general competitive bidding rules set forth in Part1,   :subpart Q of the Commission's rules would be inappropriate for future auctions of 218219 MHz Service licenses.(#  S!( III. BACKGROUND ă  Sr#( ^4.IVDS was established in response to a petition for rulemaking filed by TV Answer, Inc. (TV  xAnswer) (now known as EON Corporation (EON)), a company proposing a system that would provide  S"%( xinteractivity capabilities to television viewers.O "%/ yO'(  #X\  P6G;/P#эAmendment of Parts 0, 1, 2 and 95 of the Commission's Rules to Provide for Interactive Video Data  {OR((Services, GEN Docket No. 912, Notice of Proposed Rule Making, 6 FCC Rcd 1368 (1991) (Allocation Notice).O In the 1992 Allocation Report and Order,? &"%"/ yO(  #X\  P6G;/P#эAmendment of Parts 0, 1, 2 and 95 of the Commission's Rules to Provide Interactive Video and Data  {OX( x^Services, GEN Docket No. 912, Report and Order, 7 FCC Rcd 1630, 163033 (1992) (1992 Allocation Report and  {O"( xOrder), on recon., Memorandum Opinion and Order, 7 FCC Rcd 4923 (1992), further recon., Second Memorandum  {O(Opinion and Order, 8 FCC Rcd 2787 (1993).? the""% ,t)t)44`""  xCommission established a frequency allocation at 218219 MHz for IVDS, allowing a 500 kilohertz  xfrequency segment to two licensees in each of the 734 cellulardefined service areas (306 Metropolitan  S( xStatistical Areas (MSAs) and 428 Rural Service Areas (RSAs)).% / {O(  b#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 163033. The 218.0-218.5 MHz block is frequency segment A, and the 218.5-219.0 MHz block is frequency segment B. 47C.F.R.  95.853(a).% When the Commission adopted the  S( x~service rules governing IVDS in the 1992 Allocation Report and Order, it decided, inter alia, to regulate  xbIVDS as a private radio service, and to establish licensing criteria such as a fiveyear license term,  S:( x`restrictions on ownership of both frequency segments in a given market, and construction benchmarks. :/ {O (#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 163741.  xWe designed technical requirements that would permit the spectrum allocation for IVDS as sought by TV  x~Answer and reduce the potential for harmful interference to nearby operations, including reception of TV  S( xChannel 13 broadcasts in the 210216 MHz band.m / {O(#X\  P6G;/P#эId. at 163337.m We later modified the IVDS construction benchmark  S( xBscheme,^4 / {On(  #X\  P6G;/P#эSee Amendment of Part 95 of the Commission's Rules to Modify Construction Requirements for Interactive  {O8( xVideo and Data Service (IVDS) Licenses, WT Docket No. 95-131, Report and Order, 11 FCC Rcd 2472 (1996)  {O((eliminating the oneyear construction benchmark) (OneYear Construction Report and Order). and, in our Mobility Report and Order, we authorized use of this spectrum to provide mobile  St(as well as fixed operation.tZ / {On(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd 6610.  S$ ( ^5.In the Omnibus Budget Reconciliation Act of 1993 (1993 Budget Act), Congress authorized  S ( xthe Commission to award licenses for certain spectrumbased services by competitive bidding (i.e.,  S ( x2auctions). / yOd(#X\  P6G;/P#эPub. L. No. 10366, Title VI,  6002(a), 107 Stat. 312, 387 (1993). In the Competitive Bidding Second Report and Order, the Commission determined that IVDS  xlicenses should be awarded through competitive bidding, and prescribed certain general rules and  S ( xFprocedures to be used for all auctionable services.\ |/ yO(  L#X\  P6G;/P#эImplementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket No. 93253,  {On ( xxSecond Report and Order, 9 FCC Rcd 2348 (1994) (Competitive Bidding Second Report and Order), on recon.,  {O8!(Second Memorandum Opinion and Order, 9 FCC Rcd 7245 (1994). In the Competitive Bidding Fourth Report and Order,  xRwe established specific auction procedures for IVDS, setting forth auction methodology and payment  S<( xprocedures,A&</ yO|$(  L#X\  P6G;/P#эImplementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket No. 93253,  {OD%( xFourth Report and Order, 9 FCC Rcd 2330 (1994) (Competitive Bidding Fourth Report and Order), on recon., Sixth  {O&( xtMemorandum Opinion and Order and Further Notice of Proposed Rule Making, 11 FCC Rcd 19341 (1996)  {O&((Competitive Bidding Sixth MO&O/Further Notice).A and incorporating by reference many of the general rules and procedures set forth in the  S( xCompetitive Bidding Second Report and Order, such as the installment payment and associated grace",t)t)44"  S( xperiod rules./ {Oh(#X\  P6G;/P#эSee, e.g., 47 C.F.R.  95.816(d)(3) (1994) (referencing 47 C.F.R.  1.2110 (1994)). In addition, the Competitive Bidding Fourth Report and Order established provisions such  xas installment payments to ensure that small businesses, rural telephone companies, and businesses owned  xby members of minority groups and women (collectively, "designated entities") are afforded a meaningful  S( xLopportunity to participate in IVDS auctions.LZ/ {O(  f#X\  P6G;/P#эCompetitive Bidding Fourth Report and Order, 9 FCC Rcd 233640. The Commission offered two other  x6designated entity preferences in the IVDS auction: a tax certificate program, and bidding credits for businesses owned  {O( xby minorities and/or women. Id. We eliminated the tax certificate program after Congress repealed our authorizing  {O( xRstatute, 26 U.S.C. 1071. Competitive Bidding Sixth MO&O/Further Notice, 11 FCC Rcd at 19360. We  xsubsequently revised the eligibility for bidding credits to race- and gender-neutral criteria in light of the Supreme  {Or ( xCourt's decisions in Adarand Constructors, Inc. v. Pe9a, 515 U.S. 200 (1995) and United States v. Virginia, 518 U.S.  {O< ( x515 (1996). See Implementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket  {O (No. 93253, Tenth Report and Order, 11 FCC Rcd 19974, 19981-85 (1996), recon. pending. More recently, in the Part 1 Third Report and Order, we  xstreamlined the general competitive bidding procedures to provide a uniform set of Part 1 provisions to  S<( xbe applied to all auctionable services, including IVDS.<n / {OJ(#X\  P6G;/P#эSee Part 1 Third Report and Order, 13 FCC Rcd 374. The new Part 1 licenserelated payment rules  S(apply to existing IVDS licensees effective March 16, 1998.\ / {O(  #X\  P6G;/P#эId. at 385. Summary of the Part 1 Third Report and Order appeared in the Federal Register on January  {O~( x15, 1998, see 63 Fed. Reg. 2315, so the revised licenserelated payment terms took effect on March 16, 1998 (i.e., 60 days after publication of the rule in the Federal Register).  S( ^6.The first eighteen IVDS system licenses (two licenses in nine of the top ten MSAs) were  S( x.awarded by lottery held September 15, 1993, and granted on March 28, 1994.\$/ yO`( *R  #X\  P6G;/P#эPublic Notice, Interactive Video and Data Service Licenses Granted, Mimeo No. 42412 (released Mar.30,  {O(( ^1994). The September 1993 IVDS lottery was permitted under the 1993 Budget Act (passed Aug. 1993), the pertinent  {O(applications having been accepted for filing by the Commission prior to July26,1993. 1993 Budget Act  6002(e). Subsequently, utilizing  St( xthe procedures adopted in the Competitive Bidding Fourth Report and Order, we held the first auction for  SN ( xIVDS licenses on July 28 and 29, 1994, covering the remaining 594 MSA licenses.JN H/ yO6(  #X\  P6G;/P#эPublic Notice, Announcing High Bidders for 594 Interactive Video and Data Service (IVDS) Licenses,  {O(Mimeo No. 44160 (released Aug. 2, 1994), erratum, Public Notice, Mimeo No. 44265 (released Aug. 9, 1994).J On January 18, 1995  xBand February 28, 1995, the Commission conditionally granted licenses to the winning bidders, subject to  S (the bidder meeting the terms of the auction rules, including down payment requirements.Z / {O@ (  #X\  P6G;/P#эSee News Release, Interactive Video and Data Service (IVDS) Applications to be Granted January 18, 1995,  xMimeo No. 51403 (Dec.29, 1994) (listing first group of grants); Public Notice, Interactive Video and Data Service (IVDS) Applications to be Granted February 28, 1995, 10 FCC Rcd 3388 (1995) (listing second group of grants).  S ( ^7.On September 4, 1996, Petitioners filed the Petition for Rulemaking, seeking a change in  x*the IVDS license term from five to ten years, with a corresponding extension of installment payment  S^( x amortization..Z^/ {O&(  #X\  P6G;/P#эThe Commission designated the Petition for Rulemaking as RM-8951. See Public Notice, Report No. 2166  xJ(Nov. 22, 1996) (setting comment date of Dec. 23, 1996). Comments in support of the Petition for Rulemaking were  xtimely filed by ITV, Inc. and IVDS Affiliates, LC (ITV/IALC), InSync Interactive Corporation (InSync), and"T(,t)t)\(" Progressive Communications, Inc. (Progressive).. The Petition for Rulemaking was later amended with requests for regulatory relief on other"^X,t)t)44"  S( xissues such as construction benchmarks, ownership limitations, and technical restrictions.X/ {O(#X\  P6G;/P#эSee Letter Amendment; Second Letter Amendment; and Third Letter Amendment. During the  x\pendency of the Petition for Rulemaking, the IVDS License Holders Committee, an adhoc coalition,  S( x$informally contacted Commission staff with similar requests.Z/ {O:(  #X\  P6G;/P#эSee, e.g., Letter from Michele C. Farquhar, Chief, Wireless Telecommunications Bureau to Donald F.  xjLounibos, IVDS License Holders Committee (Jan. 8, 1997) (responding to issues raised by the Committee at a meeting held with Commission staff on November 13, 1996, and in a followup electronic mail correspondence). We received no comments in opposition to the Petition for Rulemaking.  S8( ^Z8.On December 4, 1996, the Wireless Telecommunications Bureau ("Bureau") announced a  xFebruary 18, 1997 start date for an auction of 981 IVDS licenses, consisting of the 856 RSA licenses, and  S( xj125 MSA licenses being reauctioned because the first auction winners were found in default.# / yO(  #X\  P6G;/P#эPublic Notice, Auction of Interactive Video and Data Service (IVDS) ! Auction Notice and Filing Requirements for 981 IVDS Licenses Scheduled for February 18, 1997, 11 FCC Rcd 20950 (1996).# Then, on  xJanuary 29, 1997, the Bureau announced postponement of the IVDS auction, "to give the Commission an  xopportunity to consider [the] Petition for Rulemaking and numerous informal requests of potential bidders  Sp(and license holders seeking to obtain additional flexibility for the service."pd / yOt(#X\  P6G;/P#эPublic Notice, Wireless Telecommunications Bureau Postpones February 18, 1997 Auction Date for 981 Interactive Video and Data Service (IVDS) Licenses, 12 FCC Rcd 1389 (1997).  S ( IV. ORDER ă  S ( ^9.Background. In authorizing the use of auctions to award licenses, Congress directed the  x$Commission to ensure that designated entities are given the opportunity to participate in the provision of  SZ( xpspectrumbased services.~Z / {O(#X\  P6G;/P#эSee 47 U.S.C.  309(j)(4)(D).~ In accordance with this statutory mandate, the Commission's competitive  xDbidding rules for the first auction of IVDS licenses allowed winning bidders that qualified as small  xjbusinesses to pay 20 percent of their net bid price(s) as a down payment and the remaining 80 percent in  xinstallments over the fiveyear term of the license(s), with interest only paid for the first two years, and  S( xinterest and principal payments amortized over the remaining three years. N / yO (#X\  P6G;/P#э47 C.F.R.  95.816(d)(3) (1994) (incorporating by reference 47 C.F.R.  1.2110 (1994)). The first interest payment,  xdue March 31, 1995, was deferred to June 30, 1995 pursuant to administrative action by the Office of  Sj( x`Managing Director.!j/ yO#(  #X\  P6G;/P#эPublic Notice, Quarterly Installment Payments for IVDS "Auction" Licensees to Begin June 30, 1995, Mimeo No. 53031 (released Mar. 29, 1995). The Bureau further stayed the date for making the initial interest payment pending  SB( xCommission resolution of licensees' substantive requests related to the payment requirements."B6/ yO'(  l#X\  P6G;/P#эInteractive Video and Data Service (IVDS) Licensees, Request for Stay to Postpone Commencement of  {O'(Installment Payment Program, Order, 11 FCC Rcd 3031 (WTB 1995). The stay"B",t)t)44"  x was lifted on January 5, 1996, with licensees required to make the interest payments backdue from  S( xMarch31, 1995 and June 30, 1995.W#&/ {O@(  #X\  P6G;/P#эSee Interactive Video and Data Service (IVDS) Licensees, Various Requests by Auction Winners, Order,  {O ( x(11 FCC Rcd 1282, 1284 n.23 (1995) (IVDS Omnibus Order); Letter from Regina W. Dorsey, Chief, Billings and  xCollections Branch, Financial Operations Division, OMD to IVDS Licensees (Mar. 29, 1996); Interactive Video and  {O(Data Service (IVDS) Licenses ! Request for Stay, Order, 12 FCC Rcd 13129 (1996).W Although the interest payments due September 30, 1995 and  xVDecember 31, 1995 remained uncollected (hereinafter, the "Suspension Interest"), we denied requests to  S( x"set-back" the payment schedule.$/ {O(#X\  P6G;/P#эIVDS Omnibus Order, 11 FCC Rcd at 1285. Therefore, the first installment payment consisting of principal and interest was due March 31, 1997.  S( ^ 10.Pursuant to the installment payment rules in effect for payments due prior to March 16,  S( x 1998,%H/ {O (  #C\  P6Q/P#эAs explained at footnote 22, supra, March 16, 1998 is the effective date of the grace period rule, as revised  {O(by the Part 1 Third Report and Order. any licensee whose installment payment is more than 90 days past due is in default, unless a  S( x"grace period" request is filed prior to the default date.&"/ {O(  #X\  P6G;/P#э47 C.F.R.  1.2110(e)(4) (1994). See also Public Notice, Reminder to Licensees with Installment Payment  xJPlans: Availability of Grace Periods, 12 FCC Rcd 7971 (1997); Public Notice, Wireless Telecommunications Bureau  xStaff Clarifies "Grace Period" Rule for IVDS "Auction" Licensees Paying by Installment Payments, 10 FCC Rcd 10724 (1995). Specifically, in anticipation of default on one  x.or more installment payments, a licensee could request that the Commission grant a three- to six- month  Sp( xVgrace period during which no installment payments need be made.'p / yO(  #X\  P6G;/P#э47 C.F.R.  1.2110(e)(4)(ii) (1994). In considering whether to grant a request for a grace period, the  xCommission (or the Bureau upon delegated authority) may consider, among other things, the licensee's payment  xhistory, including whether the licensee has defaulted before; how far into the license term the default occurs; the  xreasons for default; whether the licensee has met construction build-out requirements; the licensee's financial  {O(condition; and whether the licensee is seeking a buyer under an authorized distress sale policy. Id. The licensee would not be declared  xin default during the pendency of such request. If the Commission (or the Bureau upon delegated  xtauthority) grants the request, the licensee would not be considered in default during the grace period, and  xthe interest that accrues while no payments are made is amortized by adding it to the other interest  S ( x payments over the remaining term of the license.a( @/ {O(#X\  P6G;/P#эId.a Upon expiration of any grace period without successful  xresumption of payment, or upon default with no such request submitted, the license is cancelled  S (automatically.) / yO!(#X\  P6G;/P#э47 C.F.R.  1.2110(e)(4)(iii) (1994).  S0( ^F 11.In the Part 1 Third Report and Order, we modified the grace period provisions as applied  S ( xjto all existing licensees who are currently paying for their licenses in installments.* b/ {O &(#X\  P6G;/P#эPart 1 Third Report and Order, 13 FCC Rcd at 436. Thus, beginning with  xinstallment payments due on or after March 16, 1998, a licensee that does not make payment on an  xinstallment obligation when due will automatically have an additional 90 days in which to submit its  xrequired payment without being considered delinquent, but will be assessed a late payment fee equal to"*,t)t)44 "  S( x`five percent of the amount of the past due payment.+/ {Oh(#X\  P6G;/P#эId. (codified at 47 C.F.R.  1.2110(f)(4)(i)). If the licensee fails to make the required payment  x.within the first 90-day period, the licensee automatically will be provided a subsequent 90 days in which  xbto submit its required payment without being considered delinquent, this time subject to a second,  S( xadditional late payment fee equal to ten percent of the amount of the past due payment.,Z/ {O(#X\  P6G;/P#эId. (codified at 47 C.F.R.  1.2110(f)(4)(ii)). The licensee  x is not required to submit a filing to take advantage of these provisions. A licensee who fails to make  xpayment within 180 days after an installment payment due date sufficient to pay all pastdue late payment  xfees, interest, and principal, will be deemed to have failed to make full payment of its obligation and the  S( xblicense shall automatically cancel without further Commission action.-/ {Ot (#X\  P6G;/P#эId. at 438 (codified at 47 C.F.R.  1.2110(f)(4)(iii)). The late payment fee and  x automatic cancellation provisions described above do not apply to licensees with properly filed grace  xperiod requests until such time as the Commission (or the Bureau upon delegated authority) addresses  Sp(these grace period requests.[.p~/ yO(  #X\  P6G;/P#э"We further clarify that such licensees are not deemed to be in default on these licenses until such time as  {OV(the Bureau issues a decision on these grace period requests." Part 1 Third Report and Order, 13 FCC Rcd at 442.[  S ( ^d 12.Discussion. As of March 16, 1998, the effective date of the revised grace period rule, the  xIVDS installment payment portfolio consisted of licensees that have remitted their requisite installment  xpayments, licensees that have not remitted their requisite installment payments but have properly filed  xgrace period requests under the former installment payment rules, and licensees that have not remitted their  xHrequisite installment payments and do not have grace period requests on file in conformance with the  x~former rules. Petitioners request that the Commission forego acting on the pending grace period requests  xand not apply the revised installment payment rules to IVDS licensees until resolution of the proposals  S ( xtset forth in the Notice below in an initial Report and Order./\ / {O(  #X\  P6G;/P#эSee Third Letter Amendment (attaching Letter of Cyberforce L.L.C. to Magalie Roman Salas, Secretary,  {OL( xFederal Communications Commission at 3 (Feb. 26, 1998)); see also Letter of J.Jeffrey Craven to Jerome Fowlkes, Deputy Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau at 2 (Feb. 11, 1997). In that regard, Petitioners seek a waiver of  xthe late payment fee and automatic cancellation provisions of the revised grace period rule for IVDS  S( xlicensees until the Commission issues an initial order in this rulemaking.~0 / {OX(#X\  P6G;/P#эSee Third Letter Amendment at 1.~ In addition, the Commission  xhas before it several requests from IVDS licensees for broader relief associated with the installment" 0,t)t)44"  S( xBpayment program.1/ {Oh(  #X\  P6G;/P#эSee Petition for Special and Extraordinary Relief of MKS Interactive, Inc. (Mar. 12, 1996) ("MKS Petition");  xRequest for Modification of Interactive Video & Data Service ("IVDS") Installment Payment Obligations from a  xQuarterly to Annual Payment Schedule of J. Jeffrey Craven and Stephen E. Coran (Apr. 3, 1997) ("Craven/Coran  x2Request"); Request for Continuance of Interest-Only Payments of Cyberforce, LLC (June 17, 1997) ("Cyberforce  xZRequest"); Letter in Support of Request for Modification of Interactive Video & Data Service ("IVDS") Installment  xFPayment Obligations from a Quarterly to Annual Payment Schedule, from Denise B. Moline, P.C. (June 20, 1997)  xf("Moline Letter"); Letter Request of IVDS Interactive Acquisition Partners (June 27, 1997) ("IIAP Letter");  xApplication for Restructured Payment Schedule of S. Blair Elliott (July 1, 1997) ("Elliott Application"); Formal  xProposal for WorkOut of Loli, Inc. (Mar. 6, 1998) ("Loli Proposal") (collectively, "Miscellaneous Payment Relief Requests"). Some licensees seek more modest relief, generally associated with the pendency of  S(this rulemaking.2Zb / {O (  #X\  P6G;/P#эSee Craven/Coran Request (requesting suspension of all IVDS installment payments during the pendency  x of the rulemaking; also requests modification of IVDS installment payment obligations from a quarterly to annual payment schedule); Moline Letter (supporting the Craven/Coran Request). Other licensees request various types of payment deferral and/or restructuring.3B / {O(  #X\  P6G;/P#эSee MKS Petition at 45 (seeks suspension of all payments due under the IVDS installment payment plan  xuntil IVDS licenses are commercially viable); Cyberforce Request at 1 (requesting interest-only payments to remain  xin effect until (a) the arrival of technology that will enable IVDS licensees to develop a bankable business plan for  xthe construction and operation of the license; or (b) the operation of at least 1 nationwide network of IVDS licensees  xfor a period of 6 months); IIAP Letter at 2 (requesting a general postponement of all IVDS principal payments for  x(a minimum of two years, or until such time that a bank could refinance the installment debt); Elliott Application at  x"2 (seeking extension of installment payment terms from five to ten years, with interest only during the first five years and principal plus interest over the remaining five years); Loli Proposal at 34 (requesting a reduction in principal).  S( ^L 13.We believe that widespread cancellation of IVDS licenses through operation of the late  xLpayment fee and automatic cancellation provisions of the revised grace period rule would be inconsistent  S8( xwith many of the proposals made in the Notice below. Therefore, we will grant Petitioners' request to the  xextent that the Commission will not act on grace period requests until the rulemaking is resolved. Since  xthe late payment fee and automatic cancellation provisions of the revised grace period rule do not apply  xto licensees with properly filed grace period requests until such time as those grace period requests are  S( xaddressed,4/ {O(#C\  P6Q/P#эSee supra footnote 46 and accompanying text. there is no reason to grant a servicewide waiver of those provisions as Petitioners request.  xWe also believe that IVDS licensees that have remitted adequate installment payments as of March 16,  x1998, and thus did not have grace period requests on file when the revised rules took effect, should not  xbe penalized through the operation of the late payment fee and automatic cancellation provisions of the  x8revised grace period rule, insofar as the Commission will need time to evaluate the issues set forth in the  S ( x.Notice. Therefore, for those licensees, we suspend the operation of the late payment fee and automatic  xcancellation provisions of the revised grace period rule during the pendency of this rulemaking. In sum,  xthe Commission will not assess late payment fees or cancel any IVDS license for which a properly filed  xLgrace period request is pending, or for which adequate installment payments were made as of March 16,  S4( x1998, until resolution of the issues raised in the Notice in an initial Report and Order. Licensees that have  xbeen delinquent in payment without properly filed grace period requests are in default of their payment obligations and will be notified by the Bureau regarding debt collection procedures.  S( ^ 14.All other requests for payment deferral or restructuring that are inconsistent with this Order,  xincluding those contained in the Miscellaneous Payment Relief Requests, are hereby denied. We conclude"p 4,t)t)44R"  S( xthat the options presented in the Notice offer the most appropriate and fair method of resolving IVDS  xRfinancial concerns, and we are reluctant to adopt any solutions that will only postpone these payment  S( xdifficulties and further prolong uncertainty.5^/ {O(  b#X\  P6G;/P#эAccord Amendment of the Commission's Rules Regarding Installment Payment Financing For Personal  {O( xCommunications Services (PCS) Licensees, WT Docket No. 9782, Second Report and Order and Further Notice  {O(of Proposed Rule Making, 12 FCC Rcd 16436, 16446 (1997) (C Block Second Report and Order). In that regard, we remind licensees that there is no  xsuspension of the requirement to make quarterly payments under our installment payment rules,  xHirrespective of our actions today, and that we will strictly enforce the late payment fee and automatic  x8cancellation provisions of the revised grace period rule beginning with the first payment due upon sunset of the waiver.  S( 7 V. MEMORANDUM OPINION AND ORDER ă  SJ ( ^(15.On May 16, 1996, the Commission adopted the Mobility Report and Order, in which we  xamended our rules to authorize mobile in addition to fixed operation for IVDS RTUs operated with an  S ( xeffective radiated power (ERP) of 100 milliwatts or less.6 / {O(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6613, 6617. We decided that the output power of these  S ( xmobile RTUs could be measured in terms of "mean power" rather than "peak power,"7 / yO(  #X\  P6G;/P#эThe terms "mean power" and "peak power" (referred to as "peak envelope power") are defined at 47 C.F.R.  x2.1(c). Limited to a maximum of 100 milliwatts peak power output, a mobile RTU is precluded from transmitting  xmore than 100 milliwatts. With a 100 milliwatt mean power output limit, however, the output power is limited to  x100 milliwatts only over a time interval, thereby permitting the RTU output power at some points during the time interval (the modulation peaks) to exceed 100 milliwatts. and we eliminated  S ( xthe requirement that such units utilize automatic power controls.8 0 / {O|(  #X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6621. Automatic power control capability, included in the RTU  xcircuitry, automatically adjusts the RTU power output to the minimum amount necessary for communication between  x$the CTS and the RTU. This capability minimizes the possibility of an RTU causing interference to a television  {O( xbroadcast receiver. We implemented the automatic power control requirement for all RTUs in the 1992 Allocation  {O(Report and Order, 7FCC Rcd at 1635, 1648. In addition, we eliminated the IVDS  S ( xRduty cycle requirement for RTU operations outside of TV Channel 13 predicted Grade B contours.~9Z / {O (  #X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 661819. A transmitter "duty cycle" is a limit to the amount  x\of time a transmitter can transmit during a specific time frame, which, in IVDS, minimizes the potential for interference to reception of TV Channel 13.~  xFinally, we permitted direct CTS-to-CTS communications on a primary basis, enabling licensees to  S4( xtransmit pointtopoint communications between fixed points within their systems.j:4/ {O"(#X\  P6G;/P#эId. at 6621.j We found that these  xamendments would provide additional flexibility for licensees to meet the communications needs of the  xzpublic, which the record indicated may include commercial data distribution and inventory monitoring  S( xservices, without increasing the likelihood of interference.j;/ {O&(#X\  P6G;/P#эId. at 6611.j Timely petitions for reconsideration of the  S( xMobility Report and Order were filed by Euphemia Banas, et al. (Banas) and the National Association" ,;,t)t)44"  S( xof Broadcasters (NAB); and ITV/IALC timely filed a Request for Clarification.;</ yOh(  #X\  P6G;/P#эPetition for Reconsideration of Banas (filed July 25, 1996); Petition for Partial Reconsideration of NAB  {O0( x(filed July 25, 1996); Request for Clarification of ITV/IALC (filed July 1, 1996). See Public Notice, Report No.  x2150, 61 Fed. Reg. 46807 (Sept. 5, 1996) (setting comment date of Sept. 20, 1996 and reply comment date of Sept.  x30, 1996). Comments were timely filed by Concepts To Operations, Inc. (CTO), EON, Radio Telecom &  xTechnology Inc. (RTT), NAB, and ITV/IALC. Reply Comments were timely filed by EON and NAB. Any filings in response to our resolution of these petitions should be filed under the new docket number.; We address these filings below.  S( A.Service Designation  S8( ^16.As a threshold matter, given the regulatory flexibility provided to 218219 MHz band  S( x licensees in the Mobility Report and Order, we believe the service designation "Interactive Video and Data  xHService" no longer describes the breadth of different services evolving in the 218-219 MHz band. In  S( xaddition to radio-based interactive television services,=B/ {O(#X\  P6G;/P#эSee, e.g., Allocation Notice, 6 FCC Rcd at 1368. the Commission has noted a myriad of services  x:that licensees can offer, including "commercial data applications such as transmission of database  xinformation to pointofsale terminals, home banking or downloading of data to personal computers, VCRs,  SJ ( xor other consumer electronic products."p>ZJ / yO(  #X\  P6G;/P#эAmendment of Part 95 of the Commission's Rules to Allow Interactive Video and Data Service Licensees  {O( x2to Provide Mobile Service to Subscribers, WT Docket No. 9547, Notice of Proposed Rule Making, 10FCC Rcd 4981, 4981 n.2 (1995).p We are also aware of other uses of this spectrum, including two S" ( xzway telemetry services such as remote meter reading and energy management operations,?" / {O(#X\  P6G;/P#эSee 1992 Allocation Report and Order, 7 FCC Rcd at 1638 n.83. inventory  S ( xtmonitoring services,@ / {O"(#X\  P6G;/P#эSee OneYear Construction Report and Order, 11 FCC Rcd at 2472. a link between automatic teller machines (ATMs) and a bank's central computer,A / {O(  #X\  P6G;/P#эSee Kingdon R. Hughes, Request for Waiver of Section 95.863 of the Commission's Rules, Order, 10FCC Rcd 8642 (WTB 1995).  S ( xalarm security functions,B t/ {O(#X\  P6G;/P#эSee Petition for Rulemaking at 2. cable television theft deterrence,xC / {Ox(#X\  P6G;/P#эSee InSync Comments at 2.x and stock transaction or quotation services.D / {O !(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6614.  x>Indeed, this list of applications is not exhaustive. Therefore, on our own motion, we redesignate this  x:service as the "218219 MHz Service," to eliminate any confusion regarding the service's existing" *D,t)t)444 "  S( xcapabilities.gE/ yOh(  #X\  P6G;/P#эThe 218219 MHz band is allocated on a primary basis to the IVDS operations. 47C.F.R.2.106 Footnote  xLUS317. Licensees are also assigned to these frequencies on a secondary basis pursuant to 47C.F.R.90.259.  xdIrrespective of our redesignation of "IVDS" to the "218219 MHz Service," any current or future rules promulgated  xat 47 C.F.R. Part95, SubpartF, apply only to those entities licensed to use the 218219 MHz band on a primary basis.g This change in nomenclature is procedural in nature under the Administrative Procedure  S(Act, and consequently, the requirement of notice and comment rulemaking does not apply.zFx/ {O(#X\  P6G;/P#эSee 5 U.S.C. 553(b)(A).z  S( B.Operation of Mobile RTUs  S8( ^17.Background. As we stated in the Mobility Report and Order, by definition, mobility makes  S( xit more likely that an RTU will transiently operate in areas where interference may result.G / {O (#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6617. We therefore  xrecognized that allowing unrestricted mobile operations may promote flexibility within the service, but it  S(also increases the interference potential with respect to the operation of licensees in other services.aH/ {O(#X\  P6G;/P#эId.a  Sr( ^18.Discussion. Banas requests that the Commission eliminate the 100 milliwatt ERP limitation  xon mobile RTU transmission, and instead, require the incorporation of automatic power control capability  S$ ( xin mobile RTUs.I$ . / yO(#X\  P6G;/P#эBanas Petition for Reconsideration at 37. In support of its request, Banas states that: (1) our limitation on mobile RTU power  xis unreasonable compared to our treatment of fixed RTUs or CTSs, which operate at a much higher ERP  S ( xwithout causing interference;iJ / {O2(#X\  P6G;/P#эId. at 34.i (2) the limitation raises the cost and amount of time necessary to construct  S ( xja network;iK P / {O(#X\  P6G;/P#эId. at 56.i and (3) other interference protection rules ensure that 218-219 MHz Service stations do not  S ( x cause interference to other radio services.L / {O(#X\  P6G;/P#эId. at 67 (referencing Section 95.861 of the Commission's Rules, discussed at Section V.D.1., infra). ITV/IALC supports Banas' request,qM t/ yO(#X\  P6G;/P#эITV/IALC Comments at 23.q while NAB opposes it.lN / yO(!(#X\  P6G;/P#эNAB Comments at 36.l  xLIn addition, NAB objects to measuring RTU and CTS output power in terms of mean power rather than  S4( xpeak power.O4/ yOh$(#X\  P6G;/P#эNAB Petition for Partial Reconsideration at 36. As ITV/IALC point out, NAB appears to assume that the Commission changed the power  S ( xlimit measurements for all RTUs and CTSs to mean power.oP $/ yO&(#X\  P6G;/P#эITV/IALC Comments at 5.o We reiterate that mean power measurement  S( xcurrently only applies to mobile RTUs, and we will address NAB's objection solely in that context. EON" P,t)t)44"  S( xlopposes NAB's request,jQ/ yOh(#X\  P6G;/P#эEON Comments at 3.j as does CTO, who states that if the Commission returns to peak power  xmeasurement for mobile RTUs, mobile RTUs should be allowed to transmit at the same peak power as  S( xfixed RTUs (i.e., 20 watts).jRX/ yO(#X\  P6G;/P#эCTO Comments at 2.j RTT similarly suggests that the Commission allow mobile RTUs to transmit  xNat either mean power of 100 milliwatts or peak power of 20 watts, whichever is less based on the  Sb(licensee's particular operation.jSb/ yO(#X\  P6G;/P#эRTT Comments at 3.j In reply, NAB states that it would support this hybrid approach.gTbx/ yOz (#X\  P6G;/P#эNAB Reply at 5.g  S( ^Z19.We find Banas' claim that the 100 milliwatt power limit raises the cost and amount of time  x necessary to construct a network as unpersuasive because 218-219 MHz Service licensees are not required  x$to provide service to mobile RTUs it is merely one type of service licensees may provide. Moreover,  xwe expect that licensees will factor additional cost considerations into their decision making process  xconcerning what services to provide their subscribers and how much to charge for them. We also disagree  xwith NAB's request to measure output in terms of peak power rather than mean power. We purposefully  x chose the mean power measurement for these low power mobile RTUs because we concluded that a mean  xRpower standard would provide licensees with greater economic flexibility and efficiency in equipment  S ( xdesign, while only insignificantly increasing the risk of interference to TV Channel 13 operations.U / {Oz(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6617.  xNonetheless, the combination of suggestions in the petitions for reconsideration and associated comments  S ( x(i.e., raising the ERP limit along with requiring automatic power controls, and measuring output power  xRin terms of peak power if we do so) leads us to question whether the 100 milliwatt ERP limit may be  x`unnecessarily low. As the record does not provide the empirical data to support a reasonable alternative,  xjwe dismiss Banas' and NAB's petitions with respect to the mobile RTU power limit issue, and reexamine  S(the issue de novo in the Notice portion of this proceeding.}V/ {O(#X\  P6G;/P#эSee Section VI.G., infra.}  S( C.Duty Cycle  Sn(  SF( ^20.Background. In the Mobility Report and Order, we eliminated the duty cycle requirement  xfor: (1) fixed RTUs operating outside a TV Channel 13 predicted Grade B contour; and (2) mobile RTUs  S( xoperating in system service areas that do not overlap with a TV Channel 13 predicted Grade B contour.W, / {O!(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6619.  xIn doing so, we noted that in such areas, TV Channel 13 operations have no expectation of protection  xfrom interference, thereby rendering the duty cycle restriction unnecessary, and furthermore, that the duty  xLcycle limitation was an additional safeguard against interference rather than one of the principal ways we  SX(intended to minimize the interference potential of the 218219 MHz Service.mXX / {O&(#X\  P6G;/P#эId. at 661819.m "0P X,t)t)44 "Ԍ S( ^21.Discussion. CTO, EON and ITV/IALC support our decision, which reflects a balancing of  S( xcompeting interests on this issue.Y/ yOB(#X\  P6G;/P#эCTO Comments at 3; EON Comments at 4; ITV/IALC Comments at 57. NAB, however, requests that the Commission expand this interference  S( xprotection requirement to include an area far outside the TV Channel 13 Grade B contour (i.e., at least  S( xten miles),SZX/ yO(   #X\  P6G;/P#эNAB Petition for Partial Reconsideration at 8. Despite NAB's concern about duty cycle requirements for  {OL(CTS facilities, we note that, in fact, duty cycle limitations apply only to RTUs. See 47 C.F.R.  95.863.S but presents no evidence suggesting that interference would be caused to TV Channel 13  Sd( xreception as a result of RTU transmissions under the revised duty cycle standards set forth in the Mobility  S>( xReport and Order (generally determined by TV Channel 13 Grade B contour overlap). As a result, we  xbelieve that expanding the area of RTU duty cycle limits ten miles further in all directions would burden  xj218219 MHz Service technical operations with no attendant public interest benefits. We therefore deny  xNAB's request because it is inconsistent with our goal of providing flexibility to licensees to design their  xsystems in the most efficient way. We also deny NAB's request for expanded duty cycle regulations in  xanticipation of advanced television (ATV) implementation. This request was fully considered in the  SP ( xMobility Report and Order, in which we stated that we expect that whatever system is adopted will  xjgenerally be more immune to interference from signals in adjacent spectrum than is the case with current  S ( xanalog TV systems.[ / {OT(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6619. NAB has submitted no evidence to refute that decision. We do, however, solicit  S ( xcomment on the extent to which the duty cycle rules can be relaxed or eliminated in the Notice portion  S (of this proceeding.}\ D/ {O(#X\  P6G;/P#эSee Section VI.G., infra.}  Sd( D.Limitations on Types of Service  S(1.CTStoCTS Communications and Section 95.861  S( ^*22.Background. Households receiving overtheair television broadcasts are provided  xinterference protection from any component of a 218219 MHz Service system pursuant to Section 95.861  xof our rules. Specifically, under the rule, a 218219 MHz Service licensee must: (1) notify all households  xVwithin its service area located within a TV Channel 13 station Grade B predicted contour of the potential  S&( xfor interference to television reception from the 218219 MHz Service system;B]$&/ yO(  *#X\  P6G;/P#э47 C.F.R.  95.861(c). All reasonable forms of notification satisfy this requirement, with the selection of  {Od( xrthe particular means to the discretion of the 218219 MHz Service licensee. See Request for Interpretation of Waiver  xof Section 95.861(c), Concerning Notification of Potential Interference from Interactive Video and Data Service  {O ((IVDS) Systems, Order, 11 FCC Rcd 12187 (WTB 1996).B (2) upon request, provide  xand install a filter, free of charge, to any household within a TV Channel 13 station Grade B predicted  S( xcontour that experiences interference due to a component CTS or RTU;q^ / yO8$(#X\  P6G;/P#э47 C.F.R.  95.861(d).q and (3) investigate and eliminate  x`interference to television broadcasting and reception due to a component CTS or RTU within 30 days of"R ^,t)t)44"  xreceipt of a written interference complaint, and if it fails to do so, the CTS or RTU causing the  S(interference must discontinue operation.$_/ yO@(  #X\  P6G;/P#э47 C.F.R.  95.861(e). An affected television station, an affected viewer, or the Commission can notify the  {O(licensee in writing of an interference complaint. Id.$  S( ^23.Discussion. NAB seeks clarification that the fixed pointtopoint direct CTStoCTS  Sb( xcommunications we authorized in the Mobility Report and Order are subject to these general interference  S<( xjprotection regulations.`<"/ yO(#X\  P6G;/P#эNAB Petition for Partial Reconsideration at 9. Although we believe that our rules regarding 218219 MHz Service interference  xprotection requirements are clear, we nonetheless reiterate our policy in response to NAB's request.  xJSpecifically, all transmissions related to the 218219 MHz Service, including the CTStoCTS  S( xjcommunications now permitted under Section 95.805(b) of our rules,qa/ yO (#X\  P6G;/P#э47 C.F.R.  95.805(b).q are subject to the Section 95.861  S(general interference protections described above.nbB/ yO~(#X\  P6G;/P#э47 C.F.R.  95.861.n  SL ( 2.Use of PSN or CMRS for Internal Control Purposes (#  S ( ^J24.Background. Under our current rules, mobile RTUs are prohibited from interconnecting with  S (the PSN or CMRS providers.qc / yOH(#X\  P6G;/P#э47 C.F.R.  95.805(c).q  S ( ^^25.Discussion. ITV/IALC states that the Commission did not define the phrase "interconnection  x~with the PSN" when it adopted this rule, and seeks clarification that this prohibition does not prohibit any  S8( xuse of the PSN or CMRS providers for a licensee's internal control purposes.d8b / yO:(#X\  P6G;/P#эITV/IALC Request for Clarification at 2. NAB opposes such an  xinterpretation as inconsistent with what it claims to be the purposes of "IVDS" (enabling interactive  S( x2enhancement of broadcast material).e / yOz(  \#X\  P6G;/P#эNAB Comments at 67. EON opposes NAB's view and supports ITV/IALC's construction of the regulation. EON Reply at 24. It is also concerned that if an RTU is interconnected with the PSN,  xbthe wire providing the connection could act as an antenna, presumably increasing the potential for  S(interference to television reception.jfJ / yO!(#X\  P6G;/P#эNAB Comments at 7.j  SH( ^826.A licensee's use of the PSN or CMRS providers for internal control purposes is not an  S ( x"interconnected service."g^ / {O%(  #X\  P6G;/P#эSee Implementation of Sections 3(n) and 332 of the Communications Act ! Regulatory Treatment of Mobile  {Od&( x"Services, GN Docket No. 93252, Second Report and Order, 9 FCC Rcd 1411, 1435 (1994) (CMRS Second Report  {O.'(and Order). Since our rules do not limit the method by which a 218-219 MHz Service  xlicensee can configure internal control communications, we clarify, at ITV/IALC's request, that the mobile"g,t)t)44^"  xpRTU prohibition on interconnection with the PSN or CMRS providers does not limit a 218219 MHz  xService licensee's use of the PSN or CMRS for internal control purposes. Although we reexamine  S( xinterconnection issues in the Notice herein,}h/ {O(#X\  P6G;/P#эSee Section VI.A., infra.} this clarification does not affect the current prohibition on  xPSN or CMRS interconnection by mobile RTUs operated by 218219 MHz Service licensees. We  xpreviously considered and rejected NAB's contention that the 218219 MHz band should be developed  S:( x$primarily as an interactive service for use in conjunction with the broadcast industry.i:Z/ {O4(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd at 6615. In doing so, we  xVreasoned that consumers, through market forces, should determine the variety of uses for this allocation,  S( xwhether broadcastrelated or otherwise.aj/ {Ov (#X\  P6G;/P#эId.a NAB's interference concern is adequately addressed by the  S( xttechnical standards for connection of terminal equipment to the PSN contained in Part 68 of our rules.tk~/ {O (#X\  P6G;/P#эSee 47 C.F.R. Part 68.t  Sr( 3.Annual Reviews  S" ( ^27.Finally, NAB requests that we undertake annual review of the services provided by 218219  xtMHz Service licensees to assure that licensees are not using their facilities for unintended purposes or for  S ( xservices duplicative of services provided by other licensed communications operators.l / yO(#X\  P6G;/P#эNAB Petition for Partial Reconsideration at 9. EON opposes  S ( xthe request as unnecessary and a burdensome regulatory procedure.jm / yO(#X\  P6G;/P#эEON Comments at 6.j As both EON and ITV/IALC point  xout, this request is contrary to current FCC policy, which allows the marketplace to develop efficient uses  SZ( xPfor spectrum and encourages competition between varied communications operators.nZ0 / yO*(#X\  P6G;/P#эEON Comments at 6; ITV/IALC Comments at 7. We agree that such  xa requirement would constitute unnecessary and burdensome regulation on 218-219 MHz Service licensees  xVand places an undue burden on the agency. Further, such a requirement is unprecedented for a personal  x8radio service, and would serve no regulatory purpose in light of our proposals regarding permissible uses  S(of this spectrum.}o / {O(#X\  P6G;/P#эSee Section VI.A., infra.} We therefore deny NAB's request.  SB( t 5VI. NOTICE OF PROPOSED RULEMAKING ă  S( ^F28.Background. We initiate this rulemaking on our own motion and in response to the issues  xraised by the Petitioners. On our own motion, we address the transfer restriction that applies to lottery xwon licenses in the 218219 MHz Service, partitioning and disaggregation in the 218219 MHz Service,  xand the applicability of Part 1 standardized auction rules to future auctions of 218219 MHz Service  xlicenses. In their September 4, 1996 filing, Petitioners request that the Commission amend Section"R o,t)t)44`"  x95.811(d) of its rules to extend the term of a 218219 MHz Service station license from five to ten years.wp/ yO@(#X\  P6G;/P#эPetition for Rulemaking at 29.w Petitioners further request that we allow 218-219 MHz Service licensees that qualify for  S(installment payments to extend the installment payment period over the new tenyear license term.jqX/ {O(#X\  P6G;/P#эId. at 910.j  S`( ^r29.In their January 28, 1997 amendment, Petitioners also request the following:  x(1)areamortization plan consisting of interestonly payments for the first five years, followed by principal  S( xand interest payments over the final five years;nr/ yO (#X\  P6G;/P#эLetter Amendment at 1.n (2) elimination of the construction benchmarks set forth  S( x~in Section 95.833;isz/ {O (#X\  P6G;/P#эId. at 34.i (3) elimination of Section 95.813(b)(1), which precludes one 218219 MHz Service  xlicensee from having any financial interest in the other 218219 MHz Service license in the same  S( x market;it / {OD(#X\  P6G;/P#эId. at 45.i (4) grant of the thenpending petition for reconsideration of the Mobility Report and Order with  Sr( xregard to elimination of the 100 milliwatt ERP limit on mobile RTU operation;gur/ {O(#X\  P6G;/P#эId. at 1.g (5) elimination of  SJ ( xSection 95.863(a), the duty cycle limitations;gvJ 0 / {O(#X\  P6G;/P#эId. at 2.g and (6) elimination of Section 95.859(a)(2), the height and  xtpower limitations for CTS antennas located beyond a boundary line 10 miles outside the predicted Grade  S (B contour of a TV Channel 13 station.gw / {O\(#X\  P6G;/P#эId. at 3.g  S ( ^b30.Petitioners added three requests in their supplement filed on February 26, 1997:  x(1)elimination of the prohibition on RTUtoRTU communications; (2) an additional spectrum allocation;  xand (3) clarification of several engineering issues in demonstrating compliance with construction  S2( xVbenchmarks.+x2T / yO&(  #X\  P6G;/P#эSecond Letter Amendment (attaching Letter of James J. Keller, Myers Keller Communications Law Group, to Herbert Zeiler, Private Wireless Division, Wireless Telecommunications Bureau (Feb. 11, 1997)).+ Finally, Petitioners supplemented their Petition for Rulemaking on March13, 1998 with  xthe following requests: (1) clarification that oneway transmission from two or more RTUs to a CTS is  xa permissible communication that would satisfy any construction requirements; (2)modification of Section  xL95.855 to delete the word "automatic" from the power control rule; (3)clarification of Section 95.861(c)  x&concerning notification of potential interference from 218219 MHz Service systems; and (4) the  xBopportunity to choose among "work out" options for making installment payments that would include an  SB(amnesty component.ny$B/ {O%(  #X\  P6G;/P#эThird Letter Amendment (attachment). In the Order portion of this document, we addressed Petitioners'  xadditional request that the Commission forego acting on the pending grace period requests and waive the late  xpayment fee and automatic cancellation provisions of the new grace period rule for 218219 MHz Service licensees  {O'(until resolution of the proposals set forth in the Notice in an initial Report and Order. See Section IV, supra.n"By,t)t)44"Ԍ S( ^^ԙ31.Discussion. Our decision to postpone the February 1997 auction of RSA and defaulted MSA  xlicenses was guided by our concern that our assessment to date regarding the principal uses and regulatory  xstructure of the 218-219 MHz Service may not accurately reflect the breadth of services being developed  xjin the 218219 MHz band. We have observed the evolution of the wireless telecommunications industry  Sb( xsince our 1992 Allocation Report and Order, and we agree with Petitioners that it is appropriate to  x`reexamine the current and future uses of, and demand for, the 218-219 MHz band, and to determine the  x`appropriate regulatory models to be used for future licensing and regulation of this spectrum. Therefore,  S( x~in this Notice, we seek to examine our rules to determine whether they should be modified to provide for  xBmaximum flexibility for 218219 MHz Service licensees, and a regulatory structure that will enable these  xflicensees to meet the public's current and future needs through the most technically and economically efficient use of this spectrum practicable.  S& ( A.Regulatory Status and Permissible Communications   S ( ^r32.Background. In the 1992 Allocation Report and Order, we classified the 218-219 MHz band  S ( xas a private radio service regulated under Part 95 of our rules (i.e., Personal Radio Services), primarily  xbecause the proposed uses were to provide services "of a personal nature and offered on a subscription  Sb( xbasis."zb/ {O(#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1637. With the recent addition of mobile services as permissible communications, licensees can  S:(provide a variety of mobile, fixed, pointtopoint, pointtomultipoint, and multipointtopoint services.{:Z/ {O4(#X\  P6G;/P#эMobility Report and Order, 11 FCC Rcd 6610.  S( ^ 33.Discussion. We believe that in order to fully accommodate the wide array of service  xRofferings emerging in the 218219 MHz Service, and those contemplated for future development, we  x should change our approach to determining the regulatory status of 218219 MHz Service licensees.  x$Specifically, we propose to redesignate the 218219 MHz Service from a strictly private radio service to  x\a service that can be used for both common carrier and private operations, depending on the services  S$( xoffered by the licensee.w|$/ yO(  p#X\  P6G;/P#эFor example, as a common carrier, a 218219 MHz Service licensee would be allowed to interconnect with  {Ox( xthe PSN or CMRS providers for other than internal control purposes. See Section V.D.2, supra. Similarly, RTUto {OB( xRTU communication would be permissible. See Second Letter Amendment at 1. The proposed redesignation would  xhalso eliminate any ambiguity as to whether oneway communication constitutes a permissible use in the 218219 MHz  {O( xService. See Third Letter Amendment (attachment at 2). Accord IIAP Letter at 2 (Commission should allow license holders to use the frequency for any purpose that would present a good business model).w This is consistent with Commission precedent, in which we have concluded  xzthat authorizing a wide variety of services comports with our statutory authority and serves the public  S( xjinterest by fostering the provision of a mix of services.}Nj / {O!(  #X\  P6G;/P#эSee, e.g., Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the  xn27.5-29.5 GHz Frequency Band, to Reallocate the 29.530.0 GHz Frequency Band, to Establish Rules and Policies  {Op#( xnfor Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92297, Second Report  {O:$( xand Order, Order on Reconsideration, and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 12545, 12636 (1997)  {O%( xh(LMDS Second Report and Order); Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use,  {O%( xET Docket No. 94-32, Second Report and Order, 11 FCC Rcd 624, 63035 (1995) (GWCS Second Report and  {O&( xOrder). Cf. Amendment of the Commission's Rules to Establish Part 27, the Wireless Communications Service, GN  {Ob'(Docket No. 96-228, Report and Order, 12 FCC Rcd 10785, 10798800 (1997) (WCS Report and Order). In our regulation of other bands designated for  xboth common carrier and private operations, we permit licensees to elect common carrier or private status"},t)t)44X"  S( xin a manner that allows for a broad range of uses.~/ {Oh(  #X\  P6G;/P#эSee, e.g., LMDS Second Report and Order, 12 FCC Rcd at 12638; WCS Report and Order, 12 FCC Rcd at 10845-47. Similarly, for the 218-219 MHz Service, we propose  xto rely on applicants and licensees to specifically identify the type of service or services they intend to  xprovide within the technical parameters of the spectrum allocation, and to require that they include  xzsufficient detail to enable the Commission to determine whether the service will be offered as CMRS,  xprivate mobile radio services (PMRS), a common carrier fixed service, or a private fixed service. We  xpropose that 218219 MHz Service mobile service providers elect regulatory status as commercial mobile  S( xor private land mobile based on the threeprong statutory definition of CMRS,"/ yO (#X\  P6G;/P#э47 U.S.C.  332(d) (service provided for profit; interconnected service; service available to the public). as interpreted by the  S( xCommission in the CMRS Second Report and Order,F(/ {O: (  b#X\  P6G;/P#эCMRS Second Report and Order, 9 FCC Rcd at 142548. We note here that we are addressing similar  {O ( xconcerns in regard to regulatory status in the CMRS.  See Amendment of the Commission's Rules to Permit Flexible  {O ( xPService Offerings for the Commercial Mobile Radio Services, WT Docket No. 96-6, First Report and Order and  {O(Further Notice of Proposed Rule Making, 11 FCC Rcd 8965 (1996).F and for fixed operations, elect common carrier or  x8private status based on the nature of their service offerings under the definitions set forth in Section 3 of  S( xthe Communications Act of 1934, as amended ("Communications Act")./ yO(#X\  P6G;/P#э47 U.S.C.  153(10), (43), (44) & (46). The regulatory status that the  xprovider elects would determine the extent to which the applicant or licensee is subject to common carrier  SJ ( xregulation.zJ 2 / yO(  #X\  P6G;/P#эIf a service offering falls within the statutory definition that encompasses common carrier status, the  xJapplication and subsequent license would be subject to Title II and the common carrier licensing requirements of Title  xIII of the Communications Act and our rules. Otherwise, services would be provided on a non-common carriage  x8basis, and the application and the license would be subject to Title III and certain other statutory and regulatory  xrequirements, depending on the specific characteristics of the service. Any interested party would be able to  {O( xchallenge the regulatory status granted a 218219 MHz Service licensee. See, e.g., WCS Report and Order, 12 FCC Rcd at 10847. We also propose to apply regulatory fees and license application requirements consistent with the election of common carrier or private status made by the licensee.  S ( ^n!34.This approach should allow us to carry out our regulatory responsibilities without imposing  x8an unnecessary regulatory limitation upon licensees. We note that our final determination of permissible  xcommunications in the 218219 MHz Service will depend on our conclusions after reviewing the record  xin this proceeding. We seek comment on these proposals, or any alternatives, that will ensure that licensees can design their service offerings in response to market demand.  S( B.License Term  S( ^"35.Background. Under our current rules, the term of each system or CTS licensed to operate  Sl( xin the 218219 MHz Service is five years.qlt/ yO%(#X\  P6G;/P#э47 C.F.R.  95.811(d).q We adopted this license term in the 1992 Allocation Report  SF( xand Order in the context of awarding licenses by lottery "to reduce any potential for trafficking in licenses  xby persons who have no real interest in constructing," and as "consistent with the license term used in" ,t)t)44<"  S( xmost other private radio services."Z/ {Oh(   #X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1641. The five year license term conforms to the five xyear license term of the General Mobile Radio Service, 47 C.F.R.  95.105, the Personal Radio Service under which the 218219 MHz Service is classified, 47 C.F.R.  95.1(c). To support their request for a tenyear license term, Petitioners note  S( xthat (1) in services with similar technologies and market areas, the license term is ten years;w/ yOb(#X\  P6G;/P#эPetition for Rulemaking at 34.w (2) the use  S( xof auctions to award licenses negates the original intent of the fiveyear term (i.e., discouraging trafficking  S( xof lotterywon licenses);z/ {O (#X\  P6G;/P#эId. at 4. See also OneYear Construction Report and Order, 11 FCC Rcd at 2473. and (3) awarding licenses by auction requires a longer license term in which  xlicensees (many of whom are small businesses) may secure adequate financing, develop viable services,  S:( xand eventually recoup their initial investment.w: / yO (#X\  P6G;/P#эPetition for Rulemaking at 47.w Petitioners also contend that the extension of the license  S( xterm would trigger a reamortization of the installment payments over the longer license term,g/ {ON(#X\  P6G;/P#эId. at 9.g and  xrequest that the Commission offer 218219 MHz Service licensees a choice of (i) fulfilling payment  S( xobligations with any changes thereto associated with adjustments adopted through this Notice; (ii) amnesty;  S(or (iii) payment through a royaltybased schedule as an alternative to auction payments.l . / {Oj(  #X\  P6G;/P#эSee Third Letter Amendment (attachment at 34); cf. MKS Petition at 5 (requesting that all licensees in good  xxstanding be allowed to return their licenses to the Commission for a full refund). We choose to not seek comment  xVon Petitioners' option of making royalty payments in lieu of installment payments for the same reasons that we  {O( xexplicitly rejected royalties as an auction payment mechanism in the past. See Competitive Bidding Second Report  {O( xrand Order, 9 FCC Rcd at 2393; Implementation of Section 309(j) of the Communications Act ! Competitive Bidding,  {OX( xPP Docket No. 93-253, Notice of Proposed Rule Making, 8 FCC Rcd 7635, 7645 (1993); see also Amendment of  {O"( x the Commission's Rules to Establish New Personal Communications Services, GEN Docket No. 90-314, Second  {O( x2Report and Order, 8 FCC Rcd 7700, 7838 (1993). Specifically, the Commission stated, inter alia, that a royalty  xprogram would require adoption of complex, intrusive accounting rules for identifying the share of a firm's revenues  xthat is attributable to a particular license, and send an erroneous message to bidders that the government (taxpayers)  xis better able to bear risk than the firm (shareholders). Furthermore, the Commission said that a royalty program making government revenues dependent on the success of a regulated service may give rise to conflicts of interest.  SL ( 1.Extension of the License Term  S ( ^#36.Discussion. We agree with Petitioners that auctionable service licensees should have  xconsistent license terms. We continue to believe that licenses in the 218219 MHz Service can attract  S ( xsmall businesses interested in opportunities to participate in the provision of spectrumbased services.% b/ {O"(  #X\  P6G;/P#э47 U.S.C.  309(j)(4)(D). See Competitive Bidding Fourth Report and Order, 9 FCC Rcd at 2337;  {Oz#(Competitive Bidding Second Report and Order, 9 FCC Rcd at 2357.%  xIn this regard, a fiveyear term is particularly burdensome on small businesses paying for licenses using  xinstallment payments; to date, we have held auctions in four other wireless services in which certain  x$designated entities were eligible for installment payment plans, and each of those services has a tenyear"6,t)t)44"  S( x`license term.:/ yOh(  #X\  P6G;/P#э47 C.F.R.  24.15 (narrowband and broadband Personal Communications Services (PCS)); 47 C.F.R. 90.149 (900 MHz Specialized Mobile Radio (SMR)); 47 C.F.R.  21.929 (Multipoint Distribution Service (MDS)).: Therefore, we propose to amend Section 95.811(d) of the Commission's rules to extend  xthe term of 218-219 MHz Service licenses to ten years from the date of license grant. In doing so, we  xnote that a tenyear license term comports with our proposal to redesignate the 218-219 MHz Service from  xa private radio service (generally licensed for a fiveyear term) to a service that can also provide common  S`( x8carrier services (generally licensed for a tenyear term).` / {O (  0#X\  P6G;/P#эSee Section VI.A, supra. For the same reason, we do not seek comment on extending the license term  {O(beyond ten years. See IIAP Letter at 2. Since all 218219 MHz Service licensees will  xBface the same competitive setting and opportunity costs going forward under the regulatory flexibility we  x$propose today (irrespective of whether they acquired their licenses by auction or lottery), we propose to  xextend the license term of all licenses in the 218-219 MHz Service to ten years to ensure regulatory parity. We seek comment on these proposals.  Sp( 2.Reamortization of Installment Payment Debt and Financing Options  S ( ^$37.We also tentatively conclude that it is in the public interest to permit reamortization of  xprincipal and interest installment payments for nondefaulted 218219 MHz Service licensees in  xconjunction with the extension of the license term from five to ten years, an approach that is consistent  S ( xwith our general auction rules.  |/ {O(  #X\  P6G;/P#э47 C.F.R.  1.2110(f)(3)(ii) (as amended by the Part 1 Third Report and Order, 13 FCC Rcd at 521) ("[a]llow installment payments for the full license term").  Therefore, we propose reamortization of installment payment terms for  x8218219 MHz Service licensees to allow for two years of interestonly payments, followed by payments  xconsisting of interest and principal over the remaining eight years of the license term, an approach that  S0( xis also consistent with our general auction rules.0/ {O(  #X\  P6G;/P#э47 C.F.R.  1.2110(f)(3)(iiiiv) (as amended by the Part 1 Third Report and Order, 13 FCC Rcd at 521)  x("[b]egin with interestonly payments for the first two years; and [ ] [a]mortize principal and interest over the  xremaining term of the license"). In contrast, Petitioners' proposal for interestonly payments for the first five years,  xVfollowed by principal and interest over the final five years, does not comport with our general auction rules for  {O(installment payments. See Letter Amendment at1; see also Elliot Application at 2. Based on our structure of installment payment plans  xBin other services in which we have limited the interestonly period to two years, we believe that the two xyear interestonly period currently applicable to 218219 MHz Service licensees provides small businesses  S( xwith the appropriate level of U.S. government assisted financing.^ / {O(  >#X\  P6G;/P#эSee Amendment of Parts 20 and 24 of the Commission's Rules ! Broadband PCS Competitive Bidding and  {O ( xthe Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 9659, Report and Order, 11FCC Rcd 7824,  {Ov!(784546 (1996), recon. pending on other grounds. Our proposal here is inextricably tied  xto the requested extension of the license term from five to ten years, in contrast to prior requests to extend  Sh(payment terms beyond the five year license term based on market considerations, which we denied.j\h/ {O$(  \#X\  P6G;/P#эSee IVDS Omnibus Order, 11 FCC Rcd at 1283, recon. denied, Interactive Video and Data Service (IVDS)  {O%( xLicenses, Various Requests by Auction Winners, Memorandum Opinion and Order, 11FCC Rcd 12994, 1299798 (1996).j "@,t)t)44t"Ԍ S( ^x%38.To ensure that all 218219 MHz Service licensees that are not currently in default can take  xBadvantage of the proposed reamortization of installment payments, we propose to grant all properly filed  x~grace period requests as of the effective date of reamortization. At that time, we would recalculate every  x8nondefaulting licensee's installment payment obligations as reamortized, and credit all payments already  xreceived under the revised schedule, with any additional funds held in reserve for application against future  xBpayments. With regard to interest calculations for 218219 MHz Service licensees, we note that Section  x95.816(d)(2) of our rules requires the fixing of such calculations at the time of licensing at a rate equal  S( xto the rate for fiveyear U.S. Treasury obligations.t/ yOP(#X\  P6G;/P#э47 C.F.R.  95.816(d)(2).t If we adopt our proposal to reamortize the 218219  xMHz Service installment payments over a tenyear license term, then we would impose an interest rate  xfor those plans based on the rate for tenyear U.S. Treasury obligations at the time of licensing. All  Sp( xPSuspension Interest (i.e., interest payments backdue from September 30, 1995 and December 31, 1995){pX/ {Oh (#X\  P6G;/P#эSee paragraph 9, supra.{  xwould be submitted in eight equal payments over a twoyear period, due and payable with each of the first  S" (eight scheduled installment payments, as reamortized." / {O(#X\  P6G;/P#эAccord PCS Second Report and Order, 12 FCC Rcd at 16450.  S ( ^F&39.We understand that this proposal may trigger the payment of back due amounts, including  xjaccrued interest, earlier than expected for some 218219 MHz Service licensees. Therefore, we propose  xto offer licensees two financing options, with such election to be made on a licensebylicense basis 90  xpdays from the release date of any Report and Order promulgating the proposed reamortization. First,  xLlicensees may choose to continue making installment payments by submitting a payment consisting of all  xBaccrued interest and principal (as reamortized) due and owing as of that date. At that time, if necessary,  xHlicensees would be able to utilize the 180day late payment period in our revised installment payment  xrules, subject to the applicable late payment fees, before their licenses would automatically cancel as being  xin default. Alternatively, per Petitioners' request, licensees may surrender any licenses they choose to the  Sj( xjCommission for reauction and, in return, have all of the outstanding debt on those licenses forgiven (i.e.,  SD( x an amnesty option much like that offered to broadband PCS Cblock licensees).^D|/ {O`(  #X\  P6G;/P#эSee, e.g., Amendment of the Commission's Rules Regarding Installment Payment Financing For Personal  {O*( x^Communications Services (PCS) Licensees, WT Docket No. 9782, Order on Reconsideration of the Second Report  {O(and Order, 13 FCC Rcd 8345, 835860 (1998). For each license  xVreturned under the amnesty option, the licensee would choose either to (1) receive no credit for its down  x>payment but remain eligible to bid on the surrendered licenses in the reauction, with no restriction on  xjafter-market acquisitions; or (2) obtain credit for 70 percent of its down payment and forego for a period  xof two years from the start date of the reauction eligibility to reacquire the licenses surrendered through  xeither reauction or any other secondary market transaction. Under either option, all installment payments  xmade on surrendered licenses, plus the 70 percent credit under the second option, would be applied to  xppreviously accrued interest for retained markets, with any excess installment payments (but not down  xpayments) refunded, subject to applicable federal debt collection laws. Every licensee electing to continue  x\making installment payments would be required to execute appropriate loan documentation, that may  xinclude a note and security agreement, as a condition of the reamortization of its installment payment plan  S( xunder the revised tenyear term, pursuant to Section 1.2110(f)(3) of the Commission's rules./ {O'(#X\  P6G;/P#э47 C.F.R.  1.2110(f)(3) (as amended by the Part 1 Third Report and Order, 13 FCC Rcd at 521). Licensees  xthat fail to elect a financing option on a timely basis, and licensees who do not complete the requisite loan"d4 ,t)t)44"  x`documentation, would be held to the original fiveyear payment schedule. We believe that providing this  xchoice would substantially increase licensees' flexibility to make market driven decisions regarding their  xlicenses and enable them to revise their business plans to make them more attractive to lenders and investors. We seek comment on these proposals.  S8( C.Service and Construction Requirements  S( ^'40.Background. Section 95.831 of the Commission's rules provides that 218219 MHz Service  xlicensees make service available to at least 50 percent of the population or land area located within the  S( xservice area.n/ yO (#X\  P6G;/P#э47 C.F.R.  95.831.n To accomplish this service level requirement, we set construction benchmarks as follows:  xservice to at least 10 percent of the population or geographic area within the license service area within  SJ ( xone year of the grant of the license; 30 percent within three years; and, 50 percent within five years.J X/ {OB (#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1640-41, 1648.  xUnder our rules, failure to meet these buildout requirements results in automatic cancellation of the  S ( xB218-219 MHz Service system license.q / yO(#X\  P6G;/P#э47 C.F.R.  95.833(a).q For purposes of this benchmark, service is provided by a CTS  S ( xwhen two associated RTUs are placed in operation.a z/ {O(#X\  P6G;/P#эId.a Each 218219 MHz Service system licensee must  xfile a progress report at the conclusion of each benchmark period to inform the Commission of the  S (construction status of the system.q / yO.(#X\  P6G;/P#э47 C.F.R.  95.833(b).q  S2( ^@(41.These rules were crafted in the 1992 Allocation Report and Order in the context of awarding  xlicenses by lottery, and were intended "to reduce the filing of speculative applications by entities that have  S( xno real intention of implementing [218219 MHz Service] systems."/ {O (#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1640. We eliminated the oneyear  xconstruction benchmark in early 1996, at the request of several licensees that won their licenses in the July  S( x`1994 auction.. / {Ob(  #X\  P6G;/P#эOneYear Construction Report and Order, 11 FCC Rcd 2472; 47 C.F.R.  95.833 (as revised). The Bureau  {O,( xhad previously granted waivers of the oneyear deadline for 17 of the 18 licenses granted pursuant to lotteries. See  x6Interactive Video and Data Service (IVDS) Licenses ! Requests by Lottery Winners to Extend Construction Deadline,  {O ( xOrder, 10 FCC Rcd 4014 (WTB 1995); Interactive Video and Data Service (IVDS) Licenses ! Additional Requests  {O!( x"by Lottery Winners to Extend Construction Deadline, Order, 10 FCC Rcd 4546 (WTB 1995). The eighteenth lottery  xlicensee withdrew its requested waiver of the oneyear benchmark and filed a oneyear benchmark showing pursuant to Section 95.833(b) of the Commission's rules (received March 28, 1995). At that time, we stated that the use of auctions to award licenses reduces the incentives  Sl( xfor speculation, and therefore, concluded that the oneyear benchmark was unnecessary.lv/ {O%(#X\  P6G;/P#эOneYear Construction Report and Order, 11 FCC Rcd at 2473. We further  xstated that "eliminating the oneyear construction requirement will provide licensees with greater flexibility  xin selecting service options, obtaining financing, selecting equipment, and other considerations related to",t)t)44x"  S( xPconstruction of their systems."a/ {Oh(#X\  P6G;/P#эId.a More recently, the Bureau waived the threeyear construction benchmark  xdate for all licenses because it would have been unreasonable and contrary to the public interest to enforce  S(the benchmark while relevant Commission policy was subject to review in this rulemaking proceeding.&Z/ {O(  #X\  P6G;/P#эSee Requests by Interactive Video and Data Service Auction Winners to Waive the January 18, 1998, and  {Ot( x(February 28, 1998, Construction Deadlines, Order, 13 FCC Rcd 756 (WTB 1998); Requests by Interactive Video  {O>( xFand Data Service Lottery Winners to Waive the March 28, 1997 Construction Deadline, Order, 12 FCC Rcd 3181 (WTB 1997).  S`( ^)42.Discussion. Section 309(j)(3) of the Communications Act states, in part, that when  xzdesigning competitive bidding systems, "the Commission shall include safeguards to protect the public  S( x(interest in the use of the spectrum . . . ."rH/ yO (#X\  P6G;/P#э47 U.S.C.  309(j)(3). r In addition, Section 309(j)(4)(B) provides that the Commission  xshall promote investment in, and rapid deployment of, new technologies and services by means of  S( xPperformance requirements, such as deadlines and penalties for performance failures.~/ {O:(#X\  P6G;/P#эSee 47 U.S.C.  309(j)(4)(B).~ We have previously  S(found that these provisions could be satisfied through construction requirements.j / {O(  p#X\  P6G;/P#эSee, e.g., Implementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket  {On( xNo. 93-253, Fifth Report and Order, 9 FCC Rcd 5532, 5570 (1994); Amendment of Parts 21 and 74 of the  xCommission's Rules With Regard to Filing Procedures in the Multipoint Distribution Service and in the Instructional  {O( xTelevision Fixed Service, MM Docket No. 94131, Report and Order, 10 FCC Rcd 9589, 9659-60 (1995); GWCS  {O(Second Report and Order, 11 FCC Rcd at 669-70.  SJ ( ^*43.We continue to seek to provide 218219 MHz Service licensees with optimal flexibility in  xRselecting service options, obtaining financing, selecting equipment, and other considerations regarding  xconstruction of systems. This interest must be balanced, however, by the mandate of Section 309(j) of  xthe Communications Act. Given our belief that many of the service offerings that could be provided by  x\218219 MHz Service licensees could also be provided by licensees of other services, we believe it is  xappropriate to revisit the service and construction requirements in the 218-219 MHz Service to ensure that  xL218219 MHz Service licensees are subject to consistent policies. Although we disagree with Petitioners  S2( x`that all construction benchmarks should be eliminated,n2"/ yO(#X\  P6G;/P#эLetter Amendment at 1.n we believe that strict construction requirements  xare not the most suitable and effective means of addressing these statutory obligations given that the 218 x219 MHz Service spectrum may be used to offer a variety of fixed and mobile services that may compete with capabilities of other wireless services.  Sj( ^+44.Balancing these factors, we tentatively conclude that 218219 MHz Service licensees should  SB( xbe subject to construction requirements consistent with those presently used in other services.&B/ {O%(  #X\  P6G;/P#эSee, e.g., Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of  {O^&( xJPaging Systems, WT Docket No. 96-18, Second Report and Order and Further Notice of Proposed Rulemaking, 12  {O('( xpFCC Rcd 2732, 276667 (1997) (Paging Second Report and Order); Amendment of Parts 2 and 90 of the  xCommission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896-901"',t)t)'"  {O( xnMHz and the 935-940 MHz Bands Allotted to the Specialized Mobile Radio Pool, PR Docket No. 89-553, Second  {OZ(Order on Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639, 2651-52 (1995). "B$,t)t)44t"  x4Specifically, we propose to eliminate the threeyear and fiveyear construction benchmarks currently  xprovided in our rules, and instead require that 218219 MHz Service licensees provide "substantial service"  xto their service areas within five years of license grant. In past Orders, we have defined "substantial  xservice" as "service that is sound, favorable, and substantially above a level of mediocre service, which  S`( x would barely warrant renewal,")`$/ {O$(  #C\  P6Q/P#эPaging Second Report and Order, 12FCC Rcd at 2767. See also WCS Report and Order, 12 FCC Rcd  {O(at 1084344; LMDS Second Report and Order, 12 FCC Rcd at 12660.) and we have provided safe harbor examples of substantial service  x*showings, such as licensees offering specialized or technologically sophisticated service that does not  xrequire a high level of coverage to be of benefit to customers, or licensees providing a niche service to  S( xbusinesses or focusing on serving populations outside of areas currently serviced by other licensees.,&/ {O (  #C\  P6Q/P#эSee, e.g., LMDS Second Report and Order, 12 FCC Rcd at 12660; Amendment of Parts 2 and 90 of the  xCommission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896-901  {O( xMHz and the 935-940 MHz Bands Allotted to the Specialized Mobile Radio Pool, PR Docket No. 89-553, Third  {Od(Order on Reconsideration, 11 FCC Rcd 1170, 1170 (1995).,  x\We seek comment on whether this definition or some other articulable standard should be adopted to define substantial service for the 218219 MHz Service.  SH ( ^,45.If we amend our rules to extend 218219 MHz Service licenses to a tenyear term,H n / {OV(#X\  P6G;/P#эSee Section VI.B.1., supra. we  xfurther propose to require that all 218219 MHz Service licensees either make service available to at least  x20 percent of the population or land area, or demonstrate substantial service, within ten years of license  xgrant. Licensees would demonstrate compliance with the construction requirements by basing their  x*calculations on signal field strengths that ensure reliable service for the technology utilized, using any  xservice radius contour formula developed or generally used by industry, provided that such formula is  SX( xbased on the technical characteristics of their systems.X / {O(#X\  P6G;/P#эSee Second Letter Amendment (attachment). In the alternative, under a tenyear license term  x scenario, we ask whether, in lieu of establishing benchmarks, we should require licensees to provide  S( xsubstantial service to their service area within ten years of license grant as a condition of renewal. / {O:(  #X\  P6G;/P#эSee, e.g., LMDS Second Report and Order, 12 FCC Rcd at 1265961; WCS Report and Order, 12 FCC Rcd at 1084345.  xFinally, under a tenyear license term scenario, we propose to assess compliance of incumbent 218219  xMHz Service licensees with the fiveyear substantial service benchmark five years from the effective date  S( xof such rules promulgated pursuant to this Notice, and the tenyear requirement at the end of their tenyear  xlicense term. Under any of these proposals, licensees will be required to file supporting documentation  xshowing compliance with the construction requirements. Failure to meet the benchmark would result in  S(automatic termination of the license, which is consistent with our current rules for this service.u/ yO%(#X\  P6G;/P#э47 C.F.R.  95.833(a)(b).u "|,t)t)44"Ԍ S( ^n-46.We believe that a substantial service construction requirement can promote efficient use of  S( xthe spectrum and encourage broad deployment of service./ {O@(#X\  P6G;/P#эWCS Report and Order, 12 FCC Rcd at 10843. We further believe that this approach will  xpermit a variety of service offerings, facilitate market development, provide a clear and expeditious  xaccounting of spectrum use by licensees, and ensure that meaningful service is being provided without  x~unduly restricting service offerings. We seek comment on these tentative conclusions and proposals, and any alternatives thereto.  S( D.License Transferability  S( ^.47.We adopted a restriction on 218219 MHz block license transferability in the  Sp( x1992Allocation Report and Order as an antitrafficking rule governing the award of licenses by lottery.pZ/ {Oj (#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1641.  x8Under the rule, 218219 MHz Service licensees may not transfer, assign, sell, or give the licenses to any  S" ( xpother entity until the five year (50 percent coverage) construction benchmark has been met.q" / yO(#X\  P6G;/P#э47 C.F.R.  95.819(b).q In the  S ( xCompetitive Bidding Fourth Report and Order, we specifically amended the rule to exclude its application  S ( xto licenses acquired through auction.7 |/ {O(  z#X\  P6G;/P#эCompetitive Bidding Fourth Report and Order, 9 FCC Rcd at 2335, 2343; see also 47 C.F.R. 95.819(a) (transferability of auctionwon licenses governed by Section 1.2111 of the Commission's rules).7 Thus, the transferability restriction applies only to the 18 licenses  xRwon in the September 1993 lottery. We seek comment on whether this transfer restriction should be  xretained. Further, assuming the rule is retained, we seek comment on determining whether and when a  xlotterywon license may be transferred in light of our proposed changes to the service and construction  S4(rules,}4/ {O(#X\  P6G;/P#эSee Section VI.C., supra.} and our proposal to permit partitioning and disaggregation of 218219 MHz Service licenses.}4h / {O<(#X\  P6G;/P#эSee Section VI.F., infra.}  S( E.Spectrum Aggregation  S( ^</48.Background. In establishing rules for the 218219 MHz band, we concluded that the best  xway to promote competition in the developing marketplace would be "to make at least two facilities  SF( xHavailable in each market."F / {O (#X\  P6G;/P#эAllocation Notice, 6 FCC Rcd at 1371. Therefore, our crossownership rule prohibits an entity from holding or  xhaving an interest in the licenses for both frequency segment A (218.0-218.5 MHz) and frequency segment  S(B (218.5219 MHz) in the same service area.t / yO"$(#X\  P6G;/P#э47 C.F.R.  95.813(b)(1).t  S( ^049.Discussion. Petitioners seek elimination of the crossownership rule, stating, inter alia, that  xBcompeting services with larger bandwidth and greater capitalization provide the necessary competition to  x$alleviate any concern that a 218219 MHz Service licensee would exert monopoly power by aggregating  xone megahertz of spectrum, and that a full onemegahertz of spectrum would enhance spectrum flexibility"0,t)t)44 "  S( xthrough expanded applications and services./ {Oh(#X\  P6G;/P#эLetter Amendment at 45; accord MKS Petition at 5; IIAP Letter at 2. In 1996, we denied a request for rulemaking on this  S( xissue.Z/ {O(#X\  P6G;/P#эCompetitive Bidding Sixth MO&O/Further Notice, 11 FCC Rcd at 19363. In deciding not to grant the petition for rulemaking, we observed that the "interactive television  S( x~marketplace is in a relatively early state of competition," and that "allowing a single entity to acquire both  S( xBlicenses in a service area would limit the opportunity for other potential competitors to emerge."s/ {O(#X\  P6G;/P#эId. (emphasis added).s That  Sd( x notwithstanding, restricting the competitive analysis of the 218219 MHz band to the interactive television  S>( xfmarketplace is inconsistent with the myriad of services evolving in the 218219 MHz Service.|>~/ {O\ (#X\  P6G;/P#эSee Section V.A., supra.| We  S( xbelieve that the new regulatory environment we seek to establish with our proposals in this Notice will  xbroaden the field of potential competitors providing services similar to those in the 218219 MHz Service. Therefore, it is now appropriate to reexamine the crossownership prohibition.  Sz( ^150.We seek comment on whether we should allow licensees to aggregate spectrum in the  SR ( x$218-219 MHz Service without restriction.R / {O(  N#X\  P6G;/P#эManagement and leasing agreements, evaluated under the de facto control guidelines established by the  {O( xCommission in Intermountain Microwave, 24 Rad. Reg. (P&F) 983 (1963), would also be permitted. See Letter  x@Amendment, Exhibit 5 (request for clarification regarding leasing arrangements and Section 95.813(b)(1)). However,  x<in light of the fact that permitting aggregation would double the bandwidth available to any licensee per market, we  {O&( xdo not seek comment on requests for an additional or substitute spectrum allocation at this time. See Second Letter  {O( xAmendment at 1; see also IIAP Letter at 2; Elliot Application at 3; Letter from Dee Ann Wunschel to A. Jerome  xFowlkes, Deputy Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal  xCommunications Commission, at 2 (received Feb. 23, 1998); Letter from Dee Ann Wunschel to A. Jerome Fowlkes,  xDDeputy Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal  xCommunications Commission, at 2 (received Dec. 5, 1997). Since the industry evolving in the 218-219 MHz band is still in its relative infancy, it would be premature to consider expanding or moving the spectrum allocation. Would removal of the current crossownership prohibition  xpose a risk of significant competitive harm in some markets? Our goal in managing spectrum efficiently  S ( x*and fostering competition is to license the maximum number of commercially viable competitors per  xtregion. Commenters should address whether the 500 kilohertz spectrum capacity limit of one license per  xmarket renders these licenses not commercially viable, and why. What other technologies provide, or may  xin the future provide, comparable services to those currently provided or proposed for this spectrum? We  x4also seek comment on whether it would be appropriate to include 218-219 MHz in the calculation of  xspectrum aggregation limits, given our proposal to expand service options to common carrier or CMRS  S(operations.}x/ {O,"(#X\  P6G;/P#эSee Section VI.A., supra.}" ,t)t)44n"  S( F.Partitioning and Disaggregation  S( ^R251.In the Partitioning Report and Order, we expanded our rules to permit geographic  S( xpartitioning and spectrum disaggregation for broadband PCS licensees./ yO(  #X\  P6G;/P#эGeographic Partitioning and Spectrum Disaggregation by Commercial Mobile Radio Services Licensees, WT  {O( xdDocket No. 96-148, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21831 (1996)  {O( x(Partitioning Report and Order). "Partitioning is the assignment of geographic portions of the [ ] license along  xgeopolitical or other boundaries. Disaggregation is the assignment of discrete portions or blocks of spectrum  {O(licensed to a geographic licensee or qualifying entity." Id. at 21833 n.2. Consistent with these broadband  xPCS rules, we propose to permit partitioning and disaggregation for the 218219 MHz Service. We  xtentatively conclude that a flexible approach to partitioned areas, similar to the one we adopted for  xbroadband PCS, is appropriate for the 218219 MHz Service. We therefore propose to permit partitioning  xof 218219 MHz Service licenses based on any area defined by the parties within the licensee's service  xarea. We seek comment on this proposal, and in particular on whether there are any technical or other  xissues unique to the 218219 MHz Service that might impede the adoption of such a flexible approach.  xWith regard to disaggregation, we note that even if we permit ownership of both licenses in a market by  SJ ( xfone entity as proposed above,}J ~/ {Oh(#X\  P6G;/P#эSee Section VI.E., supra.} there would still be only one megahertz of spectrum to disaggregate.  x$Given this relatively narrow frequency segment, and the propagation and technological limitations of the  xt218219 MHz band, we seek comment on the feasibility of spectrum disaggregation in the 218219 MHz  x~Service, and particularly, whether minimum disaggregation standards are necessary. Commenters should  x provide technical justifications and other relevant support in responding to this issue. We tentatively  xconclude that combined partitioning and disaggregation should also be permitted for the 218-219 MHz  xjService. This approach would afford parties optimal flexibility to respond to market forces and demands  xfor service relevant to their particular locations and service offerings. Further, we propose to authorize  xa partitionee and disaggregatee to hold its license for the remainder of the original licensee's term, with  xrenewal expectancy. We believe that this approach would prevent licensees from using partitioning and  xVdisaggregation to circumvent our established license term rules. Additionally, by limiting the license term  xof the partitionee or disaggregatee, we ensure that there will be maximum incentive for parties to pursue  xavailable spectrum as quickly as practicable, thus expediting the delivery of service to the public. We seek comment on these proposals and tentative conclusions.  S( ^352.In the Partitioning Report and Order, the Commission concluded that allowing partitioning  xand disaggregation would help to (1) remove potential barriers to entry, thereby increasing competition;  x(2) encourage parties to use spectrum more efficiently; and (3) speed service to unserved and underserved  S|( xareas.|/ {O,!(#X\  P6G;/P#эPartitioning Report and Order, 11 FCC Rcd at 21843. Similarly, we believe that such an approach for the 218219 MHz Service would result in the  xsame public interest benefits. We note that small businesses may face certain barriers to entry into the  xlprovision of spectrumbased services, which we believe may be addressed by our partitioning and  S( xdisaggregation proposals.|/ {OF%(#X\  P6G;/P#эSee, e.g., id. at 21876.| Providing licensees with the flexibility to partition and disaggregate would  xcreate smaller areas that could be licensed to small businesses, including those entities that previously may  xBnot have had the resources to participate successfully in spectrum auctions. We seek comment on these  xtentative conclusions. In particular, commenters are invited to address whether partitioning and  xdisaggregation will help eliminate market entry barriers for small businesses consistent with Section 257"d4 ,t)t)44"  S( x.of the Communications Act.k/ yOh(#X\  P6G;/P#э47 U.S.C.  257.k We further invite comment as to the exact mechanisms for apportioning  xand paying the remaining government obligation between the parties, and whether there are any unique  x~circumstances that would make devising such a scheme for the 218219 MHz Service more difficult than for broadband PCS.  S8( ^453.In this Notice, we seek comment on a new set of construction requirements for 218219  S( xMHz Service licensees.}X/ {O (#X\  P6G;/P#эSee Section VI.C., supra.} In other wireless services, we have allowed licensees the flexibility to negotiate  S( x`which party will be responsible for meeting the applicable construction requirements.b&/ {Ot (  #X\  P6G;/P#эSee, e.g., Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the  xn27.5-29.5 GHz Frequency Band, to Reallocate the 29.530.0 GHz Frequency Band, to Establish Rules and Policies  {O ( xZfor Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92297, Fourth Report  {O (and Order, 13 FCC Rcd 11655, 1166466 (1998); Partitioning Report and Order, 11 FCC Rcd at 21857.b In each of those  xcases, our goals have been to ensure that licensees had the flexibility to structure their business plans while  x:ensuring that partitioning and disaggregation not be used as a vehicle to circumvent the applicable  xconstruction requirements, and that service be offered over the relevant population, even if not on the  x8entire spectrum. We propose that parties to partitioning and disaggregation in the 218219 MHz Service  xhave comparable flexibility in meeting construction requirements. Parties to partitioning would be allowed  x.to choose between both parties satisfying buildout requirements within their respective service areas, or  xhaving the partitionor buildout the entire market. Parties to disaggregation would choose whether one  xor both parties would be obligated to satisfy build-out requirements within the geographic service area.  x.Nonperforming licensees' authorizations would be subject to cancellation at the end of the license term. We seek comment on these proposals.  S ( G.Technical Standards  S( ^554.In light of the fact that our primary goal in this rulemaking is to provide additional  xflexibility for 218219 MHz Service licensees, we must also seek to reexamine the technical restrictions  xHcurrently applicable to the 218219 MHz Service to determine whether we can enhance the technical  SB( xflexibility of these licensees, particularly in light of the proposals contained in this Notice. The technical  S( xrestrictions, including rules requiring automatic power control capability,/ {O(#X\  P6G;/P#э47 C.F.R.  95.855(a). Automatic power controls are explained at footnote 56, supra. antenna height and transmitter  S( xjpower limitations,zj / yO (#X\  P6G;/P#э47 C.F.R.  95.855, 95.859.z duty cycle limitations, / yO"(  #X\  P6G;/P#э47 C.F.R.  95.863. For further explanation and discussion of duty cycle limitations, see footnote 57 and  {OV#(Section V.C., supra. and other interference protection standards, were based on  xan agreement between TV Answer and the Association for Maximum Service Television that IVDS (as  S( xproposed by TV Answer) and TV Channel 13 operations could coexist.T / {O&(#X\  P6G;/P#э1992 Allocation Report and Order, 7 FCC Rcd at 1632. Interference was of particular  xconcern since the RTU proposed for use by TV Answer was planned to be colocated with the  xsubscriber/viewer's television set. However, the potential applications for the 218219 MHz Service go"T,t)t)44$"  xfar beyond the service envisioned by TV Answer when these rules were designed. We also note that other  xVservices are authorized to transmit in frequencies adjacent to or nearby 218219 MHz with higher power  S( x`levels than allowed at 218219 MHz and no duty cycle restrictions,nZ/ {O(  #X\  P6G;/P#эSee generally 47 C.F.R. Part 80 (Automated Maritime Telecommunications Systems, operating at 216-218  xMHz adjacent to TV Channel 13); 47C.F.R. Part 95, Subpart G (Low Power Radio Service); 47 C.F.R. Part 90, Subpart T (220222 MHz band).n and that we have not received any complaints of interference to TV Channel 13 from any of these operations.  S8( ^655.These facts prompt us to seek comment as to whether we should relax some or all of the  xfollowing technical restrictions, as requested by Petitioners: (a) automatic power control in RTUs with  S( x8power in excess of 100 milliwatts;A$/ {Or (  *#X\  P6G;/P#э47 C.F.R.  95.855(a). See Third Letter Amendment (attachment at 2). Cf. Phoenix Data Communication,  {O< ( xInc., Request for Waiver of Section 95.855 of the Commission's Rules, Order, DA 98972 (Pub. Safety & Priv.  x(Wireless Div., released May 21, 1998) (discussing waiver of the RTU automatic power control requirement, filed in conjunction with an application for type acceptance of its proposed equipment).A (b) limits on transmitter effective radiated power, including the 100  S( xmilliwatt power limitation on mobile RTUs;'/ {O6(  p#X\  P6G;/P#э47 C.F.R.  95.855. See Letter Amendment at 1; accord IIAP Letter at 2. For further discussion of mobile  {O(RTU power limitations, see Section V.B., supra.' (c) CTS antenna height and transmitter power ratios,  xtwhether or not the CTS is located beyond a boundary line 10 miles outside the Grade B contour of a TV  Sp( xChannel 13 station;8$p2 / {OB(  #X\  P6G;/P#э47 C.F.R.  95.859(a)(1)(2). See Letter Amendment at 3. Cf. Requests for Waiver of Section 95.859(a)(2),  {O ( xnConcerning Interactive Video and Data Service (IVDS) Transmitter Power Limits, Order, 11 FCC Rcd 4669 (WTB  x1996) (discussing waiver of 47 C.F.R.  95.859(a)(2) to permit use of specific CTS technology programmed to transmit only during the TV Channel 13 horizontal blanking interval).8 and (d)duty cycle limitations.p/ {O.(#X\  P6G;/P#э47 C.F.R.  95.863. See Letter Amendment at 2; accord MKS Petition at 5; IIAP Letter at 2. We also note that we have received various  xzrequests for waiver of these technical standards that we choose to address in the larger context of this  xrulemaking, and therefore invite comment on these proposed operations in conjunction with the comments  S ( xaddressing the issues raised in this Notice.Y / {OH(   #X\  P6G;/P#эSee Jay M. Lieberman and Michael R. Walton, dba J & M Partnership Request for Waiver (July 14, 1997)  x(seeking waiver of the antenna height and power ratios, 47 C.F.R.  95.859(a)); Ronald E. Dowdy Request for  xWaiver (July 9, 1997) (same); Raveesh K. Kumra Request for Waiver (Apr. 17, 1997) (seeking waiver of the antenna  xheight and power ratios, 47 C.F.R.  95.859(a), and the duty cycle limitations, 47 C.F.R.  95.863(a)). These waiver  x requests will be incorporated into the record of this proceeding, and will also be available for public inspection at the Public Safety and Private Wireless Division, Room 8010, 2025 M Street, N.W., Washington, D.C. 20554.Y We request that commenters provide empirical data and  x>analysis of the expected effect on interference of changes they recommend. Commenters suggesting  xspecific limits are urged to provide support for their choices, recognizing that we are seeking to provide  xtechnical flexibility to coincide with the regulatory flexibility we propose. Alternatively, comments are  xsought on whether the interference provisions of Section 95.861 of our rules, which require 218219 MHz  xNService licensees to resolve interference problems to television broadcast reception or discontinue  S ( xRoperation, aresufficient to protect broadcast reception.t\ */ {O&(  v#X\  P6G;/P#э47 C.F.R.  95.861. But see Third Letter Amendment (attachment at 23) (seeking clarification that the  xfnotification requirements of Section 95.861(c) would not apply to licensees providing oneway emergency  {Of(( x|transmission to receiveonly CTSs); accord MKS Petition at 5 (requesting elimination of the notification procedures). "f(,t)t)n("  {O(For further discussion of Section 95.861, see Section V.D.1., supra.t We tentatively conclude that the evolution" Z,t)t)44n"  S( xLtoward precise digital technology, both within the evolving 218219 MHz Service industry,xZ/ yO(  X#X\  P6G;/P#эFor example, in presentations to Bureau staff, current licensees of 218219 MHz Service systems have  xindicated that the marketable uses of systems in the band appear to use digital emission types of equipment, utilizing  xmuch lower transmitter power than is presently authorized, and that digital emissions produce imperceptible (or no)  x<interference to TV Channel 13 when the RTU transmitting antenna is at least three feet away from the TV receiver.  xApplications where the RTU antenna would be removed by at least this distance in a typical environment, such as  xvending machine, utility and fire alarm monitoring, ATM transactions, and downloading data to RTUs associated with personal computers, for example, have been suggested by these licensees. and on the  S( x`part of the broadcast industry,</ {O (  z#X\  P6G;/P#эSee generally, e.g., Advanced Television Systems and Their Impact Upon the Existing Television Broadcast  {O (Service, MM Docket No. 87268, Fifth Report and Order, 12 FCC Rcd 12809 (1997).< will further reduce interference potential, and we seek comment on this  S( x>tentative conclusion. / {OF(#X\  P6G;/P#эSee also Section V.C., supra. Commenters should also address any other technical standards that could be reexamined in this rulemaking that inhibit flexible use of the spectrum and technological innovation.  S8( H.Incorporation by Reference of Part 1 Standardized Auction Rules  S( ^756.Background. In the Part 1 Third Report and Order, the Commission streamlined its auction  S( xBprocedures by adopting general competitive bidding rules applicable to all auctionable services. / {O(#X\  P6G;/P#эPart 1 Third Report and Order, 13 FCC Rcd at 381469. These  x(procedures, set forth in Part 1, subpart Q of the Commission's rules, supersede previously-adopted service xspecific rules, unless the Commission determines that with regard to particular matters, the retention or  SJ (adoption of servicespecific rules is warranted.mJ / {O(#X\  P6G;/P#эSee id. at 382.m  S ( ^857.Discussion. We propose to conduct all future auctions for licenses in the 218-219 MHz  xService (both auctions of initial licenses and reauctions of defaulted licenses) in conformity with the  xgeneral competitive bidding rules set forth in Part 1, subpart Q of the Commission's rules. Specifically,  S ( xfwe propose to employ the Part 1 rules governing designated entities,m / {O(#X\  P6G;/P#эId. at 386409.m application issues,l >/ {Ob (#X\  P6G;/P#эId. at 41023.l payment  S\( xissues,l\/ {O"(#X\  P6G;/P#эId. at 42347.l competitive bidding design, procedure and timing issues,l\b/ {O^$(#X\  P6G;/P#эId. at 44762.l and anti-collusion.l\/ {O%(#X\  P6G;/P#эId. at 46369.l In this regard,  S4( xLconsistent with our decision in the Part 1 Third Report and Order, we would no longer offer installment"4 ,t)t)44"  S( xpayments as a means of financing small business participation in the 218219 MHz Service auction. `/ {Oh(  #X\  P6G;/P#эSee id. at 398 (Commission will not offer installment payments until further notice). In eliminating installment payments, we stated that:  X. . . Congress did not require the use of installment payments in all auctions, but rather recognized  them as one means of promoting the objectives of Section 309(j)(3) of the Communications Act.  The Commission continues to experiment with different means of achieving its obligations under  the statute, and has offered installment payments to licensees in several auctioned wireless services.  2Installment payments are not the only tool available to assist small businesses. Indeed, we have  hconducted auctions without installment payments. Moreover, Section 3007 of the Balanced Budget  Act requires that the Commission conduct certain future auctions in a manner that ensures that all  proceeds from such bidding are deposited in the U.S. Treasury not later than September 30, 2002.  . . . [W]e believe that Section 3007 may require that these auctions be conducted without offering longterm installment payments.   {OZ ( xId. at 399400 (footnotes omitted). This conclusion was based on the record in the Part 1 proceeding, the record  xdeveloped on installment financing for broadband PCS C block licensees, and on recent decisions eliminating  xinstallment payment financing for the Local Multipoint Distribution Service and 800 MHz Specialized Mobile Radio.  {O( xSee id. at 39698. See also Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate  xthe 27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules and  {OF( xPolicies for Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92-297, Second  {O( x|Order on Reconsideration, 12 FCC Rcd 15082, 15088-92 (1997); Amendment of Part 90 of the Commission's Rules  xto Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93-144,  {O( xMemorandum Opinion and Order on Reconsideration, 12 FCC Rcd 9972, 10014 (1997). The Commission has  xZexplained that elimination of installment payments better serves the public interest because obligating licensees to  {O4( x(pay for their licenses as a condition of receipt requires greater financial accountability from applicants. See, e.g.,  {O(Part 1 Third Report and Order, 13 FCC Rcd at 398.  xInstead, we would retain the two tiers of small business size standards currently set for 218219 MHz  S( x Service licensees,!/ yO@(  #X\  P6G;/P#э47 C.F.R.  95.816(d)(4)(i)(ii) ("small business" is an entity with average gross revenues not exceeding $15  xmillion for the preceding three years; "very small business" is an entity with average gross revenues not exceeding  x$3 million for the preceding three years). Licensees would also be subject to the uniform rules of ownership  xdisclosure and definitions for attribution of gross revenues of investors and affiliates, as promulgated in WT Docket  {O`( xNo. 9782. See Part 1 Third Report and Order, 13 FCC Rcd at 41721 (disclosure rules) and 47678 (seeking further comment on attribution rules).! and utilize the standard schedule of bidding credits set forth in the Part 1 Third  S( x\Report and Order as applied to those two tiers of small businesses, which would allow for somewhat  Sd( xhigher bidding credits in light of the suspension of installment payment financing.dj/ {On (  #X\  P6G;/P#эCompare Part 1 Third Report and Order, 13 FCC Rcd at 404 (establishing standard bidding credits of 35%  xfor businesses with average gross revenues not exceeding $3 million for the preceding three years, and 25% for  {O"( xbusinesses with average gross revenues not exceeding $15 million for the preceding three years) with 47 C.F.R.  xP95.816(d)(1) (servicespecific bidding credits of 15% for businesses with average gross revenues not exceeding  x$3million for the preceding three years, and 10% for businesses with average gross revenues not exceeding $15million for the preceding three years). We seek comment  xon these proposals and on whether any of our Part 1 rules would be inappropriate in an auction for this service."! ,t)t)44 "  S( VII. CONCLUSION ă  S( ^958.We adopt this Order, MO&O and Notice to initiate a comprehensive examination of our  xregulations governing the licensing and use of frequencies in the 218219 MHz band. These actions are  xintended to establish a flexible regulatory framework for the 218219 MHz Service that will encourage  xspectrum efficiency, technical innovation, and competition by these licensees in the wireless marketplace,  xand serve the ultimate goal of ensuring that the spectrum at 218219 MHz provides the greatest benefit to the public.  Sr(l VIII. PROCEDURAL MATTERS ă  S" 2 A.Ex Parte Rules " Non-Restricted Proceeding  S ( ^:59.This is a non-restricted notice and comment rulemaking proceeding. Ex Parte presentations  xare permitted, except during the Sunshine Agenda period, provided they are disclosed as provided in  S (Commission rules. See generally 47 C.F.R.  1.1202, 1.1203, and 1.1206(a).  S7( B.Initial Regulatory Flexibility Analysis  S(  S( ^<;60.As required by the Regulatory Flexibility Act of 1980, Pub. L. No. 96354, 94 Stat. 1164,  x(as amended by the Contract with America Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847,  xR5 U.S.C.  603, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the  xpossible impact on small entities of the proposals suggested in this document. The IRFA is set forth in  xAppendix A. Written public comments are requested with respect to the IRFA. These comments must  S( xbe filed in accordance with the same filing deadlines for comments on the rest of this Notice, but they  x>must have a separate and distinct heading, designating the comments as responses to the IRFA. The  S( xOffice of Public Affairs, Reference Operations Division, shall send a copy of this Notice, including the  xIRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the Regulatory Flexibility Act.  S3( C.Initial Paperwork Reduction Act of 1995 Analysis  S( ^ <61.This Notice contains either a proposed or modified information collection. As part of the  x8Commission's continuing effort to reduce paperwork burdens, we invite the general public, the Office of  xManagement and Budget (OMB), and other agencies to take this opportunity to comment on the  Sm( x information collections contained in this Notice, as required by the Paperwork Reduction Act of 1995, Pub  SG( xL. No. 104-13. Public and agency comments are due at the same time as other comments on this Notice;  S! ( xBOMB comments are due 60 days after the publication of this Notice in the Federal Register. Comments  x|should address: (a) whether the proposed collection of information is necessary for the proper  xperformance of the functions of the Commission, including whether the information shall have practical  xutility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and  xLclarity of the information collected; and (d) ways to minimize the burden of the collection of information  xon the respondents, including the use of automated collection techniques or other forms of information  xtechnology. In addition to filing comments with the Secretary, a copy of any comments on the  S &( xinformation collections contained herein should be submitted to both of the following: Judy Boley,  xFederal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C. 20554, or via  xthe Internet to jboley@fcc.gov, and Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street,  S((N.W., Washington, D.C. 20503, or via the Internet to fain t@al.eop.gov."(",t)t)44%"Ԍ S(ԙ D.Notice and Comment Provisions  S( ^=62.Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419,  xinterested parties may file comments on or before October 30, 1998, and reply comments on or before  xNovember 25, 1998. Comments may be filed using the Commission's Electronic Comment Filing System  S8( x$(ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24121 (1998).  S( ^>63.Comments filed through the ECFS can be sent as an electronic file via the Internet to  S( x. Generally, only one copy of an electronic submission must be filed.  xIf multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters  xmust transmit one electronic copy of the comments to each docket or rulemaking number referenced in  xthe caption. In completing the transmittal screen, commenters should include their full name, Postal  xService mailing address, and the applicable docket or rulemaking number. Parties may also submit an  xelectronic comment by Internet email. To get filing instructions for email comments, commenters should  xjsend an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, "get form ." A sample form and directions will be sent in reply.  S2( ^ ?64.Parties who choose to file by paper must file an original and four copies of each filing. If  x.more than one docket or rulemaking number appear in the caption of this proceeding, commenters must  xsubmit two additional copies for each additional docket or rulemaking number. All filings must be sent  x8to the Commission's Secretary, Magalie Roman Salas, Office of the Secretary, Federal Communications  x$Commission, 1919 M St. N.W., Room 222, Washington, D.C. 20554. Comments and reply comments  xwill be available for public inspection during regular business hours in the FCC Reference Center of the Federal Communications Commission, Room 239, 1919 M Street, N.W., Washington, DC 20554.  S(x IX. ORDERING CLAUSES ă  Sz( ^8@65.Authority for issuance of this Order, Memorandum Opinion and Order and Notice of  ST( xProposed Rulemaking is contained in Sections 4(i), 257, 303(b), 303(g), 303(r), 309(j), and 332(a) of the  xCommunications Act of 1934, as amended, 47 U.S.C.  154(i), 257, 303(b), 303(g), 303(r), 309(j), and 332(a).  S( ^A66.Accordingly, IT IS ORDERED that this Order, Memorandum Opinion and Order and Notice  S( xof Proposed Rulemaking is adopted. It is further ordered that the Commission's Office of Public Affairs,  Sj( xReference Operations Division, shall send a copy of this Order, Memorandum Opinion and Order and  SD( xNotice of Proposed Rulemaking, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.  S!( ^B67.IT IS FURTHER ORDERED that all references to "Interactive Video and Data Service" in  x\47 C.F.R. Parts 1, 2, 20, 95, and 97 are to be removed and, in their place, the words "218219 MHz  xbService" are to be substituted. Pursuant to 47 C.F.R.  0.331(d), we hereby instruct the Wireless  xTelecommunications Bureau to make conforming edits to the Code of Federal Regulations consistent with this Ordering Clause.  S&( ^TC68.IT IS FURTHER ORDERED that the request of the Petitioners for general waiver of Section  S'( x1.2110(f)(4) of the Commission's rules, as amended by the Part 1 Third Report and Order, IS DENIED.  xHowever, a suspension of the application of Section 1.2110(f)(4)(i)(iv), limited to those 218-219 MHz"(#,t)t)44%"  xBService licensees that have remitted adequate installment payments as of March 16, 1998, will remain in  S( xeffect pending Commission resolution of the issues raised in the Notice of Proposed Rulemaking in an initial Report and Order.  Sb( ^D69.IT IS FURTHER ORDERED that the Miscellaneous Payment Relief Requests ARE DENIED to the extent that they are inconsistent with the actions and proposals described above.  S( ^RE70.IT IS FURTHER ORDERED that NOTICE IS HEREBY GIVEN of the proposed  xamendments to Parts 20 and 95 of the Commission's rules, 47 C.F.R. Parts 20 and 95, in accordance with  S( xthe proposals in this Notice of Proposed Rulemaking, and that COMMENT IS SOUGHT regarding such  xLproposals. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419,  xinterested parties may file comments on or before October 30, 1998, and reply comments on or before November 25, 1998.  S ( ^F71.IT IS FURTHER ORDERED that the Petition for Rulemaking and associated amendments  S ( x.filed by Euphemia Banas, et al. IS GRANTED in part to the extent described above and IS DENIED in all other respects.  S6( ^"G72.IT IS FURTHER ORDERED that, as described above, the Petition for Reconsideration filed  S(by Euphemia Banas, et al. IS DISMISSED.  S( ^H73.IT IS FURTHER ORDERED that, to the extent described above, WE CLARIFY issues  xraised in the Petition for Partial Reconsideration filed by NAB and the Request for Clarification filed by ITV/IALC.  S ( ^I74.IT IS FURTHER ORDERED that the Petition for Partial Reconsideration of NAB IS DISMISSED or DENIED in all other respects.  S(J75.IT IS FURTHER ORDERED that WT Docket No. 95-47 IS TERMINATED.  SX( ^K76.For further information concerning this proceeding, contact Howard Griboff at (202)  x418-0660 (Auctions & Industry Analysis Division) or James Moskowitz at (202) 418-0680 (Public Safety & Private Wireless Division), Wireless Telecommunications Bureau.  N N ;hFEDERAL COMMUNICATIONS COMMISSION  N N ;hMagalie Roman Salas  N N ;hSecretary" $,t)t)44x"  S( %  APPENDIX A s INITIAL REGULATORY FLEXIBILITY ANALYSIS  S`2!xNotice of Proposed Rulemaking ă   As required by the Regulatory Flexibility Act of 1980, Pub. L. No. 96354, 94 Stat. 1164, as  x`amended by the Contract with America Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847,  S( x5 U.S.C.  603,+/ yO) (  4#X\  P6G;/P#эSubtitle II of the Contract with America Advancement Act is "The Small Business Regulatory Enforcement  {O (Fairness Act of 1996" (SBREFA), codified at 5 U.S.C.  601, et seq.+ the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the  S( xpossible significant economic impact on small entities by the policies and rules proposed in this Notice  Ss( xof Proposed Rulemaking, Amendment of Part 95 of the Commission's Rules to Provide Regulatory  SM ( xFlexibility in the 218219 MHz Service (Notice). Written public comments are requested on this IRFA.  xComments must be identified as responses to the IRFA and must be filed by the deadline for comments  S ( xon the Notice, as described supra in Section VIII.D. The Commission will send a copy of the Notice,  x\including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).  S ( x`See 5U.S.C. 603(a). In addition, the Notice and IRFA (or summaries thereof) will be published in the  S (Federal Register. See id.  S=( I.Need for, and Objectives of, the Proposed Rules:   DThis rulemaking proceeding was initiated to secure public comment on proposals to maximize the  xfefficient and effective use of spectrum in the 218219 MHz band, allocated in 1992 to the Interactive  xVideo and Data Service (IVDS) in the Personal Radio Services, now redesignated as the 218219 MHz  xService. In attempting to maximize the use of the 218219 MHz band, we continue our efforts to improve  xthe efficiency of spectrum use, reduce the regulatory burden on spectrum users, facilitate technological  xbinnovation, and provide opportunities for development of competitive new service offerings. The  S( xproposals advanced in the Notice are also designed to implement Congress' goal of giving small businesses  xthe opportunity to participate in the provision of spectrumbased services in accordance with Section 309(j)  S(of the Communications Act of 1934, as amended (the Communications Act).w"/ yOq(#X\  P6G;/P#э47 U.S.C.  257, 309(j).w  S_( II.Legal Basis:   This action, including publication of proposed rules, is authorized under Sections 4(i), 257, 303(b),  x303(g), 303(r), 309(j), and 332(a) of the Communications Act, 47 U.S.C.  154(i), 257, 303(b), 303(g), 303(r), 309(j), and 332(a).  So(  , III.XDescription and Estimate of the Number of Small Entities to which the Proposed Rules Will  SG(Apply: (#   hThe Regulatory Flexibility Act directs agencies to provide a description of and, where feasible,  xan estimate of the number of small entities that may be affected by the proposed rules, if adopted. The  xRegulatory Flexibility Act generally defines the term "small entity " as having the same meaning as the  xtterms "small business," "small organization," and "small governmental jurisdiction." In addition, the term"#%,t)t)44!"  x"small business" has the same meaning as the term "small business concern" under the Small Business  S( xBAct, unless the Commission has developed one or more definitions that are appropriate for its activities./ yO@(  #X\  P6G;/P#э5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 15 U.S.C. 632).  x"Pursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency after consultation  xwith the Office of Advocacy of the Small Business Administration and after opportunity for public comment,  xxestablishes 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."  xA small business concern is one which: (1) is independently owned and operated; (2) is not dominant in  S( xJits field of operation; and (3) satisfies any additional criteria established by the SBA.x/ yO (#X\  P6G;/P#эSmall Business Act, 15 U.S.C.  632 (1996). A small  xorganization is generally "any not-for-profit enterprise which is independently owned and operated and  S8( xis not dominant in its field."m8/ yO (#X\  P6G;/P#э5 U.S.C.  601(4).m Nationwide, as of 1992, there were approximately 275,801 small  S( xorganizations. / yOH(  #X\  P6G;/P#э1992 Economic Census, U.S. Bureau of the Census, Table 6 (special tabulation of data under contract to Office of Advocacy of the U.S. Small Business Administration).  "Small governmental jurisdiction" generally means "governments of cities, counties, towns,  S( xtownships, villages, school districts, or special districts, with a population of less than 50,000."m / yOx(#X\  P6G;/P#э5 U.S.C.  601(5).m As of  S( x1992, there were approximately 85,006 such jurisdictions in the United States. / yO(#X\  P6G;/P#эU.S. Dept. of Commerce, Bureau of the Census, "1992 Census of Governments." This number includes  S( xP38,978 counties, cities, and towns; of these, 37,566, or 96percent, have populations of fewer than 50,000.a / {OH(#X\  P6G;/P#эId.a  xThe Census Bureau estimates that this ratio is approximately accurate for all governmental entities. Thus,  xof the 85,006 governmental entities, we estimate that 81,600 (91 percent) are small entities. Below, we  xjfurther describe and estimate the number of small entity licensees and regulatees that may be affected by the proposed rules, if adopted.   There are three ways that may be applicable to define small entities for these proposed rules: (1)  xthe U.S. Small Business Administration's (SBA) size standards under the SBA's Standard Industrial  xjClassifications (SIC), 13 C.F.R.  121.201; (2) the Small Business Act's definition of small entities under  x`15 U.S.C.  632(a); and (3) the Commission's refined definition of small business for a particular service for the purposes of competitive bidding.  S(  The proposals in the Notice would affect a number of small entities who are either licensees, or  xwho may choose to become applicants for licenses, in the 218-219 MHz Service. Such entities fall into  xDtwo categories: (1) those using the 218219 MHz Service for providing interactivity capabilities in  xconjunction with broadcast services; and (2) those using the 218-219 MHz Service to operate other types  xof wireless communications services with a wide variety of uses, such as commercial data applications and  xtwoway telemetry services. Theoretically, an entity could fall into both categories. The spectrum uses in the two categories differ markedly. "& ,t)t)44"Ԍ  TWith respect to the first category, the provision of interactivity capabilities in conjunction with  xbroadcast services could be described as a wireless provider of subscription television service. The SBA's  xrules applicable to subscription television services define small entities as those with annual gross revenues  S( xof $11 million or less.~ / yO(#X\  P6G;/P#э13 C.F.R.  121.201, SIC Code 4841.~ In the Competitive Bidding Tenth Report and Order, we extended special  x~competitive bidding provisions to small businesses with annual gross revenues that are not more than $15  xmillion, and additional benefits to very small businesses with annual gross revenues that are not more than  S( x$3 million. \X/ yO (  L#X\  P6G;/P#эImplementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket No. 93253,  {O ( xN Tenth Report and Order, 11 FCC Rcd 19974, 1998185 (1996) (Competitive Bidding Tenth Report and Order), recon.  {O (pending. On January 6, 1998, the SBA approved of the small business size standards established in  S(the Competitive Bidding Tenth Report and Order.   The Commission's estimate of the number of small business entities operating in the 218219 MHz  xband for interactivity capabilities with television viewers begins with the 1992 Bureau of Census report  x on businesses listed under SIC Code 4841, subscription television services, which is the most recent  S$ ( xinformation available. The total number of entities under this category is 1,788.P X$ |/ yO@(  R#X\  P6G;/P#эU.S. Small Business Administration 1992 Economic Census Industry and Enterprise Report, Table 2D, SIC  xCode 4841 (Bureau of the Census data adapted by the Office of Advocacy of the U.S. Small Business Administration).P There are 1,463  xcompanies in the 1992 Census Bureau report which are categorized as small businesses providing cable  S ( xand pay TV services.  / yO(  X#X\  P6G;/P#эThe Census table divides those companies by the amount of annual receipts. There is a dividing point at  xcompanies with annual receipts of $10 million. The next increment is annual receipts of $17 million, a category that  xgreatly exceeds the SBA definition of small businesses that provide subscription television services. However, there  xJare 17 firms in this category, with revenues between $10-$17 million. Approximately 1,480 SIC Code 4841 category firms have annual gross receipts of $15 million or less. Only a small fraction of those 1,480 firms provide IVDS. We know that many of these businesses are cable and television service  x$businesses, rather than businesses operating in the 218219 MHz band. We also know that, to date, we  xLhave issued 612 licenses in the 218219 MHz Service. Therefore, the number of small entities currently  x$providing interactivity capability to television viewers in the 218219 MHz Service which will be subject to the rules will be less than 612.   With respect to the second category, neither the Commission nor the SBA has developed a specific  x0definition of small entities applicable to 218219 MHz band licensees that would provide wireless  xBcommunications services other than that described above. Generally, the applicable definition of a small  xentity in this instance appears to be the definition under the SBA rules applicable to establishments  x primarily engaged in furnishing telegraph and other message communications, SIC Code 4822. This  S( xdefinition provides that a small entity is an entity with annual receipts of $5 million or less.~L / yO$(#X\  P6G;/P#э13 C.F.R.  121.201, SIC Code 4822.~ The 1992  xpCensus data, which is the most recent information available, indicates that of the 286 firms under this"',t)t)44"  S( xcategory, 247 had annual receipts of $4.999 million or less.kX/ yOh(  &#X\  P6G;/P#э1992 Economic Census Industry and Enterprise Receipts Size Report, U.S. Bureau of the Census, U.S.  x2Department of Commerce, Table 2D, SIC Code 4822 (industry data prepared by the Census Bureau under contract to the U.S. SBA Office of Advocacy).k We seek comment on whether the  xappropriate definition for such licensees in the 218219 MHz Service is SIC Code 4822, or whether we  x`should conclude, for purposes of the FRFA in this matter, that the appropriate definition for all providers  xlof services in the 218219 MHz Service is the Commission's definition of small businesses for the purposes of competitive bidding in this service.   The first auction of 218219 MHz spectrum resulted in 170 entities winning licenses for 594  xMetropolitan Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by entities qualifying  x~as a small business. For that auction, we defined a small business as an entity, together with its affiliates,  xthat has no more than a $6 million net worth and, after federal income taxes (excluding any carry over  Sp( xjlosses), has no more than $2 million in annual profits each year for the previous two years.p/ yO (  L#X\  P6G;/P#эImplementation of Section 309(j) of the Communications Act ! Competitive Bidding, PP Docket No. 93-253,  {O(Fourth Report and Order, 9 FCC Rcd 2330, 2336 (1994). We cannot  xestimate, however, the number of licenses that will be won by entities qualifying as small or very small  x>businesses under our rules in future auctions of 218219 MHz spectrum. Given the success of small  xtbusinesses in the previous auction, and the above discussion regarding the prevalence of small businesses  xin the subscription television services and message communications industries, we assume for purposes  x`of this IRFA that in future auctions, all of the licenses may be awarded to small businesses, which would be affected by the rule changes we propose.  S0( IV.XDescription of Projected Reporting, Recordkeeping and Other Compliance Requirements: (#  S(  The proposed rules under consideration in this Notice include the possibility of altered reporting  xand recordkeeping requirements for a number of small business entities. Specifically, under the proposals  S( xcontained in the Notice: (1) 218219 MHz Service licensees and applicants will be required to elect  xregulatory status (common carrier, private, commercial mobile radio service, private mobile radio service)  xand file appropriate documentation coincident with the regulatory status elected; (2) 218219 MHz Service  xlicensees will not be required to file a license renewal application after five years from the date of grant  xfof the license, but will be required to file a license renewal application after ten years after the date of  xgrant of the license; (3) nondefaulting 218219 MHz Service licensees currently participating in the  x>installment payment plan will be required to elect either to continue making payments as reamortized  xtunder the revised tenyear term or surrender any licenses it chooses to the Commission for reauction; (4)  x 218219 MHz Service licensees electing to continue making installment payments will be required to  xexecute a note and security agreement as a condition of the reamortization of its installment payment plan  xunder the revised tenyear term; (5)218-219 MHz Service licensees will not be required to file a  x8construction report after the third year of being licensed, but will be obligated to file construction reports  xRin accordance with the benchmarks to be adopted under the proposals herein; and (6) acquisitions by  xfpartitioning or disaggregation will be treated as assignments of a license and parties will be required to  xcomply with construction requirements, and to submit a certification to that effect. We request comment  xon how these requirements can be modified to reduce the burden on small entities and still meet the objectives of the proceeding. " (B,t)t)44"Ԍ S(  2 V.XSteps Taken to Minimize Significant Economic Impact on Small Entities, and Significant  S(Alternatives Considered: (#  S(  The Notice solicits comment on a variety of proposals, some of which are described below.  Sb( xRather than having a significant economic impact on small entities, the Notice is written toward  xmaximizing opportunities for participation by, and growth of, small businesses in providing wireless  xservices. We have requested comment regarding the appropriate definition of small business to be applied  S( xfunder the expanded nature of the 218219 MHz Service we propose in the Notice. The Commission  S( xexpects that its proposals in this Notice regarding extension of license terms from five to ten years, with  xBa corresponding reamortization of installment payment debt, and allowing partitioning and disaggregation  xof licenses, will specifically assist small businesses. We also believe that our proposals regarding  xpermissible uses of 218219 MHz Service, liberalization of construction requirements and technical  xHrestrictions, and elimination of the crossownership restriction, will make expansion of 218-219 MHz  xService operations easier, and this flexibility assists all licensees, including small business licensees. We  x*tentatively conclude that a flexible approach to regulation of the 218219 MHz Service will afford all  xpproviders, including small businesses, the ability to respond to market forces and demands for service  xrelevant to their particular locations and service offerings. The regulatory burdens we propose are  xnecessary in order to ensure that the public receives the benefits of innovative new services in a prompt  xand efficient manner. We seek comment on, and will consider, any significant alternatives that are  S(consistent with the objectives set forth in the Notice.  S( VI.XFederal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules: (# None."r),t)t)44"  S(  X N p x (#%'0*,.8135@8: